Friday’s Master Investor Market Report, featuring Severn Trent, HSBC, Venn Life Sciences and PluS500

• UK Government borrowing dropped to £6.8 billion in April, down from £9.3 billion in the same month of 2014 and the lowest April figure since 2008. The Office for National Statistics revised its full year estimates upwards to £87.7 billion, which remains below the government’s target of £90.3 billion. However, this target may be further adjusted by George Osborne in July when he lays out the next phase of deficit reduction plans.
• UK residential property rents rose by 4.6% over the last year according to data from property firm LSL with average monthly rents now standing at £774. This substantially differs from the ONS’s estimate for the year to March which suggested an annual increase of 2.1%. Adrian Gill, a Director at LSL, commented that, “momentum is fuelled by a fundamental shortage of housing and given oxygen by renewed wage growth”.
• The FTSE 100 climbed 18.25 points to 7,031.72 points; the FTSE 250 rose by 38.14 points to 18,192.69; the FTSE All Share advanced by 9.76 points to 3,818.84 points; and the FTSE AIM All Share finished the day up by 3.06 points at 766.71 points.

Water firm Severn Trent (SVT) saw its profits before taxation for the year ended 31st March drop by 53.5% to £148.2 million due to an exceptional credit received during 2014. Management believe that the company is starting the new regulatory period in a strong position due to its acceptance of Ofwat’s price determination for the next 5 years and a share buyback programme to reduce gearing in line with guidance. The shares slipped 8p to 2,174p.

Financial giant HSBC (HSBA) has confirmed that it is considering strategic options for its Brazilian arm, including the potential sale of its operations in the country. No commitment has been made to any particular course of action and further announcements will be made in due course. HSBC Brazil lost $306.8 million in 2014 and it has been reported that Group CEO Stuart Gulliver plans to dispose of underperforming assets across the globe. HSBC shares climbed 6.1p to 620.6p on the news.

Clinical trial management and resourcing solutions provider Venn Life Sciences (VENN) earned revenues of €4.9 million (£3.5 million) in the year ended 31st December, a 140% improvement over 2014, driven by the successful integration of the firm’s acquisitions. Momentum has continued into the current period with over €2 million (£1.4 million) booked in the first quarter of 2015 and a number of new contract wins. Venn shares closed 1.125p lower at 19.5p.

Troubled AIM stock Plus500 (PLUS) fell by over 36% to 481.63p before being suspended as short sellers led by US firm Cable Car Capital attacked the stock, which has already fallen precipitously this week. Infamous analysts Gotham City Research commented on accounting irregularities at the company and predicted further decline. Plus500 resumed trading in the afternoon and closed down 134.5p – more than 35% lower – at 248p.

Tuesday’s news today

On Tuesday we are anticipating full-year results from Flowgroup (FLOW), Minds + Machines (MMX) and Renold (RNO).

On the economic front there will be a slew of data from the US, including Durable Goods Orders, Consumer Confidence House Price Index and New Home Sales data.

Quote of the day

“The four most dangerous words in investing are: ‘this time it’s different.”
― Sir John Templeton