Daily market update: ECB rate decision, Wise, Wizz Air, Mitie, Marlowe, Dr Martens

“European shares tread water ahead of the European Central Bank's (ECB) interest rate decision,” says Russ Mould, Investment Director at AJ Bell.

“The ECB is widely expected to cut the cost of borrowing. Investors will be more focused on any signals regarding the pace of any further potential cuts.

“Inflation isn’t a problem, but sluggish economic growth is. That points to further monetary easing to encourage more borrowing and spending by consumers and businesses.

“In the UK, the FTSE 100 was flat at 8,800 as strength in miners and oil producers was offset by weakness in utilities.”

Wise

“The UK stock market is like a boxer determined to keep going in a gruelling fight. While the FTSE 100’s share price performance might have beaten the main US indices this year, the broader UK stock market continues to take a succession of blows to the head from a reputational perspective.

“Takeovers are coming thick and fast, IPOs remain scarce, and more companies are looking Stateside for their main stock listing in hope of a higher valuation.

“Money transfer group Wise has the joined the queue for those deciding the UK is no longer the best place for their primary listing. Although subject to a shareholder vote, it seems unlikely Wise will receive widespread opposition if it means the shares could be worth more in the future.”

Wizz Air

“Wizz Air is not having the best of times as costs go up, part of its fleet is grounded due to engine issues, and earnings plummet. The airline described its past year as ‘resilience and transformation’, whereas the market reaction suggests ‘awful’ might be a better word to use.

“Wizz Air used to be the aggressive growth player in the industry, with talk that it tried to buy EasyJet in 2021. The tables have now turned and it is being left behind. With its shares trading at a fraction of their peak, failure to resolve its problems could see Wizz turn from predator to prey.”

Mitie / Marlowe

“Mitie has been on quite a run of late, with the shares having tripled over the past three years thanks to momentum in the business including record contract wins and higher pricing. Earnings continued to beat expectations and the client roster continued to grow, doing work for the likes of British Airways, Aldi, Lidl, the Ministry of Justice and Lloyds, among others.

“While it is still early days for a new strategic plan, the progress so far looks encouraging. Bigger acquisitions are now in motion with a takeover bid for AIM-quoted Marlowe, a buy and build company that’s carved a niche in the non-discretionary side of facilities management. Marlowe does safety-related work around fire, water and air quality, and Mitie looks to be an ideal owner for the group.

“The pullback in Mitie’s share price on the results and acquisition announcement might simply be down to profit taking by shareholders. Certain investors often believe it is better to travel than arrive, so a set of results after a strong rally for a stock can be the trigger to get out while the going is good.”

Dr Martens

“Dr Martens is on the front foot with a strategy that seeks to kick out the troubles of old and return the business to profitable growth. This should shift the market’s focus from earlier problems in the US and a sharp drop in earnings to a business intent on regaining its power.

“Having a plan is a good start, but the proof will be in the execution. It has laid out ambitions to get back on top. Turning those dreams into reality might not be easy.

“Fundamentally, it’s all down to marketing and product innovation. Dr Martens needs to convince the consumer they need its products – get that right, and it could reclaim its crown in the footwear market. The brand still has considerable strength, the business just needs to be more creative at the front end and agile at the back end.”

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