LONDON (Alliance News) - Shares in insurer Admiral Group and Hikma Pharmaceuticals are bucking a weak open in London Wednesday, rising 3.5% and 0.8%, respectively, after well-received interim earnings reports.
Shares in miner and commodities trader Glencore are down 2.7%, the biggest FTSE 100 decliner, after reporting an expected decline in earnings but maintaining its interim dividend payout.
Looking ahead, investors await the minutes of the July US Federal Reserve policy-making meeting, to be released after the London market close at 1900 BST.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.6% at 6,488.79
FTSE 250: down 0.5% at 17,529.39
AIM ALL-SHARE: down 0.2% at 749.96
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Hang Seng: down 1.2% at 23,201.39
Nikkei 225: closed down 1.6% at 20,222.63
DJIA: closed down 0.2% at 17,511.34
S&P 500: closed down 0.3% at 2,096.92
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GBP: up at USD1.5681
EUR: up at USD1.1069
GOLD: up at USD1,121.97 per ounce
OIL (Brent): up at USD48.68 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 in BST)
10:00 EU Construction Output
12:00 US MBA Mortgage Applications
14:30 US Consumer Price Index
15:30 US EIA Crude Oil Stocks
19:00 US FOMC Minutes
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Japan posted a merchandise trade deficit of JPY268.055 billion in July, the Ministry of Finance said. That was well shy of forecasts for a deficit of JPY53.0 billion following the downwardly revised JPY70.5 billion shortfall in June (originally -JPY69.045 billion). Exports climbed 7.6% on year, topping forecasts for a gain of 5.2% although slowing from 9.5% in the previous month. Imports slid an annual 3.2% versus expectations for a decline of 8.2% following the 2.9% decline a month earlier.
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Japan's all industry activity increased unexpectedly in June, after falling in the previous month, figures from the Ministry of Economy, Trade and Industry showed. The all industry activity index rose a seasonally adjusted 0.3% month-over-month in June, in contrast to May's 0.5% decline. Economists had expected a 0.4% decrease for the month.
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Ukrainian President Petro Poroshenko is due to visit Brussels before the end of the month, a spokeswoman for the European Commission said, as a recent surge in violence casts renewed doubts on a ceasefire for the conflict-ridden country. Skirmishes between government forces and pro-Russian separatist rebels in recent days around the eastern port city of Mariupol have led to several deaths, including at least two civilians, local media reported.
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BROKER RATING CHANGES
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N+1 Puts Domino's Pizza Group Stance At Hold From Under Review, Price Target At 903p
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Liberum Initiates Micro Focus International With Hold, Price Target At 1,300p
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EXANE BNP RAISES SIGNET JEWELERS TO 'OUTPERFORM' ('NEUTRAL') - TARGET 9300 (8500) PENCE
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COMPANIES - FTSE 100
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Glencore reported a substantial fall in earnings, as expected, in the first half of the year, due to weaker commodities and oil prices and following the company's mixed production results earlier this month. The multi-commodity miner reported a pretax loss of USD527.0 million in the first half of 2015, swinging from a USD2.49 billion profit a year before, as revenue tanked to USD85.70 billion from USD114.06 billion. Exceptional items totalled USD1.55 billion in the first half, comprised of the Chad impairment, a USD377 million foreign exchange loss, a USD256 million loss on Glencore's stake in Lonmin, and USD235 million related to a metal leak. Net debt at the end of the first half had fallen to USD29.60 billion, compared to USD30.50 billion at the beginning. By the end of 2016, the miner is hoping to have net debt fall further to around USD27.0 billion. The miner kept its interim dividend flat year-on-year at 6.0 cents per share for the first half.
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Hikma Pharmaceuticals reiterated its guidance for 2015 as it posted a fall in pretax profit for its first half, after revenue was hit by the strength of the dollar and a good performance in Hikma's Branded and Injectibles segments was offset by a decline in its Generics segment. Hikma continues to expect to report full-year revenue growth of around 6% at constant currency, or around 2% at actual exchange rates, assuming the high end of its guidance range for its Generics business. For the half year to end-June, the company posted a pretax profit of USD170 million, down from USD219 million a year before, as revenue fell to USD709 million from USD738 million.
