LONDON (Alliance News) - Shares have opened broadly higher in London Thursday, after the US Federal Reserve removed the word "patient" from its policy statement Wednesday but nevertheless indicated it will continue to be patient before raising US interest rates.
FTSE 100 gainers are led by miners and oil companies, including Fresnillo, Tullow Oil, Antofagasta and BHP Billiton. In the FTSE 250, Acacia Mining is a top gainer, up 3.9%, after being raised to Overweight from Neutral by analysts at HSBC.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 6,976.66
FTSE 250: up 0.6% at 17,461.50
AIM ALL-SHARE: up 0.1% at 715.94
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Hang Seng: closed up 1.5% at 24,468.89
Nikkei 225: closed down 0.4% at 19,476.56
DJIA: closed up 1.3% at 18,076.19
S&P 500: closed up 1.2% at 2,099.50
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GBP-USD: down at USD1.4835
EUR-USD: down at USD1.0683
GOLD: down at USD1,166.27 per ounce
OIL (Brent): down at USD55.23 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in GMT)
08:30 Switzerland SNB Interest Rate Decision
09:00 EU Economic Bulletin
10:15 EU Targeted LTRO
12:30 US Current Account
12:30 US Jobless Claims
14:00 US CB Leading Indicator
14:00 US Philadelphia Fed Manufacturing Survey
14:30 US EIA Natural Gas Storage
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The US Federal Reserve said Wednesday that a hike in its benchmark interest rate "remains unlikely" for the central-bank's April 29 meeting in Washington, but said nothing about the following meeting in June. In a statement following its second regular meeting of 2015, the Fed dropped its recent outlook of being "patient in beginning to normalize" monetary policy from its unprecedented near-zero rate, in place for nearly seven years. The Fed "anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labour market and is reasonably confident that inflation will move back to its 2% objective over the medium term," the statement said. "This change in the forward guidance does not indicate that the (monetary policy) committee has decided on the timing of the initial increase in the target range."
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UK Chancellor George Osborne set out a blueprint for a "national recovery" Wednesday as he announced tax cuts and other sweeteners in his government's final budget before the May 7 general election. "Today I report on a Britain that is growing, creating jobs and paying its way," Osborne said in his budget speech to Parliament, promising to deliver a "truly national recovery." He pledged more investment in manufacturing, science and the country's poorer northern regions, and he announced a higher minimum earnings threshold for paying income tax of GBP10,800 per year from April 2016, rising to GBP11,000 in 2017, among other measures. Business groups welcomed what the Institute of Directors, called "a solid and responsible budget." Osborne raised the economic growth forecast to 2.5% from 2.4% for this year and 2.3% from 2.2% in 2016 - all lower than the 2.6% recorded last year.
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Japan's all industry activity climbed as expected at the start of the year, after falling in the previous two months, figures from the Ministry of Economy, Trade and Industry showed. The all industry activity index rose 1.9% month-on-month in January, in contrast to a 0.1% fall each in November and December. December's index was revised from a fall of 0.3%.
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Japan and China held a top-level security meeting on Thursday, the first in four years, amid soured ties over a territorial spat and differing views of wartime history. Foreign affairs and defence officials of the two countries were expected to discuss a mechanism to avoid unintended clashes at sea. "It can be said that Japan-China relations appear to be advancing gradually," Japanese Deputy Foreign Minister Shinsuke Sugiyama told the meeting in Tokyo, Kyodo News agency reported.
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Swiss authorities have so far frozen about USD403 million in connection with the massive corruption case around Brazilian oil giant Petrobras, the Swiss Attorney General Michael Lauber said. Lauber, who addressed reporters during a visit to Brasilia, said that, of that total, Swiss authorities have already approved the return to Brazil of about USD121 million. The seizure was the latest development in the unfolding USD3.7 billion scandal around the state-controlled Petrobras, Brazil's largest company, that has tarnished Brazilian President Dilma Rousseff and provoked massive public protests.
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Russian President Vladimir Putin said Ukrainians and Russians are a single people. "We in Russia always thought that Russians and Ukrainians are one people. And I believe so today," Putin told a rally on Red Square marking the first anniversary of Crimea's "unification" with Russia. Putin argued that Crimea and Russia did not unite for territory or strategic aims, but that the peninsula was "the source of our spirituality and statehood."
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Benjamin Netanyahu's Likud party confounded all expectations by scoring a victory in Israel's parliamentary elections, all but guaranteeing a third-consecutive term for the hardline premier.
Likud was projected to take 29 or 30 seats in the 120-seat Knesset after almost 99% of the ballots were counted Wednesday. Its primary rival, the centre-left Zionist Camp, trailed with 24 seats.
Netanyahu aides said the premier would start the work of forming a government "immediately," seeking to complete it in two or three weeks.
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BROKER RATING CHANGES
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EXANE BNP STARTS DIAGEO WITH 'NEUTRAL' - PRICE TARGET 1975 PENCE
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MORGAN STANLEY RAISES RECKITT BENCKISER TO 'OVERWEIGHT' ('EQUAL-WEIGHT'); RAISES PRICE TARGET TO 6300 (5800) PENCE
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BERENBERG INITIATES GREGGS WITH 'SELL' - TARGET 820 PENCE
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BERENBERG INITIATES INCHCAPE WITH 'BUY' - TARGET 915 PENCE
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BERENBERG INITIATES PETS AT HOME WITH 'BUY' - TARGET 290 PENCE
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TRADERS: HSBC CUTS LADBROKES TO 'UNDERWEIGHT' ('NEUTRAL')
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TRADERS: HSBC RAISES ACACIA MINING TO 'OVERWEIGHT' ('NEUTRAL')
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COMPANIES - FTSE 100
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Next reported a sixth consecutive year of annual pretax profit growth, as sales increased in its stores and particularly online, and it predicted another year of growth this year as it continued with its strategy of focusing on its products and its profitability. Next reported a pretax profit of GBP794.8 million for the year to January 31, up from GBP695.2 million a year earlier, while excluding a GBP12.6 million gain that included a profit on the sale of its investment in Cotton Traders, pretax profit rose to GBP782.2 million from GBP695.2 million. The British fashion retailer raised its total full year ordinary dividend by 16% to 150 pence from 129 pence.
