LONDON (Alliance News) - Shares have opened lower Monday amid a raft of UK corporate announcements. HSBC Holdings is the biggest faller in the FTSE 100, down 4.0%, as it reported just after the open lower-than-expected pretax profit in its recent full year.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 13.94 at 6,824.12
FTSE 250: down 39.26 at 16,421.62
AIM ALL-SHARE: up 4.73 at 886.33
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DJIA: closed down 29.93 at 16,103.30
S&P 500: closed down 3.53 at 1,836.25
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GBP-USD: down at USD1.6621
EUR-USD: up at USD1.3747
GOLD: up at USD1,329.19 per ounce
OIL (Brent): up at USD110.00 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
09:00 Germany IFO - Business Climate
10:00 EU Consumer Price Index
13:30 US Chicago Fed National Activity Index
13:58 US Markit Services PMI Preliminary
15:30 US Dallas Fed Manufacturing Business Index
16:30 US 3-Month and 6-Month Bill Auction
23:50 Japan Corporate Service Price (YoY)
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Earnings of British employees will likely start increasing this year, after falling for several years, as the economic recovery gathers strength, Bank of England policymaker Ben Broadbent said. In an article published in the Sunday Times newspaper, Broadbent said that low inflation and the ongoing economic recovery are supportive of income growth.
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Finance ministers from the world's top 20 economies meeting in Sydney agreed to measures they said could add 2% to global growth over the next five years. "Realistically, these policies could mean an extra 2 trillion US dollars in global economic activity and tens of millions of additional jobs," Australia's Treasurer Joe Hockey said Sunday at end of the G20 finance chiefs meeting. The bloc also urged a common reporting standard to allow the automatic exchange of tax information between jurisdictions. "Profits should be taxed where economic activities deriving the profits are performed and where value is created," the formal statement said. Members should be swapping information automatically by the end of next year.
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European Central Bank President Mario Draghi said after the G20 meeting in Sydney he is ready to act if the outlook for prices deteriorates, although he sees no fear of deflation in the euro area. The ECB will have the full set of information needed to decide whether to act or not by its next rate-setting meeting on March 6. The bank will also release its inflation estimates for 2016 for the first time in March.
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The Federal Reserve has done more than enough to help the economy and should continue to reduce the size of its massive bond-buying plan, according to Richard Fisher, president of the Dallas Federal Reserve. Speaking at the University of Texas in Austin, Fisher reiterated his view that monetary stimulus should be has been used as a crutch in lieu of wise fiscal and regulatory policies from Congress.
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Ukraine's newly appointed interim president Oleksandr Turchynov on Sunday promised renewed engagement with the West, while stressing the importance of good relations with Russia. "Foremost for us is a return to a course of European integration," Turchynov said in an address to the nation. "We have to return to the circle of European countries." Ukraine is prepared for a "new, equitable and neighbourly" relationship with Russia, he said. Ukraine's parliament voted earlier Sunday to appoint Turchynov, its speaker, as interim president to temporarily take over the duties of Viktor Yanukovych, whose whereabouts remained unknown.
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German Chancellor Angela Merkel telephoned Sunday with Russian President Vladimir Putin, and both stated that Ukraine needs a stable government as soon as possible, German government spokesman Steffen Seibert said. The Ukrainian economy is a great concern, said German Foreign Minister Frank-Walter Steinmeier, who noted that Putin and Merkel spoke of "seeking ways and possibilities to stabilize the Ukrainian economy."
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Orders received by Germany's construction sector grew in 2013, figures released by the Federal Statistical Office showed. The value of building industry orders increased 1.9% from 2012. Building construction demand rose 2.2% and orders for civil engineering climbed 1.7%. Employment in the construction sector increased 1.5% or by 11,500 persons to 756,000 in 2013.
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Two young Thai girls succumbed to injuries sustained in attacks on anti-government protest sites over the weekend, police and medical officials said. The six-year-old sister of a five-year-old boy killed by a grenade explosion Sunday in central Bangkok died in hospital, the Erawan Emergency Medical Centre said, correcting their initial report that the boy was 12 years old. Both children had just alighted from a tuk-tuk, a three-wheeled taxi, when a grenade exploded nearby, killing a 40-year-old woman and the boy on the spot, and severely injuring his sister.
