LONDON (Alliance News) - Share prices have opened mostly higher in London Thursday, following a positive lead from Asian markets.
Some individual stocks were in focus early Thursday, as the UK earnings season reached its peak.
Standard Chartered grabbed attention after Peter Sands made a long anticipated exit as chief executive, with Bill Winters, the former co-chief executive of JPMorgan Chase & Co's investment bank to succeed him in the summer of this year. The emerging markets bank was up 2.8%.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.2% at 6,945.60
FTSE 250: flat at 17,195.54
AIM ALL-SHARE: up 0.4% at 712.00
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Hang Seng: closed up 0.5% at 24,902.06
Nikkei 225: closed up 1.1% at 18,785.79
DJIA: closed up 0.1% at 18,224.57
S&P 500: closed down 0.1% at 2,113.86
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GBP-USD: flat at USD1.5529
EUR-USD: flat at USD1.1364
GOLD: up at USD1,213.28 per ounce
OIL (Brent): down at USD61.43 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 in GMT)
08:55 Germany Unemployment Rate
09:00 Italy Retail Sales
09:30 UK Gross Domestic Product
10:00 EU Consumer Confidence, Business Climate and Economic Sentiment Indicator
10:00 Italy Business and Consumer Confidence
10:15 EU Targeted LTRO
13:30 US Consumer Price Index
13:30 US Durable Goods Orders
13:30 US Jobless Claims
14:00 US Housing Price Index
15:30 US EIA Natural Gas Storage
16:00 US Kansas Fed manufacturing activity
18:00 US Fed's Lockhart speech
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The European Central Bank is ready to once again accept Greek government bonds as collateral for loans if the country proceeds with bailout-related reforms, ECB chief Mario Draghi said. Up until three weeks ago, Greece had enjoyed an ECB waiver that allowed its bonds to be accepted as collateral for loans even though they fell short of rating requirements. The central bank ended that exemption on February 11, amid uncertainty over whether Greece would continue with its bailout programme and associated reform requirements. The move forced Greek banks to turn to the ECB's more expensive emergency liquidity assistance. "The ECB had no choice other than lifting the waiver," Draghi said on Wednesday evening in a debate at the European Parliament, noting that a bailout programme has to be in place for the exemption to be granted.
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The quantitative easing will support economic activity and help to take inflation back towards the target of below, but close to, 2% over the medium term, Draghi told the European Parliament. "As in the case of the existing purchases of private sector securities, the purchases of public securities have a high transmission potential to the real economy," Draghi said. "We have already seen some positive effects of our measures." Financial conditions in money and bond markets throughout the currency bloc have eased further. Moreover, lending rates to households as well as firms decreased considerably and loan dynamics continued to recover, Draghi added.
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Germany's unemployment rate declined in January, data from Destatis showed. The adjusted jobless rate fell slightly to 4.7% from 4.8% in December. The number of unemployed persons decreased to 1.98 million from 2.01 million in the previous month. In the corresponding month of the prior year, there were 2.13 million jobless persons.
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The number of unemployed people in France decreased over the previous month in January, data from the labour ministry showed. The number of people claiming unemployment benefits fell by 19,100 over the previous month to 3.48 million in January. This marked the first decline since August.
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US communications regulators were expected to vote Thursday for rules that would categorize the internet as a public utility, preventing internet providers from charging some websites for faster service or slowing or blocking others. The five members of the Federal Communications Commission are to vote on the proposal at a public meeting in Washington. It is widely expected to pass on party lines, with two Democratic commissioners joining Democratic FCC chairman Tom Wheeler to approve against opposition from two Republican commissioners, according to the New York Times.
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Fears were growing that Islamic State jihadists were holding more Assyrian Christians than previously thought, even as Kurdish forces recaptured several of the villages in north-eastern Syria from where they had been abducted. A local activist told dpa that the militant group was holding more than 260 Assyrian residents from villages on the Khabur river near al-Hassakeh - far higher than the previously reported figure of 90.
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BROKER RATING CHANGES
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TRADERS: HSBC CUTS DIRECT LINE TO 'NEUTRAL' ('OVERWEIGHT')
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UBS CUTS HENDERSON GROUP PLC TO 'NEUTRAL' ('BUY') - TARGET 275 (230) PENCE
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GOLDMAN RAISES INFORMA TO 'BUY' ('NEUTRAL')
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COMPANIES - FTSE 100
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Peter Sands made a long anticipated exit as the chief executive of Standard Chartered, with the emerging markets bank appointing Bill Winters, the former co-chief executive of JPMorgan Chase & Co's investment bank to succeed him in the summer of this year.
