Daily Stock Market Report (Tue 25th August 2026) - VLX, VTY, CSN, TUN, GKP

There has been a remarkable surge in the price of bitcoin since the beginning of last week: from around $63,000 to over $80,000. The rise this morning alone is some 2%.

It really started flying on Wednesday 19th, when US Treasury Secretary Scott Bessent announced an intention to massively increase the buyback of long-term US Treasury bonds (10- to 30- year bonds). The Treasury said it was “increasing, by at least double, the size of liquidity support buyback operations”.

The 10-year US yield has been increasing over the past year, approaching 5%:

The 30-year yield is over 5%:

The US government famously has a tendency to borrow short-term rather than long-term, but with the federal debt load officially crossing over the $40 trillion mark this month, interest rates are becoming a sensitive subject whether at the short end or the long end of the curve.

Gold has also been a beneficiary of bond buyback talk, up $300 an ounce (or 7%) since August 19th. But Bitcoin has put it in the shade, increasing by around 25% over that timeframe.

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Roland Head joins me today.

Leaving it there for now, thanks! Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

Chesnara (LON:CSN)

Up 4% at 343.5p (£796m) - Half-Year Financial Report - Graham - AMBER/GREEN =

This is not an exciting business: it buys up old insurance books and extracts the profit from them as they gradually expire.

For its shareholders, it has paid a nice dividend of 20p+ annually, increasing over time. There’s also been some decent share price growth in recent years:

These interim results read very well:

• Adjusted Operating Profit (AOP) of £31m, up 46%

• Assets under Administration (AuA) of £21bn, up 38%

(Assets under Administration in this case is a balance sheet number - it’s different to the number reported by fund managers/trading platforms.)

The headline numbers are:

• Operating Capital Generation (OCG) of £96m, up 79%

• Cash Remittances of £73m, up 31%

I don’t trust these numbers quite as much as I do the profit numbers. For example, “cash remittances” is measuring how much cash has been sent to Chesnara from all of its various business units during the period. I’d expect that to be a lumpy figure that doesn’t represent underlying profits.

OCG, too, doesn’t seem to represent cash generation that’s sustainable. Today’s notes say that OCG “was supported by £51m of acquisition-related impacts and capital optimisation activities relating to Chesnara Life UK…” Sounds to me like this is non-recurring in nature.

For me, AOP of £31m is the number I trust the most, to measure underlying profitability that might be repeatable.

HSBC Life/Chesnara Life: HSBC withdrew from selling protection policies, selling HSBC Life (UK) Limited to Chesnara in a deal that completed in February this year. This was Chesnara’s 15th and largest acquisition.

The price for HSBC Life was £260m, of which £140m was raised in a rights issue.

So it’s very important to consider that dilution when looking at today’s numbers. The number of shares outstanding has increased from 151 million (June 2025) to 230 million (June 2026).

Thankfully, the acquisition appears to have gone very well so far. Another big acquisition is planned, too: €110m for Scottish Widows Europe, a closed life insurance book based in Luxembourg and owned by Lloyds Banking (LON:LLOY). This one will be paid with Chesnara’s existing cash resources (no need for an equity raise).

CEO comment today, summing up the interim results:

"Chesnara has delivered a very strong financial performance in the first half of 2026 with Operating Capital Generation up 79% and a 6% increase in the interim dividend. The integration of Chesnara Life UK, our largest acquisition to date, continues at pace with strong capital generation already delivered from our first five months of ownership. The regulatory Change in Control for the proposed acquisition of Scottish Widows Europe SA is anticipated around the end of 2026, and we continue to see attractive opportunities to grow the business, underpinned by a healthy M&A pipeline and disciplined execution across the Group."

Outlook excerpt: “We have made strong progress against the priorities set out for 2026. In the second half of the year, our focus will remain on delivering our strategic priorities.”

Graham’s view

In some ways, I’d treat this like I treat many of the High Street banks: these are respectable blue-chip stocks where it’s often difficult to understand the full nature of the risks taken on by shareholders.

Thankfully, there are some metrics that do help out.

The Solvency Coverage Ratio (185%) tells us that the company still has plenty of regulatory capital, although it spent a huge chunk of it on the HSBC acquisition:

The balance sheet shows the leverage that’s inherent in running a major insurance operation: £21 billion of assets are supported by equity of little over £500m.

