3i Infrastructure Share News (3IN)

LONDON (Alliance News) - London stock indices were struggling to post gains Wednesday midday, as UK investors were spooked by weak trade data from China and a cut to global economic growth forecasts by the World Bank.

The large-cap FTSE 100 was adding just 1.76 points to 6,286.29 at midday, after three consecutive sessions of gains. The mid-cap FTSE 250 was down 0.2% at 17,170.49 and the AIM All-Share was up 0.1% at 745.10.

The latest Chinese trade data reignited worries about the Asian giant's economy, as exports declined by more than expected in May. The General Administration of Customs said exports slid 4.1% year-over-year in May, only slightly worse than economists' expectations for a 4.0% decline but accelerating from the 1.8% fall in April. This was due to weaker overseas demand for Chinese goods.

At the same time, imports dropped 0.4% in May from a year ago, much slower than the 6.7% fall expected by economists and the 10.9% fall registered in April.

Despite the general poor sentiment in the London market following the economic data from China, London-listed mining stocks, usually the most affected by macro developments in that country, were firmly in the green. The FTSE 350 Mining Sector index was up 1.5%, as the Chinese imports data "offered a beacon of hope" about the country's economy, Accendo Markets Head of Research Michael van Dulken said.

Asian stocks ended mixed, with the Shanghai Composite index down 0.3%, and the Hang Seng in Hong Kong down 0.1%. Meanwhile, the Japanese Nikkei 225 index rose 0.9%.

In Europe, the CAC 40 index in Paris was down 0.4%, while the DAX 30 in Frankfurt was off 0.5%.

The World Bank trimmed its global growth outlook due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.

The global economy is forecast to grow 2.4% this year instead of the 2.9% projected in January, the official lender said in its June Global Economic Prospects report. The growth outlook for next year was trimmed to 2.8% from 3.1%. Nonetheless, the pace of expansion is expected to pick up to 3.0% by 2018.

Strong UK industrial production data weren't enough to perk up investors. Data from the Office for National Statistics showed that industrial output advanced 2% in April from March, when it grew 0.3%. Economists had forecast a marginal 0.1% increase. On a yearly basis, industrial production rebounded to 1.6% growth following 0.2% shrinkage in March.

The pound jumped following the data to USD1.4579, but gave back most of the gains shortly afterwards, standing at USD1.4557 at midday. It had traded at USD1.4570 at the London equities close Tuesday.

Oil stocks were also among the gainers in the FTSE 100, with Royal Dutch Shell 'A' shares up 2.3% and BP shares up 0.8%. The oil producers were benefiting from higher crude prices, as Brent oil hit a new 2016 high at USD52.21 a barrel, its highest level since early October. The North Sea Benchmark was quoted at USD52.15 a barrel at midday, higher than the USD51.10 late Tuesday.

Coca-Cola HBC was the best blue-chip performer, up 2.8% at 1,450 pence. Societe Generale lifted its price target on the soft drinks company to 1,890p from 1,740p after the soft drinks bottler held a Capital Markets presentation on Monday. Shares in Coca-Cola HBC have added 8.2% since the group said it expects an "improving external environment" to support growth in its markets over the period to 2020.

Meanwhile, Imperial Brands was down 0.1% despite the tobacco company on Wednesday reiterating its commitment to 10% growth in its dividend over the medium term.

Ahead of its investor day in Bristol, Imperial Brands said its focus remains on simplifying its brand portfolio and optimising its investment decisions both in terms of brands and markets. In addition, Imperial Brands said it will maintain a disciplined approach to costs, which will underpin plans to increase its dividend 10% by a year in the medium term.

In the FTSE 250, 3i Infrastructure was the best mid-cap performer, up 4.6% at 174.70p. The infrastructure investment group said it has raised a total of GBP385.0 million to fund the completion of previous investments and to fund new deals.

3i said it issued 233.3 million shares at 165 pence per share to raise the funds. Around GBP230.0 million of the proceeds will be used to fund the completion of investments made in Wireless Infrastructure Group and TCR, 3i Infrastructure said, with the rest to back new investment opportunities.

Workspace Group was adding 3.9% after the flexible office-space provider hiked its dividend by 25% as it reported rises in both its property valuation and rental income over its financial year that ended March 31. Workspace posted a final dividend of 10.19 pence per share, taking its full-year dividend to 15.05p per share, up 25% from the 12.04p per share paid for the year prior.

Net rental income rose 28% to GBP74.1 million from GBP57.7 million, driving up revenue to GBP101.2 million from GBP83.6 million, whilst Workspace's underlying property valuation increased by 21% to GBP1.78 billion from the GBP1.42 billion reported a year earlier.

Meanwhile, WH Smith was down 3.1%. The books and stationery retailer said sales have increased in the third quarter of its financial year so far, with a familiar pattern of strong trading in its travel business but a decline for its high-street branches.

WH Smith said group sales grew 2.0% year-on-year in the 14 weeks to June 4, with like-for-like sales flat. The group's financial year runs to the end of August. In the high street arm, total sales were down 4.0% and like-for-like sales down 3.0%, in line with expectations as the group focuses on profitability.

Shares in the New York were called for a positive open, with the Dow 30, the S&P 500 and the Nasdaq 100 indices all pointed up 0.1%.

Still in the economic calendar Wednesday, US mortgage applications are at 1200 BST. In the afternoon, there are US JOLTS job openings and the National Institute of Economic & Social Research's UK GDP estimate, both at 1500 BST, and US EIA crude oil stocks at 1530 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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