LONDON (Alliance News) - He's back.
James Murdoch on Friday joined Rebekah Brooks in resuming their former positions in the UK prior to the News Corp phone hacking scandal, as he was reappointed as chairman of Sky.
The stock was up 2.3% in early trading, as the television broadcaster also reported 5% revenue growth for its first half and strong customer growth in its second quarter.
Meanwhile, the broader market was being supported by a continued rally in oil prices and a surprise interest rate cut by Japan.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.4% at 6,016.09
FTSE 250: up 0.9% at 16,337.48
AIM ALL-SHARE: up 0.1% at 688.61
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Hang Seng: closed up 2.5% at 19,683.11
Nikkei 225: closed up 2.8% at 17,518.30
DJIA: closed up 0.8% at 16,069.64
S&P 500: closed up 0.6% at 1,893.36
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GBP: flat at USD1.4379 (USD1.4378)
EUR: down at USD1.0895 (USD1.0951)
GOLD: down at USD1,112.80 per ounce (USD1,115.39)
OIL (Brent): up at USD35.58 a barrel (USD34.13)
(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 GMT)
09:00 Italy Producer Price Index
09:00 EU M3 Money Supply and Private Loans
10:00 EU Consumer Price Index
13:30 US Gross Domestic Product and GDP Price Index Preliminary
13:30 US Personal Consumption Expenditures Prices
13:30 US Employment cost index
13:30 US Goods Trade Balance
13:30 Canada Gross Domestic Product
13:30 Canada Industrial Product and Raw Material prices
14:45 US Chicago Purchasing Managers' Index
15:00 US Reuters/Michigan Consumer Sentiment Index
18:00 US Baker Hughes US Oil Rig Count
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The Bank of Japan announced plans to introduce negative interest rate in order to achieve its 2% inflation at the earliest possible time but left its massive asset purchase program unchanged. The bank also pushed back the projected timing for reaching inflation target, citing lower crude oil prices. The policy board of the BoJ on Friday voted 5-4 to apply -0.1% interest rate on current accounts that financial institutions maintain at the bank. The board said it will cut the rate further into negative territory, if judged as necessary. The negative rate will affect only a portion of current accounts as it adopts a "three-tier-system".
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Industrial production in Japan stumbled a seasonally adjusted 1.4% on month in December, the Ministry of Economy, Trade and Industry said - sliding for the second straight month. That missed forecasts for a fall of 0.3% following the 0.9% decline in November. On a yearly basis, industrial production slipped 1.6% - also missing expectations for a decline of 0.6% following the 1.7% gain in the previous month.
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Republican candidates, standing on a stage for once not dominated by Donald Trump, answered a range of questions in a debate more substantive than previous ones in which the bombastic New York real estate mogul stole most of the spotlight. Trump refused to take part in the debate, the seventh among a crowded field of Republican candidates. Instead he held a rally to benefit veterans at a separate venue a short distance away. Both events were in Des Moines, Iowa, the capital of the state that will hold first-in-the-country polls on Monday in the long process of electing the next US president.
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Just four members of an anti-government militia remained at the weeks-long armed occupation of a federal wildlife refuge in the western US state of Oregon, the FBI said, but the standoff between the occupiers and law enforcement was not over. At an evening press conference, FBI Agent Greg Bretzing told news media that reports that the "situation" at the Malheur National Wildlife Refuge, which armed protesters have occupied for more than three weeks, had ended were "not true".
