UK markets still lagging behind and SIG is caught in a fierce storm

Friday, September 6, 2019 - 11:47

“Having overseas exposure has proved to be the winning strategy for investors so far this year, with the main UK market indices trailing behind most other big markets in the world. Only the key benchmarks in India, Hong Kong and Japan have fared worse than the FTSE 100, 250 and All-Share,” says Russ Mould, Investment Director at AJ Bell.

“The UK market continues to struggle with upwards momentum with the FTSE 100 taking another step back on Friday, falling 0.3% to 7,251, whereas markets were racing ahead last night in the US.

“On the London market, utilities were out of fashion once again, so too miners and some of the banks.

“Next week sees results from Ashtead and Morrisons. The market will also get the latest policy decision from the European Central Bank which is President Mario Draghi’s penultimate meeting at the helm before stepping away after eight years in charge to make way for France’s Christine Lagarde.”

Major markets so far in 2019

China: Shanghai CSI 300 +30.4%

Russia: Russian Trading System +24.9%

US: NASDAQ Composite +22.3%

China: SSE Composite +19.7%

US: S&P 500 +18.7%

France: CAC 40 +18.4%

Germany: DAX Xetra +15.2%

Brazil: Bovespa Stock Index +15.1%

US: Dow Jones Industrial Average +14.6%

UK: FTSE 250 +12.4%

UK: FTSE All-Share +8.7%

UK: FTSE 100 +8.1%

Japan: Nikkei 225 +5.4%

Hong Kong: Hang Seng +3.2%

India: S&P BSE 100 -1.8%

SIG

“Insulation supplier SIG is battening down the hatches in light of concerns about economic activity, particularly in the wake of very weak figures in UK construction activity.

“The UK construction sector last month saw its largest decline in new work for more than a decade as property developers delayed decisions because of Brexit uncertainty.

“SIG is stuck in the middle of the storm and despite efforts in the past two years to bring operating costs under control it may well find life hard going in the near-term.

“The focus is now on prioritising profit over volume which is reflected by an increase in margins in the first half of 2019. To its credit, SIG has nearly halved its net debt since the start of 2017 which leaves its balance sheet in a better state to weather any storms.”

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


The daily market update is written by Russ Mould, AJ Bell’s Investment Director and his team. The article highlights the movement in the main index, winners and losers on the day and any macro-economic announcements.