LONDON (Alliance News) - UK shares have opened mixed Wednesday, confounding expectations of further gains, with small and mid-cap stocks rising, while blue-chips are slightly lower.
The FTSE 100 index is being weighed down by British American Tobacco, off 4.0%, after it said revenue in the first nine months of its financial year grew by 2.4% at constant foreign-exchange rates, as it raised its tobacco prices, but fell 9.6% at actual currency rates.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.2% at 6,361.59
FTSE 250: up 0.5% at 15,096.48
AIM ALL-SHARE: up 0.4% at 707.61
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Hang Seng: up 1.1% at 23,336.35
Nikkei 225: closed up 2.6% at 15,195.77
DJIA: closed up 1.3% at 16,614.81
S&P 500: closed up 2.0% at 1,941.28
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GBP-USD: down at USD1.6089
EUR-USD: flat at USD1.2711
GOLD: flat at USD1,247.92 per ounce
OIL (Brent): down at USD86.31 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times British Summer Time)
09:30 UK Bank of England MPC Vote
10:30 UK Bank of England Minutes
12:00 US MBA Mortgage Applications
13:30 US Consumer Price Index
13:30 Canada Retail Sales (MoM)
15:00 Canada Bank of Canada Interest Rate Decision and Rate Statement
15:30 Canada Bank of Canada Monetary Policy Report
15:30 US EIA Crude Oil Stocks
16:15 Canada Bank of Canada Press Conference
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Japan posted a merchandise trade deficit of JPY958.3 billion in September, the Ministry of Finance said - remaining in the red for the 27th consecutive month. The headline figure missed forecasts for a shortfall of JPY780.0 billion, following the JPY949.7 billion deficit in August. Exports were up 6.9% on year to JPY6.383 trillion , beating estimates for a gain of 6.5% following the 1.3% decline in the previous month.
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A deal between Russia and Ukraine on gas supplies for the upcoming winter should be finalized and signed next week if all sides keep up their "good will," EU Energy Commissioner Guenther Oettinger says. The agreement, which would be valid through the end of March, would see Ukraine pay USD385 per 1,000 cubic metres of Russian gas. It would have to pay for gas in advance, Oettinger says. In exchange, Ukraine will start settling its gas debts.
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Iran has assured neighbouring Iraq of help "until the end" in the fight against Islamic State militants, Iranian President Hassan Rouhani said Tuesday in Tehran. "As we supported Iraq from the beginning against those terrorists, we will be there until the very end," Rouhani told visiting Iraqi Prime Minister Haider al-Abadi, the Iranian presidency said. Al-Abadi is on his first trip to Iran since taking office last month. His office said the visit was aimed at "unifying regional and international efforts" to help Iraq in the fight against Islamic State militants.
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Ebola drug trials and collection of survivors' blood for treating patients are expected to get underway in West Africa within weeks, a senior World Health Organization (WHO) official said Tuesday in Geneva. The WHO and partner organizations are currently selecting treatment centres in Guinea, Liberia and Sierra Leone in order to conduct trials of experimental Ebola drugs, said Marie Paule Kieny, head of health information at WHO. Drug companies have been working to fast-track Ebola drugs and vaccines by testing them directly in West Africa, as advised by the WHO and international experts.
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Hong Kong's government and student leaders met on Tuesday in their first round of talks after three weeks of pro-democracy protests. The activists are calling for open elections for the Chinese territory's next chief executive in 2017, rejecting Beijing's decision to have a closed election committee nominate two to three candidates for the public vote.
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Egypt has invited Israel and the Palestinians to resume indirect negotiations next week on a long-term Gaza truce, Palestinian delegation member Qais Abdul Karim said Tuesday. The indirect negotiations had began on September 23, days before the expiry of a one-month truce that temporarily ended 50 days of fighting between Israel and the Hamas movement that runs Gaza. Israel and Egypt have since eased restrictions on the movement of people and goods through their border crossings with Gaza.
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The Pentagon said it is possible that weapons delivered by the US military and meant for Kurdish fighters in Kobane may have inadvertently fallen into the hands of Islamic State militants. At least one of 28 bundles of weapons did not reach its intended destination, spokesman Admiral John Kirby said, but noted he cannot confirm video that appears to show that Islamic State instead acquired the weapons. "The short answer is ... we don't know," he said.
