Must read: China, Frasers/Boohoo, UBS

GLOBAL MARKETS

On the final trading session of a volatile month for markets, European equities have opened mixed with the FTSE 100 trading around the flatline. Real estate stocks such as Land Securities Group (LSE:LAND) and Persimmon (LSE:PSN) are outperforming, while Glencore (LSE:GLEN) has sunk to the bottom of the UK blue-chip index.

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China’s factory activity shrank for a fifth consecutive month in August. The official NBS manufacturing PMI hit 49.7 below the key 50 boom bust divide but ahead of forecasts for 49.4. Meanwhile, its services sector reading fell to an eight-month low of 51 in August versus 51.5 in July, touching the weakest level since December.

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Investors will be paying close attention to today’s US inflation data, the PCE price index ahead of Friday’s jobs report.

FRASERS

According to a regulatory filing, Frasers Group (LSE:FRAS) has upped its stake in Boohoo Group (LSE:BOO) from 7.8% to 9.1%. Earlier this week in a similar move, the sportswear giant raised its stake in ASOS (LSE:ASC) to nearly 20%. Both online fashion businesses Boohoo and Asos have suffered share price declines over the past year, arguably providing an attractive opportunity to buy more shares at a discount.

Frasers has been acquiring stakes in several retail businesses as it looks to position itself as a consumer platform for the world’s best brands to provide a “world-leading retail ecosystem”. While several retailers have been battling with the demise of the high street and the cost-of-living crisis, Frasers has been faring well lately, landing its shares up over 10% so far this year, outperforming the wider market.

UBS

UBS Group AG (SIX:UBSG) reported a record second-quarter profit of $28.88 billion (£22.73 billion) following its takeover of embattled Swiss rival Credit Suisse, which closed in June, driven by a one-off accounting gain from the deal. UBS’ net new money in global wealth management hit $16 billion, the highest level in more than 10 years.

The Swiss lender also said it would be fully integrating Credit Suisse’s domestic bank with aims to achieve cost savings of over $10 billion by the end of 2026. UBS is planning to cut 3,000 jobs integrating Credit Suisse in Switzerland over the coming years.

The bargain price UBS paid for Credit Suisse has been heavily accretive to its share price, which has staged impressive gains in recent months, with the rally extending in today’s session to 2008 highs. The combined entity now has around $5 trillion in client assets, making it a “premier global franchise” in wealth management. Cut-throat decisions under the watch of returning CEO Sergio Ermotti lie ahead with the daunting challenge of trying to balance the need to retain key staff, while simultaneously carrying out major job cuts. Nonetheless so far, investors appear optimistic about the potential for the combined group.