LONDON (Alliance News) - Stocks were staging a rebound in London Friday, after losses the day before caused by the raised prospect of a US interest rate hike next month and by the disappearance of a passenger jet headed for Egypt.
No wreckage of Egyptair flight MS804, which had 66 people onboard, has yet been found amid stepped-up international search efforts in the eastern Mediterranean Sea.
Betting firm Ladbrokes was the top mid-cap gainer, up 7.0%, after UK competition authorities said it would need to sell no more than 10% of its combined betting shops to secure approval of its merger with Gala Coral.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.3% at 6,133.88
FTSE 250: up 0.7% at 16,846.25
AIM ALL-SHARE: up 0.1% at 723.22
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Hang Seng: up 0.9% at 19,875.73
Nikkei 225: closed up 0.5% at 16,736.35
DJIA: closed down 0.5% at 17,435.40
S&P 500: closed down 0.4% at 2,040.04
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GBP: flat at USD1.4593 (USD1.4583)
EUR: firm at USD1.1222 (USD1.1204)
GOLD: firm at USD1,254.69 per ounce (USD1,251.18)
OIL (Brent): up at USD49.08 a barrel (USD47.73)
(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)
1000 EU current account
1100 UK CBI industrial trends survey
1330 Canada retail sales
1330 Canada consumer price index
1500 US existing home sales
1800 US Baker Hughes US oil rig count
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An international effort to find traces of Egyptair flight MS804 in the eastern Mediterranean Sea was set to continue Friday, as more experts arrived to work out what happened to the plane. Ships and planes from France, Greece and Egypt have been scouring the area where the Airbus A320 is thought to have come down on its way from Paris to Cairo, about 280 kilometres from the Egyptian mainland. Multiple reports of debris in the hours after the crash were found not to have been from the passenger jet, which disappeared from radar around 2:30 am (0030 GMT) on Thursday. The plane was carrying 56 passengers, seven crew members and three security officers. One passenger described as British was confirmed Friday to be a dual Australian-British national, the Australian government said.
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National Health Service trusts across England are expected to record their worst financial performance in a single year, with a deficit of more than GBP2 billion. Figures published on Friday for 2015-16 are expected to show a slight improvement on the worst case scenario deficit, but it will still be the poorest on record. In February, a report containing the first nine months' worth of figures said the NHS was on track for a GBP2.8bn deficit across the year. It said if savings could be made in the final three months of the financial year, the figure may fall to around GBP2.4bn.
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Germany's producer prices continued to drop in April, figures from Destatis revealed. Producer prices declined 3.1% in April from last year, the same pace of decrease as seen in March but slightly faster than the 3% fall forecast by economists. Producer prices have been falling since August 2013. The 3.1% decrease was the biggest since January 2010 when prices slid 3.5%. Excluding energy, producer prices decreased 1% from last year.
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The International Monetary Fund has reached an agreement with Baghdad to help the Iraqi government deal with budget strains due to the sharp drop in oil revenues and millions of people displaced by the fight against Islamic State militants. Iraq will be able to borrow up to USD5.4 billion under the 36-month agreement with IMF staff in the region. The so-called stand-by arrangement must still be approved by the IMF's executive board as early as June or July, after Iraqi authorities implement reforms required under the deal.
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Four Western powers and the EU called on banks and businesses to re-engage with Iran following the lifting of sanctions under an international deal struck last year to curb Tehran's nuclear ambitions. Relations between Iran and the West have been thawing in the wake of the deal, which addresses concerns that Tehran was developing nuclear weapons. In return, Iran secured the removal of crippling economic sanctions. But Tehran has recently been critical over the amount of time it is taking for the agreement to take full effect. Among other things, the country is eager to be fully reintegrated into the European banking system.
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Nigerian security forces have rescued 97 hostages, including a second "Chibok girl," and killed 35 members of the Boko Haram terror group that had been holding the hostages, a military spokesman said. The operation to free the hostages, which included women and children, took place in the Sambisa Forest region in north-east Nigeria, Sani Usman said. The Chibok Girl was one of 276 girls kidnapped more than two years ago by the Islamist terrorist group Boko Haram from a school in the village of Chibok in the north-eastern state of Borno. More than 200 of the schoolgirls remain missing.
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All Venezuelan citizens were called on to participate in military exercises as the country prepares for a supposedly imminent invasion by the US. Venezuelan Defence Minister Vladimir Padrino Lopez called on all Venezuelans to participate in the drills, to be organized by the armed forces throughout the country under the slogan "2016 Independence", which will take place Friday and Saturday. President Nicolas Maduro announced the exercises earlier this week after pledging to prolong his government's special emergency powers.
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BROKER RATING CHANGES
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GOLDMAN INITIATES EVRAZ WITH 'NEUTRAL' - TARGET 130 PENCE
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Liberum Initiates IFG Group With Buy, Price Target At 215p
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N+1 Singer Cuts Vernalis To Hold From Buy, Target To 46p From 86p
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COMPANIES - FTSE 100
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Defence support services company Babcock International said its Ascent Flight Training Ltd joint venture has won a contract from the UK Ministry of Defence. Ascent, the company's joint venture with US defence contractor Lockheed Martin, will deliver the rotary wing element of the UK Military Flying Training System on behalf of the UK MoD. The deal is worth around GBP400.0 million to Babcock.