In March, looking at the full-year results, I was AMBER/GREEN. I was willing to look past the heavy adjustments to the profit figures and come out with a moderately positive view.

Looking at it today, the share price is up by 50p and the adjustments are still very heavy. On a statutory basis, the net income result on today’s income statement is only around breakeven. To get £31m of adjusted operating profit, you have to add back £23m of integration/restructuring costs and a few other small items.

So this is far from straightforward. I could justifiably move back to a neutral stance, I think. But I’m inclined to trust their acquisition process, on the basis of their track record, and therefore I’d have some degree of confidence that the statutory numbers will be looking much better in a few years, when HSBC Life (and Scottish Widows Europe) have been bedded in. So let’s leave it AMBER/GREEN for today.

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Roland's Section

Volex (LON:VLX)

Up 19% at 634p (£982m) - AGM Statement - Roland - AMBER/GREEN ↑

One of the key points Ed highlighted in last week’s webinar was how earnings-driven momentum can continue for longer than expected.

Volex appears to be a case in point – today’s AGM update includes an upgrade to FY27 profit expectations. This continues a run of upgrades that have already added 20% to FY27 EPS estimates over the last 12 months:

Volex’s share price has risen by 50% over the same period:

For anyone new to this stock, Volex is an industrial firm producing a wide range of wiring products for markets including data centres, automotive OEMs and consumer goods companies. Growth over the last year or two has been turbocharged by the AI boom, which has accelerated demand for the company’s data centre solutions. These are also among its highest-margin products.

AGM update: “very strong start to FY2027”

Volex has started the year at a good pace, with 28% organic revenue growth at constant currency compared to the same period last year. Growth is still being driven by Data Centre demand, but performance also appears to have improved in the company’s other divisions:

• Complex Industrial Technology (data centres): “customer demand has been sustained at the elevated exit rate of FY2026”.

• EV & Electrification: “increased demand” supported by electrification trends and customer focus on energy efficiency.

• Consumer Electricals, Off-Highway and Medical all saw “good growth”.

In a welcome dose of transparency, Volex’s management cautions that the impressive H1 revenue growth rate reflects the ramp-up of Data Centre demand during FY26. Growth rates are “expected to normalise” during the current year and we are told that a more meaningful sequential growth rate versus H2 FY26 is 8%:

Sequential trading is the better guide to underlying momentum, with average monthly revenue in the first four months of the year running 8% higher than the monthly average for the second half of FY2026.

KST Acquisition

In July, Volex announced that it was acquiring the remaining 64% of KST Signaltek for $89m, a medical technology business in which it was a founding shareholder.

KST generated revenue of $51.8m during the year ended 31 March 2026 and is expected to accretive to group margins:

The Acquisition is expected to be immediately earnings enhancing, and to improve the Group's underlying operating margin, with KST's EBIT margin ahead of the Group's underlying operating margin

The return on capital employed from the Acquisition is expected to exceed 15% within two years of completion

Broker forecasts updated following the acquisition suggest KST will add c.4% to earnings in the first full year of completion (FY28).

Outlook: “ahead of current market expectations”

As a result of the strength of trading in the opening months and the operating leverage inherent within the business model, the Board now expects FY2027 underlying operating profit to be ahead of current market expectations.

I can’t see any updated broker forecasts today, but Volex does provide details of current consensus expectations:

• Revenue $1,338m ($1,327m to $1,347m)

• Underlying operating profit: $138.3m ($135.3m to $141.3m)

Roland’s view

I’m not sure how big today’s upgrade really is – there are no qualifying words such as material or significantly to suggest a major upgrade.

However, there are a few clues I can work with:

• Revenue: YTD revenue is said to be 8% ahead of H2 FY26. Annualising this suggests FY27 revenue could be c.$1,425m, assuming no further growth. That’s about 6% ahead of previous consensus.

• Underlying operating profit: today’s update mentions positive operating leverage and cost control. This suggests to me that Volex’s underlying operating margin will be higher than FY26 (10.2%) and higher than the previous consensus view of 10.3%. I’m going to stick a finger in the air here and suggest an improved margin of 10.7% after factoring in the expected contribution from KST. On that basis, I estimate underlying operating profit could be c. $153m – around 10% ahead of current consensus.

• Underlying EPS: applying a c.10% increase to current consensus gives me a figure of perhaps $0.51 per share, putting Volex on a forward P/E of 17.

