LONDON (Alliance News) - Shares have opened lower Wednesday ahead of UK GDP figures at 0930 GMT.
ITV reported strong 2013 results and expressed confidence for 2014, but its shares are down 4.2% at the open on disappointment in the size of its special dividend.
Several brokers have initiated ratings Wednesday. Barclays has re-initiated Vodafone at Overweight, while UBS has started Randgold Resources at Buy. Liberum has commenced Infinis Energy at Hold, according to traders.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 23.95 at 6,806.55
FTSE 250: down 75.38 at 16,452.50
AIM ALL-SHARE: down 1.59 at 888.39
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DJIA: closed down 27.48 at 16,179.66
S&P 500: closed down 2.49 at 1,845.12
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GBP-USD: down at USD1.6666
EUR-USD: slightly down at USD1.3737
GOLD: flat at USD1,341.10 per ounce
OIL (Brent): flat at USD109.51 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
09:00 Italy Wage Inflation
09:25 UK MPC Member Broadbent Speech
09:30 UK Gross Domestic Product
09:30 UK Index of Services
09:30 UK Total Business Investment
15:00 US New Home Sales
15:30 US EIA Crude Oil Stocks change
18:00 US 5-Year Note Auction
23:50 Japan Foreign bond and stock investment
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The Chinese yuan lost ground against the US dollar in Asian deals on Tuesday. The yuan declined to 6.1135 against the greenback, a level not seen since October, 2013. The yuan thus lost 0.4% from yesterday's closing quote of 6.0917. If the yuan extends slide, it may face support around the 6.12 mark.
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SENIOR CHINA SOURCE: MARKET OVERREACTING TO YUAN VOLATILITY
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Germany's consumer confidence is set to improve in March, a closely watched survey from GfK showed Wednesday. The consumer confidence index rose to 8.5 points from 8.3 points in February. The index was forecast to remain unchanged at February's originally estimated value of 8.2. After five consecutive increases, economic expectations registered a moderate fall of 3.4 points to 31.9 in February. In contrast to economic expectations, income expectations rose further in February, to 48.6 from 46.2.
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Consumption among Swiss households decreased in the beginning of the year, reversing much of the gain seen in December, amid widespread weakness across business sectors, survey data released by the UBS revealed. The UBS consumption Indicator, which gauges private consumption trends in Switzerland, dropped to 1.44 in January from 1.81 in December.
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Japan's economic recovery will continue even if the economy contracts after the sales tax hike in April, Bank of Japan policymaker Koji Ishida said. Speaking to business leaders in Saitama City, north of Tokyo, Ishida said government stimulus together with exports and capital expenditure will support growth.
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Bitcoin investors and enthusiasts were in turmoil Tuesday after one of the largest exchanges of the virtual currency ceased operations amid reports of a massive theft. Mt Gox, a Tokyo-based website that acted as a kind of Bitcoin bank was unreachable Tuesday following a leaked memo. It allowed holders to store their virtual currency there or exchange it for dollars, yen or other hard currency and had conducted hundreds of millions of dollars in transactions since its 2010 founding. The memo, which purported to come from Mt Gox management detailed how the site may have lost some 744,000 Bitcoins to theft over several years and was on the verge of bankruptcy.
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Italy's new government was finally confirmed by parliament on Tuesday, after two days of debate that saw Prime Minister Matteo Renzi pledge big reforms and attack the anti-establishment Five Star Movement. In a widely-anticipated result, Renzi's executive earned a comfortable majority in the lower house of parliament, the Chamber of Deputies, winning a vote of confidence with 378 votes in favour, 78 votes over the majority threshold. The upper chamber, the Senate, had given its support to the new executive late on Monday.
