1. No stress…
High Conviction holding, Virgin Money UK (VUK), passed the Bank of England’s stress test with flying colours this week. In the chart below, which shows the results of the test, you can see VUK has the 3rd largest capital buffer above the hurdle rate after Nationwide and Llloyds. This has cleared the way for VUK to start buyback discussions with the regulator, and we expect an announcement before the end of the quarter.
Source: Bank of England
Companies mentioned are illustrative only and not a recommendation to buy or sell any particular security.
2. The Swifties are coming…
Can Taylor Swift save the Australian economy? June CBA credit card spending data was released this morning. And CBA sighted Taylor Swift concert tickets as having helped push spending higher! Our spending on eating and drinking out also continues to rise. Eating out is tracking about 70% ahead of pre-COVID levels.
Meanwhile data from SiteMinder, the hotel platform, shows a massive spike in February 2024 hotel bookings recently, larger than December and January (the traditional holiday period) put together. Guess what’s on in February – Taylor Swift concerts!
Source: CBA
Source: Wilsons, SiteMinder
3. Fast food…
The UN Food and Agriculture Organisation (FAO) reported that global food prices hit a 2 year low in June. This was led by cheaper grains, vegetable oil and sugar prices. But don’t count on your chocolate getting cheaper. The London cocoa market had a volatile week thanks to Cargill. The trader had built a dominant position in cocoa this year, using ICE Futures Europe to source large amounts of beans. Traders who sold futures have scrambled to find enough to deliver when July futures expire on Friday, sending the contract to a premium of up to £240 a ton to September.
Source: ICE Futures Europe, Bloomberg