LONDON (Alliance News) - Stocks in London are set to end a poor week on a firmer note, with markets encouraged that trade talks between the US and China will be extended into a second day on Friday, despite a hike in US tariffs. In early UK company news, both International Consolidated Airlines and Millennium & Copthorne Hotels reported sharp drops in first quarter profit, while Brewin Dolphin launched a share placing after buying the Irish wealth management unit of Investec.IG says futures indicate the FTSE 100 index of large-caps to open 48.29 points higher at 7,255.70 on Friday. The FTSE 100 index closed down 63.59 points, or 0.9%, at 7,207.41 on Thursday, leaving it 2.4% lower for the week. "Global equity markets were mixed as investors digested the latest headlines from the US-China trade talks. Asian markets pared earlier gains, European bourses are pointing to a stronger open, whilst US futures head south," said Jasper Lawler at London Capital Group. In Asia on Friday, the Japanese Nikkei 225 index ended down 0.3%. However in China, the Shanghai Composite is up 2.5% while the Hang Seng index in Hong Kong is up 1.1%."We are not seeing see the same risk-off reaction that we have seen in previous sessions," said Lawler. "The fact that the two sides have agreed to continue negotiations on Friday is offering a glimmer of hope that the relationship between the two powers hasn't deteriorated beyond repair."In a statement late Thursday, the White House said trade talks that began in the US capital at 5pm local time had ended for the day and would resume on Friday.The resumption of talks comes after an increase in tariffs on billions of dollars worth of Chinese goods took effect Friday.Existing tariffs on USD200 billion worth of imports, from consumer goods such as suitcases and furniture along with certain food items, increased from 10% to 25% at the stroke of midnight in Washington.Trump announced the duty increase on Sunday, saying the move was necessary because trade negotiations are moving too slowly. On Wednesday he also accused Beijing of breaking provisions of the deal negotiated thus far in several rounds of talks.In UK company news, British Airways-owner IAG reported a sharp drop in first-quarter profit. On a statutory basis, operating profit before exceptional items tumbled to EUR135 million from EUR280 million a year ago. Including exceptional items, profit fell even more sharply to EUR135 million from EUR919 million. This was despite revenue rising 5.2% to EUR4.65 billion from EUR4.42 billion. Fuel unit costs for the quarter were up 16%, while passenger unit revenue was down 0.8%. "In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable and are reporting an operating profit of EUR135 million," said Chief Executive Willie Walsh. Looking ahead, IAG expects its 2019 operating profit before exceptional items to be in line with 2018 on a proforma basis, while passenger unit revenue at constant currency is expected to improve over the remainder of the year.Separately, IAG said revenue passenger kilometres were up 7.7% in April year-on-year, while load factor improved to 83.4% from 81.9%. Millennium & Copthorne Hotels said first-quarter profit halved due to the effect of hotel refurbishments.Total revenue for the first three months of the year amounted to GBP215 million, down 0.9% on a year ago. On a like-for-like basis, revenue per available room dipped 0.8%.Meanwhile, pretax profit slumped 58% to GBP11 million. Profit was hurt by refurbishments in London and Singapore and, in addition, net finance costs were GBP5 million higher. The hotel operator added that it is in the final stages of talks with Hilton regarding its operation of the Millennium Times Square New York as an affiliate of Hilton.Post the period end, for the first 21 days of April, like-for-like revenue per available room increased by 2.2%.Bunzl said it has poached Inchcape's chief financial officer to replace Brian May, who has decided to retire from the distribution firm. May has spent 13 years as Bunzl's finance director, and will be succeeded by Richard Howes. Howes will assume the role of CFO on January 1, 2020. Howes is currently CFO of car dealership firm Inchcape. Prior to this, he was CFO of Coats Group. Inchcape said it has started to look for his replacement.Brewin Dolphin Holdings is to carry out a fundraising following a series of acquisitions, it said, including a new one in Ireland.Wealth manager Brewin has bought the Irish wealth management unit of Investec for around EUR44 million. The firm, which confirmed mid-April it was in talks with Investec, said this builds on its plan to expand Irish operations, creating a "top three" wealth management business in the republic. Following the Investec deal and a number of others, Brewin plans raise approximately GBP60 million at a price of 305 pence a share. Liberum Capital and RBC Europe are acting as joint bookrunners for the placing. The 305p placing price is a 5.0% discount to Brewin's closing price of 321p on Thursday in London.BBA Aviation said its performance remains in line with expectations. Revenue for the four months to April 30 was up 23%, reflecting organic growth alongside contributions from acquisitions. On a like-for-like basis, revenue was up 1.1%. BBA Aviation said Signature revenue in the period was up 23% on a reported basis, up 0.4% like-for-like, as the US business & general aviation market "performed as we expected" in the first quarter. In its Ontic division, revenue was up 34% and like-for-like sales up 14%. Ontic continues to have a strong order book, BBA Aviation said, and the integration of Firstmark is proceeding well. Morgan Advanced Materials backed its annual outlook as it reported an in-line first three months of 2019. Sales in the period was up 2% on a year ago on an organic, constant currency basis. Headline operating margins are slightly ahead of a ear before, benefiting from organic growth and efficiency actions. Within the Carbon & Technical Ceramics division, sales were 7% higher than a year prior, while Thermal Products sales were down 3% amid a decline in Europe. In the US on Thursday, Wall Street ended in the red, with the Dow Jones Industrial Average ending down 0.5%, the S&P 500 down 0.3% and the Nasdaq Composite 0.4% lower.Shares in ride-hailing company Uber are set to begin trading on the New York Stock Exchange on Friday in what is expected to be the biggest initial public offering of a US company in years.Uber priced its shares at USD45 dollars each, at the lower end of the USD44 to USD50 price range outlined in its filing last month with US regulators. This price values the company at about USD82 billion.Uber dominates the smartphone app-based ride-hail market in the US, and also offers food delivery services, freight intermediation for truck drivers, and e-bike and scooter sharing.The economic events calendar on Friday has UK industrial production and the first-quarter GDP reading at 0930 BST and US inflation data at 1330 BST. ING said it is anticipating a "bumper" first-quarter UK GDP figure. "The stockpiling effect may not have been quite as significant as some surveys suggest, although in any case, whatever inventory boost there was is likely to be reversed through the second quarter," ING said.ING expects quarter-on-quarter growth of 0.5% for the first three months of the year.
29 Jul 2015 15:19