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Admiral Group reported a slight fall in pretax profit in the first half, but said it had a "very solid" showing in the UK, where results were helped by positive claims cost developments and small price increases in that key car insurance market. The car insurer said it made a GBP181.7 million pretax profit in the six months to the end of June, slightly down on the GBP183.3 million reported in the corresponding period the prior year. Excluding minority interests, pretax profit was up 1% to GBP186.1 million. The insurer increased its interim dividend per share to 51.0 pence from 49.4p.
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Imperial Tobacco Group said its net revenue was dragged lower by currency effects in the first nine months of its financial year, as a rise in volumes in its growth brands portfolio was offset elsewhere to pull total volumes down. Imperial said tobacco net revenue in the nine months to the end of June was GBP4.44 billion, down from GBP4.63 billion a year earlier. The 4% decline on a reported basis compared to a 2% rise in constant currencies.
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International Consolidated Airlines Group said late Tuesday its offer for Aer Lingus has become unconditional after it received confirmation that Ryanair Holdings has formally accepted the offer. Ryanair's acceptance of the offer had been one condition required for the deal to go through. Ryanair owned a 29.8% stake in Aer Lingus.
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The Royal Bank of Scotland Group has struck a deal to sell its Luxemourg-based fund arm to private equity house Blackfin Capital Partners, the Financial Times reported. The sale of the fund governance business, called RBSL, for an undisclosed amount is at a significant premium to book value, the FT said, citing one source familiar with the situation. The deal is part of the ongoing restructuring plan RBS is undertaking under Chief Executive Ross McEwan as he pushes the bank to focus on its UK retail and commercial banking operations.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Irish nutrition and ingredients company Glanbia said its pretax profit rose in the first half of its financial year, on the back of a rise in revenue heavily boosted by the weakness of the euro. Glanbia said its pretax profit for the six months to July 4 was EUR117.6 million, significantly up from the EUR98.0 million it posted a year earlier, despite the group booking higher exceptional costs in the period. The group said it will pay an interim dividend of 4.88 euro cents per share for the half, up 10% year-on-year.
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Hochschild Mining said its pretax loss widened in the first half of the year after being hit by lower production, lower commodity prices and higher costs but said production in the second half of the year is set to substantially increase. The miner reported a pretax loss of USD43.4 million in the first half of 2015, widening from a USD11.7 million loss a year earlier as revenue tanked to USD190.3 million from USD282.0 million. Silver production in the period fell to 6.3 million ounces from 8.5 million ounces whilst gold production followed and dropped to 41,000 ounces from 55,000 ounces.
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Enquest said it swung to a pretax loss in the first half of 2015 after revenue fell on the back of lower oil prices and its finance costs rose due to its rising debt but the company reaffirmed its full year guidance as more projects are expected to come online in the second half. The oil and gas development and production company reported a first half pretax loss of USD34.6 million, swinging from a USD78.6 million profit a year earlier as revenue fell to USD414.6 million from USD503.6 million.
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COMPANIES - INTERNATIONAL
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Danish brewer Carlsberg reported its second-quarter net income attributable to shareholders declined to DKK1.59 billion from last year's DKK2.21 billion. Adjusted attributable net profit was DKK1.73 billion, compared to DKK2.29 billion a year ago. Net revenue declined to DKK18.93 billion from DKK19.16 billion last year. Total sales volumes of beer dropped to 38.6 million hectolitres from 40.3 million hl a year earlier. The company noted that the decline reflected weak results in Western Europe and market decline in Eastern Europe, partly offset by strong Asian results.
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JP Morgan Chase & Co is in advanced talks with the US Securities and Exchange Commission to pay more than USD150 million to resolve allegations it inappropriately steered private-banking clients to its own investment products without proper disclosures, The Wall Street Journal reported citing people familiar with the matter. The newspaper said that the settlement could be announced within the next few weeks.
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Motorola Solutions is in advanced talks to acquire Airwave Solutions, a UK communication services provider, as it seeks to build out its software and services business, Bloomberg reported citing people familiar with the matter. The report indicate that Airwave, which is controlled by Macquarie Group Ltd, could fetch about GBP1 billion. Talks are ongoing and the deal may still fall through, in part due to Airwave's complex shareholder structure.
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The US Securities and Exchange Commission said that Bank of New York Mellon Corp has agreed to pay USD14.8 million to settle charges that it violated the Foreign Corrupt Practices Act by providing valuable student internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund.
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Wednesday's Scheduled AGMs/EGMs
Playtech
Mountview Estates
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
25 Jun 2015 15:31
