LONDON (Alliance News) - UK shares have continued their rally at the open Friday, while the pound has slipped below USD1.50, as markets digest the European Central Bank's larger-than-expected quantitative easing programme announced on Thursday.
ECB President Mario Draghi said the bank will start buying sovereign debt in March at a rate of EUR60 billion per month through September 2016. However, the bank also said it will continue until there is a "sustained adjustment in the path of inflation which is consistent with" the ECB's aim of achieving inflation rates below, but close to, 2% over the medium term, making the process effectively open-ended.
Crude oil prices are firm on news of the death of King Abdullah of Saudi Arabia, the largest oil producer in the Organization of Petroleum Exporting Countries, on speculation of a potential change to the current hands-off Saudi policy toward the world oil price.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.4% at 6,823.25
FTSE 250: up 0.5% at 16,458.57
AIM ALL-SHARE: up 0.1% at 697.48
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Hang Seng: closed up 1.3% at 24,850.45
Nikkei 225: closed up 1.1% at 17,511.75
DJIA: closed up 1.5% at 17,813.98
S&P 500: closed up 1.5% at 2,063.15
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GBP-USD: down at USD1.4990
EUR-USD: down at USD1.1349
GOLD: down at USD1,294.70 per ounce
OIL (Brent): up at USD49.57 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)
08:30 Germany Markit Manufacturing/Services PMI Preliminary
09:00 EU Markit Manufacturing/Services/Composite PMI Preliminary
09:00 Italy Trade Balance
09:30 UK Retail Sales
13:30 US Chicago Fed National Activity Index
14:45 US Markit Manufacturing PMI Preliminary
15:00 US CB Leading Indicator
15:00 US Existing Home Sales
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Saudi Arabia's King Abdullah bin Abdulaziz, who maintained strong relations with the West and joined in the fight against terrorism, has died and his brother Salman has become king. The king, whose age was believed to be 91, will be laid to rest after the noon prayer on Friday in the city of Riyadh at the Mosque of Turke al Abdullah. Following the funeral there will be a three-day period for condolences, state-run Saudi television said. The broadcaster announced that Abdullah's brother, Salman, 79, has become king. He has been crown prince and defence minister since 2012 and served as a governor of Riyadh province for almost five decades. It added that King Salman has called on the royal family's council to pay allegiance to Muqrin, the late king's half brother, as his crown prince.
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Waving the red and white flags of SYRIZA, tens of thousands of Greeks took to the streets of Athens, declaring their determination to oust the conservative New Democracy party in favour of the anti-bailout leftists on election day. A mix of students, professionals and the elderly, overflowed from central Omonia square to hear 40-year-old SYRIZA leader Alexis Tsipras promise to upset the traditional parties that have ruled Greece for four decades. "We stand here and ask you for a clear mandate so that we can free the country from the bailout," Tsipras told supporters. Tsipras is almost certain to win Sunday's vote and will be the first ever leftist leader to be elected in Greece. Opinion polls show SYRIZA maintaining a solid lead of 4 to 5% over Prime Minister Antonis Samaras' New Democracy party.
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British households perceived that the value of their home increased in January, but the pace of growth was the weakest in 14 months, survey figures from Markit Economics and Knight Frank showed Friday. The Knight Frank/Markit House Price Sentiment Index fell to 58.2 In January from 59.1 in the previous month. Any figure above 50 indicates that prices are rising and the higher the figure, the steeper the increase. It was the twenty second consecutive month that the reading has been above 50.
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China's manufacturing sector contracted barely in January, the latest survey from HSBC Bank showed on Friday with a PMI score of 49.8. That beat forecasts for 49.5 and was up from 49.6 in December - although it remains below the boom-or-bust line of 50 that separates expansion from contraction.
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The manufacturing sector in Japan continued to expand at an accelerated pace in January, the latest flash purchasing managers' index from Markit Economics and the Japan Materials Management Association revealed. The Markit/JMMA manufacturing purchasing managers' index, or PMI, edged up to 52.1 in January from 52 in December.
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Yemeni President Abd Rabu Mansour Hadi and the government resigned Thursday, a day after a deal to resolve a standoff with the Houthi rebel movement that has overrun the capital. Hadi's resignation, reported by local media and confirmed online by government officials, came only minutes after that of Prime Minister Khaled Bahah and his technocratic government.
