Cambridge Index

Cambridge Index eases 1.7%

The Cambridge index dropped 519.3 points or 1.7% to close at 27,730.6, as four out of the top five index heavyweights posted weekly losses to their share prices. Johnson Matthey, down 0.5%, announced that it has received a contract from Methanex Corporation for supplying a licence for a 5,000 mtpd autothermal reforming and methanol technology. DS Smith, down 1.9%, announced that trading for the four months to 04 September 2018 remained in line with its expectations. Also, the company reported progress in all geographic regions and recorded upbeat like-for-like volume growth in the year to date. Citigroup reissued its “Neutral” rating on AVEVA, down 6.1%. Abcam down 2.1%, announced that its annual revenues grew to £233.2m, while its profit before tax rose to £69.1m. Peel Hunt reconfirmed its “Hold” rating on the stock.

Greene King, up 4.9%, announced that its like-for-like sales rose 2.8% for the 18 weeks ended 02 September 2018, on the back of strong beer sales amidst England’s semi-successful football World Cup campaign and the warm weather. Its branded local pubs LFL sales climbed 5.5%, while total volumes in Brewing & Brands rose by 4%. The stock received mostly “Buy” rating from various brokers. Peel Hunt decreased its target price on Horizon Discovery Group, up 3.9%, to 177p from 181p and maintained its “Hold” rating. Sareum Holdings, up 3.3%, announced that it has selected a candidate molecule from its TYK2 inhibitor programme to further develop a new best-in-class treatment for autoimmune diseases. Xaar, up 2.7%, announced that its half-yearly revenues declined to £35.3m, while reported a loss before tax of £1.1m. Separately, the company announced that Windmöller & Hölscher has selected Xaar 5601 printheads to advance its first digital, single-pass press for flexible packaging. Jefferies reaffirmed its “Buy” rating on the stock with a target price of 490p. Peel Hunt reconfirmed its “Buy” rating on Quixant, up 2.3%.

Brady, unchanged at 66.3p, today announced that its half-yearly revenues slightly eased to £10.5m, while loss before tax narrowed to £2.3m. Peel Hunt restated its “Buy” rating on Kier, down 0.1%. Vernalis, down 0.2%, announced that the board recommends a cash offer for its issued share capital by Ligand UK. Berenberg reduced its target price on Dialight, down 3.7%, to 420p from 530p and reconfirmed its “Sell” rating. Frontier Developments down 6.3%, announced that annual revenues dropped to £34.2m, while profit before tax fell to £2.8m. Citigroup lowered its target price on the stock to 1500p from 1540p and maintained its “Buy” rating.

UK markets closed on a weaker footing last week, dragged down by heavy losses in mining sector stocks. The UK’s manufacturing PMI slid its lowest level in 25 months in August, while the construction PMI declined to a 3-month low in the same month. The UK’s services PMI climbed more than expected in August, whereas the Halifax house price index advanced in the three months ended August 2018. The FTSE 100 index declined 2.1% to settle at 7277.7, while the FTSE AIM 100 index fell 0.2% to close at 5886.06. Meanwhile, the FTSE techMARK 100 index lost 1.8% to end at 4623.45.

US markets ended in negative territory the previous week, after US trade deficit widened to a 5-month high in July. The US manufacturing PMI fell to its weakest reading since November 2017 in August, while the nation’s factory orders fell higher than expected in July. The US non-farm payrolls index climbed higher than expected in August, whereas the ISM manufacturing activity index unexpectedly advanced to a 14-month high in the same month. The US unemployment rate remained steady near its 18-year low in August. The DJIA index fell 0.2% to end at 25916.54, while the NASDAQ index lost 2.6% to close at 7902.54.


The Cambridge & FTSE AIM 100 Index Movement

Sector Break-up - Market Cap.

Sector Break-up - No. of Comps.

Index movers

Amino Technologies PLC

Amino Technologies PLC, a leader in digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution, gained 3.2% to 207.5p.

AVEVA Group PLC

Engineering technology company, AVEVA Group PLC, declined 6.1 % to 2666p. Citigroup reissued its “Neutral” rating on the stock.

Dialight PLC

Dialight PLC, a provider of electronic lighting and electromagnetic products, dropped 3.7% to 499p. Berenberg reduced its target price on the stock to 420p from 530p and reconfirmed its “Sell” rating.

Elektron Technology PLC

Elektron Technology PLC, a provider of fast moving engineered products, climbed 3.9% to 47.5p.

Frontier Developments PLC

Frontier Developments PLC, a leading independent developer of video games, plummeted 6.3% to 1050p and emerged as the top loser in the Cambridge Index. The company, in its final results for the 52 weeks ended 31 May 2018, announced that revenues dropped to £34.2 million from £37.3 million reported in the last year, while profit before tax tumbled to £2.8 million from £7.8 million. Likewise, the basic earnings per share declined to 9.6p from 22.7p in the previous year. Meanwhile, the company stated that Board remains upbeat regarding the revenue outlook for the FY2019. FinnCap issued its “Corporate” rating on the stock. Citigroup lowered its target price on the stock to 1500p from 1540p and maintained its “Buy” rating.

