Leading shares are slipping lower after China’s economy saw a slowdown in the first quarter, albeit in line with expectations.
But the biggest fallers in the UK index were closer to home. Following Persimmon’s cautious trading update on Thursday, housebuilders are leading the way down, with Berkeley Group 106p lower at £28.70, Taylor Wimpey down 4.2p at 172.8p and Persimmon itself falling 21p to £18.79.
The falls come despite UK contruction data showing housebuilding recording quarterly growth of 6.8%, the biggest rise since March 2014.
Also heading lower is InterContinental Hotels, down 52p to £28.76 as JP Morgan moved from neutral to underweight on worries about its pipeline of rooms.
Overall the FTSE 100 is down 20.55 points at 6344.55, with commodity companies slipping back after their recent recovery. Anglo American is off 22.9p at 667.3p while Antofagasta is down 9.3p at 455.7p.
Ahead of the weekend’s meeting of oil ministers, crude is on the slide again on concerns Iran may not take part, with Brent down just over 1% at $43.33. BP, which suffered a humiliating defeat at its annual meeting over chief executive Bob Dudley’s £14m paypacket, is down 1.25p at 357.3p.
Among the mid-caps, hedge fund group Man is up 7.5p at 159p despite a slight drop in assets under management in the first quarter from $78.7bn to $78.6bn. But the results were in line with forecasts and analysts pointed to strong sales from its key AHL business. Analyst Paul McGinnis at Shore Capital said:
We think the flows figure represents a good performance in a difficult quarter for fund managers and indeed at the time of the final results on 24 February, the company had indicated the net flows for 2016 were slightly negative at that stage.
Based on last night’s closing price of 151.5p and before any changes to forecasts (which we provisionally expect to be minor), Man trades on 10.9 times our December 2016 adjusted earnings per share of 19.8c (translated at $1.42/£), falling to 10.4 times in December 2017 (20.7c). The prospective December 2016 dividend yield is 4.7% (10.2c). We think these multiples, an around 20% discount to the sector, materially undervalue a company ... and we think it should trade at a sector premium. Our fair value is 245p, buy.
Liberum also issued a buy note but said:
A bull would highlight that funds under management flat on the year end at $78.6bn was a good result given the market volatility. A bear would suggest that net inflows of just $0.5bn were dull and coupled with a cautious outlook statement then the risk to forecasts is probably to the downside.
