LONDON (Alliance News) - London share prices were showing some resilience Wednesday, opening just slightly lower despite much larger losses overnight in the US and Asia.
Hargreaves Lansdown led FTSE 100 decliners, down 4.7%. The equities broker and investment fund supermarket reported higher first-half pretax profit and strong net business inflows, but saw operating margins come under pressure.
Providing an indication of that tight market, CYBG, the owner of the Clydesdale and Yorkshire retail banking brands, got its IPO away Wednesday but had to price it at the low end of the targeted range.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.3% at 5,906.72
FTSE 250: down 0.3% at 16,255.56
AIM ALL-SHARE: down 0.1% at 692.55
----------
Hang Seng: closed down 2.3% at 18,991.59
Nikkei 225: closed down 3.2% at 17,191.25
DJIA: closed down 1.8% at 16,153.54
S&P 500: closed down 1.9% at 1,903.03
----------
GBP: firm at USD1.4399 (USD1.4388)
EUR: firm at USD1.0905 (USD1.0898)
GOLD: flat at USD1,125.13 per ounce (USD1,125.76)
OIL (Brent): soft at USD32.81 a barrel (USD33.07)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Wednesday's Key Economic Events still to come
(all times in GMT)
08:45 Italy Markit Services PMI
08:50 France Markit Services and Composite PMI
08:55 Germany Markit Services and Composite PMI
09:00 EU Markit Services and Composite PMI
09:30 UK Markit Services PMI
10:00 Italy Consumer Price Index
10:00 EU European Commission Economic Growth Forecasts
10:00 EU Retail Sales
12:00 US MBA Mortgage Applications
13:15 US ADP Employment Change
14:45 US Markit Services and Composite PMI
15:00 US ISM Non-Manufacturing PMI
15:30 US EIA Crude Oil Stocks
----------
EU President Donald Tusk offered London sought-after concessions in a proposal published Tuesday, opening the next round of negotiations with member states, in a bid to convince British citizens to vote in favour of continued EU membership. British Prime Minister David Cameron said the proposed reforms deliver "substantial change," while adding that "there's more work to do" before final agreement, in comments to the BBC. But proponents of a so-called Brexit - Britain's departure from the EU - slammed the measures.
----------
The National Institute of Economic and Social Research left its UK growth outlook for 2016 unchanged and raised its 2017 forecast marginally as the economy is likely to gain strength from foreign demand. The NIESR pushed back its forecast for the timing of the first interest rate hike as it now see tightening only after the UK referendum on membership of the EU. According to NIESR, the most likely time to begin raising the rate is the second half of 2016. The think tank maintained its 2016 economic growth estimate at 2.3%. Growth will accelerate again in 2017 as the improving external environment strengthens export demand. The outlook for 2017 was raised to 2.7% from 2.6% estimated in November.
----------
Shop prices in the UK were down 1.8% on year in January, the British Retail Consortium said. That follows the 2.0% decline in December. Individually, food prices were up 0.1% on year - rising for the first time since August. Food prices fell 0.3% in December. Non-food prices tumbled an annual 3.0% for the second straight month. "Higher levels of consumer confidence are currently translating into other parts of consumer spending - in leisure, entertainment and eating out - rather than into shopping which is providing the backdrop to a tough trading environment for retailers but great news for shoppers," said BRC chief executive Helen Dickinson.
----------
China's service providers experienced the fastest growth in six months in January but overall private sector activity was stable due to the ongoing contraction in manufacturing. The Caixin General Services Purchasing Managers' Index rose to 52.4, the highest level since July, from December's 17-month low of 50.2, survey results from Markit showed. The Composite Output Index came in at 50.1 in January, slightly above the neutral 50-point level and up from 49.4 in December.
----------
Bank of Japan Governor Haruhiko Kuroda said there is no limit to measures for monetary policy easing and it is open to expand asset purchases further, if necessary. "If we judge that existing measures in the toolkit are not enough to achieve the goal, what we have to do is to devise new tools, rather than give up the goal," Kuroda said in a speech in Tokyo. In January, the bank surprised the markets by introducing negative interest rate.
----------
Japan's consumer confidence weakened as expected at the start of the year, though slightly, survey data from the Cabinet Office showed. The seasonally adjusted consumer confidence index dropped to 42.5 in January, in line with expectations, from 42.7 in December.
