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(Alliance News) - The pound continued to sink early Thursday, amid drama in Westminster. It was hovering just above USD1.2200, down from USD1.2233 late Wednesday and USD1.2290 at the close on Tuesday.
However, unlike on Wednesday, the FTSE 100 equity index is not expected to benefit, called to open slightly down Thursday.
With political crises in the UK and Italy, and concerns about the global economic impact of the US's unresolved confrontations with China and Iran, gold prices continued to rise.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 11.91 points, 0.2%, at 7,102.80
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Hang Seng: down 0.3% at 25,538.84
Nikkei 225: closed down 0.1% at 20,460.93
DJIA: closed up 258.10 points, 1.0%, at 26,036.10
S&P 500: closed up 0.7% at 2,887.94
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GBP: down at USD1.2209 (USD1.2233)
EUR: unchanged at USD1.1083
Gold: up at USD1,546.34 per ounce (USD1,536.29)
Oil (Brent): soft at USD60.19 a barrel (USD60.62)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
1000 CEST Germany labour market statistics, unemployment)
1100 CEST EU business climate and economic sentiment indicators
1400 CEST Germany provisional CPI
0830 EDT US advance economic indicators report
0830 EDT US 2nd estimate GDP
0830 EDT US unemployment insurance weekly claims report - initial claims
0830 EDT US weekly export sales
0945 EDT US Bloomberg Consumer Comfort Index
1000 EDT US pending home sales index
1030 EDT US EIA weekly Natural Gas Storage Report
1630 EDT US Fed money stock, discount window borrowings, foreign central bank holdings
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More than one million people have signed a petition calling on UK Prime Minister Boris Johnson not to suspend Parliament amid growing anger over the decision. Thousands of people rallied for hours outside Parliament on Wednesday night, and there were smaller demonstrations in other towns and cities. The plan to suspend Parliament was heavily criticised by opposition parties, and has been criticised by some Conservative MPs, and there are legal challenges in English and Scottish courts. The e-petition on Parliament's website gained the 100,000 signatures needed for it to be debated by MPs in just a few hours, and reached a million before midnight. On Wednesday, Johnson said he wanted to prorogue Parliament in order to bring the current record-breaking session to a close in order to bring forward his Government's new legislative agenda. But opposition leaders said the prime minister is trying to halt their efforts to block a no-deal Brexit.
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British car manufacturing output declined 11% year-on-year in July to 108,239 units, data from the Society of Motor Manufacturers & Traders showed. According to the trade association, July marked the fourteenth consecutive month of decline after car manufacturing dropped by 20% in June. SMMT said ongoing weakness in major EU and Asian markets, along with some key model changes, affected July production. Production for export fell 15% in July, although overseas demand remained the main driver of overall volumes, accounting for eight in ten cars built, data showed.
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People have been warned they could miss out on PPI refunds as a flurry of last-minute claims could see phone lines overwhelmed and websites crash. Consumers were told "this is big money, don't leave it to chance" as Thursday's 11.59pm deadline draws nearer, with "many billions" of pounds remaining unclaimed. An estimated 64 million payment protection insurance policies were sold in the UK – many in the 1990s and early 2000s. PPI was routinely added to products such as store cards, credit cards or mortgages. It was intended to protect people if they could not keep up with their payments, due to illness or unemployment for example. But it was widely mis-sold.
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Italy's populist Five-Star Movement has formally asked the nation's president to give caretaker premier Giuseppe Conte the mandate to try to form a new coalition government in a bid to forestall an election that could put right-wing nationalist Matteo Salvini in power. Movement leader Luigi Di Maio said he informed President Sergio Mattarella that the Five-Stars had reached an agreement on a potential coalition with the opposition Democratic Party, an arch-rival. Many analysts have said a government made up of such bitter political foes was not likely to last long, in all probability only delaying the election Salvini wants to snag the premiership for himself. Conte resigned a week ago after Salvini's League party, the Five-Stars' previous governing partner, bolted from their long-squabbling coalition.
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Hurricane Dorian caused limited damage in the northern Caribbean as it left the region on Wednesday night, setting its sights on the US mainland. It is expected to gather strength and could to grow into a dangerous Category 3 storm. Power outages and flooding were reported across the US Virgin Islands, the British Virgin Islands and the Puerto Rican islands of Vieques and Culebra after Dorian hit St Thomas as a Category 1 storm.
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BROKER RATING CHANGES
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PEEL HUNT RAISES NEWRIVER REIT TO 'BUY' ('ADD')
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PEEL HUNT RESUMES KIER GROUP WITH 'BUY' - TARGET 200 PENCE
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COMPANIES - FTSE 100
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Micro Focus International warned it does not expect to meet its annual guidance. Recent trading has led the board to conclude that the software firm will not hit its constant-currency revenue guidance of a 4% to 6% year-on-year drop for the financial year to October 31, now expecting a larger fall. "Weak sales execution has been compounded by a deteriorating macro environment resulting in more conservatism and longer decision making cycles within our customer base," said Micro Focus. The company now expects revenue to fall around 6% to 8% year-on-year. Against this backdrop, Micro Focus said it has decided to accelerate a strategic review of its operations.
