LONDON (Alliance News) - London shares are showing some resilience early Tuesday, losing less ground at the open than seen by markets in the US and Asia overnight.
Share in Glencore, which lost 16% on Monday, are rebounding a little, up 5.0%. Also rising are fellow miners Anglo American, Rio Tinto, BHP Billiton and Antofagasta.
Wolseley shares are down 8.3%, after the FTSE 100 building materials firm said its pretax profit was lower due to one-off charges, but its trading profit pushed higher and it said it will return GBP300.0 million to shareholders via a share buyback.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.0% at 5,899.93
FTSE 250: down 0.8% at 16,478.26
AIM ALL-SHARE: down 0.5% at 723.36
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Hang Seng: down 2.9% at 20,557.02
Nikkei 225: closed down 4.1% at 16,930.84
DJIA: closed down 1.9% at 16,001.89
S&P 500: closed down 2.6% at 1,881.77
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GBP: flat at USD1.5176
EUR: up at USD1.1260
GOLD: down at USD1,126.73 per ounce
OIL (Brent): up at USD47.57 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)
09:30 UK M4 Money Supply, Mortgage Approvals, Consumer Credit
10:00 EU Consumer and Industrial Confidence, Business Climate
11:00 UK CBI Distributive Trades Survey
13:00 Germany Consumer Price Index (YoY) Preliminary
13:30 Canada Industrial Product and Raw Material Price indices
13:55 US Redbook index
14:00 US S&P/Case-Shiller Home Price indices
15:00 US Consumer Confidence
20:40 UK BOE Governor Carney speech
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India lowered its key interest rates by a more-than-expected 50 basis points as economic growth in the current fiscal is forecast to be weaker than previously projected. The Reserve Bank of India, governed by Raghuram Rajan, cut its repo rate to 6.75% from 7.25% and the reverse repo rate to 5.75% from 6.25% with immediate effect. The bank was expected to reduce the rate by a quarter point Tuesday. This was the fourth rate cut so far this year. The bank reduced its key rates by 25 basis points each in January, March and June.
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Germany's import prices declined at a slightly faster-than-expected pace in August, figures from Destatis showed. The import price index fell 3.1% year-over-year in August, faster than the 1.7% decrease in the previous month. Economists had expected a 3.0% drop for the month. The import price index has been falling since January 2013. The latest rate of decline was the fastest since January, when prices had fallen 4.4%.
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Confidence among Japan's small and medium-sized enterprises increased unexpectedly in September, though slightly, survey figures released by the Shoko Chukin Bank showed. The small business confidence index rose by 0.2 percentage points to 49.0 in September from 48.8 in the previous month. Economists had expected the index fall to 48.3.
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The European Commission said it has opened an in-depth investigation into Ireland's exemption for airlines from paying air travel tax for transfer and transit passengers. The in-depth investigation follows a judgement by the General Court on November 25, 2014 annulling the Commission's 2011 findings that the exclusion of transfer and transit passengers did not result in state aid. The Commission said it will now investigate whether the tax exemption provides certain companies with a selective advantage, in breach of EU state aid rules.
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The number 2 Republican in the US House of Representatives said he will run for speaker of the lower chamber, after John Boehner said he would step aside next month. In a surprise announcement Friday, Boehner said he would resign from the House on October 30 to avoid a looming challenge from conservative members of his caucus that could damage his Republican Party and the US Congress. His deputy, Kevin McCarthy, is considered a favourite to take over the top spot in the House. McCarthy, who has represented California in Congress since 2007, will face the difficult task of unifying the divided Republican Party, which proved Boehner's undoing, as well as gaining support from the larger House.
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Russian President Vladimir Putin said Monday it is a mistake not to cooperate with the Syrian regime of Bashar al-Assad to defeat Islamic State. Putin told the UN General Assembly that al-Assad's regime is the only one "truly fighting" Islamic State. "We think it is an enormous mistake not to cooperate with the Syrian government and its forces who are confronting terrorism face to face," he said.
