Executive summary

  • UK equities slid in August - the FTSE All-Share fell by (2.9%) - following a number of disappointing economic readings and a seasonally quieter market.

  • 20 of 23 sectors registered negative performance in August, with Industrial Engineering and Leisure Goods as the weakest sectors, and Tech Hardware and Equipment performing strongest.

  • ECM activity continued to decline, by both volume and value compared to July.

  • UK public M&A quietened down significantly in August with only four deals announced in the month.

Market drivers in August

UK markets slid amid disappointing economic data

Economic headlines in August

  • UK inflation continued to decrease coming at 6.8% (Y/Y) in July as gas and electricity prices dropped.
  • Bank of England raised the Bank Rate from 5.00% to 5.25%, the highest level in 15 years.
  • RICS house price balance feel to a net balance of -53% in July, the lowest level since Great Financial Crisis.
  • UK composite PMI fell from 50.8 in July to 47.9 in August, a sizeable miss on expatiations for 50.3 and marked a 31-month low.
  • Eurozone Services PMI fell from 50.9 in July to 48.3 in August, entering contraction territory.
  • US inflation increased slightly to 3.3% (Y/Y) in July from 3.0% (Y/Y) in June.

UK markets continue to lag behind European and US peers

UK markets continue to lag behind European and US peers chart with in numbers to the side

Source: Bloomberg, FactSet, Macrobond, Calastone, Investec Economics
 

Outflows exacerbated over the summer

Outflows exacerbated over the summer graph

Source: Bloomberg, FactSet, Macrobond, Calastone, Investec Economics

 

MPC has a long road ahead when it comes to inflation

MPC has a long road ahead when it comes to inflation graph

Source: Bloomberg, FactSet, Macrobond, Calastone, Investec Economics

How did UK sectors fared in August

August lost some of the ground gained in July for most sectors

Monthly sector snapshot

UK sector performance - Monthly sector snapshot


Drivers of sector performance in August

  • Aerospace & Defence stocks continued their rally in August and posted another month of significant gains. BAE Systems share price increased by c.8.3% as it announced the acquisition of the aerospace of Ball Corporation for c.$5.6bn.
  • Despite an impressive performance in August, Tech Hardware and Equipment stocks continue to be among the worst performers year-to-date having been heavily impacted by high interest rates and rising inflation.
  • Oil prices continue to be a tailwind for Oil & Gas Producers. Prices rose throughout August, with the WTI benchmark up c. 17% over the last three months.


Sector performance (Year to date)

Sector performance LTM (chart)

Source: FactSet, Financial Times, Investegate, ONS, Investec Economics

 

Sector performance (August 2023)

Sector performance (August 2023) chart

Source: FactSet, Financial Times, Investegate, ONS, Investec Economics

UK ECM activity takes a break in August

ECM activity quietened down as we reached the height of summer

ECM activity snapshot

Deal value and numbers

Primary ECM issuance across the deal size spectrum in August

Primary ECM issuance across the deal size spectrum in August chart

Public equity fund-raises by sector and highlighted deals

Public equity fund-raises by sector and highlighted deals

Selldowns

Sell-down activity over August

Announced IPOs in August 2023

The UK IPO pipeline deals

Source: Source: Dealogic. Analysis and commentary only includes transactions greater or equal to £5m, and only includes transactions involving an issue of new shares i.e. primary share issuances.

UK Public M&A activity in August

2023's scorecard

2023's scorecard numbers

 

Selected deals

selected deals including blancco, kinova and instem

Source: Company announcements, FactSet, Practical Law

Download the report in PDF

Download the August market review PDF 558.23 KB

Get the monthly Investec Market Review delivered to your inbox

Please fill in the form below:

Investec Bank plc and its subsidiaries recognise and respect the privacy and data protection rights of individuals with regards to personal data.

We may use your personal data to provide you with services you request from us,  or to manage your accounts, make decisions, detect and prevent fraud, fulfil any contractual relationship with you, undertake analysis and assessment, ensure that we comply with legal and regulatory requirements and/or for other purposes where in our legitimate interests.

For further details as to how Investec uses personal data, please refer to our Data Protection Notice.

Sending...

Please complete all required fields before sending.

Thank you for registering your details.

You will be added to our market review mailing list and will be sent the next edition via email.

Sorry there seems to be a technical issue

Contact our Corporate Broking & PLC Advisory team

Contact our Corporate Broking & PLC Advisory team

Bruce Garrow

Bruce Garrow

Corporate Broking & PLC Advisory
Carlton Nelson

Carlton Nelson

Corporate Broking & PLC Advisor