LONDON (Alliance News) - Shares have opened lower in London Thursday, following negative leads from Wall Street and Asian markets, while oil prices continue to decline.
However, gold has gained overnight, leading to early gains by FTSE 100 miners Fresnillo and Randgold, up 1.2% and 1.0%, respectively.
In the FTSE 250, KAZ Minerals is up 16%, after it said it swung to a tiny pretax profit in the first half of the year, despite the company's revenue being hampered by lower commodity prices. Rank Group is up 3.2%, having reported growth in profit in its recently-ended financial year, boosted by strong sales in its venues and digital businesses.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.5% at 6,374.63
FTSE 250: down 0.4% at 17,322.67
AIM ALL-SHARE: down 0.2% at 746.25
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Hang Seng: down 2.3% at 22,642.08
Nikkei 225: closed down 0.9% at 20,033.52
DJIA: closed down 0.9% at 17,348.73
S&P 500: closed down 0.8% at 2,079.61
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GBP: down at USD1.5661
EUR: flat at USD1.1124
GOLD: up at USD1,138.11 per ounce
OIL (Brent): down at USD46.80 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in BST)
09:30 UK Retail Sales
11:00 UK CBI Industrial Trends Survey
13:30 US Initial and Continuing Jobless Claims
13:30 Canada Wholesale Sales
15:00 US CB Leading Indicator
15:00 US Philadelphia Fed Manufacturing Survey
15:00 US Existing Home Sales
15:30 US EIA Natural Gas Storage
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US central bankers are awaiting further improvement in the economy before hiking rates from the current all-time lows, according to notes released from last month's meeting of the Federal Reserve monetary policy body. The rate-setting Federal Open Market Committee, led by Fed Chair Janet Yellen, left the unprecedented near-zero range on its benchmark interest rate unchanged, in a July 29 statement. Notes from the meeting said that one member of the committee "indicated a readiness to take that step at this meeting but was willing to wait for additional data to confirm a judgement to raise the target range." Overall, the panel "concluded that, although it had seen further progress, the economic conditions warranting an increase in the target range for the federal funds rate had not yet been met."
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Eurozone finance ministers approved the first tranche of Greece's new 86-billion-euro bailout, EU diplomats said, enabling the cash-strapped country to meet a loan repayment deadline the following day. The decision brings some respite after Greece teetered on the brink of bankruptcy during months of fraught bailout negotiations, which took their toll on the country's embattled economy and strained relations in the 19-member currency bloc. Earlier Wednesday, the final hurdles were cleared as the German and Dutch Parliaments approved Greece's third bailout programme in five years. The finance ministers later held a conference call, rubber-stamping the deal and clearing the way for a first bailout tranche of EUR26 billion.
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Germany's producer prices dropped at a slightly slower pace as expected in July, data from Destatis revealed. Producer prices decreased 1.3% year-on-year in July, following a 1.4% drop in June. The annual pace of decline matched expectations. Producer prices have been falling since August 2013. Excluding energy, producer prices decreased 0.3% from last year.
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China's yuan will not be added to the International Monetary Fund's basket of reserve currencies until at least October 2016. The IMF said it would not make changes to its reserve currencies until then and would decide by the end of the year whether to add the Chinese currency to the mix. Any decision would only go into effect late next year. China has been pushing for years for the yuan to be considered alongside the dollar as one of the world's most important reserve currencies, but Beijing's strict regulation of the currency had prohibited the IMF from taking the move.
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BROKER RATING CHANGES
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BARCLAYS RAISES AMEC FOSTER WHEELER TO 'OVERWEIGHT' ('EQUAL WEIGHT') - TARGET 1200 PENCE
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UBS RAISES SIGNET JEWELERS TO 'BUY' ('NEUTRAL') - TARGET 9000 (8500) PENCE
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COMPANIES - FTSE 100
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Meggitt said it has won a sole-source contract from the US Defense Logistics Agency to replace fuel cells in Hornet jets in a deal worth up to USD39.8 million. The aerospace and engineering company said the three-year deal, which will end in late 2018, will see it make deliveries from its polymers and composites facility in Rockmart in Georgia in the last quarter of the year.