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BROKER RATING CHANGES
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S&P CAPITAL IQ CUTS BG GROUP TO 'HOLD' ('BUY') - PRICE TARGET 1000 PENCE
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TRADERS: RBC CAPITAL CUTS FIRSTGROUP TO 'UNDERPERFORM' ('SECTOR PERFORM')
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JPMORGAN RAISES MITCHELLS & BUTLERS TO OVERWEIGHT (NEUTRAL) - TP 370 (420) PENCE
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HSBC RAISES LONMIN TO 'BUY' ('HOLD') - TARGET 76 (135) PENCE
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COMPANIES - FTSE 100
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Sky said it has reappointed James Murdoch, son of Rupert Murdoch, as chairman, succeeding Nicholas Ferguson, as the television broadcaster reported 5% revenue growth for its first half and strong customer growth in its second quarter. Murdoch was previously chief executive of Sky between 2003 and 2007 and chairman between 2007 and 2012. Martin Gilbert has been appointed deputy chairman, with Andrew Sukawaty to replace Gilbert as Sky's senior independent director. For the half year to end-December, Sky posted a pretax profit of GBP414 million, down from GBP1.21 billion a year before, mostly as a result of exceptional profits from the sale of the company's stake in ITV in the year comparative period not repeating.
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British Land said it and joint venture partner Oxford Properties have secured a new tenant for the Leadenhall Building in the City of London, known as 'The Cheesegrater'. The pair have signed a lease agreement with Quadrature Capital, an investment management firm, for Level 33 at the building, which is now 94% let or under offer. Quadrature has signed a ten-year lease for the 11,000 square foot floor. British Land didn't provide financial details of the lease.
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Barclays is facing a GBP1.0 billion lawsuit from dealmaker Amanda Staveley over the emergency GBP5.8 billion funding call the bank launched in 2008, the Financial Times reported. Staveley's PCP Capital Partners has sued Barclays in London, according to a court listing seen by the FT. No details on the nature of the dispute were known, but Barclays confirmed to the newspaper it hinged on the capital call it made at the height of the financial crisis.
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Rolls-Royce Holdings Chief Executive Warren East is expected to announce a cull of senior managers on Friday, part of the ongoing restructuring of the engine maker, the Financial Times reported. East, who took over as chief executive in July last year, is set to inform staff that a "few dozen" of the 2,000 senior managers at the group will be cut, according to a source close to the situation, focused on those who report directly to him or his executive management team.
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COMPANIES - FTSE 250
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Tullett Prebon said revenue rose 14% in the final two months of 2015 compared to the previous year, helping to take its revenue growth for the year to 13%. The interdealer broker said its revenue in 2015 was GBP796 million, up 13% from the GBP704 million it reported in 2014. Excluding PVM Oil Associated Ltd and its subsidiaries, which Tullett acquired in November 2014, revenue was down 1%. The company expects its 2015 full year underlying profit margin to be higher than it had previously indicated at around 13.5%.
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Rank Group said its pretax profit and revenue rose in the first half thanks to good growth in its Grosvenor and Mecca casino and bingo brands and said it remains on track with its digital strategy and the opening of new-format bingo halls. Rank said its pretax profit for the half to the end of December rose to GBP42.7 million from GBP36.3 million. Revenue improved to GBP374.2 million from GBP361.7 million in the half, with like-for-like revenue growing 5.0%. The group hiked its dividend payout to 1.80 pence from 1.60p.
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AG Barr said the soft drinks market in the UK has remained challenging but said it expects its results for the financial year to the end of January to be in line with its expectations. The Scottish drinks firm, maker of Irn-Bru, said its revenue for the fourth quarter to the end of January is expected to grow around 2.5% year-on-year, a slowdown on the 5.0% annual growth it reported a year earlier. AG Barr said the soft drinks market in the UK remains challenging and highly competitive, though it said its trading strategy and brand activities helped it deliver a solid performance.
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India-focused oil and gas explorer and miner Vedanta Resources said its revenue for the third quarter dropped significantly year-on-year as the group contended with a tough commodities market. Vedanta said its group revenue for the quarter to the end of December was USD2.44 billion, down from USD3.36 billion a year earlier. The revenue declines were broadly shared out across its operations, with revenue falling across the board for its zinc, iron ore, copper and aluminium mining operations and for its oil and gas business. Production levels remained robust across the company, with record quarterly refined silver production from its Zinc India business and record metal production in its aluminium unit, but revenue was dragged lower by sinking commodities prices.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Avingtrans said its Sigma Components aerospace business has acquired the internal pipe manufacturing unit of Rolls-Royce. Avingtrans will pay GBP3.5 million to acquire the unit, which has factories in Nuneaton in the UK and in Xi'an in China, and will fund the deal from existing debt facilities.