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Ukraine's new leaders promised Tuesday to fight separatism, as Russia and the EU called on them to ensure the country's integrity. Interim President Oleksandr Turchynov said that the power vacuum that resulted after President Viktor Yanukovych's ouster at the weekend has resulted in calls for separatism. "This was embraced by those who envy Ukraine and who want it to break-up," he was quoted by local media as saying. Turchynov was referring to Crimea, where ethnic Russian protesters have threatened to secede after the power change in Kiev.
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US President Barack Obama signalled Tuesday that the door would remain open until "later this year" on the US military presence in Afghanistan in his first phone call with Afghan President Hamid Karzai in eight months. Obama and Karzai have been at loggerheads over a bilateral security agreement that would keep a US military presence in Afghanistan after the 2014 pullout of foreign combat troops. The call came a day before NATO defence ministers begin meeting in Brussels, where the way forward in Afghanistan is on the agenda.
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Officials at the United Nations on Tuesday briefed the General Assembly on the current humanitarian situation in Syria warning of "relentless violence" and "increasingly brutal suffering." "The conflict has inflicted unimaginable suffering on the Syrian people for nearly three years," said UN Secretary General Ban Ki-moon. "The scale and severity of humanitarian suffering in Syria is growing daily." Currently, more than 9.3 million people inside Syria, country with a total population of 22.4 million, are in need of assistance, including 6.5 million internally displaced persons, said Kyung-wha Kang, the deputy to humanitarian affairs chief Valerie Amos.
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Thousands of anti-government protesters gathered outside police headquarters in Bangkok Wednesday to demand an investigation into attacks on their rallies that have left at least 21 dead, including four children in the past week.
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BROKER RATING CHANGES
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CREDIT SUISSE RAISES BUNZL TO 'NEUTRAL' ('UNDERPERFORM') - TARGET 1530 (1000) PENCE
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TRADERS: LIBERUM STARTS INFINIS ENERGY WITH 'HOLD' - TARGET 272 PENCE
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BARCLAYS REINITIATES VODAFONE WITH 'OVERWEIGHT' - PRICE TARGET 260 PENCE
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UBS STARTS RANDGOLD RESOURCES WITH 'BUY' - TARGET 5400 PENCE
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TRADERS: MORGAN STANLEY CUTS UNITED UTILITIES TO 'EQUAL-WEIGHT' ('OVERWEIGHT')
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COMPANIES - FTSE 100
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ITV PLC announced a special dividend and raised its total dividend, as it reported a rise in pretax profit in 2013 and gave a bullish forecast for 2014. The television broadcaster posted a total dividend of 3.5 pence for the year, up from 2.6 pence in the previous year. Additionally, ITV announced a special dividend of 4.0 pence, in line with the special dividend it paid in 2012. ITV expressed confidence for 2014, saying it expects to see further growth across all parts of its businesses, and citing signs of improvement in the television advertising market.
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Petrofac Ltd announced modest net profit and revenue growth for 2013 that was in line with, to slightly better than, market expectations. The oil and gas services company also reiterated guidance towards a flat to slight increase in net profit during 2014 and said it is confident of return to strong earnings in 2015, following recent big contract wins. Petrofac said its net profit increased by 2.8% to USD650 million for 2013 from USD632 in 2012, above analyst consensus figures. The profit growth was driven by a slight increase in revenue to USD6.3 billion from USD6.2 billion.
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Weir Group FY Adjusted Pretax Profit GBP418M Vs GBP440M; Revenue GBP2.43B Vs GBP2.54B; Raises Dividend To 42P Vs 38P; Expects To Return To Underlying Growth In 2014
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Fresnillo Says Mexican Defense Ministry Has Granted New Explosives Permit For Herradura Unit At Minera Penmont; Will Begin Operations At Herradura Next Week; Confirms Gold Production Guidance Of 450,000 Attributable Oz
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Travis Perkins FY Pretax Profit GBP312.6M Vs GBP299.2M; Revenue GBP5.15B Vs GBP4.84B; Raises Dividend 24% To 21 Pence
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Tesco PLC fired the opening salvo in a new supermarket price war Tuesday as it announced a multi-million-pound investment in price cuts, but big rival Asda immediately hit back, The Times reports.
