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LONDON (Alliance News) - ASOS is dragging down the AIM All-Share Index at the open Thursday after lowering its profit guidance. The online fashion retailer, by far the biggest AIM stock by market capitalisation, dropped 40% at the open and was down 34% a half hour into trading.
Meanwhile, analysts at Liberum have initiated coverage of wide swathe of financial services companies. They favour Man Group over Tullett Prebon and Brewin Dolphin over Hargreaves Lansdown.
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 6,803.31
FTSE 250: down 0.3% at 15,934.97
AIM ALL-SHARE: down 2.0% at 795.41
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Hang Seng: down 0.2% at 23,111.39
Nikkei 225: closed up 0.1% at 15,079.37
DJIA: closed up 0.1% at 16,737.53
S&P 500: closed up 0.2% at 1,927.88
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GBP-USD: up at USD1.6748
EUR-USD: up at USD1.3605
GOLD: down at USD1,243.99 per ounce
OIL (Brent): down at USD108.01 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times British Summer Time)
10:00 EU Retail Sales
12:00 UK BoE Interest Rate Decision and Asset Purchase Facility
12:30 US Challenger Job Cuts (YoY)
12:45 EU ECB Interest Rate Decision
13:30 EU ECB Monetary policy statement and press conference
13:30 US Jobless Claims
13:30 Canada Building Permits
15:00 Canada Ivey Purchasing Managers Index
15:30 US EIA Natural Gas Storage change
18:30 US Fed Minneapolis's Narayana Kocherlakota speech
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The European Central Bank is expected Thursday to deliver a round of aggressive interest rate cuts as part of a far-reaching package of monetary measures aimed at heading off the threat posed to the eurozone's fragile recovery by deflation. Analysts predict that the Frankfurt-based bank will trim both its benchmark refinancing rate and its deposit rate by between 10 and 15 basis points, as well as pumping more funds into the eurozone's financial system to boost the corporate sector's access to credit.
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The Irish service sector continued to grow in May, with activity and new business rising sharply in the month, the results of a survey by Markit Economics showed. The seasonally adjusted Investec purchasing managers' index fell slightly to 61.7 in May from 61.9 in April. Any reading above 50 indicates expansion in the sector. The reading suggests a sharp expansion by the service sector, in line with the increased new orders in May.
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Germany factory orders recovered at a faster than expected pace in April, official figures revealed. Factory orders increased 3.1% in April from March, Destatis reported. Economists were expecting a 1.4% rise in orders after falling 2.8% in March.
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FRANCE Q1 JOBLESS 9.7%; W/OVERSEAS 10.1%; REV Q4 9.7%/10.1%
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Activity in China's services sectors continued to expand in May but at a slower pace, the latest survey from HSBC and Markit Economics revealed. The services PMI saw a score of 50.7 last month, the bank said - down from 51.4 in April. The composite PMI climbed into expansion at 50.2 in May - up from the revised 49.5 in April (originally 49.4) and snapping a three-month string of decline.
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The US economy has been growing at decent pace since the arrival of warmer weather, with all twelve of the Federal Reserve districts reporting an increase in activity in the past few months, according the Fed's Beige Book. The pace of growth was characterized as "moderate" in the Boston, New York, Richmond, Chicago, Minneapolis, Dallas, and San Francisco Districts, and modest in the remaining regions.
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The ruling party in South Korea narrowly lost out to the opposition in local elections, reports said Thursday, in the first nationwide vote since the fatal sinking of the Sewol ferry in April. Amid the highest voter turnout in 16 years, the opposition New Politics Alliance for Democracy (NPAD) won nine gubernatorial seats, while the conservative Saenuri Party won eight, Yonhap News Agency reported. The ruling party had feared a backlash at the polls after public anger erupted over the deaths of some 300 people, mostly high school students, in the sinking of the ferry off the country's south-west coast.
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The Philippines urged China on Wednesday to accept international arbitration over South China Sea disputes, a day after a court set a deadline for Beijing to address Manila's complaints. An international tribunal on Tuesday in the Netherlands gave Beijing until December 15 to reply to a complaint filed by the Philippines in March questioning China's claim to almost the entire South China Sea.
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Embattled Syrian President Bashar al-Assad scored an expected victory Wednesday in presidential elections, securing a third seven-year as head of state amid a civil war engulfing the country. Al-Assad won the Syrian presidential election with 88.7% of the vote, according to Syria's speaker Jihad Laham, who made the announcement.