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COMPANIES - FTSE 250
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Phoenix Group Holdings said it is on track to meet its financial targets, as the life insurance company reported lower cash generation and operating profit in the first half. The company also named Henry Staunton as its new chairman, the successor to Howard Davies, who is stepping down at the end of August to join Royal Bank of Scotland Group in the same role. Staunton also is the chairman of retail group WH Smith, and performs the same role at rent-to-own company BrightHouse Group. Phoenix, which manages life funds that are closed to new business, said it generated GBP110 million in cash in the six months to the end of June, down from GBP332 million in the corresponding half the prior year. Phoenix said its performance in the half puts it on track to meet its targets of generating between GBP200 million and GBP250 million in cash in 2015 and GBP2.8 billion from 2014 to 2019. Phoenix maintained its interim dividend at 26.7 pence per share.
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WH Smith said it expects its full-year results to be slightly ahead of analyst expectations after both its Travel and High Street business performed well in the second half of the year. The books and stationery retailer said that its Travel business continued to deliver a strong performance with good sales across all of its core channels in the second half of the year. WH Smith said that its High Street business also performed in line with expectations, with sales slightly ahead driven by some favourable publishing in books.
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The Rank Group reported growth in profit in its recently-ended financial year, boosted by strong sales in its venues and digital businesses, and said that trading since the year-end has been in line with management expectations. The bingo club and casino operator said pretax profit multiplied in the year ended June 30 to GBP74.5 million from GBP14.4 million the year before, as its revenue grew 4% to GBP738.3 million from GBP707.7 million, comprising 2% growth in venues revenue and 21% growth in digital. Like-for-like sales rose 5%. Rank Group will pay a dividend of 5.60p for the full year, an increase of 24% on the 4.50p it paid the prior year.
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Ladbrokes said Gala Coral Group, with which Ladbrokes has agreed to merge, achieved a mixed performance in the third quarter of its financial year, as it faced a tough comparable period which benefited from the World Cup, but its online business performed well. The bookmaker said that earnings before interest, tax, depreciation and amortisation in Coral Retail in the 12 weeks ended July 4 was 2% lower than the same period last year at GBP34.9 million, while over-the-counter revenue fell 1% but machines net revenue grew 2%.
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GVC Holdings is prepared to hike its offer for Bwin.Party Digital Entertainment to at least 130 pence per share, valuing Bwin.Party at around GBP1.1 billion, in a final push to try to gain control of the online gambling company, The Times reports. The paper said GVC is ready to raise its bid for Bwin.Party for the third time in order to trump 888 Holdings, which had a bid for Bwin.Party accepted last month. Bwin.Party had rejected GVC's rival, higher offer due to the execution risks that would be involved in GVC's bid, given it is a much smaller company than Bwin.Party is.
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Premier Oil said it swung to a substantial pretax loss in the first half of 2015 due to impairment charges, a drop in production and lower oil prices. The company swung to a USD214.7 million pretax loss in the first half of 2015 from a USD50.4 million profit a year earlier as revenue dropped to USD577.0 million from USD884.7 million. Although revenue was only just under analyst expectations, the loss is significantly wider than the USD95.0 million expected, according to a consensus.
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Kaz Minerals said it swung to a tiny pretax profit in the first half of the year, despite the company's revenue being hampered by lower commodity prices. The miner also said the Bozshakol mine will not be commissioned on schedule before the end of the year due to the recent fire at the site, and said this has been pushed back until early 2016. The miner reported a small USD2.0 million pretax profit in the first half of 2015, swinging from a USD104 million loss a year earlier despite revenue dropping to USD341.0 million from USD425.0 million.
