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13 February 2024

Market Round-Up

Virgin Money has announced that, in the past 12 months, it has seen an uptick in mortgage activity. Since interest rates have started to stabilise, mortgage rates have followed, displaying signs that sentiment around the property sector is starting to become more positive.

In January, Virgin Money saw mortgage applications jump 30% year-on-year. Signs of this early on in the year is encouraging, as it may imply the property market is improving. Accordingly, Virgin has targeted growth in business and unsecured lending, through ‘buy now, pay later’ products and credit cards, subsequently causing its share price to increase by 1.5%. However, Virgin Money still holds a cautious approach to the mortgage market, with its Chief Financial Officer stressing that the firm is not expecting a housing boom. Consequently, it has retained its profit margins to the same levels until September.
In the world of tech, Meta Platforms has added US$196bn to its stock market value following the recent announcement of the company paying its first ever dividend and posting strong Q4 results. Meta Platforms is otherwise known as the parent company of Facebook, Instagram, Threads and WhatsApp.
Subject to market conditions, Meta is paying US$0.50 per share on a quarterly basis, to keep in line with competitors Apple (US$0.24) and Microsoft (US$0.75). Dividends tend to be associated with slow growing companies, though Meta has issued it to complement its process in returning capital to shareholders. Although the yield is small, this makes the stock attractive, further heightened by its primary focus to increase the share price through buybacks.

The company announced a US$50bn share buyback scheme, after a ‘year of efficiency’ and cost cutting measures in 2023. It seems the measures have paid off, as buybacks and dividends help to push the share price up in the long-term, therefore rewarding investors for holding the stock. There was a positive reaction to the news, causing the share price to surge 20.3% after one day of the announcement. It will be interesting to see if Meta can hold this momentum throughout the year amongst headwinds and uncertainty in the markets.

Please note that this communication is for information only and does not constitute a recommendation to buy or sell the investments mentioned. Investments and income arising from them can fall as well as rise in value. The information and views were correct at time of publication but may have changed at point of reading.
 
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