LONDON (Alliance News) - The FTSE 100 has lost most of its opening gains Monday, after disappointing results from HSBC, published 15 minutes after the open, have offset initial enthusiasm resulting from the agreement late Friday of a four-month extension of Greece's debt programme.
HSBC said 2014 reported pretax profit was USD18.68 billion, down 17% on the year before and below market consensus of USD20.95 billion, saying the weak results were due to a tough fourth quarter of the year. HSBC raised its dividend slightly, however, to USD0.50 per share from USD0.49.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: marginally higher at 6,916.92
FTSE 250: up 0.1% at 17,142.18
AIM ALL-SHARE: up 0.3% at 713.35
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Hang Seng: closed flat at 24,836.76
Nikkei 225: closed up 0.7% at 18,466.92
DJIA: closed up 0.9% at 18,140.44
S&P 500: closed up 0.6% at 2,110.30
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GBP-USD: down at USD1.5386
EUR-USD: down at USD1.1358
GOLD: down at USD1,200.82 per ounce
OIL (Brent): up at USD59.84 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
(all times in GMT)
09:00 Germany IFO Business Climate
11:00 UK CBI Distributive Trades Survey
13:30 US Chicago Fed National Activity Index
15:00 US Existing Home Sales
15:30 US Dallas Fed Manufacturing Business Index
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Greece is expected to submit a final detailed list of economic reform proposals to its international creditors on Monday to secure a four-month extension of its bailout. A draft list of reforms was submitted by the new, leftist SYRIZA-led government on Sunday ahead of a formal evaluation by bailout lenders that will determine whether to extend the country's bailout until June. The reforms include privatizations and structural reforms in tax and public administration - with the goal of combating tax evasion, corruption and streamlining its civil service, according to sources. Reports said the measures, however, fall short of including significant explanations about spending cuts and projected revenue increases.
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The members of the Bank of Japan's monetary policy committee believe that the pace of the country's economic recovery remains moderate, minutes from the bank's policy meeting on January 20 and 21 revealed. They also noted that capital spending was on the upswing as corporate profits continued to grow. The members did concede that they were likely to miss their desired inflation target of 2% following years of deflation - due mainly to tumbling energy prices. Citing lower crude oil prices, the BoJ downgraded its core inflation estimate for fiscal 2015 to 1% from 1.7%. But the central bank lifted the forecast for fiscal 2016 to 2.2% from 2.1%.
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A bombing at a pro-government demonstration Sunday in which at least two people were killed marred weekend advances on a peace plan for eastern Ukraine. At least nine people were injured by the nail-packed bomb in the eastern city of Kharkiv during a memorial event for Ukrainian soldiers killed fighting pro-Russian rebels. The Interior Ministry called it was a terrorist attack and dispatched special forces to Kharkiv.
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US Secretary of State John Kerry and his British counterpart discussed the crisis in Ukraine and possible new sanctions against Russia on Saturday. Russia's actions were "simply unacceptable" and an agreement was likely on a new round of sanctions, Kerry said. British Foreign Secretary Philip Hammond urged strong US-EU cooperation against Russia's "continued aggression." Kerry said he "covered a variety of key topics" with Hammond, including Ukraine and Iran.
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BROKER RATING CHANGES
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TRADERS: PANMURE RAISES MARSTONS TO 'BUY' ('HOLD')
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COMPANIES - OTHER FTSE 100
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Old Mutual said its South African banking subsidiary Nedbank Group Ltd posted higher earnings and raised its dividend in 2014, driven by net interest income growth and a lower credit loss ratio. Nedbank's headline earnings rose 14.0% to SAR9.88 billion, as net interest income rose 8.2% to SAR22.96 billion, and impairments decreased 19.0% to SAR4.51 billion. The South African business raised its full-year dividend by 14.9% to 1.028 cents.
