LONDON (Alliance News) - Shares have opened flat in London on Friday following a weak lead from US and Asian markets. However, another full set of company updates are providing some support.
Pearson, Vodafone and Anglo America are at or near the top of the FTSE 100 after providing pre-market updates Friday and after Pearson announced the sale of the Financial Times newspaper on Thursday to Japanese media group Nikkei Inc for GBP844 million.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 6,651.32
FTSE 250: down 0.1% at 17,595.40
AIM ALL-SHARE: flat at 756.47
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Hang Seng: down 1.1% at 25,117.38
Nikkei 225: closed down 0.7% at 20,544.53
DJIA: closed down 0.7% at 17,731.92
S&P 500: closed down 0.6% at 2,102.15
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GBP: down at USD1.5474
EUR: down at USD1.0956
GOLD: down at USD1,083.37 per ounce
OIL (Brent): down at USD55.26 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)
09:00 Italy Wage Inflation
09:00 EU Markit Services, Manufacturing and Composite PMI Preliminary
14:45 US Markit Manufacturing PMI Preliminary
15:00 US New Home Sales
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Representatives of Greece's creditor institutions will travel to Athens on Friday to hold formal negotiations on a new bailout, which are set to start now that the country's parliament has passed two reform bills, a Greek government official said. EU Economy Commissioner Pierre Moscovici announced on Wednesday that the negotiations had started, but face-to-face meetings between negotiators do not yet appear to have taken place. The Greek government official said negotiators hope to complete the bailout memorandum by August 18. The technical talks are expected to be completed around August 12.
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China's urban registered jobless rate came in at 4.04% at the end of second quarter, the Ministry of Human Resources and Social Security said. In March, the unemployment rate was 4.05%. The economy created around 7.18 million jobs in urban areas during the first half of 2015, the ministry said. The government aims to add 10 million jobs in the urban area this year in order to ensure that the jobless rate does not exceed 4.5% in 2015.
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Eurozone consumer confidence deteriorated for a fourth straight month in July and at a faster-than-expected pace, preliminary estimates from the European Commission showed. The flash consumer confidence index dropped to -7.1 from -5.6 in June. Economists had forecast a score of -5.8.
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China's manufacturing sector contracted again in July and at an accelerated pace, the latest survey from Caixin revealed, with a flash PMI score of 48.2. That marked a 15-month low score, and it was well shy of forecasts for a score of 49.7. It was down sharply from 49.4 in June, and it moves further beneath the line of 50 that separates expansion from contraction.
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Japan's manufacturing sector continued to expand in July and at an accelerated pace, the latest survey from Nikkei revealed, with a PMI score of 51.4. That easily beat forecasts for a score of 50.5 and was up from 50.1 in June.
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BROKER RATING CHANGES
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UBS CUTS DAIRY CREST GROUP TO 'NEUTRAL' ('BUY') - TARGET 545 (515) PENCE
GOLDMAN CUTS DAILY MAIL TO 'NEUTRAL' ('BUY') - TARGET 920 (1050) PENCE
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SOCGEN RAISES CAIRN ENERGY TO 'HOLD' ('SELL') - TARGET 180 (165) PENCE
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RBC CAPITAL MARKETS LIFTS MAN GROUP TO OUTPERFORM FROM SECTOR PERFORM
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COMPANIES - FTSE 100
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Vodafone Group confirmed its guidance for its current financial year, as it saw revenue fall 0.9% on a reported basis, saying it made a "good start to the year." It attributed the decline in revenue to a 7.3 percentage point hit from foreign exchange movements offset a 3.1 percentage point boost from merger and acquisition activity. On an organic basis, which Vodafone defines as being on a comparable basis, including merger and acquisition activity and movements in foreign exchange rates, revenue rose 3.3%.
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Anglo American said it swung to a pretax loss in the first half of 2015 after recording a substantial USD3.5 billion impairment, driven by the fall in commodity prices, and said it is aiming to cut 35% of its workforce as part of its cost-saving initiative. The FTSE 100-listed multi-commodity miner reported a USD1.9 billion pretax loss in the six months ended June 30, swinging from a USD2.94 billion profit a year earlier, as revenue tanked 17% to USD13.34 billion from USD16.14 billion due to falling commodity prices.
