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LONDON (Alliance News) - UK stocks have opened higher Thursday on a strong lead from the US and Japan. The FTSE 250 is out-performing in early trade, led by Ocado, up 6.6%.
The online grocery deliver company reported a rise in sales in its third quarter.
Meanwhile, Morrisons is among the top FTSE 100 gainers, up 2.6%, after reaffirming its commitment to maintaining its dividend payments, despite reporting another decline in profit.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.1% at 6,837.60
FTSE 250: up 0.9% at 15,812.20
AIM ALL-SHARE: up 0.1% at 776.15
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Hang Seng: down 0.4% at 24,613.50
Nikkei 225: closed up 0.8% at 15,909.20
DJIA: closed up 0.3% at 17,068.71
S&P 500: closed up 0.4% at 1,995.69
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GBP-USD: up at USD1.6220
EUR-USD: down at USD1.2909
GOLD: up at USD1,249.54 per ounce
OIL (Brent): down at USD97.44 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 British Summer Time)
09:00 ECB Monthly Report
11:00 Ireland Consumer Price Index
13:30 US Jobless Claims
13:30 Canada New Housing Price Index
15:30 US EIA Natural Gas Storage
19:00 US Monthly Budget Statement
20:00 EU ECB President Draghi's Speech
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The house price balance in the UK fell all the way to 40% in August, the Royal Institution of Chartered Surveyors said. That was well shy of forecasts for 47% and down sharply from the downwardly revised 48% in July (originally 49%). In the London area, house prices were higher for a balance of nine percent of agents - slowing from 11% in the previous month.
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Inflation in China slowed more than expected in August and producer prices extended its decline for the 30th consecutive month, providing leeway for the implementation of additional stimulus to offset the weakness in property sector. Consumer price inflation slowed to a four-month low of 2% in August, the National Bureau of Statistics reported Thursday. It was forecast to ease moderately to 2.2% from the 2.3% in July. Inflation remains well below the government's full-year target of 3.5%. During January to August, headline inflation was 2.2%.
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Germany's inflation in August, measured on the consumer price index, held steady as initially estimated, at its lowest level since February 2010, final data from Destatis showed. The consumer price index rose 0.8% year-on-year in August, same as in July. This was the lowest since February 2010, when prices climbed 0.5%. On a monthly basis, consumer prices remained unchanged.
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FRANCE AUG CPI INFLATION 0.4% VS. 0.5% IN JUL, CONSENSUS 0.4%
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US President Barack Obama on Wednesday evening outlined his comprehensive strategy to eliminate the terrorist group known as the Islamic State. Speaking in a nationally televised primetime speech on the eve of the 13th anniversary of the 9/11 attacks, Obama vowed to use air power but no combat troops to eliminate ISIS. Emphasizing that ISIS is not, in fact, a recognized state in any way but a terrorist organization, the president put forth a four-point plan to deal with the problem.
The first point called for intensified airstrikes - adding for the first time that US air forces would follow their targets into Syria. The second point called for 475 service members to be sent to Iraq - not for combat, but for intelligence, to provide equipment and to train allies. The third point features counterterrorism to prevent attacks, and the fourth is to provide humanitarian assistance.
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EU member states on Wednesday failed to reach a decision on the implementation of new sanctions against Russia, with ambassadors due to resume talks the following day, according to sources in Brussels. While the measures were formally approved on Monday, there is now disagreement over their implementation, amid indications that a ceasefire in eastern Ukraine is holding, as well as concerns over Russian retaliation.
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The murder trial of South African athlete Oscar Pistorius enters its final phase Thursday, and judge Thokozile Masipa is expected to announce her verdict this week. The judge's analysis of the arguments presented by the prosecution and defence could last until Friday, followed by the announcement of the verdict.
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BROKER RATING CHANGES
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TRADERS: NUMIS INITIATES LONDON STOCK EXCHANGE WITH 'HOLD' - TARGET 2074 PENCE
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TRADERS: NUMIS RAISES ADMIRAL GROUP TO 'BUY' ('ADD') - TARGET 1630 (1720) PENCE
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TRADERS: CREDIT SUISSE RAISES TUI TRAVEL TO 'OUTPERFORM' ('NEUTRAL')
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HSBC CUTS WILLIAM HILL TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 365 (385) PENCE
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TRADERS: EXANE BNP INITIATES SPIRAX-SARCO WITH 'UNDERPERFORM' - TARGET 2,600P
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TRADERS: MORGAN STANLEY RAISES BWIN.PARTY TO 'EQUAL-WEIGHT' ('UNDERWEIGHT')
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TRADERS: PANMURE RESUMES INFORMA WITH 'BUY' - TARGET 620 PENCE
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TRADERS: NUMIS CUTS DIRECT LINE TO 'HOLD' ('ADD')
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COMPANIES - FTSE 100
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Royal Bank of Scotland Group and Lloyds Banking Group, both based in Scotland, have made contingency plans to move their headquarters to London in the event of the Scottish people voting in favour of a split from the UK at next week's independence referendum. "While the scale of potential change is currently unclear, we have contingency plans in place which include the establishment of new legal entities in England," Lloyds said in a statement. RBS confirmed its own contingency planning and said it believes it will be "necessary" in the event of a 'Yes' vote to re-domicile the bank's holding company and its primary rated operating entity, The Royal Bank of Scotland PLC, to England.
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Wm Morrison Supermarkets posted a further drop in profit in the first half of its financial year, again hit by dwindling UK sales and waning market share, but the grocer raised its interim dividend and confirmed its commitment to paying a dividend of not less than 13.65 pence for the current financial year. The UK's fourth largest supermarket chain raised its interim dividend by 5.% to 4.03 pence per share, and confirmed its underlying pretax profit guidance for the full financial year of between GBP325 million and GBP375 million. Morrisons posted a pretax profit of GBP239 million for the 26 weeks to August 3, compared with GBP344 million a year earlier.