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Bunzl raised its dividend for a 22nd consecutive year after reporting higher 2014 earnings on the back of a further 17 acquisitions, and said it expects further earnings growth in 2015 as it announced two further deals. The distribution and outsourcing company is highly acquisitive, snapping up small bolt-on acquisitions, particularly overseas in growth markets like the Americas. It said it spent GBP211 million on the 17 acquisitions in 2014, as it also snapped up a Spanish healthcare products company with annual revenue of EUR18 million and a Canadian cleaning and hygiene supplier with annual revenue of CAD12 million. The acquisitions it made in 2014 helped lift pretax profit to GBP299.8 million, from GBP289.9 million in 2013, as revenue rose to GBP6.16 billion, from GBP6.10 billion. Bunzl raised its total dividend for 2014 to 35.5 pence, from 32.4p.
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Associated British Foods said it still is expecting a marginal decline in adjusted earnings per share for the full year, following lower profit in the half year to February 28, as declining profit in its sugar business and the strong pound more than offset growth from its Primark retail chain. In a trading update, the group said sales at its low-cost fashion retail chain Primark are expected to be some 16% ahead of last year at constant currency rates, driven by an 11% increase in new space and very high sales densities in new stores. However, at actual rates, due to the strength of sterling, sales will be up around 12%. It said its first-half operating profit margin is lower than last year, due to a higher level of mark-down. AB Food said the profit outlook for its sugar business for the full year remains unchanged - with profitability at AB Sugar to be "substantially lower".
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Antofagasta lowered its cash cost guidance for 2015 by about 10 cents a pound, bringing it in line with its cash costs in 2014, saying that input costs were now more favourable. The copper and gold miner said it now expects net cash costs for 2015 to be USD1.40 per pound thanks to lower oil prices and the drop in the Chilean peso.
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A trade union representing workers at Aer Lingus Group has changed its stance and said it will now back the takeover bid for the Irish carrier by International Consolidated Airlines Group, Reuters reported. The Aer Lingus Central Representative Council, a group of staff representatives of the company's trade unions, said last month the proposed EUR1.36 billion takeover by IAG could have a major impact on the workforce at the Irish company and lead to up to 1,200 job cuts. But the group said it has now reversed this view after Willie Walsh, the chief executive of IAG, told a parliamentary committee that job cuts would be minimal and would be more than offset by new roles created by the expansion of Aer Lingus' fleet.
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Irish drug company Shire called for improved rare disease diagnosis while announcing its support of Rare Disease Day 2015, which takes place annually on the last day of February. Shire is launching a series of educational materials for Rare Disease Day under a new educational initiative, "Diagnosis Doesn't Have to be Rare", which highlights the often challenging rare disease diagnosis journey. These new awareness materials are posted on Shire.com.
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COMPANIES - FTSE 250
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Engineering company Keller Group said it has won a contract to work on the construction of the Koralm railway line between Graz and Klagenfurt in southern Austria. The value of the work awarded to Keller is EUR31.2 million and will involve jet grouting, bored piling and anchor works as part of the soil preparation work being undertaken for the project.
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Balfour Beatty said its Gammon Construction joint venture has won a HKD3.2 billion contract to build a residential development in Hong Kong. The project, based in Tsuen Wan, will include the construction of seven residential towers along with retail and recreational facilities, the construction and support services company said.
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DS Smith said it is trading in line with expectations as it said it has proposed a EUR300 million deal to buy European corrugated board packaging company Duropack. The corrugated packaging company said trading in the three months to the end of January, its financial third quarter, was in line with its expectations. The group also said it has completed the disposal of its testliner mill in France and will take a GBP9 million exceptional charge on the sale.
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Veterinary pharmaceutical business Dechra Pharmaceuticals raised its interim dividend as it posted a rise in pretax profit for its first half. Dechra proposed an interim dividend of 5.12 pence, up from 4.75 pence a year before. In the half year to end December 2013, the company posted a pretax profit of GBP12.6 million, up from GBP10.3 million a year before, as revenue rose 5.2% to GBP100.9 million from GBP95.9 million.
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Bovis Homes Group reported a jump in pretax profit and hiked its dividend significantly after its revenue rose in 2014 on the back of higher house sales. The FTSE 250-listed housebuilder said its pretax profit for the year to the end of December was GBP133.5 million, up 69% on the GBP78.8 million reported a year earlier. On the back of the profit rise, the group said its final dividend for the year will be 23 pence per share, bringing its total dividend for the year up to 35 pence, significantly higher than the 13.5 pence per share it paid last year.
