The FTSE 100 was flat for the month (or up 0.6 of a point to be exact), leaving it down for the year at -1.3%.

Disappointing in comparison to the US, French and German indices who were all up >3.5% in February and the Nikkei 225 in Japan which exploded +8% over the month. 

The big news headline in the UK markets in February was the announcement that the UK Competition and Markets Authority have launched a market study, amidst ‘fundamental concerns’ over possible sharing of price information amongst eight companies: Barratt Developments, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey and Vistry. The CMA found that the profits of the 11 largest housebuilders were ‘generally higher than we would expect for a well-functioning market’ but have yet to reach any conclusions as to whether competition law has been infringed upon. Listed housebuilders were duly hit and we await further developments. 

Andrew Bailey, Governor of the Bank of England, dismissed the ‘very weak recessionary’ UK economic data and stated that the Bank is seeing signs on an ‘upturn’ in the economy. The Governor hinted at the possibility of the Bank cutting rates before inflations reaches 2%. 

As reporting season draws to a close, March was a market of earnings hits and misses. Reckitt Benckiser disappointed after sales declined, despite the relative strong performance of their peers in the consumer staples sector. Howden Joinery announced in-line results, but maintained their strong margins despite the inflationary hit on their substantial input costs (wood, materials etc). ARM Holdings (Nasdaq listed, but UK incorporated and domiciled) announced stonking third quarter earnings that smashed estimates. The shares soared as much as 40% over the day’s trading. 

All eyes are now on the Budget, where the long awaited (and hoped for) tax cuts look less and less likely to materialise. One thing on the agenda is the ‘Great British ISA’ which we would of course welcome. However, our wish would be for it to be an additional amount to the pre-existing £20,000 annual allowance. Any divvying up of the existing allowance with a new set of rules (or regulations) would be an end to the Conservative Party’s reign of free and open markets and would not be well received. Let’s see what comes out of the red briefcase on the 6th March. 

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.

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