Greene King PLC

Shares of pub operator, Greene King PLC, jumped 4.9% to 510.6p and emerged as the top gainer in the Cambridge Index. The company, in its trading statement for the 18 weeks ended 02 September 2018, announced that its like-for-like (LFL) sales rose 2.8% during the period, on the back of strong beer sales amidst England’s successful football World Cup campaign and a warm weather. Its branded local pubs LFL sales climbed 5.5%, while total volumes in Brewing & Brands surged 4%. Citigroup reaffirmed its “Buy” rating on the stock. Canaccord Genuity reaffirmed its “Buy” rating on the stock with a target price of 600p. Shore Capital reissued “Buy” rating on the stock. Liberum reconfirmed its “Buy” rating on the stock with a target price of 670p. Peel Hunt restated its “Buy” rating on the stock with a target price of 700p.

Horizon Discovery Group PLC

Horizon Discovery Group PLC, the life science company supplying research tools to organisations engaged in genomics research and the development of personalised medicines, rose 3.9% to 225p. Peel Hunt decreased its target price on the stock to 177p from 181p and maintained its “Hold” rating.

Netcall PLC

Netcall PLC, a provider of call-back, auto-messaging and contact solutions, fell 2.6% to 66.8p.

Sareum Holdings PLC

Sareum Holdings PLC, which is engaged in the structure-based drug discovery business, advanced 3.3% to 0.8p. Today, the company announced that it has selected a candidate molecule from its TYK2 inhibitor programme to further develop a new best-in-class treatment for autoimmune diseases.

Scientific Digital Imaging PLC

Scientific Digital Imaging PLC, a digital imaging technology company, eased 3% to 40.3p.

Other movers

Abcam PLC

Abcam PLC, a producer and distributor of research-grade antibodies, dropped 2.1% to 1484p. The company, in its preliminary results for the year ended 30 June 2018, announced that revenues surged to £233.2 million from £217.1 million reported in the last year. Its profit before tax rose to £69.1 million from £51.9 million in the previous year, while its basic earnings per share advanced to 30.5p from 20.9p. Abcam has proposed a final dividend of 8.58p per share. Peel Hunt reconfirmed its “Hold” rating on the stock.

Brady PLC

Brady PLC, a provider of transaction and risk management solutions for metals and commodities, remained unchanged at 66.3p. Today, the company announced that its half-yearly revenues slightly eased to £10.5 million from £10.7 million, while loss before tax narrowed to £2.3 million from £3.7 million.

DS Smith PLC

DS Smith PLC, a manufacturer and distributor of paper and plastic packaging products, edged 1.9% lower to 484.8p. The company, in its trading update for the four months ended 4 September 2018, announced that trading for the period remained in line with its expectations. Also, the company reported progress in all geographic regions and has recorded upbeat like-for-like volume growth in the year to date. Additionally, the acquisition of Corrugated Container Corp helped in enhancing its customer offering and added additional capacity. Moreover, its North America Paper and Packaging division continued to deliver strong performance. Numis reaffirmed its “Add” rating on the stock with a target price of 585p. Peel Hunt reiterated its “Buy” rating on the stock.

Johnson Matthey PLC

Johnson Matthey PLC, a speciality chemicals company and leading provider of precious metal products and environmental technologies, lost 0.5% to 3478p. The company announced that it has received a contract from Methanex Corporation for supplying a licence for a 5,000 mtpd autothermal reforming (ATR) and methanol technology for the latter’s potential Geismar 3 Methanol Project.

Kier Group PLC

Building, civil engineering and property development group, Kier Group PLC, eased 0.1% to 948p. Peel Hunt restated its “Buy” rating on the stock.

Quixant PLC

Quixant PLC, a provider of specialised gaming platforms designed for gaming and slot machine applications, advanced 2.3% to 486p. Peel Hunt reconfirmed its “Buy” rating on the stock.

Xaar PLC

Xaar PLC, a provider of inkjet printing technology, edged 2.7% higher to 193p. The company, in its interim results for the six months ended 30 June 2018, announced that revenues declined to £35.3 million from £44.0 million in the same period last year. It reported a loss before tax of £1.1 million, against a profit of £5.7 million. It posted a loss per share of 1.2p, compared to earnings of 6p in the previous year. Xaar declared an interim dividend of 1p per share. Separately, the company announced that Windmöller & Hölscher has selected Xaar 5601 printheads to advance its first digital, single-pass press for flexible packaging. Jefferies reaffirmed its “Buy” rating on the stock with a target price of 490p.

The Cambridge & FTSE AIM 100 Index Movement

Sector Break-up - Market Cap.

Sector Break-up - No. of Comps.

Table 1 Cambridge Index  Weekly Top 5 Gainers

Table 2 Cambridge Index  Weekly Top 5 Losers

Table 3 Cambridge Index  Top 5 Weights

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