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“There have been some troublesome figures coming out of China in 2018 and another batch has now served to drag down markets in Asia and Europe. They suggest that China is finding it hard to sustain high levels of economic growth. “China’s industrial production in November grew by 5.4%, below expectations of 5.9%, and retail sales grew at 8.1% which is the weakest pace in 15 years. The consensus forecast for the retail numbers had been 8.8% growth. “There is some concern that the impact of the US/China trade war has yet to be properly felt, suggesting that China’s economic data could be in for more shocks in early 2019 unless the countries secure a permanent truce. “Unsurprisingly mining stocks bear the brunt of the bad news with the likes of Antofagasta down 2.3% and Evraz slipping 2%. The FTSE 100 traded 1% lower at 6,811, China’s SSE index fell 1.5% and Hong Kong’s Hang Seng index dropped 1.6%,” says Russ Mould, Investment Director at AJ Bell.
Balfour Beatty
“Today’s upgraded guidance from construction firm Balfour Beatty is no reason to get carried away.
“The boost to its full year numbers is principally driven by a series of disposals from its infrastructure investment arm rather than any significant improvement in trading.
“However, that should not detract from the job chief executive Leo Quinn is doing at Balfour which is successfully navigating a very challenging construction market in the UK.
“Revenue looks set to fall year-on-year, but this reflects the more disciplined approach inherent in the company’s ‘Build to Last’ strategy.
“Simply put the company is being more selective about the contracts it takes on in order to avoid the kind of work which ends up being a financial burden, something which happened all too regularly before Quinn took over in 2014.
“The company now has an enviably strong balance sheet and a good platform for the future. The question is what that future might look like and whether turnaround specialist Quinn will feel his work here is done and ride off into the sunset or if he’s in it for the long haul.”
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