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British EU lawmaker Nigel Farage has managed to reconstitute his eurosceptic group in the European Parliament after a member's resignation had briefly prompted its collapse. "The new group is up and running," parliament spokesman Jaume Duch confirmed on Tuesday. Having a political group in the parliament gives EU lawmakers more influence, but they require at least 25 parliamentarians from seven EU member states to join forces.
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BROKER RATING CHANGES
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JEFFERIES STARTS BG GROUP WITH 'BUY' - PRICE TARGET 1340 PENCE
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UBS RAISES ARM TO 'BUY' ('NEUTRAL') - PRICE TARGET 980 (970) PENCE
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TRADERS: ML RAISES RBS TO 'NEUTRAL' ('UNDERPERFORM') - TARGET 400 (335) PENCE
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BARCLAYS RAISES SMITH & NEPHEW TO 'OVERWEIGHT' ('EW') - TARGET 1120 (950) PENCE
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TRADERS: PANMURE INITIATES ROLLS-ROYCE WITH 'HOLD' - TARGET 744 PENCE
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COMPANIES - FTSE 100
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British American Tobacco said revenue in the first nine months of its financial year grew by 2.4% at constant foreign-exchange rates, as it raised its tobacco prices, but said that in sterling terms it was hit hard by the strength of the pound. The company, one of the world's biggest tobacco companies, said revenue grew at constant rates of exchange as a result of a slightly better price mix, despite increased competitive pricing activity in some of its key markets, in particular Australia and Malaysia, and weaker trading in Western Europe. However, at reported currency rates, it said it said revenue declined by 9.6%.
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Mining giant BHP Billiton Tuesday reported a 17% year-over-year increase in iron ore production for the first quarter, and a 1% growth from the fourth quarter. Production of metallurgical coal grew 25%. "Robust operating performance across our diversified portfolio in the September 2014 quarter delivered a nine percent increase in production with records achieved for eight operations and four commodities," Chief Executive Andrew Mackenzie said. Mackenzie said the company remains on track to generate production growth of 16% over the two years to the end of the 2015 financial year.
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BP scored a rare win this week in its legal battle over compensation payments from the Gulf of Mexico oil spill, The Daily Telegraph reported on Tuesday. The FTSE 100 oil company was boosted after the US Supreme Court ruled a group of parishes in Louisiana would not be able to sue the company for damaging wildlife in the area, the paper said.
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COMPANIES - FTSE 250
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Laird maintained its expectations for the full year, as it saw revenue rise in its third quarter to end-September, as "almost all" of its businesses saw growth across their markets. The electronics firm said revenue in its third quarter rose to USD251 million, up 15% from USD218 million, although in sterling terms, this growth was reduced to 6% to GBP150 million from GBP141 million.
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DIY and general merchandise retailer Home Retail Group said its Homebase business will pursue a three-year productivity plan to improve, but shrink, its store estate and strengthen its offering both in-store and online. Home Retail said the plan will accelerate the reduction in the number of Homebase stores by about 25% by the end of the 2018 financial year, from 323 at the end of the 2014 financial year, through scheduled lease expirations and a series of property exit transactions. "The result should be a more efficient and productive estate that can support future investments," the company said. Home Retail, which operates both Argos and Homebase, outlined its plans for its DIY business as it reported further like-for-like sales growth at both businesses in the first half of the year, driving a 3% increase in group revenue to GBP2.67 billion from GBP2.60 billion a year before.
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International Personal Finance said pretax profit rose 5% in the third quarter, driven by higher customer numbers, although profit was pulled back by currency movements, investments it made in new markets and weakness in the Czech and Slovak markets. The home credit business, with operations across Eastern Europe, reported pretax profit of GBP34.0 million in the three months to end-September, up from GBP32.5 million a year earlier, as revenue rose to GBP245.5 million, from GBP264.4 million, helped by a 4.8% increase in customer numbers to 2.6 million.
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Senior said its adjusted pretax profit in the period since July 1 has been in line with its expectations and said it expects its full-year results to meet forecasts, as it reported solid results from across its business units. The group said its performance in the first nine months of the year and the current level of activity meant it expects adjusted pretax profit to meet expectations. It added it is in a strong position for 2015, though cautioned its results could be impacted by any further currency volatility or any exacerbation of global uncertainty in markets.
