LONDON (Alliance News) - The FTSE 250 is outperforming the FTSE 100 at the open Friday, led by Thomas Cook and Afren.
Thomas Cook, up 16%, said it has struck a strategic collaboration deal with Chinese investment group Fosun International Ltd under which the latter will acquire up to 10% stake in the travel operator. Its the first big move by Thomas Cook's new chief executive.
Troubled oil and gas explorer Afren, which is set to be demoted from the mid-cap index on March 23, also is looking to China to bring in "substantial" new capital, in the form of new equity, the Financial Times reported.
Meanwhile, sofa seller DFS Furniture has set its IPO price at the lower end of the company's guidance, with conditional dealings commencing Friday. The company will have a market capitalisation of GBP543.2 million.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.1% at 6,951.91
FTSE 250: up 0.2% at 17,337.68
AIM ALL-SHARE: up 0.2% at 715.69
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Hang Seng: closed down 0.1% at 24,164.00
Nikkei 225: closed up 1.2% at 18,971.00
DJIA: closed up 0.2% at 18,135.72
S&P 500: closed up 0.1% at 2,101.04
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GBP-USD: down at USD1.5226
EUR-USD: down at USD1.1014
GOLD: down at USD1,196.48 per ounce
OIL (Brent): up at USD60.75 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in GMT)
09:00 Italy Producer Price Index
09:30 UK Consumer Inflation Expectations
10:00 EU Gross Domestic Product
13:30 US Nonfarm Payrolls, Unemployment Rate, Hourly Earnings
13:30 US Trade Balance
13:30 Canada Building Permits
13:30 Canada International Merchandise Trade
13:30 Canada Labor Productivity
20:00 US Consumer Credit Change
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UK firms hired staff at the fastest rate in four months in February, results of a survey by the Recruitment and Employment Confederation, or REC, and KPMG showed. Permanent staff appointments continued to rise and the rate of increase was fastest since October 2014. Temporary staff appointments increased at the sharpest pace in five months. Overall job vacancies grew at the fastest rate in four months as growth in permanent and temporary vacancies quickened. Average starting salaries for people placed in permanent positions increased at a strong rate, unchanged from the previous month.
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The leading index for Japan, which measures the future economic activity dropped unexpectedly in January, after rising in the previous month, preliminary figures from the Cabinet Office showed. The leading index fell slightly to 105.1 in January from 105.3 in December. Economists had expected the index to rise to 105.8.
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The European Central Bank raised its growth outlook for the eurozone on Thursday, but its president warned that high unemployment and a downbeat economic performance in parts of the region meant there is no time for complacency. "Looking ahead, we expect the economic recovery to broaden and strengthen gradually," Mario Draghi said after announcing that the ECB had left its benchmark refinancing rate on hold at a historic low of 0.05%. "It was the most positive and optimistic assessment in a long while," said INB Bank chief economist Carsten Brzeski.
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The US Federal Reserve said the 31 largest US banks passed the first part of an annual stress test devised by financial regulators to check how banks react in a simulated crisis scenario. The Fed designed the stress tests to ensure the banks have enough capital to continue lending to US businesses and households in a severe economic downturn. The most severe hypothetical scenario in the stress test projected that loan losses at the 31 participating US bank holding companies would total USD340 billion during the nine quarters tested, the Fed said in a news release.
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Russia is happy to let the West play a bigger role in solving the conflict in Ukraine, President Vladimir Putin said, while his Foreign Ministry advised against sending Western military instructors to the country. "Right now, the role of all responsible members of the international community is growing, especially of those who have real influence on the Ukrainian leadership," Putin said after talks with Italian Prime Minister Matteo Renzi in Moscow. He added that the conflict can be solved only after all sides properly observe last month's Minsk peace accords. He also reiterated Russian demand that Ukraine begin a direct dialogue with the separatists in the country's east.
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BROKER RATING CHANGES
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S&P CAPITAL IQ RAISES AVIVA TO 'HOLD' ('SELL') - TARGET 580 (490) PENCE
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LIBERUM INITIATES JIMMY CHOO WITH 'BUY' - TARGET 210 PENCE
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TRADERS: HSBC RAISES ASOS PRICE TARGET TO 3370 (2500) PENCE - 'NEUTRAL'
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COMPANIES - FTSE 100
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AstraZeneca guided that it expects its total revenue to decline by a mid-single digit percentage at constant exchange rates in 2015, in line with previous sales revenue guidance it gave at the time of its full-year results, as it announced changes to the way it presents its revenue. At the time of its full-year results in February the company guided that it expects its overall sales revenue to decline by mid single-digit percent at constant exchange rates in 2015, while core EPS is expected to increase by low single-digit percent, also at constant rates. On Friday, AstraZeneca said that based on current exchange rates, total revenue is expected to decline by low double-digit percent at actual exchange rates, and core earnings per share is expected to be broadly in line with 2014.