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Pearson reiterated its outlook for 2015 and raised its interim dividend as it posted a widened pretax loss for the first half of 2015, a day after it announced the sale of the Financial Times. Pearson reiterated its expectations for adjusted earnings per share of between 75 pence and 80 pence in 2015 - assuming the ownership of PowerSchool and the FT Group for the entirety of 2015. Pearson sold the PowerSchool business for USD350 million in June, and said that including this sale, its guidance its reduced by around 1 pence, and cautioned that if current exchange rates persist it will reduce earnings per share of around 2 pence. Pearson posted a pretax loss of GBP115 million for the half year to end-June, widened from a pretax loss of GBP36 million a year before.
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British American Tobacco said the Quebec Court of Appeal has granted the application that it and two other tobacco companies made to cancel a CAD1.1 billion provision execution order. The provisional execution was imposed on BAT's Imperial Tobacco Canada unit and the Canadian subsidiaries of Philip Morris International and Japan Tobacco International as part of a CAD15.6 billion judgement made against the three companies in two class action cases in June.
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Property developer Hammerson said its pretax profit fell in the first half of 2015 thanks to lower revenue from its joint ventures, even as its rental income improved over the period. Hammerson said its pretax profit for the half to the end of June was GBP329.4 million, down from GBP362.5 million, primarily due to a fall in the FTSE 100-listed company's share of results from its joint ventures, which declined to GBP121.1 million from GBP183 million. Hammerson said it will pay an interim dividend of 9.5 pence, up 8% from the 8.8p it paid a year earlier.
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Diageo is facing scrutiny in the US over claims it has artificially boosted its sales in the country, The Daily Telegraph reports. The drinks companies, which owns the Guinness and Smirnoff vodka brands, has been contacted by the Securities and Exchange Commission, the US financial regulator, for information on how it has shipped stock to distributors. Diageo is alleged to have been sending more cases of alcohol to its clients than they required, allowing the company to report higher sales and shipments.
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US authorities have ramped up investigations into whether banks should have raised concerns about money flows linked to alleged corruption at football governing body FIFA, The Wall Street Journal reports. In separate probes, the Brooklyn US Attorney's office and the New York State Department of Financial Services have contacted more than half a dozen banks in connection with FIFA corruption, including HSBC Holdings, Standard Chartered and Barclays. The probes are understood to be focused on the banks' money-laundering controls, which have increasingly come under regulatory scrutiny in recent years.
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Shire said the European Medicines Agency's Committee for Medicinal Products for Human Use has given a positive opinion for Intuniv in the treatment of attention deficit hyperactivity disorder in children and adolescents. The European Commission will now consider the committee's positive opinion in making a decision on whether or not to grant marketing authorisation for the product.
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Agenus announced that GlaxoSmithKline received a positive opinion for its Malaria vaccine candidate from the Committee for Medicinal Products for Human Use or CHMP of the European Medicines Agency or EMA. The vaccine candidate, named Mosquirix (RTS,S) is the first QS-21 Stimulon containing product to receive a positive regulatory decision.
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COMPANIES - FTSE 250
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Ladbrokes and Gala Coral Group said they have agreed to merge to create a gambling company with a market capitalisation of around GBP2.1 billion. Under the terms of the deal, Ladbrokes will issue new shares to Gala Coral shareholders representing 48.25% of the enlarged group, with Ladbrokes shareholders to own the other 51.75% of the business. Ladbrokes said it will launch a share placing, issuing 92.4 million shares, 9.99% of its existing total, via an accelerated bookbuild run by UBS and Deutsche Bank in order to strengthen the balance sheet of the new business. The new company will be called Ladbrokes Coral PLC and will be headed by Ladbrokes Chief Executive Jim Mullen.
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In a separate announcement, gaming technology company Playtech said it has struck a deal with Ladbrokes on an early determination on the funds it is owed under its marketing services agreement with the bookmaker. Playtech will receive GBP75 million following the Ladbrokes-Coral merger, with GBP40 million of this to be satisfied in Ladbrokes shares and GBP35 million to be paid in cash.
