LONDON (Alliance News) - Shares in London opened flat to lower Friday, with broker ratings moving prices in the absence of much large company reporting.
The exceptions were building materials company CRH and mobile giant Vodafone. The two stocks were up 4.0% and 2.7%, respectively, following positive trading updates early Friday.
Retailer Marks & Spencer led blue-chip losers, down 3.0%, after the stock was cut to Underweight by Barclays.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 6,684.82
FTSE 250: down 0.2% at 17,012.62
AIM ALL-SHARE: flat at 738.16
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Hang Seng: down 0.3% at 21,934.45
Nikkei 225: closed down 1.1% at 16,627.25
DJIA: closed down 0.4% at 18,517.23
S&P 500: closed down 0.4% at 2,165.17
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GBP: firm at USD1.3230 (USD1.3215)
EUR: firm at USD1.1023 (USD1.1005)
GOLD: flat at USD1,323.91 per ounce (USD1,323.73)
OIL (Brent): down at USD45.99 a barrel (USD46.68)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)
0830 Germany Markit services, manufacturing and composite PMI preliminary
0900 Italy industrial orders and sales
0900 EU Markit services, manufacturing and composite PMI preliminary
0930 UK Markit services and manufacturing PMI preliminary
1000 Italy retail sales
1100 Italy trade balance
1330 Canada retail sales
1330 Canada consumer price index
1445 US Markit manufacturing PMI preliminary
1800 US Baker Hughes US oil rig count
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Britain cannot have access to the single market without also respecting the other key freedoms of the EU, French President Francois Hollande said Thursday during a meeting with British Prime Minister Theresa May in Paris. "If Britain wants to be part of the single market, they can do so, but they must comply with the principle of the four freedoms," Hollande said. "There cannot be freedom of goods, circulation of goods, free movement of capital, if there is not also free movement of people." Hollande said freedom of movement was the most "crucial" point of negotiations that will ensue over Britain's relationship to the EU, which will begin after Britain formally triggers the exit process. He said Britain must choose to stay in the market and allow for free circulation or "have a different status."
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Japan's manufacturing sector contracted again in July but the pace of deterioration slowed, flash survey data from Markit showed. The manufacturing Purchasing Managers' Index rose to 49 in July from 48.1 in June. A reading below 50 indicates contraction in the sector.
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Donald Trump declared himself a champion of the American people as he claimed the Republican Party's presidential nomination at the party convention in Cleveland, Ohio and looked forward to a November contest against Democrat Hillary Clinton. "I'm with you - the American people," he said, "I am your voice." Trump vowed to put the US first by restoring law and order in the wake of a series of high profile police shootings, by restricting illegal immigration, by rejecting globalism and renegotiating trade deals and by restore the US economy.
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The 31-year-old man who drove a delivery truck down 2 kilometres of Nice's seaside promenade, killing 84 people celebrating Bastille Day, had envisaged such a terrorist attack for months before getting behind the wheel, a French prosecutor said. Tunisia-born Mohamed Lahouaiej Bouhlel also had accomplices, prosecutor Francois Molins added, saying that he sought charges against five people in custody, some of whom exchanged messages in the days, weeks and months before the attack.
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Brazilian federal police arrested 10 people suspected of plotting a terrorist attack at the upcoming Olympic Games in Rio de Janeiro, Brazil's Justice Minister Alexandre de Moraes said. The suspects, all of whom were Brazilians, were members of an online group calling itself the Defenders of Sharia. Speaking at a press conference in the capital Brasilia, Moraes called them an "amateur" and "disorganised" terror cell.
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BROKER RATING CHANGES
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BARCLAYS CUTS MARKS & SPENCER TO 'UNDERWEIGHT' ('EQUAL WEIGHT') - PT 290 (410) PENCE
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JPMORGAN CUTS SEVERN TRENT TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 2450 (2300) PENCE
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JPMORGAN CUTS SSE TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 1625 (1550) PENCE
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JPMORGAN RAISES CENTRICA TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 250 (220) PENCE
BERENBERG INITIATES WILLIAM HILL WITH 'SELL' - TARGET 240 PENCE
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BERENBERG INITIATES PLAYTECH WITH 'BUY' - TARGET 1200 PENCE
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BERENBERG INITIATES LADBROKES WITH 'HOLD' - TARGET 130 PENCE
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BERENBERG INITIATES GVC HOLDING WITH 'BUY' - TARGET 730 PENCE
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COMPANIES - FTSE 100
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Vodafone Group reiterated its outlook for its current financial year, as the mobile telecommunications giant said it "continued to make good progress" during its first quarter. In the quarter to end-June, Vodafone reported revenue of EUR13.38 billion, down 4.5% from EUR14.01 billion the year before, due to a 5.3% hit from foreign exchange movements. However, Vodafone's preferred reporting measure, group organic service revenue, rose 2.2%, helped by a strong performance from Africa, the Middle East and Asia Pacific, and a stable performance in Europe.
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Construction materials company CRH said it now expects its first half earnings to be ahead of its previous guidance due to its trading performance in the latter half of the second quarter. The Irish firm now expects earnings before interest, tax, depreciation and amortisation for the first half of 2016 of EUR1.1 billion. This is higher than its previous expectations of EUR1 billion outlined towards the end of April.
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J Sainsbury and Home Retail Group said the UK Competition & Markets Authority has unconditionally cleared the merger of the two companies following its Phase 1 investigation. Supermarket chain Sainsbury's is buying Home Retail - the owner of high-street homewares retailer Argos - for GBP1.2 billion in a deal struck in April. Sainsbury's added that the acquisition is expected to complete in early September.