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UBM said it is on track to meet its guidance for the full year as it performed in line with expectations in its third quarter to end-September, although it warned that the strength of sterling will continue to hit its reported results. The events marketing and communications services business said its constant currency performance remains on track, with all three of its business segments expected to deliver in line with the guidance it gave at its interim results in August.
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Playtech said revenue rose by more than a quarter in the third quarter of the year, and it's confident of exceeding current market expectations for the full year, as its casino product sales in particular powered ahead. The gaming software developer said revenue was EUR116.5 million in the three months to end-September, up from EUR90.6 million a year earlier, as casino software sales rose by a third to EUR62.4 million.
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Galliford Try on said it has been appointed to work on two office contracts in the UK worth a total of GBP77 million. The FTSE 250 construction group said it has been selected as preferred bidder by Northamptonshire County Council to build its new headquarters. That project is worth around GBP38 million, Galliford said. In addition, offshore energy engineering company Subsea 7 SA has selected the company for its new office building in Sutton in Surrey. Galliford said that project will be worth GBP39 million.
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Fashion retailer SuperGroup said it has appointed Non-Executive Director Euan Sutherland as its new chief executive, with founder Julian Dunkerton moving to the newly created role of founder and product and brand director. In a statement, the company said the change will allow Dunkerton, along with designer James Holder, to focus on developing its product ranges and "enhancing and protecting the brand" as it expands round the world.
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Computacenter maintained its outlook for the full year, as it saw revenue decline 3% in its third quarter to end-September, although revenues were flat at constant currency. The company said that it has seen a strong performance in the UK, but has been held back by its performance in France and Germany, although it expects both of these markets to improve in the fourth quarter.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Fitbug Holdings saw its shares rise sharply early Wednesday after it said US retail chain Target Corp and UK supermarket J Sainsbury PLC will stock Fitbug products in their wearables ranges from November 9, marking the company's largest retail sales agreements to date. In a statement, the maker of wearable devices and apps that encourage fitness and wellbeing, said its products will be stocked in all of Target's 1,800 stores as well as on Target.com, the online business. Sainsbury's, meanwhile, has agreed to stock Fitbug products in 293 stores.
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Petropavlovsk said it is on track to meet its gold production guidance for 2014, after output 2% rose in the third quarter compared with the previous quarter, while it now expects total cash costs for the year to fall thanks to cost cutting and the devaluation of the Russian rouble. The Russian gold miner said it produced 150,100 ounces in the third quarter of this year, meaning its on track to hit its 625,000 ounce target for 2014 as a whole. It said it realised an average gold price of USD1,329 an ounce in the quarter, with hedging it had done contributing USD59 an ounce.
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Cohort said one of its subsidiaries has been awarded a contract by BAE Systems PLC worth approximately GBP23 million. Under the deal, Cohort's SEA unit will provide its External Communications System for the entire Royal Navy submarine fleet.
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COMPANIES - INTERNATIONAL
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Yahoo Inc reported net income of USD6.8 billion for the third quarter, up from USD297 million in the third quarter of 2013, the California-based company said Tuesday. The profit includes a USD6.3 billion gain from Yahoo's sale of a stake in the Alibaba Group, as part of the Chinese company's initial public offering in September. Revenue increased by 1% to USD1.15 billion for the quarter, up from USD1.14 billion a year earlier.
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German automaker Daimler said Tuesday it has sold its 4% stake in US-based electric car maker Tesla Motors. Daimler said the stake sale will result in a cash inflow of around USD780 million, which will be used to strengthen its operational business. The cooperation between the partners on the automotive projects is unaffected. Development work for the Mercedes-Benz B-Class Electric Drive is completed, and the partnership with Tesla remains in place, Daimler said.
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Swiss engineering firm ABB Ltd's third-quarter net income declined to USD734 million from USD835 million in the previous year. Basic earnings per share was USD0.32, lower than last year's USD0.36.
After-tax gains from the sale of businesses amounted to USD145 million in the quarter. Quarterly revenue dropped to USD9.82 billion from USD10.54 billion in the prior year.
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Wednesday's Scheduled AGMs/EGMs
Ingenious Media Active Capital
Atlantis Japan Growth Fund
City of London Investment Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
29 Jul 2014 07:50
