The FTSE 100 closed a touch lower on Thursday (12 April), just above the 7,250 mark, as a stronger pound helped undermine the relative value of constituents’ overseas earnings.
Next Monday (16 April) US retail sales will be in focus. The last three months have seen sales shrink – the first time this has happened in five-and-a-half years. In the early hours of Tuesday (17 April) morning China’s GDP growth is reported (see Economic update). This announcement is followed later in the day by UK earnings data and the building permits release in the US. The latter offers a good insight into future construction activity as obtaining a permit is one of the first steps involved in constructing a new building. On Wednesday (18 April) UK inflation figures for March are out. Inflation dropped more than expected to 2.7% in February. Next Thursday (19 April) UK retail sales are published – several names on the British high street have run into financial difficulties amid pressure on consumer spending.
Consumer antivirus provider Avast has unveiled plans to float on the London stock market in early May, providing another investment option of scale for investors in the exciting cyber security space. It hopes to raise about $200 million of cash (roughly £140 million at current exchange rates), although that will largely be used to cut debt of somewhere in the $1.4 billion to $1.6 billion ballpark. Reports suggest a market valuation of around $4 billion.
This is a company whose products many investors may already be using without realising it. Avast owns the highly popular AVG (which it bought in 2016) suite of antivirus tools. It plans to pay dividends in the future. Operating cash flows came in at $307 million last year, amounting to 75% of adjusted earnings. The IPO will add to a burgeoning cyber security sector in London, with Avast joining companies like Sophos (SOPH) as well as smaller outfits such as NCC (NCC) AIM newcomer GRC International (GRC:AIM).
Chinese economic growth can often have a significant impact on the FTSE 100 due to the weighting of index towards miners and China’s status as the largest global consumer of the metals they produce. In this context upcoming first quarter GDP figures from the world’s second largest economy are likely to be closely scrutinised next Tuesday (17 April) – particularly given the recent war of words over trade between the US and China.
As well as traditional stock market indicies and asset classes like commodities, exchange-traded funds can also be used to capture specific investment themes, including the growth of cyber security. ETFS ISE Cyber Security (ISPY) offers exposure to a basket of global companies involved in this industry for an ongoing charge of 0.75%.
17 April - Roadside assistance provider AA (AA.) releases full year results on 17 April and investors will be eager to see what new changes CEO Simon Breakwell has in store. Breakwell shocked the market in February with his new strategy for the company and slashed the dividend. He’s not been in the job long but has the blessing of renowned fund manager Neil Woodford who increased his stake following the update.
17 April – Mining firm Rio Tinto (RIO) will publish its first quarter update at 11.30pm – reflecting its listing in Australia. During the second part of March, Rio Tinto announced $4.15bn worth of coal asset sales meaning it has now exited the coal industry completely. The sales should complete in the second half of the year and most of the proceeds are expected to be returned to shareholders.
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