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BROKER RATING CHANGES
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UBS CUTS EXPERIAN TO 'NEUTRAL' ('BUY')
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TRADERS: GOLDMAN RAISES ANGLO AMERICAN TO 'NEUTRAL' ('SELL')
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TRADERS: GOLDMAN CUTS ANTOFAGASTA TO 'NEUTRAL' ('BUY')
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UBS CUTS MICHAEL PAGE TO 'NEUTRAL' ('BUY')
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TRADERS: MORGAN STANLEY CUTS MICHAEL PAGE TO 'EQUAL-WEIGHT' ('OVERWEIGHT')
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TRADERS: JPMORGAN CUTS TELECITY GROUP TO 'NEUTRAL' ('OVERWEIGHT')
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UBS CUTS RENTOKIL INITIAL TO 'SELL' ('NEUTRAL') - TARGET 112 PENCE
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BERENBERG CUTS OXFORD INSTRUMENTS TO 'HOLD' ('BUY') - TARGET 950 (1360) PENCE
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COMPANIES - FTSE 100
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Anglo American is considering selling a cluster of coal assets in eastern Australia to try and boost returns under weak commodity prices, the Financial Times reported Thursday, citing people familiar with the matter. The company is preparing to sell five mines in Queensland and New South Wales as part of a USD3 billion to USD4 billion asset disposal programme which was ordered by Chief Executive Mark Cutani, the paper said. Its Dawson, Foxleigh and Drayton mines will all be primed for a possible sale.
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COMPANIES - FTSE 250
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Close Brothers Group's securities division is continuing to be a drag on the group, according to a first-half pre-close trading update, but the financial services group reported loan book growth in its banking division and a rise in assets under management over the course of the period. Overall, Close Brothers said it remains "confident" in the outlook for the current financial year. In a statement for the five months ended December 31, 2014, Close Brothers said that Winterflood Securities has suffered from "difficult" market conditions, with average bargains per day remaining broadly stable but income per bargain declining "significantly" due to higher market volatility and reduced investor risk appetite.
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Luxury shoemaker Jimmy Choo said revenue grew by 12% in 2014, with demand for its shoes in Asia being the main driver of growth. The British shoe company, which made its London debut late last year, said net revenue for 2014 was GBP299 million, up from GBP282 million in 2013, representing growth of 6.2% at actual currency, but 12% at constant currency rates. Retail revenue grew by 8.7% at actual rates to GBP193 million, with wholesale increased slightly by 1.9% to GBP100 million. Retail like-for-like sales grew by 5.7% at constant currency, buoyed by online.
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Carillion said it has signed contracts worth around GBP200 million to provide facilities management services for public sector prisons in the UK. The FTSE 250-listed construction and support services company said the award of the contracts is a confirmation of the announcement made by the UK Ministry of Justice in November last year, when Carillion was named preferred bidder on two contracts to provide a range of hard and soft facilities management services for the National Offender Management Service.
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Ultra Electronics said it is set to make a non-cash provision in its 2014 accounts after it received notice that its Oman Airport IT contract has been terminated. The company said it will start talks with the client next week to work towards a settlement and could not make any further comment at this stage.
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Spectris said it has struck a deal to buy privately-held US engineering software company ReliaSoft Corporation for USD42 million in cash. Spectris said Arizona-based ReliaSoft provides reliability engineering software, education, consulting and related services to product manufacturers and maintenance companies.
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COMPANIES - LONDON MAIN MARKET AND AIM
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EnQuest said its full-year production rose in 2014 towards the top end of its guidance, but revenue and earnings are both set to be lower year-on-year. The oil and gas explorer, which was relegated from the FTSE 250 earlier this year following a sharp decline in its shares on the back of the declining oil price, said its provisional production total for calendar 2014 was 28,267 barrels of oil equivalent per day, up 17% on its 2013 total. It gave guidance for production of between 33,000 and 36,000 boepd for 2015.
