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(Alliance News) - Stocks are called to open higher on Wednesday, with focus in the UK on Wednesday's Spring budget.
The budget is expected to be announced around 1230 GMT.
On the back of announcing a cut to the main 12% rate of employee national insurance to 10% during the autumn statement, eyes will be on whether Chancellor Jeremy Hunt will unveil some more tax cuts.
Across the Atlantic, on Wednesday and Thursday, Federal Reserve Chair Powell will head to Capitol Hill for his semi-annual testimony before Congress.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.1% at 7,653.80
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Hang Seng: up 1.9% at 16,460.88
Nikkei 225: closed down slightly at 40,090.78
S&P/ASX 200: closed up 0.1% at 7,733.50
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DJIA: closed down 404.64 points, 1.0%, at 38,585.19
S&P 500: closed down 52.30 points, 1.0%, to 5,078.65
Nasdaq Composite: closed down 267.92 points, 1.7%, to 15,939.59
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EUR: down at USD1.0859 (USD1.0866)
GBP: down at USD1.2706 (USD1.2721)
USD: down at JPY149.90 (JPY150.12)
Gold: up at USD2,126.55 per ounce (USD2,125.97)
(Brent): down at USD82.25 a barrel (USD82.69)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
08:30 EST Canada labor productivity
09:45 EST Canada interest rate decision
10:00 EST Canada Ivey PMI
09:30 CET eurozone construction PMI
11:00 CET eurozone retail sales
09:30 CET France construction PMI
08:00 CET Germany trade balance
09:30 CET Germany construction PMI
11:00 CET Germany new car registrations
11:00 GMT Ireland unemployment
09:30 GMT UK S&P Global construction PMI
07:00 EST US MBA mortgage applications
08:15 EST US ADP jobs report
10:00 EST US job openings and labour turnover survey
10:00 EST US wholesale inventories
10:30 EST US EIA Crude oil stocks
10:00 EST US Fed Chair Jerome Powell speaks
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UK Chancellor Jeremy Hunt is expected to make a 2p cut to national insurance central to his Budget, which he said would deliver "more opportunity and more prosperity". The chancellor, who has faced pressure from Tory MPs to ease the record-high tax burden, promised "permanent cuts in taxation" that would bring "higher growth" as he seeks to woo voters ahead of this year's general election. He looks likely to announce a cut in national insurance by a further two percentage points on Wednesday, matching a cut in the autumn statement. The change could save the average worker GBP450 a year, adding up to GBP900 when combined with last year's move.
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BROKER RATING CHANGES
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RBC cuts Antofagasta to 'sector perform' (outperform) - price target 1,650 (1,800) pence
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JPMorgan raises IAG to 'overweight' (underweight) - price target 2.50 (1.45) EUR
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Jefferies raises Experian to 'buy' (hold) - price target 4,020 (2,880) pence
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COMPANIES - FTSE 100
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ConvaTec reported that revenue edged up 3.4% to USD2.14 billion from USD2.07 billion a year earlier. Pretax profit more than doubled to USD167.4 million from USD81.9 million. On the back of the results, the Reading, England-based medical products and technology company upped its dividend by 3.0% to 6.23 US cents from 6.05 cents. Looking ahead, ConvaTec expects organic revenue growth of 5% to 7% in 2024. "Convatec's revenue growth accelerated and was broad-based across all our categories. We further expanded our operating margin and increased earnings per share and free cash flow to equity," said CEO Karim Bitar. "We remain focused on executing our FISBE 2.0 strategy. Given our innovative new product pipeline and strengthened competitive position, Convatec has pivoted to a higher level of organic sales growth. We are on track to deliver our medium-term margin guidance leading to double-digit compound growth in EPS and free cash flow to equity."
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DS Smith said like-for-like corrugated box volume performance continues to improve compared with the first half of its financial year, with flat like-for-like volumes in the period since November 1. The London-based maker of paper-based packaging noted that North America and Eastern Europe saw "good growth" in the quarter, offset by a weaker performance in Northern Europe. Looking ahead, DS mith said overall trading for the remainder of the year remains in line with management expectations. CEO Miles Roberts said: "While markets remain challenging, we continue to focus on providing value-added solutions to our customers and on driving operational efficiency and cost control across the group and view the future with confidence."
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COMPANIES - FTSE 250
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Rathbones said operating income in 2023 increased to GBP571.1 million from GBP455.9 million a year earlier. Pretax profit, however, fell to GBP57.6 million from GBP64.1 million. The investment and wealth management firm upped its 2023 dividend to 87.0p, up from 84.0p. Looking ahead, Rathbones said: "Whilst we will continue to be impacted by market reactions to political instability or adverse geopolitical events, as a strong business with increased scale, Rathbones is well-equipped to manage and navigate these challenges. Recent indicators that interest rates may fall in the medium term should be positive for equity markets and increase client confidence to invest. This in turn should be positive for net organic growth rates and the group as a whole."
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Premier Foods said it has reached agreement with the RHM Pension Scheme Trustee to suspend pension deficit contribution payments from April 1. This suspension of future contributions is taking place earlier than originally expected, the food manufacturer noted, reflecting the strong performance of the pension scheme. As a result, the company will benefit from GBP33 million increased free cash flow for the financial year ending March 29, 2025. Chief Financial Officer Duncan Leggett said: "The further significant progress in the funding position of the pension scheme has enabled us to take another important step to expected full resolution of the scheme by the end of 2026. This suspension of pension payments substantially increases the free cash flow available to us and presents us with enhanced capital allocation options to deliver on our growth ambitions."
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LondonMetric said that the scheme of arrangement for merger with LXi REIT became effective from Tuesday. In January, LondonMetric and LXi REIT agreed an all-share merger, which at the time they said would make the company the UK's fourth largest REIT, citing GBP4.1 billion in EPRA net tangible assets. CEO Andrew Jones said: "The merger is a transformational deal that creates the UK's leading triple net lease REIT with full occupancy and exceptional income longevity and certainty of income growth. The new larger business will deliver better liquidity, material economies of scale, substantial cost savings with improved terms in both debt and equity markets." Also on Wednesday, LondonMetric updated shareholders on its performance. It noted that it has exchanged on an off-market acquisition of a 213,000 square foot logistics development for GBP13.0 million. The development is located on a 20 acre site at Radway Green, Crewe, and consists of five units ranging from 18,000 to 60,000 square foot. It also said that it has sold two further non-core assets for GBP5.9 million, which reflects a 5% premium to the valuation as at December 31.
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OTHER COMPANIES
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Oxford Nanopore Technologies reported that revenue in 2023 fell 15% on-year to GBP169.7 million from GBP198.6 million. The company specialising in nanopore DNA-sequencing said its pretax loss widened to GBP149.8 million from GBP83.4 million a year earlier. CEO Gordon Sanghera said: "As we look forward, our highly differentiated platform and substantial market opportunity, positions us well to deliver long-term, sustainable growth. We are focused on key strategic initiatives to drive value, including disciplined investments in our technology and commercial operations where appropriate to unlock key opportunities in priority markets. We also remain mindful of end-market conditions, with sales cycles lengthening at the same time as we have expanded our commercial and operational infrastructure to support future growth."
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By Sophie Rose, Alliance News senior reporter
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