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AstraZeneca said it will co-commercialise its Movantik treatment for opioid-induced constipation in adults with chronic non-cancer pain with Daiichi Sankyo Inc, in line with its recent strategy of developing and commercialising drugs on its own as well as through partnerships. Under the deal, Daiichi Sankyo will pay a USD200 million up-front fee and subsequent sales-related payments of up to USD625 million. AstraZeneca will be responsible for manufacturing, will book all sales and will make sales-related commission payments to Daiichi Sankyo. Both companies will be jointly responsible for commercial activities.
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BHP Billiton said it has priced a five-year AUD1.0 billion note issued under the company's Australian medium-term note programme. It said the Australian dollar notes will pay interest at 3.00% and mature in March 2020. The proceeds will be used for general corporate purposes.
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Sky has announced an unseasonal increase to the price of its television packages, the Financial Times reported, coming just over a month after the broadcaster paid GBP4.2 billion to secure live Premier League rights. The company, which traditionally increases its prices in September, is to increase the average price of packages by GBP2.50 per month, with the cost of a Sport bundle to increase by GBP1 to GBP47 per month.
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COMPANIES - FTSE 250
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Property adviser Savills hiked its dividend payout as its pretax profit pushed higher in 2014 on the back of stronger revenue, with the company boosted by a strong London market, a recovery in the UK regional property market and a good performance in the US. Savills said its pretax profit for the year was GBP84.7 million, up from GBP70.1 million a year earlier. On the back of the rise in profit, the company has proposed a hike to its final dividend to 7.25 pence, from 7.00 pence, and said its total dividend payout for the year will be 23 pence per share, up 21% year-on-year, on the back of a further 12 pence supplementary dividend the company will pay based on the underlying performance of its transaction advisory business.
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Luxury shoe and accessories maker Jimmy Choo reported a narrowed pretax loss for 2014 thanks to a debt-for-equity swap deal it did last autumn, and its closely-watched revenue and operating earnings rose as its goods continued to prove popular and it opened more new stores, mainly in China, and renovated others. In its maiden set of annual results as a listed company, Jimmy Choo reported a pretax loss of GBP8.3 million for 2014, compared with the GBP21.4 million loss it posted in 2013, as finance costs dropped by GBP20 million following a debt-for-equity swap that it did last October. That meant its debt stood at GBP125.6 million at the end of 2014, down from GBP582.4 million a year earlier.
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Rentokil Initial said it has expanded its pest control business with the acquisition of US firm Eradico Services Inc and Sagrip SA, which will give the company a presence in the Guatemala and El Salvador markets. The FTSE 250-listed business services company did not provide any financial details on the acquisitions, but said the two businesses produced combined annual revenue of GBP7.3 million in the 12 months prior to the acquisition.
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Housebuilder Crest Nicholson Holdings said it has seen a strong start to the spring selling season and is confident of meeting its targets for the year. In a short statement ahead of the company's annual general meeting, Crest Nicholson Chairman William Rucker said the company's spring selling season has been strong since it published in January its results for the year to the end of October.
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The UK Competition and Markets Authority said an association of estate agents and lettings agents based in Hampshire, including a unit of Countrywide and a unit of Trinity Mirror, have been hit by a fine after admitting to breaching competition law. The competition regulator said Three Counties Estate Agents Ltd and Trinity Mirror Southern Ltd have agreed to pay penalties totalling more than GBP775,000 following an investigation into advertising of estate agents' fees.
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COMPANIES - OTHER
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German airline Deutsche Lufthansa's pilots, belonging to the Vereinigung Cockpit union, have called for a strike on Friday, to protest against their dispute over early retirement benefits. The union said it would now also strike the whole day Friday on Germany-wide short and mid-haul flights in addition to the industrial action planned for Wednesday and Thursday. It said flights at Lufthansa's budget units Germanwings and Eurowings wouldn't be affected by the strike action on Friday.
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Search giant Yahoo! is set to withdraw its last remaining physical presence in China by closing down its research and development center in Beijing, according to media reports on Wednesday. The R&D center was one of Yahoo's three global centres that was opened in 2009. The move will also see it cutting its global workforce of 12,500 by more than 2% or 300 positions, mostly engineers and scientists. The latest round of layoffs take Yahoo's job-cuts tally to about 700 to 900 employees since October, mostly at its international operations outside the US, amid a series of cost-cutting measures by CEO Marissa Mayer.
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Discount retailer Target plans to raise pay of all its workers to at least USD9 an hour starting next month, following similar moves by rivals Wal-Mart Stores Inc and TJX Cos Inc, the Wall Street Journal reported.
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Thursday's Scheduled AGMs/EGMs
Crest Nicholson
Arden Partners
Safestore Holdings
CRH
Chemring Group
Persimmon
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
11 Jan 2017 09:36
