LONDON (Alliance News) - UK shares have opened higher Friday, as Bank of England Governor Mark Carney backed off of forward guidance and said there is "no immediate need" to raise interest rates.
Royal Mail has reported a 2% increase in like-for-like revenues for the first half of the year, driven by further growth in its parcels revenues. However, the company said parcel volumes were flat despite strong online sales reported by UK retailers over the Christmas period.
Goldman Sachs has cut Dairy Crest to Conviction Sell from Sell, while Berenberg has cut GlaxoSmithKline to Hold from Buy.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 7.26 at 6,780.54
FTSE 250: up 19.05 at 15,999.18
AIM ALL-SHARE: up 1.43 at 871.92
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DJIA: closed down 175.99 or 1.1% at 16,197.35
S&P 500: closed down 16.40 or 0.9% at 1,828.46
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GBP-USD: up at USD1.6654
EUR-USD: down at USD1.3685
GOLD: down at USD1,257.90 per ounce
OIL (Brent): up at USD107.58 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
09:00 Italy Retail Sales
09:30 UK BBA Mortgage Approvals
12:05 UK BOE Governor Carney speech
13:30 Canada Consumer Price Index
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The Bank of England will consider wide range of economic indicators when assessing the need for higher borrowing costs, Governor Mark Carney told the BBC. The case for a rate hike would be examined in the coming Inflation Report, the BoE chief said. Policymakers will look at overall conditions in the whole labor market, not just one indicator, he added. Carney said there is "no immediate need" to raise interest rates. Any change, when it comes, would be very gradual, he said in an interview recorded in Davos, Switzerland.
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Sentiment among British households regarding the value of their homes improved to an all-time high in January, data from a survey by Markit Economics and Knight Frank revealed. The future house price sentiment index climbed to an all-time high of 72.3 in January from 70.5 in December, indicating that prices are expected to rise at the fastest pace since records started. Readings above 50 indicate improvement in sentiment, while those below suggest deterioration.
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Fitch Ratings affirmed Germany's credit ratings at 'AAA', citing decline in the country's debt-to-GDP ratio. The outlook is 'stable'. "Germany continues to have the components of a declining public debt path," Fitch said in a statement. "The economy is growing, the budget position is relatively favourable and nominal interest rates are low."
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Iranian President Hassan Rowhani called Thursday for better relations with the US but ruled out any overtures to Israel. At the World Economic Forum in Davos, Switzerland, Rowhani said Iran-US ties had entered a new phase in recent months, noting that both governments sat at the same table with other world powers to negotiate a deal to curb Tehran's nuclear programme.
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The US National Security Agency's telephone metadata programme is illegal and should be shut down, a government privacy board found in a report released Thursday. The programme, which collects phone call records on a massive scale, has provided only minimal benefits in counterterrorism efforts, according to a narrow majority of the Privacy and Civil Liberties Oversight Board.
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Thousands of anti-government protesters held out on the streets of Kiev on Thursday, as a 24-hour ultimatum by the opposition calling for President Viktor Yanukovych to step down approached. In a first concession, parliament said it would discuss whether the government should resign at an extraordinary session next week. A new round of talks between opposition leaders and Yanukovych on Thursday ended with no breakthrough. The EU commissioner for enlargement was to travel to Kiev Friday to mediate between the government and the opposition, the European Commission said.
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A car bombing early Friday hit a police headquarters in central Cairo, leaving at least three dead, state television reported. The attack also injured at least 47, health authorities said. It was not immediately clear if the casualties were police or civilians. State-run newspaper al-Ahram reported online that one of the dead was a suicide attacker. The blast damaged the building and an adjoining museum. The bombing came a day after five policemen were killed in an attack in the city of Beni Sueif, south of Cairo.
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The South Sudanese government and rebels on signed a ceasefire deal Thursday aimed at ending a five-week conflict in which thousands of people have been killed and 500,000 displaced. Negotiators representing President Salva Kiir and rebel leader Riek Machar signed the agreement in the Ethiopian capital Addis Ababa after peace talks mediated by the East African bloc IGAD had deadlocked for more than two weeks.
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Thailand's Constitutional Court met to decide whether the country's charter allows for a postponement of the scheduled February 2 general election. The court's nine judges met in a closed session and were expected to issue their decision Friday. The Election Commission requested the ruling, arguing that it cannot hold safe and successful polls in the current political circumstances, after two months of street demonstrations.
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BROKER RATING CHANGES
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JPMORGAN CUTS COMPASS GROUP TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 1060 (950) P
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GOLDMAN CUTS DAIRY CREST TO 'CONV. SELL LIST' ('SELL') - TARGET 351 (404) P
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BERENBERG CUTS GLAXOSMITHKLINE TO 'HOLD' ('BUY') - PRICE TARGET 1750 (1790) PENCE
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TRADERS: KEPLER CHEUVREUX STARTS BG GROUP WITH 'HOLD' - PRICE TARGET 1300 PENCE
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TRADERS: KEPLER CHEUVREUX STARTS BP WITH 'BUY' - PRICE TARGET 545 PENCE
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BERENBERG INITIATES TT ELECTRONICS WITH 'BUY' - TARGET 247 PENCE
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BERENBERG INITIATES DOMINO PRINTING WITH 'HOLD' - TARGET 860 PENCE
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COMPANIES - FTSE 100
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Royal Mail PLC reported a 2% increase in like-for-like revenues for the first half of the year, driven by further growth in its parcels revenues. However, the company said parcel volumes were flat for the period as its new size-based pricing meant some customers decided not to send some larger items via Royal Mail. Overall, like-for-like parcel revenues were up 8% over the nine months to end-December, driven by the new pricing structure. The lack of volume growth in parcels may come as a disappointment to the markets, which have seen retailers reporting huge growth in online sales over the Christmas period.
