LONDON (Alliance News) - Shares prices opened slightly lower Tuesday, giving back some of the gains made on Monday, when investors bet on UK voters opting to remain in the European Union.
The referendum on EU membership will be held on Thursday, with first results known only late that night.
Whitbread provided some positive news away from the Brexit campaign Tuesday. The owner of the Premier Inn hotel chain and Costa coffee shop brand said total sales in the 13 weeks ended June 2 grew by 8.0% on the same period the year before, as like-for-like sales rose by 1.8%.
In or out of the EU, we still need our skinny lattes, it appears. The stock was up 0.8% in early trade.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.7% at 6,162.01
FTSE 250: down 0.2% at 16,924.20
AIM ALL-SHARE: flat at 721.63
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Hang Seng: up 0.6% at 20,639.69
Nikkei 225: closed up 1.3% at 16,169.11
DJIA: closed up 0.7% at 17,804.87
S&P 500: closed up 0.6% at 2,083.25
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GBP: up at USD1.4708 (USD1.4689)
EUR: firm at USD1.1340 (USD1.1318)
GOLD: soft at USD1,283.61 per ounce (USD1,285.75)
OIL (Brent): soft at USD50.10 a barrel (USD50.39)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)
0930 UK public sector net borrowing
1000 Germany ZEW survey
1000 EU ZEW survey
1100 UK CBI industrial trends survey
1355 US Redbook index
1400 EU ECB President Draghi speech
1500 US Fed Chair Yellen testifies
1930 US FOMC Member Powell speech
2130 US API weekly crude oil stocks
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Billionaire currency trader George Soros has warned a vote by UK voters to Leave the EU will trigger a plunge in the pound greater than Black Wednesday - but without the benefits seen after the crisis that made him a fortune. The veteran financier said he was certain sterling would fall steeply and quickly should voters back Brexit on Thursday, leading to a "Black Friday" scenario more immediate and dramatic than when Britain crashed out of the European Exchange Rate Mechanism in the 1990s. However, unlike the departure then, there would be none of the benefits to the economy seen by a devalued pound and most voters will be left "considerably poorer", he predicted.
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Remain campaigners have warned voters will be hit hard in the pocket if Britain quits the European Union, while the Leave camp has highlighted immigration pressures as the referendum campaign enters its final stages. Unions warned families face an extra GBP580 a year bill if the country backs Brexit and retail chiefs said the impact of quitting would be "catastrophic". David Cameron's former policy guru, meanwhile, claimed the Prime Minister was told four years ago that it was "impossible" for the government to meet its immigration promises as long as the UK remained in the 28-member bloc.
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Members of the Bank of Japan's monetary policy board said that the country's overall economic recovery was unaffected by recent weak data, minutes from the bank's April 27 and 28 meeting revealed. The members also felt that Japan faced several downside risks - not the least of which came from overseas economies. "The economy was expected to head toward a moderate recovery, supported partly by the effects of the government's policies, while the employment and income situation continued to improve. However, attention should be given to the increased uncertainty in overseas economies," the minutes said.
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Japan's all industry activity expanded at a faster pace in April, the Ministry of Economy, Trade and Industry showed. The indices of all industry activity advanced 1.3% on a monthly basis in April, faster than the 0.2% increase seen in March and a 1.2% rise forecast by economists.
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One of the architects of Donald Trump's presidential campaign was fired in the face of sagging poll numbers and increased pressure from within the Republican Party. Trump's campaign issued a statement carried by multiple US media saying controversial campaign manager Corey Lewandowski "will no longer be working with the campaign" and thanked him for his hard work.
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The Orlando shooter pledged allegiance to the leader of the Islamic State in a phone call to authorities during the attack, FBI phone transcripts showed. "I pledge allegiance to Abu Bakr al-Baghdadi...on behalf of the Islamic State," Omar Mateen said in a transcript released without redactions by federal law authorities. The transcript was initially released with both al-Baghdadi and Islamic State redacted. The decision to release parts of the transcript without redactions came after the US Justice Department was criticized for the move, namely by Republican Speaker of the House Paul Ryan who called it "preposterous."
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Three high-ranking commanders of the New York Police Department have been arrested on corruption charges, US Attorney Preet Bharara said. Deputy Police Chief Michael Harrington and two of his colleagues stand accused of accepting bribes worth tens of thousands of dollars from businessmen including trips, prostitutes, hotel stays and home renovations since 2012. In return, the police officers allegedly provided private police escorts, approved and expedited gun licenses and settled private disputes.
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BROKER RATING CHANGES
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Liberum Raises Go-Ahead To Buy From Hold, Cuts Price Target To 2,740p From 2,860p
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COMPANIES - FTSE 100
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Whitbread reported growth in sales in the first quarter of its financial year and said it is confident of making good progress in the full year. The owner of the Premier Inn hotel chain and Costa coffee shop brand said total sales in the 13 weeks ended June 2 grew by 8.0% on the same period the year before, as like-for-like sales rose by 1.8%. At Premier Inn, total sales were also up 8.0% and like-for-likes were up 2.1%, while Costa saw total sales growth of 12% as like-for-likes increased by 2.6%.
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Anglo-Australian miner BHP Billiton outlined plans to improve returns from its coal business, focused on boosting productivity, cutting costs and releasing latent capacity. Mike Henry, the president of the company's Australian minerals operation, said the company sees a significant opportunity to increase the competitiveness of its coal business. BHP said it has delivered USD3.0 billion in productivity gains in its coal business, focused on costs and volumes, since 2012 and is targeting another USD600.0 million by the end of its 2017 financial year.