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US activist investor Elliott Management has written to the board of SABMiller to raise concerns about the structure of its proposed GBP71 billion takeover by US rival Anheuser-Busch InBev, the Financial Times reported. Elliott, which has a 1.46% stake in SABMiller, wrote to the board about the payment structure of the deal in the past few days, the report said, citing people with knowledge of the letter. Hedge fund managers TCI and Davidson Kempner have taken stakes in SABMiller and are understood to be pushing for a higher cash offer, the FT reported.
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COMPANIES - FTSE 250
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A report from UK lawmakers has accused Sports Direct International of failing to treat the majority of its workers with "dignity or respect". "Sports Direct is the country's largest sports retail outlet, but that size and success is founded on a business model that enables the majority of workers in both the warehouse at Shirebrook and at the shops around the UK to be treated without dignity or respect," the report from the Business, Innovation and Skills committee.
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Beazley reported a fall in profit in the first half of 2016, but revenue rose on the back of growth in gross written premiums, and it said it doesn't expect to see much disruption from the UK's decision to leave the EU. The insurance company said pretax profit in the first half of 2016 slipped to USD150.2 million from USD154.5 million the year before, although revenue rose to USD939.9 million from USD915.4 million, and gross premiums written grew to USD1.12 billion from USD1.10 billion. Beazley will pay a first interim dividend of 3.5p, up from 3.3p a year before.
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Acacia Mining said revenue, earnings and pretax profit all soared in the first half of the year after selling more gold for a higher price and at a lower cost, but said it ultimately suffered a small net loss after tax. The miner operating in Tanzania said pretax profit rose to USD101.6 million in the first six months of the year compared to USD25.0 million a year earlier, more than a four-fold increase, as revenue for the half rose to USD504.9 million from USD446.8 million. The interim dividend was increased by 43% to 2.0 cents per share.
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Alliance Trust reported a rise in net asset value and pretax profit for the first half of 2016, although it underperformed its benchmark due to market conditions in the month of the Brexit referendum. The trust reported net asset value per share of 591.4 pence on June 30, up from 561.1p at the end of 2015, and 545.9p a year before. The trust's total return was 6.6%, falling short of its benchmark, the MSCI ACWI, which saw a total return of 12.0%. It proposed a second interim dividend of 2.825 pence for the half year, taking its total dividend for the half to 5.650p, up from 5.065p the previous year.
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Electra Private Equity said Gavin Manson has been appointed to the new role of chief financial officer, effective August 8. Manson is currently the finance director for Thomas Cook Group's tour operations, hotels and resorts division, a role he has held since October 2014.
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COMPANIES - INTERNATIONAL
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AT&T reported an increase in second-quarter profit, as revenue jumped 22%, reflecting the acquisition of satellite TV operator DIRECTV. Earnings for the quarter came in line with Wall Street estimates, while revenues fell short of expectations. Dallas, Texas-based telecom giant's second-quarter profit rose to USD3.41 billion or USD0.55 per share from USD3.08 billion or USD0.59 per share last year.
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Starbucks reported a higher profit for its third quarter than a year before. The company said its bottom line rose to USD1.04 billion, or USD0.49 per share. This was higher than USD0.95 billion, or USD0.42 per share, in last year's third quarter. The company said revenue for the quarter rose 7.4% to USD5.24 billion from USD4.88 billion last year.
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21st Century Fox announced that Roger Ailes, chairman and chief executive officer of Fox News Channel and Fox Business Network, and chairman of Fox Television Stations, has resigned from his role effective immediately. Rupert Murdoch will assume the role of chairman and acting chief executive officer of Fox News Channel and Fox Business Network. Earlier there were reports that 21st Century Fox was negotiating the exit of Ailes following a sexual harassment lawsuit filed by a former network anchor.
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Smartwatch shipments declined for the first time ever in the second quarter, mainly due to weak demand for Apple Watch. The worldwide smartwatch market declined 32% to 3.5 million units from 5.1 million units last year, according to data from the International Data Corp. Although, Apple held to the top spot by shipping 1.6 million watches, it was the only manufacturer among the top 5 to post a decline. Apple reported a 55% drop in sales year-over-year. However, it still dominates the smartwatch market with a share of 47%, down from 72% last year.
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South Korean conglomerate Samsung Electronics said it has filed a lawsuit against Huawei Technologies in China, accusing the Chinese firm of infringing on Samsung's six patents over mobile phones and digital images. The lawsuit, filed in Beijing's Intellectual Property Court, seeks damages equivalent to USD24.1 million, alleging that some of Huawei's smartphones, including its Mate8 smartphone and its Honor-branded lineup of handsets, infringed on Samsung's patents.
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ConocoPhillips announced it will lay off about 1,000 employees this year, mostly from North American energy jobs in the US and Canada, according to media reports. The cuts were outlined in a town hall meeting with management Thursday. The Houston oil explorer has finished assembling some major upstream projects, and now has "more organizational capacity than we need," ConocoPhillips spokesman Daren Beaudo said in an emailed statement.
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Friday's Shareholder Meetings
United Utilities Group
Big Yellow Group
Fidelity China Special Situations
Alpha Returns Group
Magnolia Petroleum
Hogg Robinson Group
KCOM Group
Montanaro UK Smaller Companies Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
31 Oct 2016 09:39
