Edison Investment Research

Deutsche Beteiligungs announces divestment of Grohmann Engineering to Tesla Motors

Exit will generate a positive value contribution in the first quarter of FY17

Deutsche Beteiligungs (DBAG) announced today that it has agreed the sale of Grohmann Engineering, a developer and manufacturer of plants for industrial automation, to strategic buyer Tesla Motors after almost 30 years as a portfolio holding. The financial terms of the agreement have not been disclosed but DBAG has confirmed that the sale price is higher than its most recent portfolio valuation and the exit will generate a mid-single digit positive value contribution in the first quarter of its current financial year to 30 September 2017.

Market Commentary - Housing, Infrastructure, Construction and Services - 8th November 2016

Tyman is the only contributor to company news this morning. In an update it says that trading is in line though the pattern of developments is varied in each market. The key issue for the sector is what is going on the ground. The conclusions from the data indicated below are that the risks are a tad more downwards than they were. Industry leaders e talk with remain optimistic and enquiries remain at good levels but as might be expected in the current climate the views and the data point to caution, with imported inflation in the form of energy, input and finished goods costs probably being the biggest short term issue.

Market Commentary - Housing, Infrastructure, Construction and Services - 7th November 2016

The only relevant news today is from JLIF, the infrastructure investment company, which indicates that its good progress continues. The upward moves on Friday last gave no real indications of future developments.The downwards moves tell us more about the future as half of the 22 stocks in our universe fell by more than 2%.

BOE: Bank on track

Today’s BOE decision represents a correction in UK policy makers’ thinking. The sudden stop in activity which was implied by the Bank’s August stimulus package has not materialised and the focus has instead returned to significantly above-target inflation by 2018. This is going to be supportive of sterling, especially as consensus views on the exchange rate had become so negative.

Fitbit and GoPro – Horrific Halloween

We see acquisition as the endgame for both players.

Market Commentary - Housing, Infrastructure, Construction and Services - 4th November 2016

There is no new news this morning of note in the sector. The news that Severfield has won 22 Bishopsgate (not Broadgate as we stated yesterday) and that the project is going ahead at all is positive, balanced by news that a US/Spanish multi national has put on hold a major scheme in the City. The moves yesterday were predictable given the news on Voting on Article 50. The improvement in the value of Sterling caused Compass and Rentokil to lose pace, falling 2.4% and 1.1% respectively. Berendsen is still struggling to get support and fell 1.5% to 941p. In financial terms alone he share price reaction is severe

China shows its air power

Stealth fighters take to the skies at Zhuhai air show

On Tuesday, China showcased its long awaited J-20 stealth fighter jet for the first time in public at the Zhuhai air show. Yet again an impeccably timed show of force with the US Presidential Election next week. The first test flight of the aircraft in 2011 coincided with the then US Defense Secretary Robert Gates’ visit to Beijing. With other new military aircraft expected to be unveiled throughout the week we look at the changing shape of China’s military arsenal, and question how does Chinese defence spending affect Western budgets.

Market Commentary - Housing, Infrastructure, Construction and Services 3rd November 2016

Plenty of new news this morning from Morgan Sindall and Howdens providing trading updates and Severfield announcing £72m of new orders. Evidence that the London housing market is “off the boil” came yesterday from Persimmon when it referenced regional pricing remaining strong but not around the M25. The 10.3% rise in G4S achieved yesterday is overdue, in our view, as its rating has lagged the peer group by some distance.Interserve and Capita were both among the main losers yesterday down 1.8% and 1.6% respectively as concerns remain about the need for an equity issue.

Facebook Q3 16A – Straight line headache

This is the beginning of the pause we have been looking for.

Market Commentary - Housing, Infrastructure, Construction and Services - 2nd November 2016

G4S and Persimmon have issued updates this morning.Persimmon’s statement tells us that the housing market remains strong but the company is acting in a cautious manner. Persimmon’s statement reflects the longer term concerns about UK housing given the “euphoria” that seems to exist currently, especially outside the M25. The sector moves yesterday were in a narrow band with the best riser, Travis Perkins, up by 2.9% and the largest loser, Interserve down 2.1% to 331.5p.