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Bank of Georgia Holdings, the London-listed holding company of Georgia’s leading bank JSC Bank of Georgia and its subsidiaries, reported higher pretax profit in the second quarter, driven by its banking and investment businesses. In a statement, the company said it made a GEL83.7 million pretax profit in the three months to the end of June, compared with GEL59.0 million in the corresponding quarter the prior year. The group's performance in the second quarter helped the company's pretax profit in the first half of 2015 to increase to GEL156.9 million from GEL122.8 million in the corresponding half the prior year.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Stock Spirits Group reported a huge drop in pretax profit in the first half of 2015 as it suffered from disruption to its business in Poland, but said it is working to turn that part of the business around through "premiumisation" of the portfolio. The Central Europe-focused drinks distributor reported a drop in pretax profit in the six months ended June 30 to EUR1.96 million from EUR19.51 million in the first half of 2014, as revenue fell to EUR108.0 million from EUR137.7 million. Stock Spirits will pay an interim dividend of EUR0.0125.
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Engineering services company Costain Group posted higher first half pretax profit on the back of robust revenue growth as it said it expects its results for the full year to come in at the upper end of its expectations. Costain said its pretax profit in the first half was up to GBP10.0 million, nearly double the GBP5.8 million it posted a year earlier, as the company generated GBP621.1 million in revenue, up from GBP529.1 million. The company proposed a 15% hike to its interim dividend to 3.75 pence per share, up from 3.25 pence.
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Plastic piping systems manufacturer Polypipe Group said it swung to profit in the first half of 2015 and lifted its dividend payout by more than half as a result. The group said its pretax profit in the six months to the end of June was GBP23.2 million, compared to the GBP4.6 million loss it made a year earlier when its results were hit by costs related to its refinancing and its initial public offering in April 2014. Stripping out exceptional items, the group's pretax profit still rose 42% to GBP23.2 million from GBP16.4 million. Polypipe said it will pay an interim dividend of 2.3 pence per share, up 53% from the 1.5 pence per share it paid out a year earlier.
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Electronic components company TT Electronics said it turned a pretax profit in the first half of 2015, but its underlying performance was hit by higher costs and weaker contract values, while organic revenue growth was flat. TT said its pretax profit for the six months to the end of June was GBP6.3 million, compared to a GBP0.4 million loss a year earlier when the group booked GBP12.7 million in restructuring costs, which were reduced to only GBP2.2 million in the first half of 2015 as the group continues with its strategic shift. The company said it will pay a flat interim dividend of 1.7 pence per share.
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Redde said it has struck a GBP43.2 million cash and shares deal to acquire fleet accident management company FMG Group Holdings and its subsidiaries. Redde said the deal will broaden its accident and fleet management operations and will give it access to new sectors. It will also boost its opportunities in winning work with large fleet managers and owners requiring accident management and legal services. The consideration will be paid as GBP38.2 million in cash, plus a further GBP5.0 million in Redde shares.
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COMPANIES - INTERNATIONAL
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Australian airline Qantas Airways reported a turnaround to profit in fiscal 2015, recording its first full-year profit since the 2008 global financial crisis. The company also announced a capital return of AUD505 million to shareholders and an order for eight Boeing 787-9 Dreamliner aircraft.
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JPMorgan Chase, Goldman Sachs and Morgan Stanley are working to create a company that will pull together and clean reams of reference data at a lower cost than what they would spend individually, The Wall Street Journal reported citing people familiar with the matter. The paper said that the new entity will create a stream of consistent data that banks use to help determine pricing and transaction costs. The initiative is currently dubbed "SPReD", which stands for Securities Product Reference Data, and is likely to be launched as a new entity in the next six to 12 months. Each founding bank is investing "seven figures" for the entity, the Journal reported.
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Thursday's Scheduled AGMs/EGMs
Marimedia
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
20 May 2016 09:35
