FTSE down again, UK public sector borrowing surprise, InterContinental Hotels sees slower growth, stakebuilding in Everyman Media

“The FTSE 100 is on track to end the week nearly 2% lower, the result of a challenging period for investors worried about war in the Middle East, interest rates potentially staying higher for longer and mixed messages from large corporates in the US,” says Russ Mould, Investment Director at AJ Bell.

UK Public Sector Figures

“Nonetheless, there was one bright spot in the form of lower debt interest payments for the UK government. Public sector net borrowing came in at £14.3 billion for September, a 10% year-on-year decline.

“Approximately one quarter of the government’s debt is index-linked and it has benefited from lower inflation. More workers moving into higher tax brackets also gave a boost to government tax receipts.

“The big issue now is whether the government feels capable of splashing the cash, given that public sector net borrowing came in well below the OBR’s £20.5 billion forecast. It’s unlikely given that Chancellor Jeremy Hunt is looking to get the country’s finances in a significantly better shape. The UK’s net debt as a percentage of GDP is still far too high and something needs to be done about it.”

InterContinental Hotels

“Among corporate news, InterContinental Hotels echoed the positive sentiment seen earlier this week from Whitbread.

“Hotels are in rude health as demand is strong which enables operators to push up room rates. InterContinental has been busy buying back shares and it looks as if shareholders will get an update next February on future plans to spend surplus cash.

“However, the key sticking point for investors is the rate of growth for revenue per available room, which slowed in the third quarter versus the first-half period.”

Everyman Media

“Barbie and Oppenheimer helped to put a lot more bums on seats in cinemas around the world this year, yet that hasn’t helped to reverse the declining share price at posh cinema operator Everyman Media.

“Keep an eye on private equity group Blue Coast as it clearly sees value in the business, having lifted its stake in Everyman to 22.9%. If the market won’t accurately value shares in a company, the trend is for someone to take that business private – and the stakebuilding in Everyman implies it could be one of the next candidates to disappear from the stock market.”

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