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(Alliance News) - Stock prices in London are seen opening slightly higher on Wednesday following positive trading in Asia, even as investors tracked developments in the Russia-Ukraine crisis.
In early company news, lender Barclays launched a share buyback programme, miner Rio Tinto posted its largest profit ever, and carmaker Aston Martin reported a narrowed loss.
IG futures indicate the FTSE 100 index will open 10.39 points higher at 7,504.60. The index closed down 9.88 points, or 0.1%, at 7,494.21 on Tuesday.
Barclays said it delivered a strong performance in 2021 embodied by a resilient, growing and well-capitalised balance sheet.
For 2021, total income edged higher to GBP21.94 billion from GBP21.77 billion in 2020, though net interest income was down slightly to GBP8.07 billion from GBP8.12 billion. Pretax profit almost tripled to GBP8.41 billion from GBP3.07 billion in 2020.
The bank's 2021 common equity tier one ratio - a key measure of a bank's financial strength - was 15.1%, unchanged from 2020.
Barclays declared a total dividend of 6.0 pence, substantially higher than the 1.0p paid out in 2020. The bank also intends to initiate a share buyback of up to GBP1.0 billion, which is expected to commence in the first quarter of 2022.
"Looking ahead into 2022, we are focussed on delivering consistent performance and returns across our businesses, supported by robust management of our balance sheet, costs and controls. We recognise that the economic environment is more than usually uncertain, with rising inflation rates and tighter monetary policy, while many parts of society continue to recover from the severe social and economic effects of the COVID-19 pandemic," said Chief Executive Officer CS Venkatakrishnan.
Rio Tinto reported a sharp rise in annual earnings boosted by higher commodity prices as the Anglo-Australian miner paid out its highest total dividend ever.
For 2021, Rio generated sales revenue of USD63.50 billion, up 42% from USD44.61 billion in 2020 as pretax profit doubled to USD30.83 billion from USD15.39 billion. Adjusted underlying earnings surged to USD21.4 billion from USD12.46 billion.
Rio Tinto declared total 2021 dividend of 1,040 US cents, up from 557.0 cents in 2020. This also included a 247 cents special payout.
Looking ahead, Rio said capital expenditure to be USD8.0 billion in 2022, rising to USD9.0 billion to USD10.0 billion in 2023 and 2024. The miner's production guidance was unchanged from January update.
Aston Martin Lagonda posted a sharp rise in annual revenue as the luxury carmaker was boosted by significant growth in Americas and record sales in China, driven by strong demand for its sports utility vehicle, the DBX .
For 2021, Aston Martin generated revenue of GBP1.10 billion, up 79% from GBP611.8 million in 2020, and its pretax loss narrowed by half to GBP213.8 million from a loss of GBP466 million.
Aston Martin's 2021 total wholesales were GBP6.18 billion, up 82% from GBP3.39 billion in 2020 as more normal operations were resumed following Covid-19 restrictions in 2020.
The carmaker said its brand desirability is strong, pointing to retails outpacing wholesales. Wholesales are deliveries to dealers, while retails are dealer sales to customers.
The Aston Martin Valkyrie Spider was two-times oversubscribed following its launch in the summer, the company noted. It also said the order book was filling up for the plug-in hybrid supercar Valhalla, which is now due to start deliveries in early 2024.
Looking ahead, the Warwickshire, England-based firm said it was "well on its way" to achieving medium-term targets of 10,000 wholesales, GBP2 billion revenue and GBP500 million adjusted EBITDA by 2024/25.
Supply chains globally continue to experience disruption, Aston Martin said, and it is focused on mitigating any impact on production.
The first quarter is expected to be the smallest quarter of the year, given the timing of product launches of the DBX707 in the second quarter and V12 Vantage in third quarter. The carmaker is refining the production process for the Valkyrie hypercar programme, it said.
"The operating environment remained challenging throughout 2021. Despite this, we grew our core business to plan, with a demand-led delivery of our volume targets and enhanced core profitability. We achieved strong pricing and closed the year with dealer stock at optimum levels. We also started delivery of the once-in-a-generation Aston Martin Valkyrie hypercars. This was achieved despite the technical ambition of the product, supply chain constraints and with no compromise on quality, resulting in fewer cars than originally planned shipping in 2021," said Chief Executive Officer Tobias Moers.
In Asia on Wednesday, the Shanghai Composite was ended 0.9%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney closed up 0.6%. Financial markets in Japan were closed for the Emperor's Birthday holiday.
US President Joe Biden on Tuesday announced the "first tranche" of sanctions against Russia, including steps to starve the country of financing, saying Moscow had started an invasion of Ukraine.
Further, Biden threatened tougher steps if Russia "continues its aggression".
"We're implementing sanctions on Russia's sovereign debt. That means we've cut off Russia's government from Western financing," Biden said.
"It can no longer raise money from the West and cannot trade in its new debt on our markets or European markets either." The measures also target VEB, Russia's state development bank, and members of the country's "elites," the US leader said.
"They share the corrupt gains of the Kremlin policies, and should share in the pain as well."
Still, Biden left the door open to a final effort at diplomacy to avert a full-scale Russian invasion.
Russian President Vladimir Putin said Wednesday that Moscow was ready to look for "diplomatic solutions" amid raging tensions with the West over Ukraine but stressed that the country's interests were non-negotiable.
Western officials have been warning for weeks the Russian leader has been preparing an all-out invasion of Ukraine.
However, the sanctions were not as bad as feared - crucially not aiming at Russia's crude exports - providing some much-needed breathing room for investors.
"While it's always sensible to react cautiously when responding to a provocation, when you spend most of the last few weeks' warning of 'massive' sanctions, it rather undermines your narrative if you fail to deliver them when your warnings are ignored," commented CMC Markets analyst Michael Hewson.
"As sentiment continued to ebb and flow, markets in Asia edged cautiously higher, and this looks set to see markets here in Europe do the same, as we look to how and when the next development plays out," Hewson added.
The pound was quoted at USD1.3601 early Wednesday, firm from USD1.3595 at the London equities close Tuesday.
The euro was priced at USD1.1338, down from USD1.1344. Against the Japanese yen, the dollar was trading at JPY115.08 in London, up from JPY114.94.
Brent oil was quoted at USD96.90 a barrel Wednesday morning, firm from USD96.70 late Tuesday. Gold stood at USD1,895.84 an ounce, soft from USD1,900.36.
In Wednesday's economic calendar, there is eurozone inflation data at 1000 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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