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BROKER RATING CHANGES
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DEUTSCHE BANK CUTS BALFOUR BEATTY TO 'HOLD' ('BUY') - TARGET 280 PENCE
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UBS RAISES GO-AHEAD GROUP TO 'NEUTRAL' ('SELL') - TARGET 2150 (1700) PENCE
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UBS RAISES STAGECOACH PRICE TARGET TO 365 (340) PENCE - 'NEUTRAL'
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UBS RAISES NATIONAL EXPRESS PRICE TARGET TO 330 (300) PENCE - 'BUY'
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UBS RAISES FIRSTGROUP PRICE TARGET TO 135 (120) PENCE - 'NEUTRAL'
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COMPANIES - FTSE 100
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HSBC FY Pretax Profit USD22.57B Vs USD20.65B; Underlying Pretax Profit USD21.59B Vs USD15.29B; FY Return On Equity 9.2% Vs 8.4%; Q4 Pretax Profit USD3.96B Vs USD4.43B; Expects Emerging Markets To be Choppy
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Distribution and outsourcing company Bunzl PLC Monday reported strong growth in profits and revenues in 2013, driven mainly by further acquisitions as it announced two new deals in Germany and Czech Republic. The company is highly acquisitive, snapping up small, normally family-run, businesses in its highly fragmented markets. It spent GBP295 million on 11 acquisitions in 2013 alone. That helped push up revenues to GBP6.1 billion, from GBP5.36 billion in 2012, with only 2% of that coming from organic growth. That helped push up the company's pretax profit to GBP289.9 million, from GBP263.8 million, with margins also improving.
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Rolls-Royce Awarded USD90.1M Contract For V-22 Engines For US Marine Corps
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RSA Insurance Group PLC Sunday said it is considering a number of measures, including a rights issue, in order to raise the capital it needs to boost its balance sheet. In a statement issued on its website, RSA, widely expected to cancel its dividend as it struggles with the aftermath of a discovery of a GBP200 million hole in its balance sheet last year, said no final decision has been made on how to raise the capital it requires. New Chief Executive Stephen Hester is expected by some analysts and commentators to scale back the company's operations, particularly outside the UK, when the compay publishes its business review alongside its full year preliminary results for 2013 on Thursday.
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Billionaire John Malone's Discovery Communications Inc is in discussions with British Sky Broadcasting Group PLC to make a joint bid for Channel 5 to gain a foothold in UK free-to-air broadcasting, the Financial Times reported. Bids for Channel 5, which broadcasts Big Brother, are due next Thursday. The talks between Discovery and BskyB have focused on BskyB managing the channel's advertising sales, the report said.
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Old Mutual PLC said its majority-owned South African banking subsidiary, Nedbank Group Ltd, has reported a 16% rise in annual headline earnings, driven revenues and a slower increase in impairments than in net interest income. According to the statement, Nedbank reported ZAR8.67 billion in headline earnings, compared with ZAR7.48 billion in 2012. Nedbank declared an increase in its dividend to 895 cents a share from 752 cents the year prior.
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Primark owner Associated British Foods PLC said a much lower profit from its Sugar business in the first half of the year, will be offset by strong 13% sales growth from its retail business Primark, and a good trading performance from its Grocery and Ingredients divisions. In a pre-close trading update, the food producer and clothing retailer said it expects to report an adjusted operating profit in line with last year for the first half of the year ending March 1, although adjusted earnings for the first half will be "firmly" ahead of last year, it said, helped by a further reduction in the underlying tax rate.
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COMPANIES - FTSE 250
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Bovis Homes PLC became the latest UK housebuilder to report and increase in profit for the full year boosted by improving house market conditions and an increase in the number of mortgages products available including high loan to value packages. The Kent-based firm posted a 48% increase in pretax profit to GBP78.8 million for the period ended December 31, 2103 from GBP53.2 million a year earlier, as revenue rose 31% to GBP556.0 million from GBP425.5 million in 2012.