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UK Chancellor of the Exchequer George Osborne has said he made a mistake in not radically restructuring Royal Bank of Scotland Group back in 2010 but adds he would now like to push ahead with selling the government's stake in the bank as quickly as possible, the Financial Times reported. The Chancellor, speaking in an interview with the paper's FT Weekend magazine, said he would like to proceed with a sale "as quickly as we can to get rid of it". Osborne conceded, however, that the size of the government's stake in the UK bank is "massive" and suggested the sale could take years to complete.
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COMPANIES - FTSE 250
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Thomas Cook Group said it has struck a strategic deal with Chinese investment group Fosun International Ltd under which the latter will acquire a 5% stake in the travel operator. Thomas Cook said Fosun will pay GBP91.8 million to acquire 73.1 million shares Thomas Cook will issue to it, giving Fosun a 5% stake in the company. The shares are valued at 125.58 pence, compared to the travel firm's opening price Friday of 138.00p, up 14%. Fosun then intends to acquire further Thomas Cook shares via open market purchases, with plans to increase its shareholding in the company to around 10% of its enlarged share capital.
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Troubled oil and gas company Afren also is looking to China to bring in "substantial" new capital, in the form of new equity, the Financial Times reported. The Africa-focused explorer and producer has been going through tough times, faced with the dip in commodity prices as well as its own management issues. Ethelbert Cooper, the Liberian entrepreneur who founded Afren, plans to recapitalize the company in partnership with a consortium of Chinese investors. This will become the first Africa-China partnership in the oil and gas sector listed in the UK.
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Miner Evraz said it has signed an agreement to sell its structural tubing business for a total of USD51 million in cash to Maruichi Oregon Steel Tube. The tubing business is owned by Evraz North America, and the USD51 million deal includes USD8.5 million of proceeds from the sale of inventories. The cash from the deal will be re-invested in the the North American subsidiary.
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Construction and support services company Kier Group said it has promoted three executive directors to its board, leading to the departure of its chief operating officer. The changes mean Steve Bowcott, Kier's chief operating officer, will leave the company on April 30.
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Alliance Trust proposed a special dividend, as it posted a total return on net asset value below the MSCI All Country World Index for 2014 and said it was reasonably pleased with its performance in the latter half of the year after a weaker start. It proposed a fourth interim dividend of 2.4585 pence, and including the special dividend of 2.456 pence, takes the total dividend for 2014 to 12.38 pence, up 14% from 10.83 pence a year before. The trust posted a total return on net asset value of 8.1%, below the 11.2% total return delivered by the MSCI All Country World Index.
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COMPANIES - LONDON MAIN MARKET AND AIM
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DFS Furniture said it has set a price at the lower end of the company's guidance for its upcoming initial public offering, with conditional dealings commencing Friday. The company said it has set an offer price of 255.0 pence per share, which would give it a market capitalisation of GBP543.2 million. This is toward the lower end of the company's guidance from February, when it said the offer price would be between 245.0 pence to 310.0 pence per share
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Falkland Oil and Gas said the Zebedee exploration well in the company's namesake country has been spudded by Premier Oil. Falkland Oil has a 40% interest in the Zebedee well, whilst Premier as operator of the license holds a 36% stake. Rockhopper Exploration holds the remaining 24%. The well is targeting estimates of around 21 million barrels of oil equivalent.
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COMPANIES - INTERNATIONAL
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It's a gain of over 6,000% for investors who bought shares of Pharmacyclics Inc back in February 2010 and held them these past five years. Pharmacyclics, whose flagship cancer product is Imbruvica, is to be acquired by AbbVie Inc for USD261.25 per share, which equates to a total transaction value of USD21 billion. AbbVie has outbid Johnson & Johnson, long considered as the front-runner, to sign on the dotted line of the acquisition deal. Imbruvica is being jointly developed and commercialized by Pharmacyclics and Johnson & Johnson's subsidiary Janssen Biotech Inc.
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Commercial real estate services firm CBRE Group Inc is in discussions to acquire Johnson Controls Inc's global workplace solutions or GWS business for over USD1 billion, reports said. The division manages 1.8 billion square feet of corporate real estate worldwide. While the value of the deal is not yet known, it is said to be worth between USD600 million and USD1.5 billion.
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Friday's Scheduled AGMs/EGMs
Elephant Capital
WM Morrison Supermarkets
Motive Television
Rangers International Football Club
William Sinclair Holdings
Spitfire Oil
Ixico
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
11 Jan 2017 09:36
