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“A stabilisation in China’s yuan currency has helped to stop the rot for global markets and the FTSE 100 manages to claw back a bit of ground to trade above the 7,200 mark on Wednesday.
“At the moment trade talks between the US and China are still scheduled for September and these, along with a meeting of the US Federal Reserve, are likely to be an increasing focus for the market as we move through August,” says AJ Bell Investment Director Russ Mould.
Glencore
“While you might end up playing the world’s tiniest violin in response, it is still fair to say that life is not easy for commodities giant Glencore at present.
“Heavy exposure to industrial metals means the fragile state of the global economy is putting it under all sorts of pressure while the growing influence of ethical factors in the investment world presents its own challenges.
“The company is at the sharp end of the current trade war between China and the US given the former is the world’s largest consumer of the metals it produces and trades.
“As these results show though, the company is also facing some problems of its own making, with its African assets underperforming thanks to operational issues.
“The company cannot afford to sit on its hands and by shuttering its Mutanda cobalt and copper mine in Congo and overhauling management it is at least taking swift action to address these challenges.
“Now it just needs to deal with probes by US authorities and the depressed state of a thermal coal market which had previously fuelled its profit. Which is likely to be just as difficult as it sounds.”
Standard Life Aberdeen
“Fund manager Standard Life Aberdeen has endured a tricky start since the merger which created it in 2017 and while the company has managed to stem the flow of cash out of its products to some extent it has still served up a big decline in underlying first half profit.
“A big part of the rationale for combining Standard Life and Aberdeen Asset Management was achieving the scale necessary to thrive in a competitive market.
“Making a success out of two companies with very different corporate cultures was always going to be a challenge though. And this is not just hindsight talking, many observers warned as much at the time.
“Abandoning the co-CEO structure earlier this year was seen as a step in the right direction and the increase in assets under management unveiled today also provides at least a measure of encouragement.
“However, investors might still be asking if now sole chief executive Keith Skeoch and Martin Gilbert, in his newly installed role as vice-chairman, are really the right people to take the company forward, particularly as they were the architects of a deal which has been shown to have decidedly shaky foundations.”
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