----------
Ireland's service sector activity expanded at the sharpest pace in more than nine-and-a-half years in January, survey figures from Markit Economics showed. The seasonally adjusted Purchasing Managers' Index, or PMI, climbed to 64.0 in January from 61.8 in December.
----------
US trade officials hope to sell lawmakers on a 12-nation Pacific trade pact that is to be formally signed in New Zealand on Thursday even as US elections look likely to delay congressional action. "Momentum for passage is growing," US Trade Representative Michael Froman told reporters, pointing to support from US business and agriculture groups for the Trans-Pacific Partnership. However congressional leaders have indicated they will put off a vote on the deal agreed among member countries last year until after November presidential and legislative elections.
----------
BROKER RATING CHANGES
---------
SOCGEN CUTS SAINSBURY TO 'HOLD' ('BUY') - TARGET 260 (310) PENCE
---------
JEFFERIES INITIATES ITV WITH 'BUY' - TARGET 310 PENCE
---------
GOLDMAN RESUMES NATIONAL EXPRESS WITH 'NEUTRAL'
----------
GOLDMAN RESUMES GO-AHEAD GROUP WITH 'SELL'
----------
GOLDMAN RESUMES STAGECOACH WITH 'NEUTRAL'
----------
BERENBERG INITIATES CARPETRIGHT WITH 'HOLD' - TARGET 450 PENCE
----------
BERENBERG INITIATES LAVENDON GROUP WITH 'BUY' - TARGET 230 PENCE
----------
COMPANIES - FTSE 100
----------
Hargreaves Lansdown reported higher first-half pretax profit and strong net business inflows, although the fund supermarket saw its operating margins come under pressure. Pretax profit rose to GBP108.1 million in the six months ended December 31, from GBP101.9 in the corresponding half the prior year. Hargreaves Lansdown lifted its interim dividend to 7.80 pence from 7.30p. Total assets under administration swelled 20% to GBP58.8 billion over the course of the 12 months to December 30, as net business inflows added up to GBP2.77 billion. Operating margins weakened to 67.9% from 70.7%.
----------
Johnson Matthey said it remains on track to deliver full financial year results that will meet expectations after reporting a small drop in sales during the third quarter as markets remain challenging for some of its divisions. The speciality chemical company said group sales in the three months to the end of December totalled GBP736.0 million, representing a small 1% drop from the GBP745.0 million in sales reported a year earlier. Although overall sales fell year-on-year, sales from continuing businesses were up 3% year-on-year.
----------
Sky said it has invested GBP300,000 in sports fan engagement and marketing firm InCrowd. InCrowd was formed by the people behind Opta, the sports data group, and focuses on developing mobile applications offering real-time content, match analysis and interactive games to sports fans. Sky Sports, Sky's sports-focused channel portfolio, will work with InCrowd to explore new ways to delivering sports content to users.
----------
AstraZeneca said it has secured conditional marketing approval from the European Commission For Tagrisso, or osimertinib, tablets used in the treatment of lung cancer. Eligibility for using the Tagrisso treatment will be dependent on the mutation status of a patients' cancer, which will be validated using a diagnostic test or based on a tumour tissue sample or plasma.
----------
Severn Trent increased its full-year guidance for the amount it will make from outcome delivery incentives and said the rest of the business remains on track to meet expectations. The water and wastewater company serving the Midlands and Wales said the net reward from the outcome delivery incentives for the full year is now expected to be GBP15.0 million. Utility companies in the UK are issued penalties or rewards for meeting or failing to meet certain measures and targets.
----------
British Airways has threatened to pull most of its aircraft out of London City Airport should a new owner of the hub raise charges in order to cover the GBP2.0 billion it is like to pay for the site, the Financial Times reported. The airline, owned by IAG, is the largest carrier at London City Airport, transporting around 40% of the passengers going through the hub each year. Willie Walsh, chief executive of IAG, has expressed concerns about the GBP2.0 billion valuation put on the airport by its current US owner, which is seeking to sell the airport and has already attracted offers from at least three groups.
----------
COMPANIES - FTSE 250
----------
Balfour Beatty said it has won a GBP245.0 million highways maintenance contract from Coventry City Council, Solihull Metropolitan Borough Council and Warwickshire County Council. The construction and infrastructure group said its Balfour Beatty Living Places unit will work with the three councils under the seven-year deal, under which it will be the single source provider for all three local authorities. The contract is extendible by three years.
