TEP, AAF, INVP: Hot Stocks amidst declining UK business confidence

Highlights

• According to Lloyds Bank business barometer, business confidence in the UK fell below the long-term average of 28% to 25% in July.
• Approximately 58% of companies are planning to raise their charge in the coming year.
• The manufacturing sector were one of the worst hit with dipping confidence in July according to the survey.

UK businesses reported a fall in confidence in July to its lowest since March 2021 as companies are facing soaring energy bills and input costs, while pay pressures also increased, according to a recent survey published on Friday.

Increasing energy bills coupled with input costs pressure has dented UK businesses hard as it witnessed the overall confidence fall in July, according to a recent survey published on Friday.

According to Lloyds Bank's business barometer, the business confidence in the UK fell to its lowest since March 2021, dipping below the long-term average of 28% to 25% in July. According to the report, approximately 54% of businesses surveyed were most concerned about inflation, 38% about the economic slowdown, and 25% about tightening labour markets.

Approximately 1200 businesses were surveyed in the Lloyds Bank's business barometer and according to the results, approximately 58% of companies are planning to raise their charge in the coming year. However, only 5% of them are planning to lower their costs. Around 66% of businesses said they passed on some of their rising costs due to inflation to their customers. However, only 17% of those surveyed stressed that they expect an average pay growth of 4% or more next year.    

Although businesses maintained a positive outlook on the economy in recent months, the optimism has dropped by 10 points to 12%. With economic headwinds becoming more forceful, economists expect the Bank of England to raise borrowing costs on 4 August by 50 basis points.

Amidst falling consumer confidence, let's look at three FTSE listed stocks offering decent returns.

Telecom Plus Plc (LON: TEP)

Telecom Plus Plc is a UK-based multi-utility supplier firm which deals in the supply of electricity, gas etc. to residences and businesses. As of 29 July, the company has offered its shareholders with returns of 112.48% in the last year with a YTD return of 40.40%.

TEP’s Earnings Per Share (EPS) stands at 0.42, and its annual dividend yield stands at 2.6%.

Telecom Plus Plc currently holds a market cap of £1,748.76 million, and its shares were trading at GBX 2,210.00 at 08:05 AM (GMT+1) on 29 July 2022. 

Airtel Africa Plc (LON: AAF) 

The international provider of telecommunications and mobile money services in Africa enjoyed a market cap of £5,949.15 million as of 29 July. The firm’s returns have been impressive with both its YTD and one-year returns being in the positive zone at 17.39% and 90.25% respectively. Airtel Africa Plc’s shares were trading at GBX 158.20 and was down by 0.06% at 08:10 AM (GMT+1) on 29 July. 

Investec Plc (LON: INVP) 

Financial services company Investec boasted of a market cap of £3,049.54 million and were trading at GBX 439.30, up by 0.27% at 08:10 AM (GMT+1) on 29 July. INVP offered its investors with a one-year return of 70.44% in the last year with the YTD return at 16.28%. 

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

Source-

https://money.usnews.com/investing/news/articles/2022-07-28/inflation-pressure-hurts-uk-business-confidence-lloyds#:~:text=July%2028%2C%202022%2C%20at%207%3A11%20p.m.&text=LONDON%20(Reuters)%20%2D%20British%20business,to%20a%20survey%20on%20Friday.

https://news.yahoo.com/uk-business-confidence-soaring-inflation-cost-of-living-crisis-230153174.html