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Fashion and home goods retailer Next reported a 19% rise in pretax profit for the first half of the year, citing a range of factors including the improving UK economy and much better summer weather, although it kept most of its full-year outlook unchanged having already raised it twice this year. Next's pretax profit was GBP324.2 million in the six months to end-July, up from GBP271.8 million a year earlier, as revenue rose to GBP1.85 billion, from GBP1.68 billion. The growth was driven by a 7.5% revenue increase in its stores and 16% growth in its directory business. Next raised its interim dividend to 50.0 pence, from 26.0p, but said it wouldn't be paying any more special dividends for the time being. It expects to pay a total dividend of 150 pence this financial year, up 16% from last year.
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COMPANIES - FTSE 250
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Ocado Group sounded a note of caution on the UK retail environment as it posted a rise in sales and average orders per week for the third quarter, but said its average order size had shrunk during the period. The FTSE 250 grocery-delivery company said group sales in the 12 weeks to August 10 were up 23% to GBP231.9 million, against GBP189.2 million a year earlier. Retail sales in the period were up 16% to GBP218.5 million against GBP189.2 million last year. Average orders per week increased by 17% to 163,000, against 139,000 last year, but average order size was down by 1.7% to GBP111.64 against GBP113.54 in the corresponding period in 2013.
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Dunelm Group upped its full-year dividend by 25% after recording a year of "solid" growth, with rises in pretax profit and revenue supported by the opening of new stores and improvements in its multi-channel offerings. In its full-year results for the 52 weeks to June 28, the homewares retailer said pretax profit rose 7.3% to GBP116.0 million from GBP108.1 million the previous year. Revenue was up 7.8% for the year to GBP730.2 million from the GBP677.2 million reported for 2013. The company said Nick Wharton has resigned from his position as chief executive and is stepping down from the board. Will Adderley, currently serving as executive deputy chairman, has been appointed to resume the role of chief executive with immediate effect.
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RPC Group said it has reached a deal to sell its rigid-sheet businesses in Italy and Belgium for an undisclosed amount. The two deals are expected to conclude towards the end of this month, the FTSE 250-listed rigid-plastic packaging company said. RPC said the deals, along with the sale of its disposables trading business Tedeco-Gizeh GmbH in Germany, mark the end of the divestment portion of its "Fitter for the Future" programme.
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Housebuilding and construction company Galliford Try said it had been appointed to three new contracts worth over GBP100 million combined, in Lincolnshire, Swansea and Northampton.
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DIY and general merchandise retailer Home Retail Group reported a ninth consecutive quarter of like-for-like sales growth for Argos, this time supported by margin growth, but tepid growth at its Homebase DIY unit as sales of seasonal goods fell short of last year. Home Retail said it expects to report a benchmark profit in line with market expectations for the full year, although, as always, this will depend on how Argos performs over the key Christmas trading period.
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Go-Ahead Says 65%-Owned Southeastern Awarded Department For Transport Contract
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Ashmore Group FY Pretax Profit GBP170.3M Vs GBP257.6M; Dividend 16.45p Vs 16.10p
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COMPANIES - LONDON MAIN MARKET AND AIM
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Ryanair Holdings's chief financial officer has said the low-cost carrier is flying six more passengers per flight in 2014 against last year, due to improvements in its customer service and the way the company sells tickets, Reuters reported on Wednesday. Speaking to reporters in Dublin, Howard Millar said the group expects load factors to increase between 3 and 4 percentage points to "close to 86%" of available seats this year. An increase of that size on the company's fleet of Boeing 737s, which carry 189 passengers apiece, would mean 6 to 7 more passenger a flight, Reuters said.
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SpaceandPeople Says Some Areas Have Disappointed Compared To April Forecast; Says German Retail Profits For Year Significantly Lower Than Anticipated;Forecasts 2014 Profit Before Tax, Items Of GBP800K, With GBP200K Upside Potential; Forecasts 2014 Profit Before Tax, After Items Of GBP500-700K; Says Cash Position Strong, Plans 2.0p Dividend Payable April 2015
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Bacanora Minerals Ltd said it has appointed Kiran Morzaria, chief executive of Rare Earth Minerals PLC, as a non-executive director with immediate effect. Bacanora and Rare Earth are joint venture partners in the Sonora lithium project in Mexico and Rare Earth Minerals has a 11.9% shareholding in Bacanora.
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COMPANIES - INTERNATIONAL
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French lender Credit Agricole is said to near an official agreement with US officials in the next couple of months to settle an investigation of the bank's business in sanctioned countries including Iran, according to Bloomberg. A resolution is likely to follow a settlement with German lender Commerzbank AG, which is in talks with US authorities to pay nearly USD650 million for breaking trade embargoes. Reports added that Credit Agricole's fine could be similar to Commerzbank's. At least 3 other European banks such as Deutsche Bank AG, Societe Generale SA and UniCredit SpA are also being probed for possible sanctions violations in several countries, reports stated.
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Swiss banking giant UBS is working with hedge fund Standard General on loans for electronics retailer RadioShack as it tries to stave off bankruptcy, Bloomberg reported Wednesday, citing people with knowledge of the matter. Standard General, a shareholder of RadioShack, is said to be seeking to improve RadioShack's cash position by issuing debt or equity.
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Thursday's Scheduled AGMs/EGMs
Lonmin
Daejan Holdings
Darty
New India Investment Trust
South African Property Opportunities
Accsys Technologies
Ortac Resources
Entertainment One
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