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Anglo-Dutch publisher Reed Elsevier announced plans to combine its UK and Dutch parent companies in an effort to simplify its corporate structure and "increase transparency" for shareholders, as it posted a rise in adjusted pretax profit for 2014. The company is transferring ownership of all of its businesses and its two listed parent companies Reed Elsevier PLC and Reed Elsevier NV into a new single group entity, named RELX Group PLC, although it will not change its brand or name for customer-facing products and business units. Reed Elsevier proposed a full-year dividend of 26.0 pence for 2014, up from 24.60 pence a year before.
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British American Tobacco reported a drop in 2014 profit in both current currency rates and at constant rates, while revenue grew at constant exchange rates, but was hit at the reported rate by the strength of sterling. The tobacco giant reported a pretax profit of GBP4.85 billion for 2014, down 16% at currency exchange rates, from GBP5.80 billion in 2013, after the group said it was hit by a non-tobacco litigation charge and adverse exchange movements on a translational and transactional level. The group declared a 4% increase in its total dividend per share for the year of 148.1 pence.
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Royal Bank of Scotland Group revealed a GBP3.47 billion attributable loss in 2014 as it counted the cost of billions of pounds' worth of writedowns, restructuring, litigation and conduct. In a statement, RBS reported a GBP3.47 billion loss attributable to shareholders in the year ended December 31, 2014, a significant improvement on the GBP9.0 billion attributable loss reported in the prior year. However, the group swung to an operating profit of GBP3.50 billion in 2014, compared with an operating loss of GBP7.50 billion in 2013, aided by impairment releases in its Ulster Bank and RBS Capital Resolution.
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CRH reported strong growth in operating profit for 2014, as a recovery in its US markets gained momentum and markets in Europe stabilised, and it predicted a strong 2015 as it looks to take advantage of falling commodity prices and further improvements in its markets. The Irish building materials company said it swung to a pretax profit of EUR761 million in 2014, compared with a loss of GBP215 million in 2013 when it had booked a EUR755 million impairment charge related to a review of its asset portfolio. Despite the return to earnings and margin growth, the company decided to keep its dividend for the year unchanged at EUR62.5 cents.
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Capita reported a strong increase in profit and revenue for 2014, driven by new contract wins and acquisitions, and said it had got off to an "excellent start in 2015, with new contract wins almost double the level they were this time last year. The outsourcing company reported a pretax profit of GBP292.4 million for 2014, up from GBP215.0 million in 2013, as revenue rose to GBP4.38 billion, from GBP3.90 billion. Its closely-watched pretax profit excluding exceptional items rose 13% to GBP535.7 million, from GBP475.0 million. It raised its total dividend for the year by 10% to 29.2 pence, from 26.5p in 2013.
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RSA Insurance Group marked a swing to pretax profit in its last financial year by resuming dividend payments, which had been put on hold as part of a broad restructuring aimed at getting the insurer back on track. RSA, which was hit by an accounting scandal in its Ireland operations in 2013, said it made a GBP60 million statutory pretax profit in 2014, compared with a GBP203 million pretax loss in the prior year. RSA said it will pay a 2 pence final dividend.
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COMPANIES - FTSE 250
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Countrywide reported a jump in pretax profit for 2014 on the back of higher revenue and hiked its dividend substantially on the back of the results. The FTSE 250-listed estate agency said its pretax profit for the year to the end of December was GBP102.4 million against GBP62.9 million last year, a 63% increase. Revenue in the year rose to GBP702.2 million, up from GBP584.8 million, boosted by strong performances in its lettings and estate agency businesses over the year. The strong profit growth prompted the company to hiked its final dividend for the year to 10 pence per share, up from 6 pence last year.
