01 April 2021
Better-than expected-economic data (see Economic Update) boosted the pound on Wednesday (31 March), which acted as a drag on the FTSE 100. When sterling strengthens, the FTSE 100 tends to fall as its constituents derive most of their revenue in other currencies. The blue-chip index fell 0.86% to 6,713.63.
SECTOR IN FOCUS
Deliveroo Holdings plc’s (ROO) hotly-anticipated float this week had been billed as the UK’s most important in a decade.
The food delivery firm’s debut was meant to be the first step in the Government’s bid to persuade more fast-growing tech firms – the type the FTSE lacks in great numbers – to list in London.
However, the firm’s debut did not exactly go to plan, with its shares plunging by as much as 30% within hours of its debut yesterday.
Warning signs began to emerge in the build-up to the IPO, with a number of high-profile fund managers publicly ruling out buying its shares. Their concerns centre around working conditions for Deliveroo’s delivery drivers and the fact it is yet to turn a profit.
Deliveroo’s IPO also comes at a time when technology stocks have fallen out of favour with investors, which has possibly contributed to its lacklustre debut.
The next major test is on 7 April, when the general public can start trading Deliveroo shares.
The UK economy beat expectations in the final three months of last year – but suffered its worst 12 months in more than 300 years for 2020 as a whole.
Data from the Office for National Statistics (ONS) shows the economy grew by 1.3% in the last three months of 2020 – 0.3 percentage points more than economist predicted.
However, the UK’s coronavirus-battered economy is still 7.3% smaller than it was before the pandemic – the second largest contraction in Europe after Spain.
Separate ONS data shows households saved cash at near record levels in the final three months of 2020 in order to protect themselves from the economic fallout caused by coronavirus.
Experts say the economy should recover quickly if households spend some of this spare cash when business reopens fully.
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8 April – Homewares retailer Dunelm Group plc (DNLM) resumed its dividend in February on the back of strong half-year sales growth. However, it warned at the time that fresh lockdown restrictions would hit future revenue. It releases its latest trading update on Thursday (8 April).
8 April – Trendy online fashion retailer Asos plc (ASC) has thrived over the past year, with High Street competitors forced to temporarily close due to coronavirus. The retailer, popular with fashionable twentysomethings, strengthened its position in February, after acquiring four well known brands from Arcadia, including Topshop and Miss Selfridge, in a reported £300m deal. Asos publishes its interim results on Thursday (8 April).