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COMPANIES - INTERNATIONAL
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Iran has signed an agreement to buy 118 Airbus aircraft, which reportedly worth USD25 billion at list prices in one of the biggest deals signed since Western sanctions against Tehran were lifted. Airbus Group confirmed that Iran has signed two agreements with Airbus covering new aircraft orders and a comprehensive civil aviation co-operation package. The agreements were signed at the Élysée Palace, Paris, during Iranian President Hassan Rouhani's official visit to France with French President François Hollande.
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Shares of Amazon.com dropped 11% in after-hours trading after the online retailer reported a fourth-quarter profit and revenues that fell short of Wall Street estimates. Seattle, Washington-based Amazon's fourth-quarter profit surged to USD482 million or USD1.00 per share from last year's profit of USD214 million or USD0.45 per share. On average, 37 analysts polled by Thomson Reuters expected earnings of USD1.56 per share for the quarter. Analysts' estimates typically exclude special items. Amazon's sales for the quarter grew 22% to USD35.75 billion from USD29.33 billion a year ago.
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Software giant Microsoft announced earnings for its second quarter that topped analysts' expectations, despite revenues that fell more than expected. Currency translation weighed on the top line. The company reported quarterly net income of USD4.998 billion, or USD0.62 per share. This was down from USD5.863 billion, or USD0.71 per share, last year. The company noted that its Windows 10 product is now active on over 200 million devices. It also said that the annualized revenue run rate for its commercial cloud unit is now more than USD9.4 billion.
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Apple is working with partners in the US and Asia to develop new wireless charging technology that could be deployed on its mobile devices as soon as next year, Bloomberg reported citing people familiar with the plans. The report indicated that Apple is exploring cutting-edge technologies that would allow iPhones and iPads to be powered from further away than the charging mats used with current smartphones. The iPhone maker is looking to overcome technical barriers including loss of power over distance with a decision on implementing the technology still being assessed. In addition, Bloomberg reported that Apple acquired education-technology startup LearnSprout, which creates software for schools and teachers to track students' performance.
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Visa reported an increase in profit for the first quarter, as customers spent more using its cards, with earnings trumping Wall Street expectations. Foster City, California-based Visa's first-quarter profit rose to USD1.94 billion or USD0.80 per class A share from USD1.57 billion or USD0.63 per share a year ago. Excluding an adjustment of the revaluation of its Visa Europe put option, adjusted earnings were USD1.69 billion or USD0.69 per share. Visa, the world's largest credit and debit card company, said revenues for the first quarter grew 5% to USD3.57 billion from USD3.38 billion last year.
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Xerox is planning to split into two, the Wall Street Journal has reported, citing people familiar with the matter. According to the report, the company may divide itself to companies containing its hardware operations and another containing its services business. The Norwalk, Connecticut based company may announce this plan tomorrow, when it is reporting its quarterly results. The report further noted that billionaire investor Carl Icahn will be getting three seats on the company's board.
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Sony announced earnings for its third quarter that advanced from last year. The company said its bottom line came in at JPY120.1 billion, or JPY93.33 per share. This was up from JPY90.1 billion, or JPY76.96 per share, in last year's third quarter. The company said revenue for the quarter rose 0.5% to JPY2580.8 billion. This was up from JPY2566.7 billion last year.
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Honda Motor announced earnings for third quarter that decreased from last year. The company said its profit dropped to JPY124.1 billion, or JPY68.91 per share. This was down from JPY152.3 billion, or JPY84.56 per share, in last year's third quarter. The company said revenue for the quarter rose 3.4% to JPY3617.2 billion. This was up from JPY3497.9 billion last year.
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Friday's Scheduled AGMs/EGMs
Caledonian Trust
Weatherly International
Ixico
JPMorgan Asian Investment Trust
Lonmin
Treatt
Scottish Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