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World leaders at the United Nations called on European countries to welcome refugees with compassion and urged global action including stepped up financial support for Middle East countries bearing the brunt of a migration crisis. Leaders gathered for the high-level session of UN General Assembly were under growing pressure to solve the crisis in the Middle East, including Syria, and to find a solution for the refugees flooding out of the region. King Abdullah Ibn al-Hussein of Jordan said the international community needs to support agencies operating in the countries neighbouring Syria, reminding world leaders that his country, along with Lebanon and Turkey, have borne the brunt of the Syrian refugee crisis.
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Afghan government forces are preparing an offensive to recapture the northern city of Kunduz, which has fallen to Taliban insurgents, a government official said. "The city has unfortunately fallen to the Taliban, and the government forces are preparing an offensive at the (Kunduz) airport," Interior Ministry spokesman Sediq Sediqqi told reporters in Kabul. "Reinforcements are there. We are trying to take back the city. We cannot confirm number of casualties at the moment." The Taliban have launched audacious attacks on cities in the past, but Kunduz is the first citied that the rebels have managed to capture, 14 years after being ousted from power.
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BROKER RATING CHANGES
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S&P CAPITAL IQ RAISES SHELL TO 'BUY' ('HOLD')
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MACQUARIE RAISES TULLOW OIL TO 'OUTPERFORM' ('NEUTRAL') - TARGET 242 (239)P
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Cantor Fitzgerald Ups Tullow Oil To Hold From Sell, Price Target At 168p
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TRADERS: INVESTEC RAISES PENNON GROUP TO 'BUY' ('HOLD')
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TRADERS: INVESTEC INITIATES ALDERMORE WITH 'BUY'
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LIBERUM RAISES ASOS TO 'BUY' ('HOLD') - TARGET 3,300 PENCE
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LIBERUM INITIATES MOSS BROS GROUP WITH 'BUY' - TARGET 115 PENCE
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COMPANIES - FTSE 100
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Building materials company Wolseley said its pretax profit was lower due to one-off charges, but its trading profit pushed higher and the group said it will return GBP300.0 million to shareholders via a share buyback. The company said its pretax profit for the year to the end of July was GBP508.0 million, compared to GBP676.0 million a year earlier, due to it booking GBP242.0 million in exceptional charges in the year, mostly related to a GBP234.0 million writedown on its business in the Nordic region. The group said it will pay a final dividend of 60.5 pence per share, up from 55.0 pence a year earlier, bringing its total dividend to 90.75 pence, up from 82.5 pence. This will be supplemented by a GBP300.0 million share buyback programme the company will conduct over the next 12 months.
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Property developer Hammerson said it and joint venture partner Allianz Real Estate have signed an agreement with the National Asset Management Agency in Ireland to acquire the Project Jewel loan portfolio. The portfolio is being acquired by the joint venture for EUR1.85 billion, with Hammerson to pay EUR1.23 billion of the consideration, and is secured against a series of real-estate assets based in Dublin, including Dundrum Town Centre.
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Virgin Media will this week increase its maximum internet speed to 200 megabits per second, putting further pressure on rival BT Group to improve its broadband service, the Financial Times reported. Virgin Media, owned by Liberty Global, is in the middle of a GBP3 billion investment programme to improve its network in the UK, and the new top speed its service will offer is nearly three times the 76 Mbps offered by BT.
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COMPANIES - FTSE 250
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Publishing and events company Euromoney Institutional Investor said it has acquired a 10% stake in private capital placement platform and workflow tools provider Zanbato for USD5.5 million in cash. The investment has been made as part of a USD14.0 million Series B funding round for Zanbato. The US company operates a software platform which helps broker-dealers, placement agents and fund managers to handle share placings and operates a separate software unit which allows institutional investors to access direct private investments.
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Rotork said it has acquired US manufacturer Roto Hammer Industries and actuator service business Servo Moteurs Service in two separate deals. The manufacturer of electric, pneumatic and hydraulic valve actuators and gearboxes said it has acquired Roto Hammer for a total of USD12.4 million in cash, which will be funded from existing bank facilities. Rotork also has acquired Servo Moteurs Service for a total of EUR1.4 million in cash.
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Outsourcer Mitie Group said it has performed well in the first half of its financial year and said it remains confident of delivering robust organic revenue growth for the year to the end of March. The company said its organic revenue has been strong in the first half, ending on Wednesday, with growth driven by new contracts and expansions of existing deals. Mitie said 94% of its target revenue for the full year has been secured and it said its overall performance will be weighted, as normal, to the second half.