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Weir Group PLC said it had won a USD98 million, or GBP59 million, two-year contract to provide general maintenance services on Lukoil's West Qurna-2 oilfield in southern Iraq. The engineering company has invested over USD8 million in establishing a service centre in the town of Basra.
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ITM Power PLC said it has secured a contract with AMEC PLC and National Grid PLC to assess efficient usage of Power-to-Gas energy storage. The energy storage and clean fuel company said the project will look at the cost and energy benefit of deploying Power-to-Gas technology at specific sites on the UK gas network. FTSE100 engineering and project management company AMEC, which is a major supplier to National Grid, will undertake a third-party assessment of the cost benefit analysis.
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COMPANIES - FTSE 250
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Close Brothers Group PLC said it is expecting a strong result for the first-half of its financial year, as the recovering economy boosted all three of the FTSE 250 financial services firm's divisions. In a trading update ahead of its first-half results for the six months ending January 31, Close Brothers said its positive first-quarter performance has so far carried on into the second quarter, adding that it is confident in its outlook for the full financial year.
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Workspace Group PLC said like-for-like rent roll increased 1.8% in the third quarter while total rent roll has increased 7.6% to GBP56.7 million in the nine months since March 31, 2013. In an interim management statement for the period October 1, 2013 to December 31, 2013 the commercial property provider said like-for like roll increased to GBP46.5 million during the period.
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Cairn Energy Says Contacted By Indian Tax Authorities To Discuss FY 2007 Assessments; Says Indian Tax Authorities Have Instructed It To Hold Its Shares In Cairn India During Talks
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3i Infrastructure Says European Portfolio Is Performing Well; Says Portfolio Income From Beginning Of Current Financial Year To Dec 31 Was GBP63.6M; Says Operating Levels Are Consistent With Plans Of Paying 5.5% Dividend
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COMPANIES - ALL-SHARE AND AIM
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President Energy PLC said the results of an independent audit of its prospective resources are substantially ahead of expectations. The oil and gas exploration and production company with operations in South America said the audit, by the consultancy company RPS Group PLC, was across its three 2014 drilling target prospect areas in Paraguay and based on extensive seismic studies of the sites conducted by President over the last 12 months. The company said that according to RPS the three target areas are now estimated to have a gross mean unrisked prospective resource of 1.09 billion barrels of oil equivalent, which equates to 647 million barrels of mean unrisked oil equivalent to President and 130 million barrels of mean risked resources.
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ITM Power PLC said it has secured a contract with AMEC PLC and National Grid PLC to assess efficient usage of Power-to-Gas energy storage. The energy storage and clean fuel company said the project will look at the cost and energy benefit of deploying Power-to-Gas technology at specific sites on the UK gas network. FTSE100 engineering and project management company AMEC, which is a major supplier to National Grid, will undertake a third-party assessment of the cost benefit analysis.
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Avacta Says H1 Trading Was In Line With Market Expectations
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Miton Group To Sell Miton Capital Partners For GBP6.4M; Would Sell Liverpool Fund Management Business To Seneca Investment Managers; Expects 2013 Adjusted Pretax Profit Of GBP4.5M, In Line With Market Expectations
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Tower Resources Says Considerable Progress Made On Namibia Farmout Deal
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Strategic Minerals Knows Of No Reason For Recent Share Price Movement
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Charles Stanley Q3 Revenue GBP36.7M Vs GBP31.1M; Client Funds Up 13.4% In 9-Mo Since March 31 At GBP20.1B
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Brooks Macdonald Says Trading In Line With Expectations; Third Party Assets Under Administration Are Now In Excess Of GBP160M
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Judges Scientific Says Good Organic Sales Growth; Strength Of Sterling Not Helpful For Export Driven Industries But Has Order Book Strong
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Victoria Oil & Gas Says USD16.3M Paid By RSM Towards December 23 Cash Call; Agrees Audit To Determine Final Balance Payable By Or To Be Refunded To RSM
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SpaceandPeople FY Gross Revenue GBP36.8M Vs GBP30.1M; Expects FY Pretax Profit To Be In Line With Market Expectations
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Serviced Office Group Sells County House, Beckenham For GBP5.1M
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Finsbury Food Confident Reporting A Year-On-Year Rise In Pretax Profit But Cost Inflation Will Hit H2
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COMPANIES - OTHER
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UK department store chain House of Fraser will move ahead with an initial public offering of shares on the London Stock Exchange after takeover discussions with French retailer Galeries Lafayette have ended, the Financial Times reported. The FT said the House of Fraser's IPO, which would value it about GBP350 million, probably will take place in the second half of this year, citing "people familiar with the situation". The FT said House of Fraser declined to comment on Thursday.
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Friday's Scheduled AGMs/EGMs
Artilium
Topps Tiles
Henderson European Focus Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
3 Oct 2014 07:36
