Cambridge Index advances 5.1%

270819_The Cambridge & FTSE AIM 100 Index Movement

The Cambridge Index advanced 1190.3 points or 5.1% to close at 24,592.5, as Index heavyweight Greene King rallied on acquisition news.

UBS Group raised its target price on AVEVA Group, up 2.1%, to 3,775p from 3,550p and maintained a “Neutral” rating.

UBS reaffirmed its “Neutral” rating on DS Smith, up 3.3%.

Greene King, up 49.4%, announced that it has accepted a takeover offer from Hong Kong-listed property developer CK Asset Holdings Limited, in a deal worth £2.7b or £4.6b including debt, subject to shareholders’ approval.

Sareum Holdings, up 9.2%, in its trading update for the year ended 30 June 2019, announced that it expects loss after tax to marginally narrow to £1.45m from £1.47m in the prior year.

Shore Capital reissued its “Buy” rating on Frontier Developments, up 3.6%.

Tristel, up 3.2%, expects to publish its results for the year ended 30 June 2019 on 16 October 2019.

Cambridge Cognition Holdings, up 0.8%, announced that it anticipates revenue for the six months ended 30 June 2019 to fall to £2.2m from £2.8m in H1 2018 and annual revenue to drop to £5.5m from £6.1m in FY2018.

Science Group, unchanged at 187.5p, announced that it has signed a standby loan agreement with Frontier Smart Technologies (Frontier), wherein it has conditionally subscribed for 4m shares in Frontier for a total consideration of £1m. Following the agreement, the company’s shareholding in Frontier will be 23.5m ordinary shares or 52.3% of the voting share capital. The standby loan facility will expire on 30 April 2022.

Brady, down 40.7%, in its trading update for the six months ended 30 June 2019, announced that it expects recurring revenue for the period to be in line with previous forecasts, amid positive engagement with existing customers. However, a pipeline of revenue from new customers would not materialise in 2019, despite new business bookings anticipated in H2 2019. Brady expects its annual EBITDA performance to take a hit, as a result of a drop in revenue to £19m. The company expects to publish its interim results on 23 September 2019.

UK markets closed mixed last week. The UK’s public sector net borrowing posted a less than expected surplus in July, whereas the house price index fell in August. German Chancellor Angela Merkel stated that a solution to the Irish border issue could be found before the Brexit deadline. The FTSE 100 index declined 0.3% to settle at 7095, while the FTSE AIM 100 index rose 0.9% to close at 4408.4. Meanwhile, the FTSE techMARK 100 index gained 1% to end at 5342.6.

US markets ended mixed in the previous week, after US President, Donald Trump, ordered American companies to start searching for an alternative to China. The US manufacturing sector activity contracted for the first time since September 2009 in August, while the nation’s services PMI dropped more than expected in the same month. Minutes of the US Fed’s July monetary policy meeting indicated that policymakers considered the interest rate cut as a “mid-cycle adjustment” and not a “pre-set future course” for further cuts. The DJIA index marginally rose to end at 25898.8, while the NASDAQ index lost 0.5% to close at 7853.7.

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