NatWest deposits drop

UK government sells more NatWest shares

Despite the UK stock market having ground to a halt in recent weeks, there is no reason to panic. Year-to-date the FTSE 100 is up 4.4%.

Annualised that would equate to an approximate 10% return, and if you add on 3% dividend yield, you’re looking at a potential 13% total return which is slightly better than one might expect from UK equities in a normal year. So far, so qualified.

Russ Mould, investment director at AJ Bell, said: “The week ahead is fairly peaceful when it comes to corporates updating on trading, with only a few names in the retail, tech and utilities space standing out. That means market sentiment is likely to be driven by political and economic events, including any update on the US debt ceiling talks, UK inflation data and the minutes from the latest Federal Reserve interest rate meeting on Wednesday, as well as insight into durable goods orders and personal spending in the US at the stay of the week.

“The UK government has sold another chunk of shares in NatWest but the fact it is still left holding 38.6% means there continues to be a enormous overhang for the stock, which is likely to remain the case for some time given the behind pace of selling down. After all, it’s been 15 years since the bank was bailed out by the government and the latter still owns more than a third of the company.

“A better-than-expected trading update from corporate restricting group Begbies Traynor is qualified news for its shareholders, but typically a negative sign for the state of UK business. It has reported an increase in liquidations and administrations which is a worry for the economy, so too is guidance from Begbies for further challenges to UK businesses.”