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Poundland Group said late Monday its acquisition of 99p Stores is now complete. The discount retailer purchased its smaller rival 99p Stores for GBP55 million in a cash and shares deal of GBP51.5 million in cash and the issue of new Poundland shares with a value of GBP3.5 million at closing. The cash element was funded by an equity placing completed on Friday last week through which it raised GBP50.0 million via the placing of 17.9 million shares at 280.00 pence per share. The acquisition includes 99p Stores' network of 251 stores.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Commercial flooring company James Halstead said its pretax profit and revenue both increased in the year to the end of June and said it will raise its dividend payout to the highest in its century-long history. The group said its pretax profit for the year was up to GBP44.2 million from GBP41.8 million a year earlier, as revenue ticked higher to GBP227.3 million from GBP223.5 million.
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Boohoo.com reported a rise in profit in the first half of its financial year as revenue grew more than initially expected on the back of new customers, and it said that sales in the full year will also increase above prior expectations. The online fashion retailer said that its pretax profit in the six months ended August 31 rose 39% to GBP6.3 million from GBP4.5 million the year before, while revenue grew 35% to GBP90.8 million from GBP67.2 million, beating its initial expectations.
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Insurance technology company Quindell said it has received a notice of a claim against the company under the Financial Services and Market Act 2000. Quindell said it is not yet in a position to verify the claims made in the notice, but the estimated value of the claims made against the company is around GBP9.0 million before costs. It said the claimant firm also said it has been approached, but not retained, by other potential claimants who together would have a claim of a maximum value of a further GBP9.0 million. It added the claim would not have any impact on its plans to return capital to its shareholders.
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Sefton Resources said it has bowed to pressure from a group of shareholders by proposing to oust and replace the majority of its board. However, the company now faces the risk of its shares being suspended as its nominated adviser will resign if the proposed board changes are approved by shareholders. As a result of the board changes, Sefton said the requisition from the three shareholders has been withdrawn. However those changes will still require shareholder approval which will now be sought at the company's annual general meeting, the date of which will be announced shortly.
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Ryanair Holdings late Monday said the EUR398 million it last week said it will distribute to shareholders amounts to EUR0.2942 per share, and it will consolidate shares on the basis of 39 new shares for every existing 40 shares as part of the cash return. Last Thursday, the low-cost airline said that it is returning the funds from the proceeds of the sale of its stake in Aer Lingus Group PLC, via a B share programme to be concluded before December. This will bring the total funds returned to shareholders this year to EUR800 million.
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Daniel Stewart Securities late Monday said it expects its pretax and amortisation loss to be wider than anticipated in its most recently completed financial year. The broker and investment bank said that it expects its loss before tax and amortisation for the year ended March 31 to be GBP1.4 million, following an upwards revision of bad debtor write offs by GBP500,000. However, this is still better than the GBP1.5 million loss it made the year before.
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COMPANIES - INTERNATIONAL
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Internet giant Yahoo! said it will continue with its plan to spin off its stake in Alibaba Group Holding regardless of a favourable ruling from the US Internal Revenue Service. Yahoo is planning to spin off all of its remaining holdings in Alibaba into a newly formed independent registered investment company - Aabaco Holdings. Earlier this month, the IRS declined to grant Yahoo advance approval for the planned spin-off without incurring taxes.
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Japan Tobacco has entered the final stages of talks to buy Reynolds American subsidiary Santa Fe Natural Tobacco, Nikkei reported. The report said that the two sides aim to reach an agreement this week. The price is expected to reach around USD5 billion, making the acquisition Japan Tobacco's largest since it bought the UK's Gallaher for USD14.7 billion in 2007.
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The US Securities and Exchange Commission charged Credit Suisse Securities (USA) with submitting deficient information to the agency over a two-year period about trades done by its customers, commonly referred to as "blue sheet data". Credit Suisse Securities (USA), which is headquartered in New York, agreed to settle the charges by paying a USD4.25 million penalty and admitting it violated the recordkeeping and reporting provisions of the federal securities laws.
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Tuesday's Scheduled AGMs/EGMs
Wizz Air
Mwana Africa
United Carpets
Associated British Engineering
Arcontech Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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