MARKET REPORT

Thursday 13th May 2021

Due to staff holidays the market report will be slightly shorter than normal.

Market Headlines

US consumer inflation rose 4.2% in April year-on-year, the most since 2008, ahead of the 3.6% rate expected and up from the 2.6% figure in March, further stoking inflation fears.

The US Colonial pipeline reopened following the cyberattack, as it warned it would take several days before supplies returned to normal, with twelve states having declared a state of emergency amid consumers panic buying petrol and stations running dry.

Japan’s service sector sentiment index fell to 39.1 in April, from 49.0 in March, the first drop in three months.

The S&P 500 fell 2.1%, the Nasdaq dropped 2.7%, the Nikkei 225 dipped 2.5%, the Hang Seng lost 1.7%, whilst the Shanghai Composite closed down 1.0%. European markets were lower.

Investments on our buy list

Hipgnosis Songs Fund (SONG) - announced its latest acquisition, the catalogue of legendary Grammy Award winner Andy Wallace comprising 100% of producer, mixer and performance royalties on 17,242 songs. Collaborations include , , Blink-182, , , , Guns N' Roses, , , , Nirvana, Paul McCartney, , , Run D.M.C., Rush, , , , and White Zombie. The growth in streaming continues to support the fund, which trades on a 3.9% premium to NAV with a 4.3% projected yield. We remain positive.

Source: Alpha Terminal

Redrow (RDW) - Jefferies increased its target price from 751p to 833p to accompany its BUY rating. Last week Barratt Developments announced its results would be ahead of expectations which led to a number of broker upgrades, which augers well for Redrow’s prospects. Buy.

Source: Alpha Terminal

Recap of yesterday

Diageo rose 3.4% as it reported strong trading particularly in North America and now expected organic operating profit growth of 14% for the full year to the end of June. It also restarted its share buyback programme of up to £4.5bn.

Redde Northgate added 6.9% as it upgraded forecasts after momentum had built up since December, with fiscal 2021 sales up 43% year-on-year and it now expected full year profits to be moderately above the top end of analysts’ forecasts.

Spirax-Sarco gained 2.0% as it said most businesses would see full year sales growth above the 8.5% rise in global industrial production, having previously guided to a 7% increase. It now expected Watson- Marlow’s sales to rise 55% due to exceptional demand by the pharmaceutical industry, up from 35%.

UDG Healthcare surged 20.7% as it agreed to a 1023p per share takeover by private equity manager Clayton, Dubilier & Rice.

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