Was I wrong to turn neutral? I reviewed Volex’s results in June and moved our view down to AMBER, noting customer concentration in data centres and declining sales in two of the group’s five divisions.

It now looks like I was wrong, or at least premature, to take this position.

While I would argue that risks remain relating to the buildup of working capital and exposure to a small number of large Data Centre customers, underlying momentum still seems positive.

At some point I expect the Data Centre boom to slow, but I have no idea when this will be – the pipeline of projects under construction still appears to be quite large.

Perhaps I should have put more weighting on Volex’s improving quality metrics:

A combination of stable/rising ROCE and rising book value suggests Volex is generating genuine economic value for its shareholders, over and above its cost of capital:

The StockRanks also have a broadly positive view of Volex, styling the stock as a High Flyer, with weak value but strong quality and momentum:

While momentum and profitability remain positive, Volex could continue to make progress and does not look overvalued to me.

To reflect this, I am moving my view back up to AMBER/GREEN today.

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Vistry (LON:VTY)

Up 17% at 314p (£998m) - SAHP Funding Award - Roland - AMBER/RED =

One of the question marks hanging over Vistry this year has been the size and timing of the award it would receive as part of the government’s Social and Affordable Housing Programme (SAHP). This aims to provide £39bn of funding for social housing over the next 10 years.

Today we’ve learned the answer – Vistry has received an initial tranche of funding of £350m, which it says is “the largest award possible in this phase” of the programme. The market has reacted very favourably, although the shares remain extremely depressed on a medium-term view:

One apparent positive in today’s announcement is the company expects the SAHP funding to have a material impact during the current financial year:

• The funding “will enable the delivery of over 3,000 affordable homes”

• Vistry has as “an established pipeline” and has “identified immediate opportunities to deploy its own grant funding […] within the current year”

Vistry has long experience in this sector, working with partners such as housing associations to complete new housing schemes. As a result, the company has the advantage of having existing relationships with many of the other relevant parties needed to move developments to completion:

• The group has “longstanding relationships with 29 of the 32 other strategic partners announced this morning” and operates “within all of the Mayoral Strategic Authorities” including in today’s announcement.

• Vistry has received direct grant funding awards under successive affordable homes programmes for nearly twenty years.

CEO Adam Daniels is also keen to highlight that today’s funding is a step up in size from any previous programmes:

• Vistry’s total funding under the 21-26 Affordable Homes Programme was £278m, with an initial award in 2021 of £83m.

Roland’s view

We have commented on Vistry’s operational and financial problems a number of times this year, most recently in May and July. I won’t repeat all of that here, except to highlight that prior to today the stock was trading at a near-75% discount to its last-reported book value:

As Mark and I have both commented, it seems likely that there is a value opportunity here, if the company can get its balance sheet and profits moving in the right direction.

Sadly there is no commentary today on whether this SAHP award is in line with expectations, or how it might affect profit expectations for the current year. I don’t have access to any recent broker notes for Vistry, either.

As a result, I can’t be sure how many of the 3,000 homes mentioned today were already included in guidance for the full year. After all, an SAHP award has been expected for some time and was explicitly included in July’s H2 guidance:

Higher weighting of volumes in H2 in both Open Market and Partner Funded, as seen in prior years

The benefit of confirmation of the SAHP allocations improving Partner Funded transaction activity

I am fairly confident that today’s news should underpin existing FY26 guidance, but it’s not clear to me if there is any net positive impact that wasn’t previously included.

My decision: Vistry is due to report its half-year results on 24 September, together with the results of a review by the group’s new CEO. We should learn more then about both forward guidance and the likely impact of today’s news.

In the meantime, I have to choose whether to retain our AMBER/RED view today or revert to a neutral (AMBER) view.

The StockRanks support either choice, styling Vistry as Contrarian, with strong quality and value scores and very weak momentum:

In general, my feeling is that the tide may be turning for some listed housebuilders, potentially including Vistry.

However, while I do think Vistry could be an interesting special situation, I think there are some company-specific risks worth noting.

One concern is that recent press reports have suggested that insurer Allianz has cut the level of credit insurance it provides for suppliers to Vistry, potentially putting further pressure on the group’s cash flow.

From an equity perspective, this kind of issue is always a warning flag that’s worth considering. For this reason, I’m going to leave our AMBER/RED view unchanged for now.

We’ll take a fresh look at the situation in September, when the half-year accounts should provide greater clarity on the group’s financial situation and trading outlook.