top of page
Image by Sean Robertson

May 2023


Welcome to our latest global investment market update

Hello and welcome to the latest market update, our monthly round-up of the latest news that affects the investment market.

As always, we’re grateful to our friends at Charles Stanley for their input into this content. There’s a fair bit to get through, so we’ll get to it.



Hot off the press, the latest figures for UK inflation were released yesterday. Inflation fell to 8.7% in April, below double digits for the first time since last August. That being said, city commentators were expecting a sharper decline to around 8.2%. Rampant food prices are still driving a good proportion of this, and it means that another bank rate rise in June is now all but guaranteed.

Inflation may be proving an intractable issue in the West, but data from Argentina was particularly sobering. Inflation hit 109% in April, prompting the Central Bank of Argentina to raise its key interest rate by six percentage points to a staggering 97%. Only Venezuela and Zimbabwe are currently experiencing higher price rises, according to the International Monetary Fund. Eye-watering, to say the very least.



A series of new sanctions against Russia were introduced at the G7 summit in Japan. The UK will ban Russian diamond imports to the UK, as the government targets an industry worth $4bn in exports for Russia in 2021.

Imports of the country’s copper, aluminium and nickel will be blocked later this year. The UK will target 86 more people and companies connected to President Vladimir Putin, and the US is imposing sanctions on 278 members of Russia's parliament. Washington said it will also target organisations outside Russia that provide support for its military, or its annexation of Ukrainian territory. The European Commission proposed a further ban on Russian imports, as well as on high-tech exports.



UBS has said it expected a financial hit of about $17bn from the takeover of Credit Suisse in a US regulatory filing. Management also noted it was rushed into the $3.4bn deal – brokered by the Swiss government – and it had less than four days to complete a due diligence process. The filing also noted that both Credit Suisse and its investment bank will report substantial pre-tax losses in the second quarter and for the whole of this year.

The former chief executive of the First Republic Bank, Michael Roffler, blamed its collapse on contagion from the failures of other regional banks, noting that regulators did not express concerns regarding the bank's strategy, liquidity, or management performance. California banking regulators shut down First Republic Bank on 1 May and sold its assets to JP Morgan.

The Bank of England is planning to reject Revolut's application for a banking licence in the UK, according to a report by The Telegraph published last Thursday. Revolut applied for a licence in the UK in 2021, which would allow it to offer regulator-protected deposits and lending products like mortgages. The group was once the UK’s largest tech “unicorn” – companies that reach a valuation of $1bn in private rounds of funding without being listed on the stock market. Its founders have criticised regulation in the UK and said they would not consider an initial public offering in London because of this.

Image by Stephen Dawson


Bank of England Governor Andrew Bailey acknowledged for the first time last week that the Bank of England is dealing with a UK wage-price spiral. He said the central bank will lift interest rates as far “as necessary” to get inflation back to the bank’s 2% target.

“Some of the strength in core inflation reflects the indirect effects of higher energy prices,” Mr Bailey said. “But it also reflects second-round effects as the external shocks we have seen interact with the state of the domestic economy. And as headline inflation falls, these second-round effects are unlikely to go away as quickly as they appeared.”

China’s recovery after it scrapped Covid-19 restrictions in December appears to be losing steam. Economic data released by Beijing for April broadly missed expectations. Industrial production was up 5.6% year-on-year, compared to a consensus view of 10.9%. Retail sales over the month rose by an annual rate of 18.4% – lower than forecasts of 21%. Fixed asset investment rose by 4.7%, against expectations of 5.5%. As a result, JPMorgan lowered its GDP growth target for 2023 to 5.9% from 6.4% and Barclays cut its forecast to 5.3% from 5.6%.

chat gpt.jpg


At the G7, European Commission president Ursula von der Leyen called for “guardrails” around developments in AI. “Artificial Intelligence’s potential benefits for citizens and the economy are great,” von der Leyen said. “At the same time, we need to agree to guardrails to develop AI in the EU, reflecting our democratic values.”

Shell plans to use AI-based technology from big-data analytics firm SparkCognition in its deep-sea exploration and production – a move it said would boost offshore oil output. Algorithms will analyse large seismic data sets to aid oil discovery. The new process could shorten explorations to less than nine days from nine months, the two companies said.

This powerful trend could shake up entire industries, and we will be monitoring the investment opportunities out there.



US private-equity group Apollo Management said it did not intend to make an offer for John Wood Group, the engineering and consulting business that is active in the North Sea oil industry. Apollo’s final offer of 240p a share in cash, values Wood at about £1.7bn. No further bid is allowed for six months under the Takeover Code.

Shares in Aston Martin motored (sorry) ahead after the luxury carmaker announced a £234m investment by China's Geely. The Asian group will become its third-largest shareholder once the deal is concluded.

Tensions in the South China Sea have spooked Warren Buffett, one of the world’s most high-profile investors. Mr Buffet has now sold all of Berkshire Hathaway’s shares in TSMC, the Taiwanese multinational semiconductor contract manufacturing and design company. The final holdings of the investment company were sold in the first quarter after Berkshire slashed its holding by 86% late last year. The billionaire blamed the move on rising regional tensions between China and Taiwan.

About two months after China’s Alibaba unveiled a restructuring plan that would the conglomerate split into six units, the break-up has started. The board approved a full spin-off of its cloud business, which dominates China’s market, via a stock dividend distribution to shareholders. Management aims to complete a public listing within the next 12 months. It is also exploring initial public offerings for its logistics and grocery. The news came alongside disappointing quarterly results for the group, which missed growth expectations.

Vodafone will cut 11,000 jobs as part of a wider strategic plan to restore the company’s fortunes after sales grew just 0.3% last year. The job cuts will be over three years and represents about a tenth of the group’s workforce. Management also plans to step-up investments in customer service.

BT Group also said it will shed up to 55,000 jobs in the UK and globally by the end of the decade to cut costs. The headcount reduction represents up to 40% of its current workforce and includes staff and contractors. Chief executive Philip Jansen said that by the end of the 2020s BT will have a "much smaller workforce" and a "significantly reduced cost base". BT reported a 12% drop in profits to £1.7bn for the year to April.

FTSE 100 landlord British Land said higher interest rates had hit the value of its portfolio, which declined 12% in value in the year to the end of March.

Trading at high street bakery Greggs remains brisk, with sales at stores open for more than a year up more than 17%. However, the group is not immune to the cost-of-living crisis that has seen consumers tighten their belts. The comparable period last year saw sales hit by the Omicron wave of Covid-19, so the growth was from a low base. Indeed, Management noted that sales growth had fallen back a little in the ten weeks to 13 May.

Online fashion retailer Boohoo said it expected a better performance in its new financial year after profits halved in the year to March. The shares rallied following the statement – but remain at about half their value at this time last year. Online rival Asos recently posted heavy losses and its shares moved another leg lower this week after analysts raised the prospect that the business would need a cash injection over the next six months. The once retail stars have been hit by supply-chain issues, increased returns from customers and the cost-of-living crisis crimping consumer demand.

German industrial group Siemens raised its outlook for the second time this year after notching up record profits in several divisions. Management now expects annual revenue growth of between 9% and 11%, up from a previous forecast of 7% to 10%.

bottom of page