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Attractions and theme park operator Merlin Entertainments delivered a profit for 2014 right at the top end of analyst expectations, buoyed by strong growth in revenue, amid the 'The LEGO Movie' craze over the summer, although the company said that while its confident and poised for further growth, it faces tough comparatives in 2015. Merlin reported earnings before interest, taxes, depreciation and amortisation of GBP411 million for 2014, representing growth of 5.3% at actual exchange rates, and right at the top end of its earnings guidance which it reiterated earlier this month. Its pretax profit for the year was GBP249 million, up from GBP186 million. Merlin recommended a final dividend of 4.2 pence per share, taking its full year dividend for 2014 to 6.2 pence per share.
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Interserve said its long-standing non-executive chairman Norman Blackwell is set to stand down before the company's 2016 annual general meeting, as it reported a lower pretax profit for 2014 due to transaction and integration costs for recent acquisitions. Lord Blackwell has been the chairman of the support services company for nearly 10 years. He will step down no later than the company's 2016 AGM, and Interserve is already looking externally for a replacement. The company reported a pretax profit of GBP61.9 million for 2014, down from GBP68.1 million in 2013, as it booked GBP19.4 million in transaction and integration costs for the acquisition of the Initial Facilities business and The Employment & Skills Group.
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Bank of America Merrill Lynch said the majority owner of Saga has agreed to sell a further 4% of the company's shares after an enquiry from an institutional investor, a move that will result in an increase in the free float of shares. Acromas Bid Co Ltd, which is made up of a consortium of staff and private equity firms Charterhouse, Permira and CVC, has agreed to sell 45.0 million Saga shares for 185 pence a share, leaving it with a stake of about 68% in the business, said BofA Merrill Lynch, which is acting as sole placing agent.
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Activist investor Sherborne Investors has renewed its efforts to influence matters at Electra Private Equity with new proposals to make changes to the private equity investment trust's board and review options to increase shareholder value. In addition, one of the publicly traded vehicles through which Sherborne acts is looking to raise up to GBP100 million in a move that could result in an increase to the 25.16% stake that Sherborne currently holds in Electra.
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COMPANIES - INTERNATIONAL
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Anheuser-Busch InBev reported profit attributable to equity holders of USD9.22 billion in fiscal 2014, compared to USD14.39 billion, prior year. Normalized profit attributable to equity holders increased to USD8.87 billion from USD7.94 billion. Revenue increased year-over-year to USD47.06 billion from USD43.20 billion.
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German conglomerate Bayer posted 51% lower fourth-quarter 2014 net income of EUR224 million, versus EUR455 million a year before. Group sales for the quarter went up by 12% to EUR11.04 billion from EUR9.89 billion in the previous year.
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German telecom giant Deutsche Telekom AG, the parent company of T-Mobile US Inc, reported that its fourth-quarter adjusted net profit grew 12.4% to EUR399 million from EUR355 million in the prior year. Net loss narrowed to EUR110 million from EUR752 million in the previous year. Revenue for the quarter grew to EUR17.00 billion from EUR15.67 billion in the prior year.
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German insurer Allianz reported that its fourth-quarter net income attributable to shareholders declined to EUR1.22 billion from EUR1.26 billion in the same quarter last year. Quarterly total revenues were EUR30.1 billion, compared with EUR26.8 billion in the comparable quarter last year.
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Iberdrola USA and UIL Holdings Corp announced that they have entered into a definitive agreement under which Iberdrola USA will acquire UIL and create a newly listed US publicly-traded company. UIL President and Chief Executive Officer James Torgerson will become the new company's CEO upon closing.
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Computer and printer maker Hewlett-Packard Co is in talks to buy Wi-Fi gear maker Aruba Networks Inc, Bloomberg reported Wednesday, citing people with knowledge of the matter. The purchase may be announced as soon as next week, Bloomberg quoted one of the people as saying. The deal has not been completed and the talks could still fall through.
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Smartflash said it has been awarded a USD532.9 million verdict by a jury in the US District Court for the Eastern District of Texas after finding that computing and electronics giant Apple infringed a series of Smartflash patents in order to produce and sell its popular iTunes software. The trial focused on three Smartflash patents covering devices and methods for storing data and providing access to that data through electronic payment systems. Smartflash alleged that Apple used the three patents without permission in iTunes software. The jury found that Apple's infringement was willful.
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Thursday's Scheduled AGMs/EGMs
Gooch & Housego
IDOX
Jelf Group
APC Technology
JZ Capital Partners
Nova Resources
British Assets Trust
Zytronic
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
6 May 2016 13:49