Markets end quarter on a positive note, Rio Tinto strikes copper deal, Rolls-Royce poaches another BP expert, property stocks unmoved despite biggest drop in prices since 2009 and Virgin Orbit crashes to earth

“It’s all quiet on the Western front for equities as the first quarter finishes on a welcome note of calm. Continental Europe stocks saw small gains on the last trading day, with Asian shares also pressing ahead,” says AJ Bell Investment Director Russ Mould.

“It means the FTSE 100 is on track to record an approximate 2% gain for Q1, which investors will take as a win when you consider the period involved a major banking crisis.

“US shares had a better time, with the S&P 500 on track for a 6% first quarter gain and a 16% advance from the Nasdaq – helping to make up for their miserable showing last year.”

Rio Tinto

“Rio Tinto perked up after striking a deal with First Quantum Minerals, whereby the pair will collaborate on a project to advance one of the world’s biggest untapped copper deposits.

“Miners have adopted a more cautious approach to spending big money on projects since the last commodities boom ended so badly with companies drowning in debt. Sharing the costs via a joint venture is one way to spread the risks.

“The market seems to like the deal, but as with everything in mining, it will be a long and expensive journey before any copper is extracted from the deposit on a commercial scale.”

Rolls-Royce

“When someone joins a company as chief executive, it is common practice to rebuild the team so they can put their stamp on the business rather than having to do things ‘the old way’. Rolls-Royce has seen more musical chairs than a five-year-old’s birthday party over the past three months, and we now get another wave of players.

“Tufan Erginbilgic has only been CEO since the start of the year and he’s already appointed two of his former colleagues from BP. If you want to get the job done, why not turn to people you know and trust, and that’s exactly what’s going through the mind of the person trying to revive the British engineer. Ex-BP worker Nicola Grady-Smith has already signed up as chief transformation officer and now Helen McCabe is joining from the oil producer as chief financial officer.

“The market has put its faith in Erginbilgic to repair Rolls-Royce and get it firing on all cylinders again, judging by the 50%-plus rise in the share price this year. McCabe’s appointment and news of other people changing roles helped to push the stock up another 1%.”

House Prices

“The markets seemed to be taking the largest annual drop in house prices since 2009 in their stride – with companies with exposure to the property market largely flat or modestly higher.

“The seventh consecutive monthly fall in prices may be dispiriting, but the fact demand is under pressure is not new news. As such, it has largely already been factored into the share prices of estate agents like Foxtons, housebuilders like Taylor Wimpey and property listings site OnTheMarket.

“Though Savills, which provides a broad range of services across the real estate space and is thus a good bellwether for the sector, was lower in early trading on Friday.

“The performance of OnTheMarket’s dominant rival Rightmove has been impressively durable, reflecting its advantages as a market leader.

“Being on top creates a virtuous circle for Rightmove. Its site has the most listings and is therefore the one which prospective property buyers will go to when looking for their next home.

“This reinforces its position as a must-have product for estate agencies and gives it significant pricing power when it comes to securing subscriptions from housebuilders and estate agents.

“It has held up well through previous downturns – with the need to sell properties to stay alive making the product arguably even more crucial to agents.”

Virgin Orbit

“Space looks increasingly like a frontier too far for investors with Virgin Orbit crashing to earth as it fails to secure new funding, sees nearly the whole workforce laid off, and ceases operating for the foreseeable future.

“In more bullish markets the promise of developing a commercial satellite launch business might have been enough to excite but not in these more sober times.

“Attention may now turn to its more established space tourism sister business Virgin Galactic which has lost more than 60% of its value over the last year.

“The collapse of Silicon Valley Bank means the funding environment for technology start-ups is less favourable than it was and it may fall to wealthy entrepreneurs like Elon Musk and Richard Branson to keep the dream of a large-scale space industry alive.”

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