FTSE squeezes ahead, Tesco gains share but CEO pay in focus ahead of AGM, Bellway moves on rival and Raspberry Pi jumps again as unconditional dealing gets underway

“The FTSE 100 bucked the negative trend seen across the rest of Europe by squeezing in a small rise to 8,169 in early trading on Friday. Coming to the rescue were AstraZeneca, HSBC and Unilever which led the market higher,” says Russ Mould, Investment Director at AJ Bell.

“Despite dampened expectations for the number of US rate cuts this year, investors don’t appear to be in a proper funk. Yes, we’ve seen several days of choppy trading on the markets but a robust session on Wall Street last night and resilience on the FTSE 100 at the end of the trading week doesn’t portray a picture of an investor with their head in their hands.”

Tesco

“A solid first-quarter trading update from supermarket Tesco was overshadowed by controversy over a £10 million pay package for CEO Ken Murphy which will be voted on at the AGM today.

“It may not quite be in the league of Elon Musk’s $45 billion award, which was signed off by shareholders last night, but it still sticks out at a time when many of the company’s staff and shoppers are feeling the pinch.

“Given Tesco is already the leading UK grocery play, it is impressive that the company has been able to gain market share. It speaks to just how effective initiatives like its Clubcard prices have been in securing customer loyalty and is important given the inflationary tailwind which previously boosted sales is starting to ease.

“Tesco’s wholesale operation Booker also occupies the number one spot and here the situation is a bit more mixed with the headline figures affected by lower tobacco sales and a hit to catering thanks to poor weather. However, the underlying performance was a bit better than these numbers would suggest.

“While the company is doing well right now, Tesco operates in a cut-throat industry with the German discounters Aldi and Lidl holding its feet to the flames. The company needs to continue offering excellent customer service and attractive pricing if it is to remain on top.

“The good news for Tesco is that everyone needs to do a weekly shop and it remains the supermarket of choice for many people. The hope will be that as borrowing costs go down and pressures on household spending ease, baskets and trolleys will be that bit fuller.”

Bellway / Crest Nicholson

“A clever strategy is to make acquisitions when times are hard. Exploit an opportunity to buy a rival, increase scale and reap the benefits once market conditions improve.

“Bellway is trying to do just that, with its eyes firmly fixed on Crest Nicholson. The offer price hasn’t quite hit the mark so the next step is to do the M&A dance and keep coming back with a more generous bid until it gets the deal over the line.

“Crest Nicholson’s profit warning yesterday made for miserable reading so its investors might welcome a nice bid premium to dig them out of a hole.”

Raspberry Pi

“A key reason why companies float on the stock market is to raise brand awareness and boost their reputation. Being a listed company means the accounts are transparent and everything it does is in full public view. A lot of people like this openness and it can help to drive more business as people often have greater trust in the company.

“Having a successful IPO also raises awareness of a stock among the investment community and Raspberry Pi has been the talk of the town after its stock market debut went off with a bang earlier this week.

“Today marks the first day of unconditional dealing on the market for Raspberry Pi which means investors can buy and sell as they wish without restrictions.

“This trading freedom has seen the stock enjoy another pop, jumping a further 14% to 469p versus a listing price of 280p. That’s a nice return for investors lucky enough to get in at the start. Big demand for the stock meant some retail investors didn’t get everything they wanted in the IPO offer, so they might have come back for more at a higher price, hence why the shares are still motoring higher.”

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