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The Unite Group reported a higher profit and revenue for 2014, while declaring a significant increase in its dividend and giving a positive rental growth outlook. The developer and manager of student accommodation, declared a final dividend of 9.0 pence per share, taking its total dividend for 2014 to 11.2 pence, up from only 4.8 pence in 2013, noting this was a payout ratio of 65%, well up from 35% last year. Unite reported a pretax profit of GBP108.4 million for 2014, up from GBP77.1 million in 2013, as total revenue, which includes both rental income and property sales among other income, rose 6.8% to GBP108.5 million from GBP101.6 million.
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Hansteen Holdings said it has acquired a further 24.2 million units in the Ashtenne Industrial Fund for GBP11 million, increasing its holding in the fund to 40.8%. The Ashtenne Industrial Fund owns some 13.6 million square feet of multi-let industrial properties in the UK, according to Hansteen, with a property portfolio consisting of 3,285 units on 269 individual estates, with an annual rent roll of GBP39.2 million and vacancy of 18.1%, at end-June 2014. The gross asset value of the properties at that time was GBP447.7 million.
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Premier Oil said it has plugged and abandoned the Badada-1 exploration well in Kenya, though it added the well had been drilled within budget. FTSE 250-listed Premier Oil did not provide any detail on why the well had been plugged and abandoned, but one of its partners, AIM-listed Tower Resources, said the well had failed to find commercial hydrocarbons. Premier Oil has a 55% stake in the well, with Tower holding a 15% stake and the remaining 30% held by Taipan Resources Inc, which is also the operator.
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Thomas Cook Group is seeking to sell its airline as part of its ongoing turnaround plans, The Sunday Times reported. The tour operator is understood to have sounded out a number of potential buyers in recent months, the paper said, including rival carriers and private equity investors.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Quindell said it has extended the exclusivity period for its discussions with Slater & Gordon Limited regarding the disposal of its professional services division to March 31. The insurance services outsourcing provider said that the discussions continue but that the indicative terms being discussed with the law firm for the division "would imply a significant premium to the company's market capitalisation" on Friday.
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COMPANIES - UK OTHER
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DFS Furniture Sets Price Range For IPO At 245-310p For GBP585M Market Cap
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Fashion chain New Look has hired bankers to work on a stock market listing which could value the company at up to GBP2 billion, Sky News reported. Sky said it understands the company has hired JPMorgan to work on options for a flotation, five years after its private equity owners, Apax Partners and Permira, aborted a previous attempt to take it public owing to challenging market conditions.
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COMPANIES - INTERNATIONAL
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Canadian drug maker Valeant Pharmaceuticals International said it agreed to buy gastrointestinal drug maker Salix Pharmaceuticals in a deal worth about USD14.5 billion. Valeant also reported a fourth-quarter profit that surged from a year ago, driven largely by revenue growth and lower operating costs. Quebec-based Valeant said it will pay USD158 per share in cash for Salix, which would give the deal an enterprise value of USD14.5 billion. The acquisition was approved by the boards of both companies and is expected to close in the second quarter of 2015.
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Citigroup is in exclusive talks to sell its consumer lending unit OneMain Financial Inc to subprime lender Springleaf Holdings Inc for more than USD4 billion, according to media reports on Friday.
Baltimore-based OneMain Financial, formerly known as CitiFinancial, provides personal loans from more than 1,100 branches nationwide. OneMain Financial is part of Citi Holdings, the unit created by Citigroup after the 2008 financial crisis to house its bad assets.
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Swiss cement giant Holcim, which is in the process of merging with French peer Lafarge, said full-year attributable net income edged up to CHF1.287 billion from CHF1.272 billion in the prior year. Earnings per share rose to 3.95 francs from 3.91 francs. However, net sales were CHF19.110 billion, slightly lower than CHF19.719 billion in the prior year.
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Monday's Scheduled AGMs/EGMs
Thomas Cook Group
Velocys
Infrastrata
Golden Saint Resouces
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
11 Mar 2016 07:57
