Cambridge Index declines 3.6%

251119_The Cambridge & FTSE AIM 100 Index Movement

The Cambridge Index dropped 985.5 points or 3.6% to settle at 26760.3, as Index heavyweights such as Johnson Matthey and DS Smith posted weekly losses to their share prices.

UBS raised its target price on AVEVA Group, up 1.3%, to 4365p from 3775p and gave a “Neutral” rating.

Johnson Matthey, down 12.1%, in its interim results for the six months ended 30 September 2019, announced that revenues surged 37% to £6.8b from £5b reported in the same period last year. However, its profit before tax fell to £225m from £244m posted in the previous year, while its basic earnings per share declined to 91.8p from 106.1p in the previous year. The company’s board declared an interim dividend of 24.5p per share. Deutsche Bank lowered its target price on the stock to 3600p from 3700p and gave a “Buy” rating. Liberum Capital reaffirmed its “Buy” rating on the stock.

Brady, up 47.5%, announced that a potential offeror has proposed to acquire its entire issued and to be issued share capital. Separately, Brady announced that its subsidiary Brady Trading Limited has secured a £5m loan from Hanover Acquisition Limited, from which it will immediately withdraw £3m to refinance the existing Brady Trading and Brady Credit Trading Limited facility. Also, Brady announced the resignation of Ian Jenks as a Non-Executive Chairman and Bob Beveridge as a Non-Executive Director, with immediate effect. Following the resignation, Nick Greatorex has been appointed as the Non-Executive Chairman and Matthew Peacock, Nick Greatorex and Jog Dhody as Non-Executive Directors.

FinnCap reissued its “Corporate” rating on Netcall, up 10%.

IQGeo, unchanged at 44p, announced that it has secured two new contracts worth more than $1.2m from a US-based electric and natural gas utility firm. The first order includes licences for IQGeo's geospatial software along with recurring maintenance and support and the second order is for professional services.

Cambridge Cognition Holdings, down 1.8%, announced the launch of an improved electronic clinical outcome assessment (eCOA) platform.

Bango, down 3.4%, announced that it has surpassed the revenue and additional targets for its subsidiary Audiens SRL, which was acquired by Bango in January 2018, two months prior than expected. Consequently, Marko Maras, founder and CEO of Audiens, will obtain the agreed deferred incentive payment of €1.16m in January 2020, while Bango will gain complete ownership of Audiens.

Dialight, down 16.7%, in its trading update for the year ending 31 December 2019, announced that it expects EBIT to fall in the range of £5m to £8m, affected by the global economic slowdown due to the US-China trade dispute. The Signals and Components market conditions remained weak and is not expected to recover until the second half of 2020.

UK markets closed higher last week, supported by gains in healthcare and consumer discretionary sector stocks. The UK’s manufacturing PMI eased more than expected in November, while the services PMI unexpectedly declined to a 40-month low in the same month. The UK’s budget deficit widened to a 5-year high in October. The FTSE 100 index advanced 0.3% to settle at 7326.8, while the FTSE AIM 100 index rose 2.2% to close at 4643.6. Meanwhile, the FTSE techMARK 100 index gained 1.5% to end at 5656.7.

US markets ended in the red in the previous week, after reports emerged that the phase one of the US-China trade deal might not be signed this year. The US manufacturing sector activity rose to a 7-month high in November, whereas the services PMI advanced beyond estimates in November. The FOMC minutes showed that most officials considered maintaining the current interest rate level for a longer period, provided the economic condition remains constant. The DJIA index fell 0.5% to end at 27875.6, while the NASDAQ index lost 0.2% to close at 8519.9.

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