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(Alliance News) - UK retail sales grew by more than expected in March as consumers looked ahead to an easing of lockdown restrictions, according to the latest figures from the Office for National Statistics on Friday.
On an annual basis, UK retail sales increased 7.2% in March rebounding after falling 3.6% in February. The latest figure beat the market forecast, cited by FXStreet, for a 3.5% rise.
On a monthly basis, retail sales grew 5.4% in March following a 2.2% rise in February. The month-on-month print beat market consensus of 1.5%.
The ONS said the March figures reflected the effect of the easing of coronavirus restrictions on consumer spending,
In early January, UK Prime Minister Boris Johnson announced a third national lockdown forcing all non-essential stores to close. As part of the UK government's roadmap out of lockdown, shoppers returned to high streets last week when non-essential retail stores were permitted to reopen.
"Specialist food stores such as bakers and butchers saw increased sales, as the continued closure of hospitality saw customers buying produce for the Easter festivities," said Darren Morgan, director of economics at the ONS.
Commented Aled Patchett, head of retail and consumer goods at Lloyds Bank: "On the back of the sector's continued recovery in March, the next few months will be critical for physical retailers as they look to claw back some of the GBP27 billion lost in sales over the course of three lockdowns."
He added: "However, while consumers are quickly parting with any surplus household savings generated in the past year – boosted further by uncertainty concerning overseas holidays – many retailers will still be wary of being caught up in the euphoria of an initial sales boom and of the long road ahead."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 6,921.93
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Hang Seng: up 0.7% at 28,961.62
Nikkei 225: closed down 0.6% at 29,020.63
DJIA: closed down 321.41 points, or 0.9%, at 33,815.90
S&P 500: closed down 0.9% at 4,134.98
Nasdaq Composite: closed down 0.9% at 13,818.41
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EUR: up at USD1.2026 (USD1.2014)
GBP: up at USD1.3854 (USD1.3838)
USD: down at JPY107.93 (JPY108.11)
Gold: firm at USD1,784.28 per ounce (USD1,782.29)
Oil (Brent): flat at USD65.61 a barrel (USD65.58)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
0930 BST UK CIPS-Markit flash manufacturing and services purchasing managers' index
0930 CEST Germany flash PMI
1000 CEST EU flash PMI
0945 EDT US manufacturing and services PMI
1000 EDT US residential sales
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UK public sector net borrowing - excluding public sector banks - is estimated to have been GBP28.0 billion in March, which is the highest March borrowing since monthly records began in 1993, the ONS said. UK public sector net borrowing is estimated to have been GBP16.0 billion in February.
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Japan's core consumer price index declined 0.2% year-on-year in March, marking the eighth straight month of deflation, a government report showed. The market had expected the Japanese consumer prices to decrease by 0.1%. Fuel, light and water prices fell the most in March, by 4.8%, followed by education prices, which decreased by 2.2%. However, CPI rose by 0.2% from the previous month on a seasonally adjusted basis.
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BROKER RATING CHANGES
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BARCLAYS CUTS WORKSPACE TO 'UNDERWEIGHT' ('OVERWEIGHT') - TARGET 700 (745) PENCE
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JPMORGAN RAISES CLARKSON TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 3428 (2756) PENCE
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COMPANIES - FTSE 100
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GlaxoSmithKline said the US Food & Drug Administration has approved the drugmaker's Jemperli treatment for women with recurrent or advanced endometrial cancer. The approval was for patients with cancer who had progressed on or after previous treatment with platinum-based chemotherapy and whose cancers have a deficient mismatch repair genetic anomaly. "Unfortunately, as many as 60,000 women are diagnosed with endometrial cancer in the US each year and these women currently have limited treatment options if their disease progresses on or after first-line therapy. Today's approval of dostarlimab by the FDA has the potential to transform the treatment landscape for these women and demonstrates our continued commitment to helping patients with gynaecologic cancers," said Chief Scientific Officer Hal Barron.
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COMPANIES - FTSE 250
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FirstGroup confirmed a Sky News report that it has agreed to sell its US bus operations to EQT AB for a GBP3.3 billion headline enterprise value. The public transport operator will sell the First Student and First Transit units to EQT Infrastructure, affiliated with Swedish private equity firm EQT. Of the proceeds, FirstGroup said it will return GBP365 million to shareholders during calendar 2021.
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LondonMetric Property said it has sold two property assets in Derby for a total of GBP11.1 million. The London-based real estate investment trust said an M&S Foodhall was sold to an overseas private investor for GBP6.2 million. A second property, currently operating as a Wickes store, was sold to an overseas property company for GBP4.9 million, LondonMetric said. LondonMetric sold the properties at a 6.0% net initial yield and a 7% surplus to book value.
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COMPANIES - MAIN MARKET AND AIM
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Engineering parts maker Senior said trading in the three months to March 31 has been in line with expectations. In the Aerospace unit, sales were down 25% for the the first quarter last year, but up 2% from the fourth quarter. In the Flexonic unit, sales were down 4% from the first quarter last year but up 10% from the fourth quarter. Senior said net debt at end of March GBP220.8 million, giving GBP140.6 million headroom on its facilities. Senior said its 2021 market assumptions remain unchanged, and defence markets are anticipated to remain stable. However, civil aircraft production volumes look set to recover to pre-Covid level only by 2024-25, it said. "Production volumes for civil aerospace will be lower in 2021 than 2020 based on the production rates that the aircraft and engine OEhave announced. We also recognise that there are varying levels of inventory in different tiers of the supply chain," the company said.
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Currency and derivatives manager Record said assets under management equivalents rose by 37% in its financial year that ended March 31 to USD80.1 billion, which it said is its highest ever. AUME grew by 7% during the final quarter. Client number by 17, or 24%, to 89 in financial 2021. "We are well positioned with a robust balance sheet, long-standing and strong client relationships, and an excellent team," Chief Executive Leslie Hill said.
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COMPANIES - GLOBAL
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Saudi Arabian Oil may bring in external investors to some of its oil and gas assets, as it conducts a strategic review of its upstream business, Bloomberg News reported. Saudi Aramco is in talks with advisers to evaluate its options, the news agency said. It will study possibilities including selling stakes in the operations at some fields or entering joint ventures with other large energy producers. The Dhahran, Saudi Arabia-based firm could also form partnerships to develop new gas resources, according to Bloomberg. Deliberations are at an early stage, and the structure of any potential deal hasn't been decided. However, Bloomberg said that Aramco is unlikely to open up its most important oil assets, though it could bring in investors to less sensitive operations.
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Friday's Shareholder Meetings
BB Healthcare Trust PLC - AGM
Beeks Financial Cloud Group PLC - GM re fundraising
Faron Pharmaceuticals Oy - AGM
Hikma Pharmaceuticals PLC - AGM
INVESCO Income Growth Trust PLC - GM re voluntary wind up
Minds + Machines Group Ltd - GM re sale of assets to GoDaddy Inc
Senior PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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