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AstraZeneca said a phase three trial of anifrolumab, a potential new medicine for the treatment of systemic lupus erythematosus, met its primary endpoint. Anifrolumab achieved a statistically-significant and clinically-meaningful reduction in disease activity versus placebo.
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COMPANIES - FTSE 250
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Consumer goods firm PZ Cussons has agreed to sell Greek food subsidiary Minerva and Polish personal care brand Luksja. Minerva is being sold for GBP41.0 million in cash, with the proceeds to be used to reduce debt and drive "focused investment" in core brands. Minerva was the first company to sell branded packaged olive oil in Greece. PZ Cussons did not give financial details of the Luksja deal, but said completion of the sale is subject to competition clearance being granted in relevant territories, including Poland. PZ Cussons and Sarantis, the buyer of Luksja, have also agreed to enter into a distribution agreement for PZ Cussons's core brands in Poland. Following completion, PZ Cussons's on-the-ground operations in Poland will be wound down. "We are streamlining the group to focus investment on core Personal Care and Beauty brands to deliver higher margin earnings, in geographies that can scale, with the aim of returning the group to sustainable, profitable growth," said Chief Executive Alex Kanellis.
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Recruitment firm Hays reported a slight dip in annual profit amid "weaker market conditions". Net fees were up 5% to GBP1.13 billion in the year to June 30, up 6% on a like-for-like basis, while pretax profit slipped 3% to GBP231.2 million. Before exceptional items, however, profit was up 3% to GBP246.3 million. In Germany, Hays saw record net fees despite weakening market conditions, while the firm noted signs of reduced business confidence in the UK & Ireland in the fourth quarter. Hays raised its full-year dividend by 4% to 3.97 pence and its special dividend by 9% to 5.43p. "Looking ahead, despite an increasingly tough global economic backdrop, our market positions, combined with our highly experienced global management teams and strong financial position, means I am confident we will continue to appropriately balance our long-term potential with the more challenging markets we currently face," said Chief Executive Alistair Cox.
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Guarantor loans provider Amigo Holdings reported a sharp rise in quarterly profit. Revenue in the three months to June 30 was up 14% year-on-year to GBP71.5 million, with pretax profit up 33% to GBP22.6 million. The firm's net loan book grew 14% to GBP728.4 million. In response to "an evolving regulatory and economic environment", Amigo said it will be prioritising new customer lending over re-lending to existing clients, while its credit policy has been "further enhanced and tightened". "This positive action means that we are hitting the ground running ahead of what we recognise is a changing regulatory and economic landscape. By doing this, we are being proactive and pragmatic. We are focused on achieving the best customer outcomes - all with long-term returns as a key driver," said Chief Executive Hamish Paton.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Brickability Group, which sells over 300 million bricks a year, started trading on AIM on Thursday after raising GBP57 million in its initial public offering. The IPO led by Cenkos Securities was priced at 65p a share, giving the construction materials company a market capitalisation of GBP150 million. Brickability has been around for over 25 years, but Chief Executive Officer Alan Simpson said: "The move to AIM and the additional funding will allow us to continue our growth trajectory through further organic growth and through accretive bolt-on acquisitions."
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COMPANIES - INTERNATIONAL
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Woolworths Group reported a strong rise in annual sales as the Australian retailer's home market saw growth in the second half. In the 53 weeks to June 30, net pretax profit attributable to shareholders jumped 55% to AUD2.69 billion compared to AUD1.74 billion in the 52 week period the year before. Sales from continuing operations increased 5.3% to AUD59.98 billion from AUD56.94 billion. "We made good progress on our transformation across all of our businesses in financial 2019 with improving sales and earning before income and tax momentum in the second half," Chief Executive Brad Banducci said.
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Apple apologized for its digital assistant Siri sharing some of what it heard with quality control workers as it unveiled new rules for handling data from conversations. Under the changes, Apple will allow its employees to review conversations only from customers who opt into the "Siri grading" program to improve the voice recognition technology. Apple will also delete by default any recordings used for the program. "We realize we haven't been fully living up to our high ideals, and for that we apologize," Apple said in a post.
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Wine and spirits distributor Pernod Ricard has agreed to acquire US spirits maker Castle Brands for USD223 million. Through a subsidiary, Pernod Ricard will acquire all of Castle Brands' shares for USD1.27 per share, a 92% premium to Castle Brands' closing price on Tuesday in New York. The offer, which has been unanimously approved by Castle Brands' board, includes the assumption of debt. The portfolio of New York-based Castle Brands includes Jefferson's bourbon and rye, Goslings rum, Gozio amaretto and Arran Whisky. Pernod Chair & Chief Executive said: "Through this acquisition we welcome this great brand portfolio, in particular, Jefferson's bourbon whiskey, to the Pernod Ricard family. Bourbon is a key category in the US which is our single most important market.
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Thursday's Shareholder Meetings
Iomart
Lansdowne Oil & Gas
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