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Aggreko said it now expects its 2015 interim and full year results to fall short of current market expectations, citing a further slowdown in its North American oil and gas related business and "ongoing security challenges" in Yemen. The temporary power provider said it now expects to post a full year pretax profit for 2015 of between GBP250 million and GBP270 million at current exchange rates. It had previously said it expects its 2015 trading profit excluding currency movements and pass-through fuel to be broadly in line with 2014
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Private equity firm Clayton, Dubilier & Rice and SSA Investments, the Arora family investment vehicle, said they have sold a chunk of shares in FTSE 250-listed discount retailer B&M European Value Retail, raising GBP408 million. The pair sold 120 million B&M shares for 340 pence per share, a discount to B&M's closing price of 352.8 pence on Thursday. The shares were sold in a placing run by Bank of America Merrill Lynch, Goldman Sachs and Numis Securities. The shares sold represent a 12% stake in the discount retailer. CD&R retains an approximate 11% stake in B&M, and SSA retains a 21% stake.
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Lonmin said it is planning to close or temporarily shut down numerous mine shafts in South Africa, threatening around 6,000 jobs, which will lead to production being around 100,000 platinum ounces less per year over the next two years. The platinum group metals miner said it was taking the "necessary protective measures" to reduce its cost base in the current pricing environment so that it will be able to sustain a viable operation even if the current metal pricing environment continues for some time, it said.
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Financial services company Close Brothers Group said it performed well in the five months to the end of June and expects its results for the financial year to the end of July to meet its forecasts. The group said it performed well in the five months, with good returns in its banking arm, improved trading conditions for its Winterflood Securities business, and steady progress in its asset management franchise.
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Drinks company AG Barr said trading in the first half was subdued, in line with its expectations, but said it still expects to meet its expectations for the full year despite the competitive trading environment with which it is currently grappling.
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COMPANIES - INTERNATIONAL
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Online retailer Amazon.com said it swung to a second quarter profit, as sales surged 20%. The company's quarterly earnings came in as a surprise for Wall Street analysts who were expecting the company to report a loss. The company also gave an upbeat sales forecast for the current quarter. For the second quarter ended June 30, 2015, the Seattle, Washington-based company reported net income of USD92 million, compared to a net loss of USD126 million for the year-ago quarter. Before this, Amazon had posted quarterly profit just once in the last four quarters.
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Starbucks, the world's largest specialty coffee retailer, said its third quarter profit rose 22% from last year, as revenue surged 18%. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue. At the same time, the company raised its its fiscal year 2015 adjusted earnings outlook. Separately, Starbucks and PepsiCo announced that they have entered into an agreement for the marketing, sales and distribution of a locally-relevant portfolio of Starbucks ready-to-drink coffee and energy products in Latin America.
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AT&T reported a decline in second-quarter profit, hurt by one-time expenses while revenues inched up on the back of customer additions, partly offset by a stronger dollar. Excluding one-time items, AT&T's quarterly earnings easily topped Wall Street estimates, while revenues fell shy of expectations. AT&T is awaiting regulatory approval for its USD48.5 billion acquisition of DirecTV.
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Visa reported an increase in profit for the third quarter, as customers spent more using its cards, with both earnings and revenues trumping Wall Street expectations. Foster City, California-based Visa's third-quarter profit rose to USD1.70 billion from USD1.36 billion a year ago.
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Air France KLM said its second-quarter net result, group share, was a loss of EUR79 million, compared to a loss of EUR11 million in the previous year. Revenues grew 3% to EUR6.64 billion from EUR6.451 billion in the prior year, but slipped 4.5% on a like-for-like basis.
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BASF reported second-quarter net income of EUR1.26 billion, flat with the prior year. Sales were EUR19.08 billion compared to EUR18.45 billion, a year ago. Sales grew by 3% despite overall lower sales prices. The company said this development was supported by higher volumes in gas trading as well as by positive currency effects in all divisions. BASF expects Group sales to increase slightly in 2015, primarily supported by the sales growth anticipated in the Functional Materials & Solutions and Performance Products segments.
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Friday's Scheduled AGMs/EGMs
Montanaro European Smaller Companies Trust
Greka Drilling
Edinburgh Investment Trust
Hogg Robinson
Helical Bar
United Utilities
Roxi Petroleum
Rare Earth Minerals
Treveria
DJI Holdings
Volex
Petroceltic International
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
31 Oct 2016 09:39
