Cookie Policy

We use cookies on our website and have placed these on your computer. By continuing to use our website you consent to this. For more information, including how to change your cookie settings and to disable our non-essential Google Analytics cookies, please refer to our Cookie Policy. If you do not wish to be reminded of this on each visit, please use the close button.

Newsround: Sterling settles as FTSE advances

15 March 2019


Tags: Macro Economics

FTSE News  

Sterling eased back despite MPs voting against a no-deal Brexit on Wednesday evening, helping the FTSE 100 advance 0.4% to 7,185.43 on Thursday.

Next week will likely feel like Groundhog Day for investors with a further ‘meaningful vote’ on Brexit expected (see Economic update). In terms of scheduled announcements, UK earnings data is released on Tuesday (19 March), followed by inflation figures on Wednesday (20 March). Later the same day, the US will announce its latest decision on interest rates. Next Thursday (21 March), the Bank of England will make its own call on rates, with no movement expected given the current uncertainty over Brexit. Retail sales data for the UK is also out. Friday sees the release of PMI data from the Eurozone.

 

Sector in focus

There was M&A activity in the challenger bank space this week as OneSavings (OSB) and Charter Court Financial (CCFS) announced plans to merge. The two parties are targeting synergy savings totalling £22m by year three of the combination. As already flagged, OneSavings Bank shareholders will own 55% of the combined entity while chief executive Andy Golding and chief finance officer April Talintyre will take over the same roles at the new group. The aim is to create a specialist lender with greater clout in what management openly admits is ‘an increasingly mature and competitive’ market while tapping into Charter Court’s automation-enabled underwriting tools to improve efficiency. Despite the commitment to maintain two separate distribution platforms ‘to create an enhanced proposition to the broker community’, management have identified pre-tax cost synergies amounting to £22m on an annual run-rate by the third anniversary of the merger. A third of the savings are expected to be delivered in the first year and three quarters by the end of the second year. Results from OneSavings, announced on Thursday (14 March) revealed a 23% increase in loan growth to £9bn and a net interest margin (a key measure of a bank’s profitability) of 3.04%.

 

Economic Update

Despite two heavy defeats, Theresa May is expected to bring her Brexit deal back before the House of Commons, likely on Tuesday (19 March) or Wednesday (20 March) with a short extension on the current March 29 deadline then requested from the EU to pass the necessary legislation. If the agreement is rejected for a third time, then May has suggested there might be a longer extension. An extension requires unanimous support from all EU members and the default position remains that the UK exits the EU in a fortnight, something most observers believe is still not being priced in by the market.

 

ETF Watch 

Investors looking for exposure to stocks in Asia Pacific, excluding Japan, could consider exchange-traded fund Vanguard FTSE Developed Asia Pacific ex-Japan (VAPX). For an ongoing charge of 0.22% it offers exposure to a basket of stocks in Australia, Hong Kong, New Zealand, Singapore, and South Korea.

 

 Company Announcements

21 March – Full year results from high street retailer Next (NXT) will give investors a chance to see how the company, headed up by Simon Wolfson, is weathering the current storm on the high street. In January, the company revealed a surprise increase in Christmas sales. As ever, Wolfson’s comments on the outlook for the consumer economy will be closely followed.

22 March –  Investors will be looking for an update from engineering conglomerate Smiths Group (SMIN) on the progress of plans to separate its medical division from the rest of the group when it announces first half numbers. The medical unit is struggling and has never really sat comfortably alongside Smiths’ other divisions, which supply airport scanners and components and equipment to the energy and construction’ industries.

 

How can you make the most of your ISA in 2019?

We’ve brought together some expert insight from the world of money and personal finance for tips on how to make the most of ISA investments this tax year…

Read more

Writer: Tom Sieber Tags: Macro Economics

You can start investing today through any of our account options:

Dealing Account

Access a wide range of global investments in this flexible, unrestricted account.

Find out more

Stocks and Shares ISA

Take advantage of tax free investing with our Stocks and Shares ISA today.

Find out more

Self-Invested Personal Pension (SIPP)

From great value to best-in-class, access the SIPP to suit your needs through our extensive network of providers.

Find out more

I've still got questions!

Our experts are on hand to help at our UK based Customer Experience Centre on 0345 0700 720

Selftrade does not provide investment advice. This article is the authors view and is not the view or opinion of Selftrade and Selftrade accepts no liability for any loss caused as a result of the use of this information. The opinions expressed are those of the author at the time of writing and should not be interpreted as investment advice.

The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance. We do not provide advice or make recommendations about investments. If you have any doubts about the suitability of an investment, you should seek advice from a suitably qualified professional adviser.

If you have a Stocks and Shares ISA, make sure you get the best value for your investments. We are ranked top for price on large portfolios (Platforum, 2018).

Open an account today and we’ll cover any transfer fees up to £100.*

*T&Cs apply.

Open a Stocks & Shares ISA

Find out more