Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- NatWest shares won’t be sold on the cheap by UK Govt
- Heineken dented by big Chinese write-down
- Wetherspoon boss pocketed £9.5mln in share sale
- McDonald’s shares shrugged away disappointing financials
NatWest shares won’t be sold on the cheap by UK Govt
NatWest Group PLC (LSE:NWG) shares won’t go on sale to the British public at a cut-price, that’s according to the latest announcement from the UK’s new Chancellor of the Exchequer Rachel Reeves.
In a speech today Reeves cited the high cost such a scheme would cause the national purse.
The British government still intends to fully exit its shareholding in NatWest by 2025-26.
It comes after a review of the prior government’s plan to sell discounted shares, in a scheme that could potentially have introduced investing to a larger public audience.
“Whilst protecting the taxpayer is understandable and even laudable, the share sale could have been used as a valuable catalyst to get first time investors on board,” AJ Bell’s head of financial analysis Danni Hewson said in a note.
“Creating a teaching moment that could have changed the investing landscape for the better would have been exciting, although there are still other ways the government could boost the number of UK retail investors.”
Heineken shares tumbled, dented by big Chinese write-down
Heineken N.V. (EURONEXT:HEIA) shares lost just over 10% on Monday after first-half financial results fell short of analyst expectations.
The Dutch beer brewer reported a €874 million ($948 million) impairment on its investment in China Resources Beer, which resulted in a significant net loss.
Operating profits were around 12.5% higher than the same period a year ago, although still failed reach the market’s consensus expectations.
Revenue and sales volumes also missed forecasts.
Heineken blame poor weather in Europe and a softer-than-anticipated boost from summer sporting events, like the Euro 2024 football tournament.
It meanwhile told investors it now expected its full-year profit growth forecast to land in the range between 4% and 8%.
Chief executive Dolf van den Brink,noted the company’s difficulties such as ncreased promotional spending and competitive pressures in Europe.
Nevertheless the brewing boss remained optimistic about future growth, particularly in the low and no-alcohol segments, where Heineken saw double-digit growth in several markets.
In Amsterdam, Heineken shares were down €9.20 or 10.14% closing the day at €81.50.
Wetherspoon boss Tim Martin pocketed £9.5mln in share sale
JD Wetherspoon PLC (LSE:JDW) founder and chair Tim Martin has pocketed just over £9.5 million, through a share sale.
Martin sold 1.361 million shares in the company at a price of 739p, a stock market statement revealed.
It comes after Wetherspoon, in earlier this month, reported a 5.8% improvement in like-for-like sales in the 10 weeks to 7 July – which saw revenue reach new ‘record’ levels.
"Sales per pub are approximately 21% higher than pre-pandemic levels, which has helped to compensate for the very substantial increase in costs,” Martin told his fellow shareholders on 10 July.
Martin now holds 24.58% of the pub group, down from 25.68%.
In London, Wetherspoon shares were down 2.6% closing Monday’s session at 730p.
McDonald’s shares shrugged away disappointing financials
McDonald's Corp (NYSE:MCD, ETR:MDO) investors shrugged off what were, on the face of it, disappointing financial results – with the fast-food share actually rising close to 5% in New York.
On Monday, McDonald's reported second-quarter earnings and revenue short of expectations.
Revenue totalled $6.49 billion, up 2% on the same period last year but notably below the Wall Street consensus forecast of $6.63 billion.
Earnings (adjusted) per share came in at $2.97, not $3.07 as predicted by analysts.
It comes as global same-store sales fell by 1% - which makes it McDonald’s first declining quarter since the COVID lockdown days of 2020.
US operations saw a 0.7% drop in same-store sales, similarly it was the first decline in this metric for four years.
McDonald’s blamed reduced foot traffic and said consumers had become more selective with spending due to inflation. It meanwhile, announced it planned to extend its promotional $5 meal deal, which was recently introduced at the end of June.
The fast food firm needs a comprehensive rethink of its pricing strategy, chief executive Chris Kempczinski noted.
In New York, MCD shares were up $11.21 or 4.45% changing hands at $263.06, after traded as low as $250.23 earlier this morning.