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Hiscox Ltd joined fellow insurer Beazley PLC in paying a special dividend to shareholders for 2013 as it reported a 12% rise in pretax profits for its last financial year. In a statement, Hiscox said it made a GBP244.5 million pretax profit for the year ended December 31, 2013, compared with a GBP217.5 million pretax profit for the year prior, boosted by a drop in its combined ratio, a measure of underwriting profitability, to 83.0% from 85.5%, on the back of a benign hurricane season. Hiscox declared an increase in its dividend to 21.0 pence per share from 18.0 pence, while proposing a 36.0 pence special dividend on top of that after reviewing its capital requirements for the coming year. This marks the second year running the insurer has been able to make a special capital return to shareholders but said it does not promise a third.
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Essar Energy Independent Committee Says Offer Undervalues Company; Independent Committee Says Unanimous In Decision
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COMPANIES - ALL-SHARE AND AIM
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Mothercare PLC said it has started searching for a new chief executive after Simon Calver stood down with immediate effect, a move that comes just over a month since the company issued a profit warning in the wake of tough Christmas trading. In a statement, the struggling mother and baby product retailer said Calver will "provide transitional support" until the end of March, but the day-to-day operations will be run by executive management, reporting to the company's Chairman.
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Shares Of Mentum And Churchill Mining Suspended On AIM; Mentum Proposed Acquisition Of Advanced Large Scale Copper-Gold Deposits in Kyrgyz Republic; Says Would Pay GBP27.0M For Acquisition In Shares
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DekelOil Raises GBP700,000 In Share Placing
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XP Power FY Pretax Profit GBP18.4M Vs GBP15.7M; Revenue GBP101.M Vs GBP93.9M; Dividend 55.0p Vs 50.0p; Expects To Grow Revenues Again In 2014 If Improved Macro-Economic Outlook For Customers Continues
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Dialight FY Pretax Profit GBP11.2M Vs GBP19.8M; Revenue GBP131.2M Vs GBP115.1M; Dividend 14.4p Vs 13.5p; Expects To Return To Earnings Growth In 2014
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Macau Prop Opportunties Sells Zhuhai Properties For USD65M
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Coms Says FY Pretax Profit To Be About GBP450,000; Says FY Revenue To Be About GBP14.0M
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All Leisure Says It WIll Not Propose Dividend Payments In Forseeable Future; FY Group Revenue GBP142.1M Vs GBP127.4M; FY Pretax Loss Of GBP13.6M Vs GBP0.8M Profit
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Aer Lingus 2013 Pretax Profit EUR39.5M Versus Restated EUR40.4M In 2012; Revenue EUR1.43B, Up 2.3% From EUR1.39B In 2012; 2013 Dividend 4 Cents Per Share, Unchanged; Expects To Keep Dividend At Same Level For "Foreseeable Future"
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JQW Says Trading For Period Significantly Ahead Of Market Expectations
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Omega Diagnostics Says Gets USD600,000 Grant To Support Visitect CD4 Test
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Primary Health Properties Says Subsidiary Has Contracted With Watkin Jones Group For Health Centre Development In Chester For GBP18.5M
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Wolf Minerals H1 Net Consolidated Loss After Tax Narrows To USD1.3M From USD2.5M
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United Carpets Group Says It Is Benefitting From 2012 Restructure; Trading In H2 Better Than Expected
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Rangers International FC Enters Into Two Secured Short Term Credit Facilities For GBP1.5M; Says Credit Facilities To Be Used For Working Capital Over Next Few Months
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Hellenic Carriers FY Loss USD14.2M Vs Loss USD20.7M; Suspends Full Year Dividend To Optimise Use Of Cash; FY Revenue USD10.9M Vs USD13.2M
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Gulf Keystone Petrol Considers AIM Cancellation And Admission To Official List
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Kingspan FY Pretax Profit EUR102.0M Vs EUR90.0M; Final Dividend Per Share Of 8.5 Cents, Total Dividend Up 14% To 14.0 Cents; FY Revenue EUR1.79Bn Vs EUR1.63Bn
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President Energy Raised USD50.8 Million Through Placing And Open Offer
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Monday's Scheduled AGMs/EGMs
Treatt
Henderson Value Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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