UK markets bounce back, Barclays still in pain, Acacia’s horrific results and UP Global Sourcing’s latest disaster

“The UK stock market starts the new week in a better mood, rising 1.1% to 7,170 thanks to particular strength in mining stocks, insurers and banks,” says AJ Bell Investment Director Russ Mould.


“Try as it might the UK banking sector is still struggling to distance itself from a financial crisis which began more than a decade ago.

“The latest painful reminder of the turmoil comes as Barclays is charged a second time by the UK’s Serious Fraud Office over a 2008 funding deal with Qatari investors. The bank had turned to this option as a way of avoiding a more restrictive government bailout.

“Significantly the SFO’s charge of unlawful financial assistance, relating to a $3bn loan to the state of Qatar just before the fundraising closed, is being made against the Barclays Bank subsidiary rather than the wider group.

“This is the division to which banking licences are granted, something that requires regulators to deem the company ‘fit and proper’. Barclays says it will defend the charge.”

Acacia Mining

“The full extent of meddling by the Tanzanian government is laid bare in Acacia Mining’s results today. Gold sales are 22% lower than the amount of gold produced in 2017, a reflection of a ban introduced last year on exporting unprocessed ore.

“The company has experienced negative free cash flow as it hasn’t been able to sell everything it produced, and it reported a $709m pre-tax loss for the year. Unsurprisingly the dividend has been cancelled.

“While the shares have already fallen by a large amount to reflect the aforementioned problems, Acacia still hasn’t resolved its issues with the Tanzanian government.

“Its major shareholder Barrick Gold is doing all the talking with government officials which leaves Acacia somewhat powerless in its quest to get back on track and start making money again.”

UP Global Sourcing

“Home products supplier UP Global Sourcing is coming up to its first anniversary as a listed company and there is little to celebrate.

“It has issued two major profit warnings and seen its share price fall 68% in value since its 128p IPO price in March 2017.

“Although its problems are caused by external factors – namely the pace of retail orders – it does illustrate the risks of investing in small companies reliant on third parties.”

These articles are for information purposes only and are not a personal recommendation or advice.