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The chief executive of British Airways-owner International Consolidated Airlines Group has issued a new warning on the cost of a third runway at Heathrow and told ministers a rival scheme may become the preferred option, Sky News reported. Sky said Willie Walsh, the CEO of IAG, has written to the UK Department for Transport in recent weeks to argue Heathrow Hub, a scheme to extend the northern runway at the airport, should be given serious consideration.
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COMPANIES - FTSE 250
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Saga said trading remains on track to meet its expectations for the year to the end of January 2017. The company, which provides products and services for over-50s, said it has continued to make progress on its strategic priorities so far in the current financial year, with solid trading in its core insurance and travel units. The group added it has continued to make progress on its push to become a more "customer-driven business" and said it continues to invest in new opportunities in order to grow the business.
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Oil services company Petrofac said it is on track to meet its net profit guidance for 2016 and said it remains confident on its outlook given a robust order book. The company said net profit for 2016 is set to meet its expectations and will be broadly evenly split between the first and second halves. Petrofac said its order backlog at the end of May was at USD18.9 billion, down from USD20.7 billion at the end of December, which it said provides "excellent revenue visibility".
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Components and systems manufacturer Senior said its Aerospace arm is trading in line with expectations, but its Flexonics business is continuing to face tough market conditions. Senior said the Aerospace business has seen activity increase in line with its forecasts, boosted by additional work on new aircraft. Margins for the unit, however, will be lower in the first half of 2016 as the ramp-up on new aircraft production programmes continues. For Flexonics, trading has continued to be weighed down by weak conditions in the truck and off-highway sector and ongoing softness in the oil and gas market.
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Just Eat said it has appointed Paul Harrison as chief financial officer with effect from September 26, replacing Mike Wroe who will be stepping down on that date. Harrison joins the online takeaway delivery company from London-listed software company WANdisco PLC, where he has been CFO since 2013, prior to which he was group finance director at FTSE 100 software firm Sage Group for 13 years.
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The UK Competition and Markets authority said it has until the end of August to decide whether or not to accept undertakings offered by Cision in relation to its recently completed acquisition of UBM's PR Newswire business. The CMA said that it had been offered undertakings by Cision. It has considered these undertakings and said that it "considers that there are reasonable grounds for believing that the undertaking offered, or a modified version of it, might be accepted by the CMA to remedy the substantial lessening of competition identified by the CMA."
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COMPANIES - LONDON MAIN MARKET AND AIM
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Chemring Group said its pretax loss widened in the first half due to contract delays and a weaker sales mix despite higher revenue, prompting it to pull its dividend for the period. The defence contractor said its pretax loss for the half to the end of April was GBP16.8 million, compared to a GBP15.1 million loss a year earlier. Revenue for the half grew to GBP180.1 million from GBP161.7 million, up 11%. However, a lower-margin sales mix, phasing of revenue to the second half, and issues involved in the sale of ammunition to a customer in the Middle East, hurt profitability. That ammunition contract is now up and running, and initial revenue from the deal has been recognised, Chemring said. A substantial increase on this contract in the second half will increase the weighting of the group's full year to the second six months, and Chemring said it now anticipates its annual results will be slightly below market expectations.
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Shoe Zone announced a shake-up to its management team including the resignation of Chairman Ian Filby and a number of role transfers among executives. Filby will step down from his role as non-executive chairman to allow Chief Executive Anthony Smith to move to the role of executive chairman. Chief Financial Officer Nick Davis will replace Smith as CEO and will continue to manage the finance function until a replacement is appointed.
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Petra Diamonds said it has recovered a 121.26 carat white diamond at the Cullinan mine in South Africa. The stone is a type-2 diamond of "exceptional colour and clarity", Petra said. It will be sold at the company's last tender of its 2016 financial year to the end of June, currently underway in Johannesburg.
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COMPANIES - INTERNATIONAL
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National Bank of Abu Dhabi and First Gulf Bank have confirmed discussions regarding a possible merger between the two banks that could create one of the biggest banks by assets in the Middle East. National Bank of Abu Dhabi and First Gulf Bank announced that they are in merger discussion that could form an entity with about USD170 billon in assets. National Bank of Abu Dhabi has a market capitalization of around USD13 billion, while First Gulf Bank has about USD16 billion.
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Iran has reportedly reached a new deal with US aerospace giant Boeing to buy 100 planes as the country seeks to renew its aged passenger planes. However, the deal still requires approval from the US federal authorities. Meanwhile, Boeing has been granted permission to present its products to IranAir and other few airlines. The deal is reported to be worth USD17 billion. This deal makes Boeing the first major American company to make a deal with Iran after the nuclear sanctions were lifted earlier this year. Earlier this year, Europe's Airbus had won a provisional for 118 jets worth USD27 billion.
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Walmart Stores and JD.com said that they have formed a strategic alliance to better serve consumers across China through a combination of e-commerce and retail. The agreement between the companies includes a wide range of business initiatives, covering both online and offline retail. As part of the agreement, Walmart will receive 144.95 million newly issued JD.com Class A ordinary shares, amounting to approximately 5% of total shares outstanding.
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Tuesday's Shareholder Meetings
Coca-Cola HBC
Whitbread
Saga
Futura Medical
Strategic Minerals
Global Resources Investment Trust
JPMorgan Senior Secured Loan Fund
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
