The FTSE 100 made a tentative start to the week, not helped by a slight pullback in oil prices which clipped the wings of index heavyweights BP and Shell.
Continuing ructions in the bond market saw Asian shares fall as AI-related names were punished, with Alibaba sinking on news of a big capital raise, while European markets were also on the back foot. With US futures pointing to a lower open on Wall Street, the stakes are steadily being raised ahead of Nvidia’s quarterly earnings later this week.
Gold prices continued to gather momentum as government bond yields remain elevated, with the impact from the US Treasury’s surprise intervention last week proving to be as fleeting as a mayfly’s lifespan. The introduction of tit-for-tat tariffs between America and its northern neighbour only add to what is already a volatile picture.
Attention will zero in on Federal Reserve chair Kevin Warsh at the Jackson Hole Symposium later this week as the ongoing crisis in the Middle East continues to stoke concerns about inflation.
Shein
Appropriately enough for a business which made its name selling clothes at discount prices, Shein looks set for a cut-price IPO.
Having seen its efforts to list in the US and UK stymied by regulatory issues and ESG concerns, Shein is set to list with a $27 billion valuation in Hong Kong, some way below its $100 billion peak value in 2022.
The world has changed since then. Four years ago Shein was still riding the e-commerce boom seen since the pandemic but inflationary pressures, shifting consumer habits and tariffs have conspired to knock the business off course.
Shein still has strengths as a retail business, which include identifying and latching on to emerging trends at pace, significant flexibility in its supply chain and a large global customer base.
There are also suggestions it might move into other product categories beyond just clothing. But it will start life as a public company with plenty to prove.
Thames Water
In an attempt to see off a possible nationalisation, Thames Water creditors have unveiled plans for a big refresh.
The former head of Yorkshire Water, Liz Barber has been lined up to join the board along with two alumni from broadband infrastructure business Openreach and a former senior civil servant in Bernadette Kelly.
The hope being that these are the sort of credible names which can inspire confidence in the company’s future in private hands.
Groaning under the weight of its heavy debts and with cash expected to dry up faster than many of the UK’s reservoirs this summer, its lenders are seeking to avoid a situation where the business is renationalised under a special administration regime.
Such an outcome would impose large losses on creditors, who are seeking to formally take ownership of the business, having already assumed de facto control, with plans to list it on the stock market as early as 2030.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