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The US will offer USD290 million in additional aid to countries facing an influx of Syrian refugees, Secretary of State John Kerry said Wednesday in Beirut. On the first visit by a US secretary of state to Lebanon in five years, Kerry said that USD51 million dollars of the grant would assist Lebanon, which is struggling to cope with more than 1 million refugees displaced by the civil war in neighbouring Syria.
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The head of the Joint Mission of the Organization for the Prohibition of Chemical Weapons and the United Nations admitted Wednesday that the June 30 deadline set for the destruction of Syria's chemical weapons program will not be met. She stressed that the focus of the mission is now on the immediate removal of the remaining dangerous chemicals from the conflict-torn Middle East nation.
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BROKER RATING CHANGES
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BERNSTEIN RAISES BSKYB TO 'MARKET-PERFORM' ('UNDERPERFORM,') - PRICE TARGET 850 (700) PENCE
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TRADERS: LIBERUM INITIATES ABERDEEN ASSET MANAGEMENT WITH 'BUY' - TARGET 555 P.
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TRADERS: LIBERUM INITIATES HARGREAVES LANSDOWN WITH 'SELL' - TARGET 829 PENCE
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TRADERS: LIBERUM INITIATES SCHRODERS WITH 'BUY' - TARGET 2,879 PENCE
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JEFFERIES CUTS TATE & LYLE TO 'HOLD' ('BUY') - TARGET 715 (730) PENCE
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TRADERS: LIBERUM INITIATES BREWIN DOLPHIN HLDGS WITH 'BUY' - TARGET 379 PENCE
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TRADERS: LIBERUM INITIATES ASHMORE GROUP WITH 'SELL' - TARGET 303 PENCE
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TRADERS: LIBERUM INITIATES PARAGON GROUP WITH 'BUY' - TARGET 476 PENCE
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TRADERS: LIBERUM INITIATES TULLETT PREBON WITH 'SELL' - TARGET 240 PENCE
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TRADERS: LIBERUM INITIATES CLOSE BROTHERS WITH 'BUY' - TARGET 1,498 PENCE
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TRADERS: LIBERUM INITIATES INTERNATIONAL PERSONAL FINANCE WITH 'BUY'
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TRADERS: LIBERUM INITIATES INTERMEDIATE CAPITAL WITH 'HOLD' - TARGET 424 PENCE
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TRADERS: LIBERUM INITIATES RATHBONE BROS WITH 'BUY' - TARGET 2,214 PENCE
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TRADERS: LIBERUM INITIATES MAN GROUP WITH 'BUY' - TARGET 112 PENCE
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TRADERS: LIBERUM INITIATES JUPITER FUND WITH 'BUY' - TARGET 515 PENCE
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COMPANIES - FTSE 100
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Johnson Matthey PLC said pretax profit increased in its full year as revenues from its Emission Control Technologies and Process Technologies divisions drove forward growth at the company. The multinational chemicals and precious metals company, said its pretax profit jumped 17% to GBP406.6 million for the twelve months ended March 31 from GBP348.6 million the previous year as revenues increased 4.0% to GBP11.16 billion from GBP10.73 billion. It proposed a final dividend of 45.5 pence, resulting in a full year dividend increase of 10% to 62.5 pence.
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UK pharmaceutical giant GlaxoSmithKline PLC has agreed to a USD105 million settlement covering 44 US states over allegations that it unlawfully promoted its asthma treatment Advair and antidepressants Paxil and Wellburtin. As part of the settlement, announced on Wednesday by California attorney general Kamala Harris, Glaxo is required to continue its Patient First Program through to at least March 2019, amongst other stipulations such as a requirement that scientifically trained personnel must be ultimately responsible for developing and approving responses to health care provider questions on an unbiased, non-promotional basis. The Patient First Program reduces the financial incentives for sales representatives, and was brought into Glaxo's US operations in 2011. Following a spate of investigations across its international operations, starting with large scale bribery investigations from Chinese Authorities, Glaxo is implementing a new compensation programme in all countries it operates in by 2015.
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Lonmin PLC, in partnership with South African platinum miners Impala Platinum Holdings Ltd and Anglo American Platinum Ltd, a subsidiary of Anglo American PLC, have asked for time to consider a new pay proposal from the Association of Mineworkers and Construction Union, as major strikes continue to cripple the platinum sector in the country. The Department of Mineral Resources for South Africa announced late on Wednesday that it presented a new proposal from the union to chief executives at the major platinum mining companies during talks, and the parties have now requested time to consider the proposal, with the meetings resuming on Thursday.
