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LONDON (Alliance News) - UK stocks opened the week on a positive note, Monday, but shares in HSBC Holdings sank after the bank's 2015 numbers fell short of analyst forecasts.
HSBC Holdings reported a 1.0% increase in annual pretax profit, missing analyst expectations after a loss-making fourth quarter, as the bank grappled with slowing Chinese economic growth, declining commodity and oil prices, and historically low interest rates.
The bank lifted its dividend for the year to USD0.51 per share from USD0.50, as pretax profit rose to USD18.87 billion in 2015, from USD18.68 billion in 2014. Coming one week after HSBC decided to remain in the UK, rather than move to its historic home of Hong Kong, the results missed analyst expectations of a USD21.78 billion pretax profit, according to consensus estimates compiled by the bank.
Chairman Douglas Flint said the group had a "broadly satisfactory" financial performance in 2015, which he said was marked by "seismic shifts" in global economic conditions, and cautioned that China's slower economic growth will "undoubtedly" play its part in a "bumpier" financial environment. Nevertheless, Flint expects China to be the driver of global growth, as the Asian giant's economy transitions to services from manufacturing.
HSBC made a fourth-quarter pretax loss of USD858.0 million, compared with a USD1.73 billion pretax profit in the corresponding three months of 2014. The stock was the worst performer in the FTSE 100, down 4.2%.
The FTSE 100 as a whole ploughed 1.0%, or 68.83 points, higher to 6,019.06, with mining stocks helping the index to rise back above the 6,000 mark.
The FTSE 250 traded up 1.1% at 16,337.30, and the AIM All-Share was up 0.3% at 686.08. European stocks also opened higher, with French CAC 40 up 1.4% and the German DAX 30 up 1.5%.
In Asia on Monday, the Nikkei 225 index in Tokyo ended up 0.9%, the Shanghai Composite up 2.4%, and the Hang Seng in Hong Kong up 0.9%.
Shares in Home Retail Group soared 12% to 171.90 pence, making them the best performer in the FTSE 250. The gains were made after Frankfurt-listed Steinhoff International Holding said after the market close on Friday that it has put forward a proposal to Home Retail for a possible all-cash offer which would be for 175.0p per Home Retail share.
This offer is considerably higher than the deal currently on the table from J Sainsbury earlier this month, which implied a price of around 161.3p per Home Retail share. The offer made by Sainsbury earlier this month was thought to be towards the lower end of the range that Home Retail would be willing to sell at, according to reports prior to the deal being unveiled - making the higher offer by Steinhoff even more significant.
Sainsbury's was one of the worst performers in London's blue-chip index, down 1.5%.
Veterinary drugs company Dechra Pharmaceuticals was up 4.5% after it said its pretax profit rose in the first half of its financial year on stronger revenue, with good growth in its existing portfolio and encouraging signs from its pipeline.
The FTSE 250 company said its pretax profit for the six months to the end of December was GBP14.2 million, up from GBP12.6 million a year earlier, as revenue increased to GBP110.7 million from GBP100.9 million.
Dechra said it saw good growth in its European franchise, led by its Genera business, though this was offset by the weak euro, which wiped out the vast majority of revenue growth in the region. In North America, revenue rose significantly, up 59% thanks to the investments made by the group in expanding in the region in recent years.
AIM-listed eServGlobal traded up 14% after it said it will support a mobile money platform for Djibouti Telecom to provide mobile wallets.
The mobile payments company said the mobile money wallets will be offered to all Djibouti Telecom subscribers, providing cash management and e-payment services on mobile phones. The services include airtime top-up, local transfers, international remittance, bill and merchant payments.
Still ahead in the economic calendar, there are flash Markit manufacturing, composite and service purchasing managers' index readings for a number of countries. Data from France and Germany have already been released, while the eurozone at 0900 GMT and US manufacturing PMI at 1445 GMT. Elsewhere, the Confederation of British Industry's industrial trends survey is at 1100 GMT and the Chicago Federal Reserve's national activity index at 1330 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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