Barclays Share News (BARC)

LONDON (Alliance News) - Shares in London ended higher Tuesday, with investors shrugging off poor manufacturing data from the UK, the US and China, as corporate news took centre stage, with London Stock Exchange Group and Barclays enjoying different fortunes.

LSE ended at the top of the blue-chip FTSE 100 after attracting suitors from the US and Germany, while Barclays sunk after confirming it will reduce its African exposure and slash its dividend for the next two years.

The FTSE 100 was up 0.9%, or 55.79 points, at 6,152.88.

The FTSE 250 was 1.1 %, or 186.41 points, at 16,789.49, and the AIM All-Share was 0.6%, or 3.98 points at 696.85. In Europe, the CAC 40 index in Paris was up 1.2% and the DAX 30 in Frankfurt 2.3%

Intercontinental Exchange, the owner of the New York Stock Exchange, said it may enter the bidding for the London stock exchange operator, offering an alternative to the all-share merger with Deutsche Boerse already being discussed.

No approach has been made to the board of the LSE, according to US-based ICE, which confirmed a report by Bloomberg News that it was exploring a bid. According to that report, CME Group Inc also is assessing whether it could provide competition to Deutsche Boerse.

Later Tuesday, LSE confirmed it has received no takeover proposal from ICE, adding that discussions over a "merger of equals" with Deutsche Boerse "continue to progress".

Shares in LSE ended up 7.8% at 2,887.42 pence, having hit an all-time high of 2,918.00p earlier in the day.

Barclays reported a widened net loss for 2015, and said it will sell down the 62.3% stake held in its African business, slash annual dividends by more than half, and enlarge the size of its non-core unit, as new Chief Executive Officer Jes Staley looks to accelerate the group's restructuring and strengthen its financial position.

Staley said the bank intends to sell down the stake in Johannesburg-listed Barclays Africa Group over the next two to three years, with the aim of deconsolidating the business from the group's accounts. The African business is a "high quality" franchise, Staley told reporters.

He said that holding a majority stake has become less attractive due to the international reach of regulatory capital requirements, both in the UK and further afield, while the economic slowdown in South Africa and the depreciation of the rand have hit returns.

That move is one of several measures designed to simplify the group, Barclays said, confirming plans to prepare for ring-fencing regulations in the UK. Staley said the group will be founded upon two sibling entities, capable of achieving solid investment-grade credit ratings: Barclays UK, the ring-fenced bank, will house retail operations in the country, while the Corporate & International division will host the investment bank.

Barclays ended firmly in the red, down 8.1% at 158.10p. The stock went as low as 152.80p, though it did not touch its previous low of 147.45p in mid-February.

Elsewhere on the blue-chip index, Direct Line Insurance Group ended up 5.8%. The motor and home insurer reported higher profit and an increased dividend for 2015 ahead of consensus expectations, but Shore Capital and Nomura said the group's operating profit fell below their respective estimates.

Direct Line said pretax profit rose to GBP507.5 million in 2015, up from GBP456.8 million the prior year. Operating profit from continuing operations improved to GBP520.7 million from GBP506.0 million. Though the latter was ahead of consensus estimates of GBP493 million, it fell behind Shore's forecast of GBP557.0 million, while Nomura said it fell 1.0% shy of the broker's own expectations.

Direct Line lifted its total dividend for 2015 to 50.1 pence per share from 27.2p the prior year. The 2015 total dividend included a previously declared 27.5p first special payment following the sale of its international operations.

Miner Anglo American also attracted investors, ending up 2.3%, after it said the positive trend experienced in its rough diamond sales has continued, reporting a rise in sales value of its most recent sales cycle.

Anglo American conducts its diamond business through its investment in De Beers, in which it holds an 85% stake. Anglo American said De Beers' second sales cycle of 2016 had a sales value of USD610.0 million, which can be compared to the first sales cycle of 2016 which yielded a value of only USD545.0 million.

Ashtead Group shares dropped 9.2%, making it the worst performer in the FTSE 100. The equipment rental company reported a marginal slowdown in revenue growth in the third quarter, though pretax profit remained much higher year-on-year. The group said its pretax profit for the three months to the end of January was GBP139.1 million, up 17% year-on-year from the GBP113.9 million it posted in 2014.

Berenberg said Ashtead's third quarter update was broadly in-line with its estimates, but US arm Sunbelt disappointed. Sunbelt's rental revenue grew 14% to USD701 million, behind Berenberg's USD727 million forecast. Meanwhile, the business' earnings before interest, taxes, depreciation and amortisation grew 17% to USD317.0 million, but below Berenberg's USD379.0 million forecast.

Shares in Fresnillo closed down 6.5%. The miner said its profit dropped in 2015 as lower gold prices placed its margin under pressure and offset a small rise in revenue, as it cut its capital expenditure budgets further and delayed some of its projects in response to the current environment.

The gold miner said its pretax profit from continuing operations dropped to USD212.4 million in 2015 from USD251.1 million a year earlier. Fresnillo's revenue in 2015 amounted to USD1.44 billion compared to USD1.41 billion in 2014, a touch under analyst expectations.

Fresnillo will pay a final dividend of 3.35 cents in 2015, building on the interim dividend of 2.1 cents to create a total dividend for 2015 of 5.45 cents. That is considerably less than the 14.80 cents paid last year, but that included 11.8 cents of special dividends.

