Monday’s Master Investor Market Report

• The Confederation of British Industry said that manufacturing output expanded at the slowest rate in over 2 years during the first 3 months of 2015, with the deceleration particularly notable among exporting firms, which suggests a loss of confidence in global prospects in the last few months. However, the average firm was still increasing production and Deputy Director General Katja Hall said, “it’s encouraging that our manufacturers are seeing – and expect to see – continued growth, with rates of expansion still above average. Exports keep dragging at the heels of growth: firms are finding the recent rise in the pound against the euro challenging, making them less competitive in Europe, while the unravelling situation in Greece is creating uncertainty”.
• Ratings agency Standard & Poor’s has estimated that the four largest UK banks still face fines of up to £19 billion, despite paying out £42 billion in the last 5 years. Lloyds has received the lion’s share of these penalties due to the extent of its PPI mis-selling. Analysts from S&P wrote that “we assume some banks will still incur material investment banking-related litigation charges in 2015, which, depending on timing, may well outstrip retail conduct charges. That said, we assume that 2015 will be the last big year for litigation charges.”
  
• The FTSE 100 climbed 33.28 points to 7,103.98 points; the FTSE 250 advanced 55.31 points to 17,784.67; the FTSE All Share rose 17.05 points to 3,834.45 points; and the FTSE AIM All Share finished 2.14 points higher at 755.57 points.

Oil exploration firm Tullow Oil (TLW) will continue development of its Tweneboa, Enyenra and Ntome projects following a favourable ruling from the International Tribunal for the Law of the Sea, which will allow work to proceed with operations in the disputed Ghana/Ivory Coast sea border so long as no more drilling is initiated. Canaccord Genuity reiterated a “hold” position on the stock. The shares dropped 7.7p to 410.3p.

Telecoms provider EE saw operating revenues contract by 1.1% in the first quarter of 2015 relative to the first 3 months of last year, dropping to £1.47 billion. BT (BT.A) is set to acquire the business in a £12.5 billion deal once regulatory approval is received. Fixed broadband customers were up by 15% year-on-year and the firm added 1.7 million users to its 4G services during the quarter. Neil Milson, EE’s CFO, said “we are delivering strong, consistent commercial performance by giving our customers the best mobile voice and data network experience in the UK“. Shares in BT fell by 3.25p to 464.35p.

Online gaming outfit Playtech (PTEC) traded well in the first quarter with total revenues of €134.9 million (£96.7 million), a 31% improvement over the same period of the prior year, driven by strong performances in the casino and services arms of the business. However, on a constant currency basis, the improvement was significantly less marked due to the recent weakness of the Euro against other major currencies. CEO Mor Weizer said that “the strong start we have made to the year, together with the progress we continue to make in all aspects of the business both on an organic and inorganic basis, gives me great confidence in our ability to deliver strong growth in 2015 and beyond”. Playtech shares declined by 7.5p to 832.5p.

Recruiter Staffline (STAF) has acquired welfare training firm A4e on a cash and debt free basis for a cash consideration of £34.5 million. Management said that the deal provided synergies with its existing Employability division and that A4e was a profitable, cash-generative business. The group has been trading well so far in 2015 and CEO Andy Hogarth said that “the significant strengths of both businesses will be united and we are confident that our leading position will be a strong platform from which to develop our strategy, services and innovation”. The shares rocketed upwards by 152p to 955p.

Tomorrow’s news today

BP (BP.), Whitbread (WTB), and Standard Chartered (STAN) will be among the firms publishing updates and results tomorrow morning.

The Office for National Statistics will also publish its preliminary estimates of GDP.

Quote of the day

“Because things are the way they are, things will not stay the way they are.”
― Bertolt Brecht