Wednesday’s Master Investor Market Report featuring Barclays, British American Tobacco and Nichols

• The Nationwide has said that UK house prices resumed upward movement following 7 months of stagnation as the cost of an average home grew by 1% in March. Prices are now 5.2% higher than they were a year ago. The building society said that prices had risen despite a slowdown in market activity, which Howard Archer, Chief UK Economist at IHS Global Insight ascribed to a shortage of properties being put up for sale, adding that he believes there are “increasing signs that the housing market is now starting to firm after weakening appreciably through the second half of 2014”.
• First quarter GDP numbers for the United States economy failed to meet analysts’ consensus expectations, with output increasing at an annualised rate of 0.2%. Economists had forecast a 1% annualised figure. Chris Williamson, an Economist at Markit, said that “a stalling of US economic growth at the start of the year rules out any imminent hiking of interest rates by the Fed. The slowdown looks temporary, as a rebound from the first quarter weakness is already being signalled by forward-looking survey data, but the sustainability of any upturn is by no means convincing yet”.
• The FTSE 100 tumbled 84.25 points to 6,946.28 points; the FTSE 250 declined by 178.20 points to 17,481.19; the FTSE All Share fell 43.41 points to 3,753.88 points; and the FTSE AIM All Share finished the day down by 0.77 points at 753.08 points.

Barclays (BARC) saw statutory profits before taxation for the first quarter of 2015 fall by 26% to £1.33 billion as the firm made provisions of £950 million against investigations into PPI sales and foreign exchange fixing as well as a £118 million loss on the sale of its Spanish operations. These were partially offset by a £429 million pound gain on its defined benefit liabilities. Mike Trippit, an analyst at Numis Securities, said that some of the news was positive, including a rise in tangible net asset value to 288p, and that “Investment Banking performance was in-line with peers, with a substantial rebound in Equities and Macro”, but found the increase FX provision troubling. The shares fell by 4.45p to 256.95p.

Sales volumes at British American Tobacco (BATS) for the 3 months ended 31st March were 3.6% lower than during the same period of 2014, due to declining industry demand in Brazil, Russia and India. However, strong performances elsewhere and the overall state of the industry meant that market share grew by 40 basis points. The company is continuing to develop a nicotine inhalation system that can be medically licenced. British American Tobacco shares dropped by 81p to 3,588.5p.

Real estate and property services group Countrywide (CWD) has seen its first quarter revenues fall by 2% year-on-year to £154.2 million as the UK housing market continued to cool and impacted its estate agency and London & premier home sales arms. The drops in these divisions were partially offset by an improved performance in residential lettings. N+1 Singer reiterated its “sell” rating on the stock, despite saying that its was expecting a weak quarter due to electoral uncertainty. The shares declined by 11p to 514p.

Vimto manufacturer Nichols (NICL) said that it has been trading in line with expectations during the first quarter of 2015 despite difficult conditions within the beverage market. Management are developing a growth strategy for Vimto aimed at increasing value. The company also announced that it had taken a 49% stake in slush drinks manufacturer Noisy Drinks. The shares rose by 10p to 1,119p.

Tomorrow’s news today

Tullow Oil (TLW), Royal Bank of Scotland Group (RBS), Shire (SHP), and Berendsen (BRSN) will be among the firms publishing updates and results tomorrow morning.

The US Government will release its latest unemployment data and the ECB will report.

Quote of the day

“My Attitude is never to be satisfied, never enough, never.”
― Duke Ellington