In the FTSE 250, Greggs ended as the best mid-cap performer, up 11%, after the bakery and food-to-go retailer reported growth in profit in its recently-ended financial year as revenue was boosted by an increase in customer visits and average transaction values.

Greggs said market conditions continued to be favourable during 2015, with low inflation leading to further rises in real disposable consumer income. As a result, the business saw strong growth throughout the year, although customer footfall in some shopping locations was subdued in the final quarter.

The company said its pretax profit in the year ended January 2 grew to GBP73.0 million from GBP49.7 million the prior year, as revenue rose to GBP835.7 million from GBP806.1 million. Greggs will pay a final dividend of 21.2 pence per share, up from 16.0p, taking its total dividend payout up 30% year-on-year to 28.6p.

Rotork shares ended up 13% after the actuators manufacturer said its cost-cutting plans were ahead of target, offsetting an expected oil and gas-driven fall in pretax profit and revenue in 2015.

The company said its pretax profit for the year to the end of December fell 28% to GBP101.9 million from GBP141.2 million in 2014, while revenue dropped to GBP546.5 million from GBP157.2 million, a 21% fall. Rotork said the results were in line with the guidance provided in its trading updates in September and November and said orders from the oil market have remained weak.

Rotork expressed confidence in its medium-term outlook and its cost-cutting measures. It is seeking to cut costs and said the actions taken so far will deliver higher-than-anticipated annual savings.

At the London equities close, shares in New York were higher, with the DJIA up 1.4%, the S&P 500 up 1.6% and the Nasdaq Composite up 2.0%.

Asian stocks also closed higher, with investors reacting to the Chinese required reserve ratio cut on Monday. The Japanese Nikkei 225 index closed up 0.4% Tuesday, the Shanghai Composite up 1.7%, and the Hang Seng up 1.6%.

The flurry of UK corporate news offset the impact of weak manufacturing data from the UK, the US and Asia.

The Caixin manufacturing Purchasing Managers' Index fell unexpectedly to 48.0 in February from 48.4 in January, survey results from Markit showed. This was the lowest reading in five months and below economist forecasts for the index to have remained unchanged at 48.4.

The official manufacturing PMI by the Chinese National Bureau of Statistics came in at 49.0 for February, missing forecasts for a score of 49.4, which would have been unchanged from the previous month. The NBS also said that its services PMI came in with a score of 52.7, down from 53.5 in the previous month.

The UK manufacturing sector expanded at the slowest pace since early 2013 in February, according to data from Markit. The Chartered Institute of Procurement & Supply/Markit Purchasing Managers' Index fell more than expected to 50.8 in February from 52.9 in January. This was the lowest reading since April 2013. It was forecast to drop to 52.3 in February.

The Institute of Supply Management manufacturing PMI reading from the US came better than expected, unlike those from China and the UK. However, the index still pointed to the fifth straight month of contraction.

The ISM said its purchasing managers index rose to 49.5 in February from 48.2 in January, with economists expecting the index to inch up to 48.5. However, a reading below 50 continues to indicate a contraction in manufacturing activity. The bigger than expected increase by the headline index was partly due to an acceleration in production growth, as the production index climbed to 52.8 in February from 50.2 in January.

Construction spending in the US increased by much more than anticipated in January, according to a report released by the US Commerce Department.

The report said construction spending surged up by 1.5% to an annual rate of USD1.141 trillion in January from the revised December estimate of USD1.124 trillion. Spending had been expected to rise by 0.5%. The much bigger than expected increase in construction spending reflected the strongest monthly growth since last May.

At the London equities close, the pound was at USD1.3928, broadly flat compared to USD1.3933 at the equities close on Monday. Similarly, the euro was at USD1.0851 at the close, having stood at USD1.0860 at the close Monday.

Brent oil was quoted at USD36.47 barrel, almost the same as USD36.48 a barrel at the close on Monday, while the gold price was at USD1,233.30, compared to USD1,233.70 at the close Monday.

In the economic calendar Wednesday, the UK construction Purchasing Manager's Index is due at 0930 GMT, and the eurozone producer price index is at 1000 GMT.

In the US, MBA mortgage applications are due at 1200 GMT, ADP employment change data are due at 1315 GMT. The Institute of Supply Management New York index is due at 1445 GMT and the Energy Information Agency crude oil stocks data are expected at 1530 GMT. The US Federal Reserve Beige Book is due at 1900 GMT.

The UK corporate calendar is expected to remain in full gear on Wednesday. ITV, Intertek Group, Virgin Money, Stagecoach, Synthomer, IndigoVision Group, Laird, Nichols, Empresaria Group, Costain Group, James Fisher & Sons and Dignity issue full-year results. Clinigen Group releases half-year results.

FTSE Russell will release the result of its quarterly FTSE index review after the London equities close Wednesday. Paddy Power Betfair and Mediclinic International are set to join the FTSE 100 after growing bigger from their recent mergers.

The betting firm and the hospital operator are expected to be joined by business-information publisher Informa and Wm Morrison Supermarkets, which bounces back into the blue-chip index having just been relegated in the last FTSE index review in December.

By Daniel Ruiz; danielruiz@alliancenews.com

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