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“While the markets continue on a cautious recovery path, the big move for gold through the $2,000 per ounce threshold is a reminder of the lingering fears over coronavirus and geo-political tensions linked to China.
“Encouraging PMI data in Europe helped push stocks higher as investors continue to eye further stimulus efforts in the US.
“The FTSE 100 gained more than 1% at one stage to trade above 6,100 for the first time in the week with precious metal miners Polymetal and Fresnillo unsurprisingly topping the leaderboard,” says AJ Bell Investment Director Russ Mould.
Legal & General
“Insurer Legal & General might have felt a bit underappreciated this morning after seemingly strong half year results and the retention of the dividend were met with a negative market reaction.
“After all, the company was an outlier in the sector in refusing to cancel its dividend at the height of the coronavirus crisis despite regulator pressure.
“Perhaps there is some disappointment that the dividend is flat, slightly behind what analysts were pencilling in and not in line with the previous policy of boosting the payout by 7% a year. However this seems a bit harsh amid widespread dividend cuts and cancellations elsewhere.
“It would seem better for Legal & General to reward shareholders with a reasonable and sustainable level of income than stretch itself and run into trouble – it is still yielding around 8% at this dividend level.
“While the numbers were resilient, the company was not unaffected by coronavirus as it faced life insurance claims associated with the premature deaths caused by the pandemic.
“And the 70%-plus decline in first half profit was probably not a bad outcome given the accompanying backdrop of investment losses and low interest rates.”
William Hill
“An encouraging performance post lockdown as sport returned and news it is further streamlining its estate of shops helped give William Hill a lift as it announced first half results.
“While the cancellation of nearly all sporting events, at least for a large part of the period, was a negative, the company managed to show some flexibility in generating increased revenue from online casino games and the like instead.
“In an environment where many businesses are struggling financially a reduction in net debt is also welcome for shareholders.
“The robust financial position should enable the company to continue its US expansion drive as it aims to take advantage of the opportunity created by the opening up of this market.
“Previous forays across the Atlantic for the UK gambling sector have proved false dawns and William Hill and its peers still have plenty to do to prove it will be a different story this time round.
“Another challenge facing the business is increased regulation and/or taxation. Politicians may well be alive to a situation where the bookmakers are thriving, in relative terms at least, while other parts of the economy and ordinary punters are struggling.
“The company’s decision to follow the trend of repaying furlough cash might go some way to reducing this pressure as might the increasing use of safeguards to ensure customers don’t run into serious trouble.”
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