LONDON (Alliance News) - London shares prices were mostly flat Tuesday, with New York called for a slightly negative open, with SABMiller one the biggest blue-chip decliners after it issued a trading update and a press report said the brewing giant has rejected an informal takeover bid from Belgian-American rival Anheuser-Busch InBev.
Citing people familiar with the matter, Bloomberg said the initial proposal was worth slightly over 4,000 pence per share, but executives and some SABMiller shareholders are looking for an offer closer to 4,500p. A deal at 4,500p per share would value SABMiller at around GBP73 billion.
One of the sources said SABMiller had communicated its preferred terms to AB InBev, but no final decision has yet been made on making a formal offer. SABMiller was among the worst blue-chip performers, down 2.9% at 3,655.50 pence.
Meanwile, SABMiller said group net producer revenue fell 9% in the six months ended September 30 on the year before, also falling 9% in the second quarter to the same date, which it said was due to the continued depreciation of its key operating currencies against the US dollar.
On an organic, constant currency basis, net producer revenue grew 4% year-on-year. Beverage volume increased by 2% in the second quarter and 1% in the first half, leaving NPR per hectolitre up 4% in the quarter and also 4% in the half.
UK shares were taking a breath from the gains seen on Monday. The FTSE 100 index was flat at 6,296.81 points, the FTSE 250 also flat at 17,114.31, and the AIM All-Share up 0.1% at 734.30.
European stocks were slightly higher, with the French CAC 40 and the German DAX 30 indices both up 0.4%.
"There certainly isn’t the same buying momentum that we experienced yesterday, and traders are searching for another reason to buy," said IG analyst David Madden. "It seems like we are at a crossroads; if a break to the upside isn’t made soon, we could be in for a slow decent."
In Asia, the Japanese Nikkei 225 index closed up 1.0%, while the Hang Seng in Hong Kong ended down 0.1%. The Shanghai market is closed until Thursday.
In the US, stock futures pointed to a slightly lower open, with the Dow 30 index seen down 0.1% and the S&P 500 and the Nasdaq 100 both pointed down 0.2%. On Monday, the Dow closed up 1.9%, the S&P 500 index up 1.8% and the Nasdaq Composite up 1.6% amid renewed hopes the Federal Reserve will delay raising interest rates following weak services data from Markit and Institute for Supply Management.
Still ahead in the economic calendar, US trade balances are at 1330 BST and the Redbook index at 1355 BST.
After the close of European equities markets, European Central Bank President Mario Draghi will be speaking in Frankfurt at 1800 BST.
Data from Destatis revealed Germany's factory orders declined in August as both domestic and foreign demand deteriorated from July. Factory orders dropped 1.8% month-on-month in August, confounding expectations for a 0.5% rise. Orders had declined 2.2% in July, which was revised from a 1.4% drop estimated initially. This was the second consecutive decrease in orders.
Meanwhile, UK house prices dropped unexpectedly in September, data from Lloyds Banking Group's Halifax division revealed Tuesday just after the market open. House prices slid 0.9% month-on-month in September, reversing August's 2.7% increase, which was the biggest monthly growth in 15 months. Economists had forecast prices to gain 0.1%.
Elsewhere on the London Stock Exchange, CMC Markets analyst Jasper Lawler said supermarkets were higher with speculation building that Tesco's half year earnings update, due Wednesday, "can match the positivity generated by Sainsbury’s surprise upgrade to profit forecasts".
Barclays, which resumed Tesco at Equal Weight, said that while it doubts like-for-like sales will show any "dramatic progress" from the first quarter, "perhaps the company will echo the less negative recent commentary from Sainsbury on the wider UK market".
Wm Morrison Supermarkets was the best FTSE 100 performer, up 2.1%. Tesco was up 1.2% and Sainsbury's was up 1.0%.
Glencore saw the recent recovery in its shares stall, after touching an all-time low of 66.67p last week. Nevertheless, the miner was still above the 100p line, down 3.4% at 111.10p.
In the FTSE 250, shares in Greggs were up 6.6% after it reported growth in sales in the third quarter of its financial year and said it expects to report full-year growth slightly ahead of previous expectations amid favourable market conditions.
Greggs said that total sales in the 13 weeks to October 3 rose 5% on the same period the year before, while own-shop like-for-like sales grew 4.9%, slightly ahead of its expectations. In the year to date, total sales grew 5.1% and own-shop like-for-likes rose 5.6%.
The bakery and food-to-go retailer also said the new UK National Living Wage will raise its costs, but noted that it already pays staff above the current minimum.
Analysts at Shore Capital and N+1 Singer said Greggs' update has caused them to upgrade its forecasts for the full financial year.
At the other end of the mid-cap index, Acacia Mining was leading the decliners, down 14%. The miner said its production output in the third quarter was weaker than anticipated and said its full-year production will now fall below previous guidance.
Acacia said its production in the third quarter was around 164,000 ounces of gold, lower than its had expected due to several short-term issues which hit production at its Bulyanhulu and Buzwagi mines over the period to the end of September, while North Mara performed in line with its expectations. All three mines are located in Tanzania.
The group does expect production to improve in the fourth quarter, but its full-year production will come in broadly flat on the 718,851 ounces it delivered in 2014, below its previous guidance for full-year production to hit 750,000-800,000 ounces.
In AIM, Independent Resources was up 15%, and Nostra Terra Oil & Gas, up 13%. The joint venture formed by the oil and gas companies has struck a deal with TransGlobe Energy to acquire a 50% stake in the East Ghazalat concession in Egypt for USD3.5 million.
Meanwhile, Stanley Gibbons Group was down 28%. The rare stamps and collectibles retailer issued a profit warning for the first half of its financial year, saying that gross margin and profit are expected to be substantially below the first half of the previous year, which will result in it missing market forecasts for the full year.
By Daniel Ruiz; danielruiz@alliancenews.com
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17 Nov 2016 15:58
