Week in Review: Flurry of strong results pushes FTSE 100 higher

FTSE news

The FTSE 100 soared higher on Thursday (29 July) following a number of strong earnings updates and dividend announcements from the likes of Royal Dutch Shell plc (RDSA) and Anglo American plc (AAL). The index ended the day 0.88% higher at 7,078.42.

• On Monday (2 August), CIPS/Markit release their latest monthly survey of conditions in the UK’s manufacturing sector.
• Tuesday (3 August) looks to be a fairly quiet day, with no notable events or data releases scheduled.
• CIPS/Markit are back with an update on conditions in the UK’s dominant services sector on Wednesday (4 August).
• The focus shifts to the construction industry on Thursday (5 August), when CIPS/Markit release their latest PMI data for the sector.
• On Friday (5 August), Halifax publishes house price data for July.

Sector in focus

The rumour mill has been in full flow ever since it was revealed in April that BT Group plc (BT.A) had appointed bankers to find a potential buyer for its TV sports division.

Sports streaming site DAZN, Amazon and even Disney have all been touted as potential suitors for BT Sport, but ITV plc (ITV) is the name that has kept cropping up.  

This week, ITV plc (ITV) ruled out a full takeover of the pay-TV sports channel but did reveal it was in talks over a potential partnership. However, there are no details about how that partnership might look.

According to the Telegraph, ITV chief executive Dame Carolyn McCall said this week: “We have a good relationship with BT and BT Sport in particular, and we do constantly talk to them about how we might collaborate and cooperate. Those discussions are ongoing.

“We are not in the market for that kind of acquisition. We’ve been focused on our balance sheet and we still see uncertainty ahead, but collaboration and cooperation with BT Sport, absolutely.”

McCall reportedly said live sport will be vital in its attempt to fight off the threat of the streaming giants.

Economic update

The UK’s economy will grow faster than nearly every advanced nation this year and next, the International Monetary Fund (IMF) predicted this week.

In its latest World Economic Outlook, the bank of last resort forecast that the UK economy would grow by a record-breaking 7% this year.

If the IMF is right, the UK will be the fastest-growing advanced economy this year, alongside the US.   

The IMF also believes the UK economy will grow by 4.8% in 2022, which suggests it will reach its pre-Covid size around the start of next year.

Responding to the forecast, Chancellor Rishi Sunak said: “There are positive signs that our economy is rebounding faster than initially expected, with the IMF forecasting the UK to have the joint highest growth rate in 2021 among the G7 economies.

“That said, we still face challenges ahead as a result of the impact of the pandemic, which is why we remain focused on protecting and creating as many jobs as possible through our Plan for Jobs.”

Fund watch

Japan may be in the spotlight for hosting the Olympics, but it also warrants some attention for the investment opportunity it offers. While Japanese shares were in the doldrums for years, the Nikkei 225 – its leading index – is up more than 24% in the past year. Man GLG Japan Core Alpha Professional Acc C (GB00B0119B50) invests in some of the country’s biggest firms, including the likes of Toyota Motor Corp, Honda Motor Co and Canon Inc. The fund has an ongoing charge of 0.9% and has returned nearly 39% in five years.

Company announcements

3 August – Investors have reason to be upbeat about Greggs plc (GRG) ahead of its interim results on Tuesday (3 August). Last month the FTSE 250-listed baker revealed that sales had recovered strongly since the Government lifted the restrictions on the economy. It added that this should have a “materially positive impact” on its full-year results.

5 August – Rolls-Royce Holdings plc (RR) shares offer “significant long-term value”, investment bank Citi said last week. The embattled engineering giant has been forced to shed thousands of jobs to stem its large losses during the pandemic. However, Citi believes the firm will eventually recover, even if it can’t say when exactly. Rolls-Royce Holdings plc (RR) releases its interim results on Thursday (5 August).