FTSE 100 dips amid weak UK consumer confidence, NatWest beats expectations on higher income and lower costs and Boohoo gives robust response to Mike Ashley’s bid to become CEO

“The FTSE 100 dipped lower on Friday morning, undone by some weakness in the energy and housebuilding sectors,” says AJ Bell Investment Director Russ Mould.

“This followed some pretty dire figures on consumer confidence with households in a downbeat mood ahead of next week’s Budget and the long-heralded ‘difficult decisions’ it might contain.

“Asian stocks were mostly higher overnight bar Japan where markets are feeling the effects of the uncertainty associated with a looming snap election.”

Natwest

“It has been a pretty decent earnings season all-round for the UK banking sector and the positive trend continued with NatWest’s numbers.

“Better-than-expected income and lower-than-expected costs provided the cocktail for upgrades and investors have responded accordingly. The company, and its peer group, have been helped here by slower-than-anticipated rate cuts.

“NatWest is keeping the lid on the longer-term outlook for returns, which looks like good expectations management and potentially an eye to the fact that targeting returns which are too high might draw the ire of politicians and regulators.

“The company is well on the way to being fully restored to private ownership with the remaining 15% government stake likely to be sold down in the coming months, which would remove a material factor overhanging the shares and represent a significant milestone for the business.

“One fly in the ointment was higher than expected impairments – running counter to what Barclays and Lloyds announced earlier this week – but for now the level of impairments looks manageable.

“The company’s move to buy Metro Bank’s mortgage book in July demonstrated CEO Paul Thwaite isn’t prepared to sit on his hands and it will be interesting to see how the strategy develops, particularly once the state’s holding in the bank has been fully erased.”

Boohoo / Frasers

“Boohoo has responded robustly to Frasers’ bid to install Mike Ashley as its new CEO, none too subtly questioning if Ashley at the helm is in the interests of shareholders other than Frasers and batting back criticism of its recent refinancing.

“In the meantime the company has pointedly outlined plans to continue with its own search for a replacement for current boss John Lyttle.

“Boohoo continues to review the validity of the requisition for a meeting to vote on Ashley’s appointment as CEO but, based on past form, the retail tycoon is unlikely to disappear quietly whatever Boohoo’s response so we can expect this saga to run for some time to come.”

These articles are for information purposes only and are not a personal recommendation or advice.