BUSINESS LIVE: THG to sell luxury portfolio to Frasers; Prudential prepares £2bn buyback; SIG profit warning

London-listed shares are trading lower this morning as investors turn cautious ahead of key inflation data in the United States, while a decline in oil and copper prices weighs on the bottom line.

The energy sector fell 0.3 percent, along with oil prices, as worries about longer US yields strengthened the dollar.

Industrial mining fell 0.7 percent as concerns about weak Chinese demand kept traders on the sidelines, pushing copper prices lower.

The Bank of England kept interest rates unchanged on Thursday, with renewed hopes for a rate cut in August following comments from policymakers.

A domestic inflation report last week showed that overall inflation in the economy had fallen to 2 percent – the BoE’s target.

US personal consumption expenditures (PCE) data will be released on Friday. Investors are counting on the figures to indicate a renewed moderation in inflation.

Britain’s gross domestic product figures are also due, which will shed more light on the state of the UK economy, after strong retail sales data on Friday tempered some optimism from the BoE’s comments.

Prudential rose 4.6 percent after the insurance group said it plans a $2 billion share buyback program to be completed by mid-2026.

Shares of THG Group rose 4.7 percent after the e-commerce company agreed to sell its portfolio of luxury goods website to Fraser’s Group for an undisclosed sum. Fraser’s Group rose 0.9 percent.

Richard Hunter, head of markets at Interactive Investor:

‘In Britain, the main index limped to a weak open in the absence of clear immediate catalysts, with most mining stocks under pressure due to a risky mood among investors.

“One bright spot came from Prudential, which announced a new $2 billion share buyback program to be completed by 2026.

‘The company has revised its free surplus requirements, which could in turn unlock the potential for greater shareholder returns and shares rose around 5% on the news.

‘The share price rise provides some relief at a torrid time for the insurer, in which doubts about China’s economic performance have weighed heavily on the shares, causing them to fall more than 35% in the past year.

‘Final UK GDP figures will be released later this week, while the business calendar remains light ahead of the impending flood of half-year results that will filter through in July.

‘The FTSE100 has added 6.5% to what has been a relatively strong performance so far, with some warming in sentiment towards the UK in general also contributing to a 3.5% gain for the FTSE250, which an increasing number of its voters are also the subject of opportunistic bidding approaches.”

Britain’s SIG Plc expects underlying profit for the year to be below market expectations due to weak demand in the construction sector.

The building materials supplier, which sells roofing and insulation materials in Britain and some European countries, now expects underlying operating profit to be between £20m and £30m, well below analyst expectations of £41.1m.

Britons are struggling with high household bills due to inflationary pressures, causing consumers to cut back on discretionary spending such as home upgrades.

SIG also predicts a 7 percent decline in like-for-like sales in the first half of the year, with underlying operating profit between £10 million and £12 million.

The European Championships and Olympics will give the British economy a £233 million boost, according to a forecast.

Experts at credit scoring agency Experian predict a rise in spending among fans heading to pubs and those stocking up on drinks and food for gatherings at home.

Some are also expected to buy new television sets to keep up with the action.

Insurance group Prudential plans a $2 billion share buyback program to be completed by mid-2026.

The life and health insurer will begin the first $700 million tranche of the buyback, for which it has entered into an agreement with Goldman Sachs International, a separate statement said.

The buyback marks progress towards the dual-listed company’s 2027 financial targets in London and Hong Kong and will increase the potential for further cash returns for shareholders, the company said.

CEO Anil Wadhwani said the Pru board continues to expect the annual dividend for 2024 to increase by 7 to 9 percent compared to a year earlier.

He added: “We are confident in growing our new businesses in fiscal 2024 and achieving our 2027 financial and strategic objectives.”

THG has agreed to sell its portfolio of luxury goods websites to Frasers Group for an undisclosed sum, with Mike Ashley’s retail giant adding brands such as Coggles and delivering annual turnover of £43 million.

Michael Murray, CEO of Frasers Group, said:

“Today we are pleased to announce a new strategic partnership with THG, including the launch of our consumer credit and loyalty offering, Frasers Plus, on the THG Ingenuity platform.

“This is an exciting step towards our Frasers Plus ambitions as we look to expand the offering to additional third-party platforms.

“We look forward to working with the THG team and unlocking further benefits for both companies.”