Wednesday, 17 May: FTSE indices started off Wednesday morning on the back foot, after fairly aggressive moves higher in the two trading sessions prior. The FTSE 100 was set to close -0.25%, as British Land and Hikma Pharmaceuticals were notable suspects weighing the primary index lower. The FTSE 100, however was still +0.92% for the week.
British Land(-3.34%) slipped lower despite beating consensus estimates for net asset value as analysts reported that the beat was very much baked in for the stock. The company reported resilience in its net asset value(NAV), falling only slightly by 0.4% to 915p from 919p a year previously as pre-tax profit on an underlying basis rose 7.4% to £390.0m. However, on a statutory basis pre-tax profit experienced a sharp reduction from £1.33bn a year before, to only £195.0m this year. The company disposed of a 50% stake in what is casually known as the “Cheesegrater” in London for £575m to be completed after the month end. Despite a successful disposal of the well-known building, worries are coming to the fore regarding a softening demand for Office and Retail space – facilitating further discounts to NAV.
Hikma Pharmaceuticals(-3.17%) suffered at the hands of analysts at Jefferies after the drug company had its rating slashed from “Buy” to “Underperform”.
Further economic data for the U.K. showed that unemployment fell to more than a four-decade low in the first quarter of the year, but regular wages adjusted for inflation declined for the first time since 2014. Unemployment fell by 0.2% on the previous quarter to 4.6%, the lowest since mid-1975, as employment rose by 122,000, hitting the highest level on record. Preliminary data showed that the UK’s economy has already slowed sharply as consumers pared back spending. The response in currency markets proved to be fairly muted, as meagre wage growth and a potentially stabilising unemployment rate seems the base case for the near future.
Across Europe, indices were down as the FTSE 100 closed -0.25%, the CAC 40 -1.63% and the DAX -1.35%.