What to watch: AJ Bell surges, Go-Ahead Group upgrades outlook and sterling falls

Kumutha Ramanathan
·3-min read
The City of London, financial district of the Metropole, just after sunset with illuminated buildings and cloudy sky, United Kingdom
Investment platform AJ Bell reported profit gains for 2020 in its latest trading update. Photo: Getty

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

AJ Bell surges on record gains

AJ Bell (AJB.L), one of the UK’s largest investment platforms, announced a profit gain before tax of £48.6m ($65.2m), up 29% in its final results for the year ended 30 September 2020. For the year ending 30 September 2019, profit before tax was £37.7m.

Retail customer numbers increased by 63,239 to 295,305, a 27% increase during this period, despite falls in the wider UK stock market due to COVID.

The company also saw significant net inflows of assets under administration (AUA) of £4.2bn, ending the year with total AUA of £56.5bn.

While the looming challenges of COVID-19 and the outcome of the Brexit transition period remains a source of uncertainty, the firm is expected to continue growing, according to Les Platts, chairman of AJ Bell.

Go-Ahead Group upgrades transport outlook

Transport provider The Go-Ahead Group (GOG.L) stock was trading up by at least 3.5% on Thursday at around 10.15am in London as it reported its latest trading update.

The business raised its outlook for the 2021 trading year, “with the majority of the upside expected to be recognised in the first half of the financial year,” the company said in a statement. “This stronger than expected performance is largely due to a one-off benefit due to the timing of recognition of Quality Incentive Contract income.”

With 100% of revenue in this division generated through contracts, the company said it also has “good visibility of financial performance into the second half of the year.

“As set out by the prime minister in his ten-point green plan, public transport is vital to achieving the country's net zero ambitions while supporting economic growth,” said David Brown, Go-Ahead Group Chief Executive.

“This, combined with public transport's ability to support the health and wellbeing agenda, underpins my confidence in the prospects of the Group.”

Sterling falls as Brexit talks extended

Investors are keeping a close eye on the pound as Brexit talks drag into double overtime.

Sterling was flat against the euro at €1.1046 (GBPEUR=X) in early trade on Thursday. The pound was up 0.3% against the dollar to $1.3406 (GBPUSD=X). However, strength against the US dollar was largely down to weakness of the greenback.

The muted price action comes as investors and traders wait for developments in Brexit trade talks between the EU and UK.

“Brexit newsflow remains a potential source of influence for sterling,” said John Fahey, a senior economist at AIB.

Modest European open ahead of COVID vaccine rollout and US bipartisan bill

European markets had a modest open on Thursday as the US and UK prepare to embark on wide scale immunisation programmes and preparations for a second US bipartisan COVID-19 relief bill come into focus.

The UK became the first western nation to approve a coronavirus vaccine. In the first phase, 800,000 doses of the Pfizer (PFE) and BioNTech (BNTX) vaccine will be made available for about 30% of the population, largely in the high risk category, including the elderly and frontline healthcare workers.

The FTSE 100 (^FTSE) was up 0.1% in London at the market open. Germany’s DAX (^GDAXI) was down 0.1%, the CAC 40 (^FCHI) fell 0.1% in France, and the FTSE MIB (FTSEMIB.MI) rose 0.2% in Italy.

US futures had modest gains. The S&P (ES=F) was down 0.1%, while the Dow Jones (YM=F) was flat and the Nasdaq (NQ=F) also rose modestly 0.1%.

Japan’s Nikkei (^N225) was up 0.03%, the Hong Kong Hang Seng (^HSI) gained 0.6%, and the Shanghai Composite (000001.SS) fell 0.2%, while the Shenzen Component (399001.SZ) rose just 0.1%. South Korea’s KOSPI (^KS11) went higher 0.8%.

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