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The US Court of Appeals in New Orleans has ruled that British oil giant BP PLC and Anadarko Petroleum, as co-owners of the ill-fated Macondo well, are automatically liable for violations of the pollution law. The two companies may face billions of dollars in fines. The Macondo well exploded in April 2010, triggering the Gulf of Mexico oil spill. While the US claims that 4.2 million barrels of oil were dumped into the Gulf of Mexico, BP pegs the figure at 2.45 million barrels.
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Wm Morrison Supermarkets PLC is set to announce a wave of management restructuring within its stores, which could see as many as 2,000 job losses, according to The Guardian. The newspaper said the supermarket chain's plans to slim down management will be announced in coming weeks, in a move resulting from trials of three possible smaller management structures in around seven of its new stores, The Guardian said.
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COMPANIES - FTSE 250
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Bellway PLC said weekly reservation rates have increased as demand for its new homes remains robust, buoyed by growing consumer confidence and a strong supply of mortgage finance. In an interim management statement for the period February 1 to May 31, 2014, the housebuilder said its weekly reservation rate rose 11% to 177 per week, up from 160 per week for the comparable period in 2013. The value of its forward order book of homes due for completion beyond July 31, 2014 has also significantly improved to GBP670 million from GBP380 million last year.
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Galliford Try PLC said its Infrastructure business has been appointed as a framework contractor to both Lots 1 and 2 of the Midlands Highway Alliance framework. The Midlands Highway Alliance is the regional highways maintenance procurement partnership established in 2007 between 20 local authorities in the Midlands, and the Highways Agency. The framework lots have a current project combined value of up to GBP261 million to the appointed contractors, over the initial three-year framework term, said Galliford Try. The Midlands Highway Alliance also retains an option to extend the framework for a further year in March 2017.
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Inmarsat To Deploy EU Wide In-Flight Passenger Broadband Services
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COMPANIES - ALL-SHARE AND AIM
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Online fashion retailer ASOS PLC lowered its profit guidance for the current financial year and next year, after saying it was hit by heavy discounting and sterling strength, which it said hit sales in its international business. ASOS shares dropped 40% on the warning. ASOS reported good sales growth in the UK and Europe in the three months to May 31, with sales growth of 43% in the UK and 37% in Europe, but said that international sales and lower retail margins were hit by sterling strength and increased promotional activity. Total retail sales for the group rose 25% at actual exchange rates and 33% at constant currency to GBP243.0 million up from GBP193.6 million for the same period a year earlier. "The resultant higher mix of UK and European sales, with lower retail margins, together with increased levels of promotional activity, leads us to reduce our EBIT [earnings before interest and taxes] margin guidance to around 4.5% from around 6.5% for the current financial year," said Chief Executive Nick Robertson.
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Harvey Nash Q1 Revenue Up 12% Like-For-Like On Year, 15% At Constant Currencies; Gross Profit Up 2% Like-For-Like On Year, 6% At Constant Currencies; Operating Profit Up 12% Like-For-Like On Year, 17% At Constant Currencies; Says Demand For Permanent Recruitment Is Strong In US, UK, HK; Weak In Mainland Europe, Norway
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Utilitywise Concludes Partnership Agreements With British Chamber Of Commerce And South West Water
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AO World FY Pretax Loss Of GBP7.6M Vs GBP8.1M Profit; Revenue Up 40% to GBP384.9M Vs GBP274.9M; Website Revenues Up 45% To GBP287.1M Vs GBP197.4M
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COMPANIES - OTHER
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Zoopla Prices London Main Market IPO At 200p To 250p, Giving It Mid-Point Market Cap Of GBP940M
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OneSaving Bank Prices London Main Market IPO At 170p Per Share, Giving GBP413M Market Cap
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FTSE confirmed Wednesday the following changes will take effect from the market open on June 23, following completion of its quarterly review.
FTSE 100 Adds:
3i Group
Intu Properties
FTSE 100 Deletes:
William Hill
Melrose Industries
FTSE 250 Adds:
AO World
BRIT
Just Eat
Kennedy Wilson Europe Real Estate
Pets At Home Group
Poundland Group
FTSE 250 Deletes:
888 Holdings
Herald Investment Trust
KCOM Group
Murray Income Trust
Merchants Trust
Partnership Assurance Group
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Thursday's Scheduled AGMs/EGMs
G4S
WM Morrison Supermarkets
Dignity
Michael Page International
Chariot Oil & Gas
Air Partner
Invesco Perpetual UK Smaller Companies Investment Trust
Camellia
MP Evans Group
InternetQ
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
26 Jan 2023 13:04
