Markets lose momentum, Whitbread plans major new hotel on the Strand and Allied Minds heads for the door

Markets seem to have lost their momentum following the rally since mid-June. Investors have become nervous once again, with all eyes on Federal Reserve chair Jerome Powell and what he says this coming Friday.

Investors are worried that the US central bank will continue to raise interest rates at a rapid pace, despite lower-than-expected inflation figures in July. If this happens, we could well see another leg down in global markets as the summer draws to a close.

“Declines across European and Asian markets on Wednesday illustrated how investors were getting the jitters. The FTSE 100 fell 0.7%, dragged down by miners, insurers, banks and telecoms,” says Russ Mould, investment director at AJ Bell.

WHITBREAD

Whereas many companies will be battening down the hatches for fear that a recession will hurt their business, Whitbread has done the opposite by committing £200 million to a new hotel development in central London.

“Its purchase of 5 Strand will provide the opportunity to build accommodation in prime tourist territory, using its ‘hub by Premier Inn’ concept which features compact rooms. Interestingly, the building was sold four years ago to an Indian property developer with the intention of creating a luxury 200-bedroom hotel. Now it’s going to be Whitbread’s latest project in squishing in as many rooms in as possible.

ALLIED MINDS

Intellectual property commercialisation investor Allied Minds joined the stock market with great fanfare in 2014, offering investors exposure to a range of bright ideas including satellite technology, telecoms and biotech. Backed by Neil Woodford, it was pitched as a way for investors to invest in the next big thing. At its peak, the business was worth more than £1 billion.

“Unfortunately, it didn’t make shareholders rich, with the value of its assets written down and uproar over staff compensation levels. Its performance on the stock market was like a company stuck in quicksand.

“Now it could be all over for investors as Allied Minds is thinking about delisting, prompting another large drop in its share price.”