Sainsbury’s, homes and cuts

Wednesday 13 January 2016

The headline index started strongly after China export figures for December confounded forecasts with a rise of 2.3% from a year ago compared with a predicted fall of 4.1%. Increased confidence in Asia and an overnight rise on Wall Street were reflected in early gains on London indices.

“Sainsbury’s (LSE:SBRY) has given the ‘big four’ grocers further encouragement following Morrison's (LSE:MRW) first positive figures in more than a year yesterday,” says AJ Bell Investment Director Russ Mould.

“Sainsbury’s reported a 0.4% fall in like-for-like sales excluding fuel in the three months to 9 January but this is a significant improvement on the previous two quarters and sales in the seven days to Christmas were up 2.6%. Sainsbury’s is confident the second half will be better than the first. But with food deflation and pressure on pricing continuing, the market is going to be challenging for the foreseeable future.  

“House-builder Barratt (LSE:BDEV) had an excellent first half and continues to see a good level of demand as the British love affair with property shows no sign of abating. Total completions were up by more than 9% and average selling prices rose by 10.8%. The Government’s decision to extend the ‘Help to Buy’ scheme gives the group added confidence.

“Fenner’s (LSE:FENR) shares slumped in early trading after it unveiled plans to restructure its conveyor belt business in North America with the loss of more than 20% of jobs. The outlook for the majority of the group remains in line with forecasts but its ECS Americas' operation has been hit by the slowdown in the coal industry.

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