----------
LondonMetric Property said it grew rental income in the third quarter as it continued to make acquisitions and disposals. The FTSE 250-listed property investor said its total investment activity in the quarter to the end of December totalled GBP142.1 million, with GBP92.7 million of disposals across its retail and leisure portfolio in the period, GBP31.2 million of distribution sector acquisitions, and an GBP18.2 million sale from the distribution portfolio.
----------
COMPANIES - LONDON MAIN MARKET AND AIM
----------
The delayed initial public offering of CYBG, the owner of the Clydesdale and Yorkshire retail banking brands in the UK, was priced at the lower end of the expected range amid volatility in financial markets, valuing the lender at GBP1.58 billion. At 180.0 pence per share, the IPO price was towards the bottom of the guided range of between 175.0p and 235p per share. Conditional trading of CYBG shares is due to begin Wednesday on the London Stock Exchange's Main Market, with unconditional trading set for Monday next week.
----------
Foxtons Group said its performance improved in the second half of the year and said it will pay a final and further special dividend to shareholders. The London-focused estate agent said its revenue rose 4.0% overall for 2015 to GBP150.0 million, despite a drop in property sales in London of around 11% amid a sharp cool down in activity in the capital, particularly in the prime, central London market. Foxtons declared a final and further special dividend payout for 2015 totalling 6.23 pence per share, taking its total dividend up to 11.00p, or a 13% rise year-on-year.
----------
COMPANIES - INTERNATIONAL
----------
Swiss crop chemicals firm Syngenta said ChemChina has offered to acquire the company at a value of over USD43 billion. ChemChina has offered USD465 per ordinary share plus a special dividend of CHF 5 to be paid conditional upon and prior to closing. The offer is equivalent to a Swiss franc value of CHF480 per share. Syngenta shareholders will in addition receive the proposed ordinary dividend of CHF11 in May 2016. The Syngenta boad unanimously recommended the offer to shareholders.
----------
Apple is reportedly expected to announced a smaller iPhone next month, in an effort to boost its slowing iPhone sales. A news report from Buzzfeed's John Paczkowski said that Apple is planning a product event for March 15. Apple is expected to launch a new iPhone-- iPhone 5SE-- a 4-inch smartphone that will look a lot similar like iPhone 5S but will sport features from the iPhone 6 and 6S. The new phone will also run on an A9 processing chip and will support Apple Pay.
----------
Online retailer Amazon.com is reportedly planning to open hundreds of bricks-and-mortar book stores, the Wall Street Journal reported. The paper quoted Sandeep Mathrani, chief executive of mall operator General Growth Properties, as saying that Amazon.com plans to open as many as 400 bookstores.
----------
Yahoo! reported a loss for the fourth quarter, hurt largely by a hefty goodwill impairment charge. Nevertheless, stripping out one-time items, Yahoo's earnings came in line with analysts' estimates. The struggling internet behemoth also announced that it is exploring strategic alternatives for some of its non-core web businesses. The company also will lay off 15% of employees.
----------
PC maker Lenovo Group reported its third-quarter profit attributable to equity holders rose 19% to USD300 million from USD253 million last year. Earnings per share were USD2.70, in comparison with USD2.30 a year ago. Operating profit for the quarter grew 17% to USD379 million from USD325 million a year earlier. Quarterly revenue was USD12.91 billion compared to USD14.09 billion last year, an 8% year-over-year decrease, or 2% year-over-year in constant currency.
----------
Swiss engineering firm ABB reported its fourth-quarter net income plunged 70% to USD204 million from last year's USD680 million. Earnings per share were USD0.09, compared to USD0.30 a year ago.
Operational earnings per share were USD0.35, compared to USD0.34 last year. Revenue declined 11% to USD9.24 billion from USD10.35 billion a year ago. On a comparable basis, revenue dropped 1%. Orders fell 12% on a reported basis and 2% on comparable basis to USD8.26 billion.
----------
Novo Nordisk reported its 2015 net profit increased by 32% to DKK34.9 billion. Earnings per share increased by 34% to DKK13.52. Adjusted for the partial divestment of NNIT, net profit and earnings per share increased by 22% and 25% respectively. Operating profit increased by 43% in Danish kroner and by 21% in local currencies to DKK49.4 billion. Sales increased by 22% in Danish kroner and by 8% in local currencies to DKK107.9 billion.
----------
Wednesday's Scheduled AGMs/EGMs
Redhall Group
Conygar Investment Co
Imperial Tobacco Group
Dunedin Smaller Companies Investment Trust
Future
----------
By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
