William John Market Report 30-06-21
William John assesses Western & Eastern equity markets, the U.K. housing market and a prominent listing from the private equity industry in London.
Private Equity, capital markets, real estate, William John, William John Capital Bonds, William John Holdings Ltd,
2119
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William John Market Report 30-06-21

William John Market Report 30-06-21

Category: Reports

Positive sentiment in the European market has rolled into this week, with the STOXX 600 (a market weighted index of the 600 largest companies in Europe by capitalisation) climbing 0.34% in early trading (as of 12:26 Central European Summer Time). This was also reflected in the U.K. markets, with the FTSE 100 climbing 0.15% (as of 11:28 British Summer Time) on 29/06. 

This affirms previous analysis that investors are not concerned with rising inflationary pressures and may signal optimism about second quarter earnings by these indexed companies. Under no uncertain circumstances should a jump in earnings be unexpected given the context of efficient vaccination programmes on the continent and in the United Kingdom, allowing economies to re-open and transition to pre-pandemic levels – this would have inevitably contributed to earnings growth. 

However, market conditions in Asia have deteriorated. With the announcement of Hong Kong banning flights from the U.K., it is clear that across the Far East concerns are mounting about the Delta variant. The Nikkei 225 (comprised of the largest companies listed on the Tokyo Stock Exchange) fell -0.81%, the Hang Seng index of Hong Kong fell -0.94% and the Shenzhen Composite Index of the 500 largest Chinese companies listed on the Shenzhen Stock Exchange fell -0.91%, all at close on 29/06. 

It is anticipated that the U.S. markets will follow the Western Europeans on earnings expectations for the second quarter. The S&P 500 closed at 4,290.61 (+0.23%) on 28/06 whilst the Nasdaq Composite Index closed at 14,500.51 (+0.98%) on the same date. 

In other news, private equity firm Bridgepoint, a primarily middle market buyout investment fund, has announced plans to list up to a quarter of its shares on the London Stock Exchange in a plan to raise up to £300 million, according to the Financial Times. 

This comes at a time whereby notable firms The Blackstone Group, KKR & Co., Apollo Global Management and The Carlyle Group are trading above $90, $60, $60 and $45 per share respectively – either all-time highs or certainly near them. Such comforting economic conditions for the industry may have encouraged the firm to make the listing decision in order to “provide greater strategic flexibility and […] further drive long-term shareholder returns”. The Global Co-ordinators of the IPO are expected to be J.P. Morgan and Morgan Stanley – with J.P. Morgan underwriting the transaction as sole sponsor. 

Finally, the U.K. housing market reached its highest level in 17 years with the U.K. Nationwide house price index rising 13.4% for the month of June, according to data released by the Nationwide Building Society. It was the highest monthly rise since November 2004 with average residential property prices hitting $245,432 – a new record. This is likely to be a continuation of market behaviour discussed surrounding the extended Tax Holiday, low interest rates and the Treasury’s pandemic mortgage schemes. All in all – a positive start to the week in Western public and private markets. 

Any opinions expressed in these documents are those of William John and are provided for information only. E&OE.