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Premier Foods Says FY Trading Profit In Line With Expectations At GBP131M; FY Adjusted Pretax Profit To Be GBP77.1M, EPS Of 8.6p
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Discount retailer B&M European Value Retail said sales in the third quarter grew at a faster pace than the year before, boosted by the acquisition of its German business Ja Woll, but the sales growth was slower than in the first half of the year due to more competitive market conditions. The value retail chain, which listed in London last year, said it is confident of meeting full-year market expectations, after group sales in the 13 weeks to December 27 rose 28.8% to GBP527.9 million from the year before. The growth rate was stronger than the 26.4% growth it reported for the same quarter last year, but slower than the almost 30% sales growth in posted during the first half of the year.
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Sagentia Group said it is considering the return of about GBP10 million to shareholders by way of a tender offer following a review of its cash requirements. In a statement, Sagentia said it reviewed its cash position after evaluating a number of potential acquisitions of different sizes in the past year. News of the potential windfall came as Sagentia said it expects operating profit ahead of its expectations at the time of the interim results, citing "the mid-year correction in the sterling-dollar exchange rate".
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Molecular diagnostics company EKF Diagnostic Holdings said it has agreed a deal with medical technology company ANGLE to investigate combining EKF's PointMan DNA enrichment technology with ANGLE's Parsotix circulating tumour cell harvesting platform. The deal will initially focused on work on colorectal cancer and will then expand to other cancer types. Circulating tumour cells will be harvested via Parsotix and then analysed using PointMan's technology to identify genetic variation in the cancer.
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Gulfsands Petroleum said Dubai-based Arawak Energy International has terminated the agreement between the two companies to develop new business opportunities in the Middle East and North Africa region. Gulfsands said Arawak advised that it the decision to terminate the agreement resulted from talks held with the company in recent days and public statements made by shareholders and non-executive directors of Gulfsands in recent weeks. In addition, Arawak has confirmed that, in view of these events, it reserves all of its rights under the loan facility it has provided to Gulfsands, including the right to terminate its loan facility and to require repayment of all money advanced to the company under the deal. At present, Arawak has advanced a total of USD10 million to Gulfsands under the deal.
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COMPANIES - INTERNATIONAL
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Hong Kong-based conglomerate Hutchison Whampoa said it has entered into exclusive negotiations with Spanish telecoms group Telefonica SA regarding the potential acquisition of O2 UK for an indicative price of GBP9.25 billion in cash. Hutchison, which already owns Three UK, the smallest of the UK's mobile operators, said the GBP9.25 billion purchase price would be paid at completion, with a further GBP1 billion due based on the cumulative cash flow of the combined Three-O2 businesses. The timing and amount of this further payment would depend on the cash flow of the businesses, Hutchison said.
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US technology giant Apple revealed in a regulatory filing that Chief Executive Officer Timothy Cook received a 2013 total compensation that more than doubled from last year. Cook, who has led Apple for more than three years since August 2011, received a total compensation of USD9.22 million, including base salary, incentives and other compensation in 2014, compared to the USD4.25 million he received last year, and the USD4.17 million he got in 2012.
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Starbucks, the world's largest specialty coffee retailer, said its first quarter profit jumped 82% from last year, helped by strong holiday sales and a hefty gain from the acquisition of its Japan joint venture. The company's quarterly earnings per share, excluding items, came in line with analysts' expectations as did its quarterly revenue. However, the company forecasts current quarter earnings below analysts' current consensus estimate.
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Maryland Attorney General Brian Frosh announced a settlement with Wells Fargo Bank and JPMorgan Chase Bank to resolve allegations that the financial firms illegally steered customers to a now-defunct Maryland-based title company in exchange for marketing services that increased their customer base. Under the agreement, Wells Fargo will provide USD10.8 million in restitution to customers who used a Wells Fargo loan officer and closed a settlement with Genuine Title between September 2011 and early 2014. Wells Fargo will also pay penalties of USD21 million to the CFPB and USD3 million to the Consumer Protection Division. Chase will provide USD300,000 in restitution and pay penalties of USD500,000 to the CFPB and USD100,000 to the Consumer Protection Division.
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Credit card lender Capital One Financial Corp reported fourth-quarter net earnings to stockholders of USD974 million or USD1.73 per share compared with USD835 million or USD1.43 per share last year. Revenues for the quarter were USD5.8 billion compared with USD5.54 billion in the prior year.
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Friday's Scheduled AGMs/EGMs
Polar Capital Global Healthcare Growth and Income Trust
Avacta Group
Solgold
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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