Sifting through the market carnage, Barclays goes big on mortgages, and Lamprell in rescue talks

“A 0.5% rise in the FTSE 100 to 7,056 is a step in the right direction and rounds off what’s been yet another volatile week on the markets,” says Russ Mould, Investment Director at AJ Bell.

“As we approach the halfway point for 2022, investors continue to cross their fingers that markets will have a better second-half than the first six months of the year.

“Only 59 socks in the FTSE 350 index are currently sitting on share price gains year-to-date.

“It’s when you dig into the data for the fallers that the scope of the market sell-off is laid bare. More than 100 stocks in the index have seen their share price fall by 30% or more, including some names which up to this year had been market darlings.

“Media group Future, asset manager Liontrust, aviation expert Wizz Air, tech investor Scottish Mortgage and sausage rolls seller Greggs have all had a terrible time on the markets in 2022, and it may take either some outstanding news, a shift in central bank monetary policy or a brighter economic outlook for them to win back investors’ favour.

“In terms of corporate news, Barclays fancies its chances as a bigger player in the residential mortgage market. The timing might seem a bit odd given cracks appearing in the property market. However, Barclays is clearly taking a long-term view and its purchase of Kensington Mortgage together with a book of UK home loans is a logical strategic move.

“UK takeovers continue to come thick and fast and today’s bid news comes with a twist. Normally a bidder would offer a good 20% to 30% premium to the market price, yet the opposite has happened with oil services group Lamprell.

“The company is in a very weak financial position and an approach from major shareholder Blofeld is more of a rescue package than a recognition of the company’s future potential.

“Lamprell says the proposal is at a very significant discount to last night’s market price and it desperately needs financial help in the interim. It could be one of those situations where something is better than nothing for shareholders, given the clock is ticking on the company’s survival.”

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.