Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Sports Direct [LON:SPD]
Citing complexities in integrating the House of Fraser business into the company, Sports Direct has this morning announced that there will be a delay in the publication of preliminary results, which had been expected this Thursday. A number of key areas are still to be agreed on and this could have a material impact on the statement, which is now expected to be made between July 26 and August 23.
Finsbury Food Group LON:FIF
Finsbury Food Group has published a pre-close trading statement this morning. UK Bakery operations have shown some decent growth with like for like sales up by 4.7%, ahead of market expectations, but the overseas picture is a little more clouded. Like for like sales are down 9.8%, although once taking into account the impact of the acquisition of its Free From bakery, the figure was a rather more robust 13.2% increase. This diversification, as well as the fact the business has navigated through a tough macro-economic climate of late are factors singled out in the statement – will this be sufficient to drag shares off their current move close to four year lows?
Insurance sector
Insurers could be buoyed by a statement from the Ministry of Justice this morning. They have announced that the discount rate has been revised up from -0.75% to -0.25%. This is the annual discounting rate applied to insurance payouts over the lifetime of the claim for those with life changing injuries, accounting for the effects of inflation and likely investment returns. It’s a change in the legislation regarding how the calculation would be made, rather than any inside signal on rising interest rates that’s changing the discount factor here. To illustrate the impact, in March 2017, the rate dropped from +2.5% to -0.75%, which as a result of compounding over the lifetime of recipients in some cases as much as doubled the amount payable.