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COMPANIES - FTSE 250
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The UK Competition & Markets Authority said it has provisionally found that the merger between betting companies Ladbrokes and Gala Coral may give rise to competition concerns in a large number of local areas. In order to resolve the concerns, around 350 to 400 betting shops may have to be sold for the merger to be conditionally cleared, the CMA said. Ladbrokes and Gala Coral are the second and third largest bookmakers in the UK by number of shops. Ladbrokes operates 2,154 betting shops in Britain and 77 in Northern Ireland, while Gala Coral operates around 1,850 betting shops in Britain.
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Financial services company Close Brothers Group said it delivered an improved performance in the third quarter, with good trading for all three of its divisions. The firm, which runs banking, securities and asset management operations, said its banking arm has continued to see good demand for its specialist lending services. In the third quarter to the end of April, the loan book increased 4.0% over the quarter and 8.2% in the nine months to the end of April to GBP6.2 billion. Winterflood, the securities arm, has seen its performance improve after tough market conditions in the first half. Profit improved across its trading books thanks to a modest recovery in equity markets and better risk appetite, Close said.
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Pendragon said it will launch a GBP20.0 million share buyback, to be run by Jefferies International, after concluding it had the capacity to return surplus cash to shareholders. The car dealer said its board of directors has considered its capital structure and capital allocation policies with a view to returning surplus capital to shareholders. Pendragon said it has a target range of 1.0 to 1.5 times net debt to underlying earnings before interest, taxation, depreciation and amortisation and is currently trading below this level.
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Aerospace and defence components manufacturer Meggitt said it has won a USD35.0 million contract with the Canadian Department of National Defence. Meggitt said it has secured a five-year deal for surface and aerial target systems, most of which will be manufactured at its Meggitt Target Systems site in Alberta, Canada.
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Spectris said acquisitions boosted sales in the first four months as it continues to restructure to better align spending plans with sales growth. The company, which makes precision measurement instruments for industrial markets, said reported sales for the first four months of 2016 grew 2.0%. Acquisitions contributed all of this growth, as like-for-like sales declined 4.0% in the period, Spectris said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Support services company John Menzies said it has made a good start to 2016 and trading is in line with its expectations. Menzies said its Aviation business has seen revenue grow 7.0% in constant currencies in the first four months of the year from a year before. Ground handling rates grew 4.0% thanks to contract wins, though cargo volumes are down 2.0% against a strong comparative for the prior year. Menzies Distribution, meanwhile, saw print media sales decline 4.0%, in line with the declines seen in 2015.
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Moss Bros Group said its overall trading performance in the 15 weeks from January 31 to May 14 has shown further improvement on the prior year. The men's suit retailer and hire company, which is holding its annual general meeting on Friday, said its good performance in the 15 weeks was underpinned by strong retail sales while the hire business also continued to show positive growth. Total sales increased by 3.3% in the period year-on-year, with like-for-likes up by 5%. Within this, like-for-like retail sales grew by 5.1% boosted by the new season's ranges, while like-for-like hire sales rose by 4.7%.
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Gulf Keystone Petroleum said it has managed to buy more time to try to address its financial woes by signing an extension to its agreement with the holders of its bonds and loan notes to May 31.
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Sinclair Pharma took itself off the market after striking a distribution and strategic marketing deal in the US and completing the sale of its non-aesthetics business. In an upbeat trading statement, Sinclair said it has signed a four-year, exclusive distribution and strategic marketing agreement with Thermigen for Silouhette Instalift. Sinclair said it has granted Thermigen a four-year distribution licence for the US market, running to mid-2020.
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COMPANIES - INTERNATIONAL
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Oil Search and Total said they have entered into an exclusive memorandum of understanding. This follows Oil Search's agreement to acquire InterOil. The MoU sets out the principles on which Oil Search will sell down 60% of InterOil's interests in PRL 15 and 62% of InterOil's interests in its other exploration assets to Total following the successful completion of Oil Search's acquisition of InterOil.
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Swiss luxury goods group Compagnie Financiere Richemont reported its fiscal 2016 profit climbed 67% to EUR2.23 billion from the previous year's EUR1.334 billion. Sales grew 6% to EUR11.076 billion from EUR10.41 billion last year. At constant exchange rates, sales decreased 1%. The company noted that growth in Europe, the Middle East, Americas and Japan was offset by weaker trading in the Asia Pacific region.
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Google is developing its own artificial intelligence chips designed specifically to be used for machine learning, the company announced on the sidelines of the Google I/O conference. Google revealed it has been using its own Tensor Processing Unit chips for more than a year. The chips are specially created for the task of machine learning and require fewer transistors for operations, Google explains. It means they can accomplish more tasks faster. The processors powered AlphaGo when it defeated the world's best human player of the Asian board game Go in March. Until that defeat Go had been considered too complex for a computer to play.
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Friday's Scheduled AGMs/EGMs
Spectris
Moss Bros Group
Applegreen
Richland Resources
Snacktime
Hydrogen Group
John Menzies
Hochschild Mining
Vislink
Headlam Group
Baillie Gifford Shin Nippon
Spectris
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
17 Mar 2016 16:17