Britain’s biggest supermarket was also forced to concede publicly that it had scrapped a key profit target, set in the wake of a profit warning two years ago, in a wide-ranging update to the City aimed at reassuring investors on the turnaround of its British business, the paper said. In the latest attempt by the big supermarkets to combat the emergence of the discounters, Tesco said that it would spend more than GBP200 million lowering prices. However, in an effort to undermine its rival’s crucial presentation at the London Stock Exchange, Asda said — ahead of the Tesco announcement — that it would add GBP100 million to its planned GBP200 million price cuts this year, The Times added.
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COMPANIES - FTSE 250
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Henderson Group FY Pretax Profit GBP127.4M Vs GBP102.7M; FY Dividend 8.00p Vs 7.15p; FY Assets Under Management GBP63.7B
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Taylor Wimpey FY Pretax Profit GBP306.2M Vs GBP204.2M; Revenue GBP2.30B Vs GBP2.02B; Declares Dividend Of 0.47 Pence Vs 0.43 Pence
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CSR FY Pretax Loss USD52.5M Vs Pretax Profit USD102.0M; Revenue USD960.7M Vs USD1.03B; FY Dividend USD0.136 Vs USD0.118; Proposes Return Of Up To USD50M To Shareholders; Expects Q1 2014 Revenues In Range Of USD170M To USD190M
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Direct Line Insurance Group PLC reported a rise in 2013 pretax profits after fewer claims from major weather events over the course of the year, despite a fourth-quarter surge, and a lower combined operating ratio. Direct Line, which is still part-owned by Royal Bank of Scotland Group PLC, said pretax profit for 2013 rose by 70% to GBP423.9 million, with fourth-quarter pretax profit rising by 51% to GBP90.9 million. Its combined operating ratio, a measure of claims costs, commission and expenses compared to net earned premium generated, fell by 3.1 percentage points to 96.1%, ahead of its 98% target. It set its target for 2014 at 95-97%, as long as claims from major weather events are "normal". Analysts had been forecasting pretax profits of GBP367 million, according to consensus provided by the company.
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Hays CEO: Seeing Signs Of Sustained Good Run In UK; Seeing Signs Of Skills Shortage, So Wages Starting To Rise
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St. Modwen Properties Offers GBP100M Guaranteed Convertible Bonds Due 2019
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Stagecoach Says Like-For-Like Revenue Across The Group In 40 Weeks To Feb 2 Rose; Says Overall Profitability Of The Group Has Remained Satisfactory
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The Restaurant Group PLC reported higher profits and revenues for its last financial year, driven by new pub and restaurant openings and higher sales from existing outlets, and said it will open a further 36 to 43 new restaurants in 2014. The company, which operates under brands including Frankie & Benny's, Chiquito, Coast to Coast and Garfunkel's, reported a pretax profit of GBP72.7 million for the year to December 29, 2013, compared with GBP64.6 million a year earlier, as revenues rose to GBP579.6 million, from GBP532,5 million. Its net profit rose to GBP56.2 million, from GBP48.2 million.
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COMPANIES - ALL-SHARE AND AIM
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Avingtrans H1 EBIT GBP2.9M Vs GBP0.3M; H1 Revenue Up 90% To GBP32.2M Vs GBP16.9M; Raises Interim Dividend To 0.9P Vs 0.7P; Says Order Book Still At Record Levels, Driven Mainly By Aerospace
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W.H. Ireland FY Pretax Profit GBP1.7M Vs GBP0.2M Loss Year Before; Revenue GBP29.7M Vs GBP25.1M Year Before; Chairman Says Current Year Has Started Well; Finance and Operations Director Alan Kershaw To Leave At February-End
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Hume Capital Securities, Former XCAP, FY Pretax Loss GBP3.7M, Vs GBP4.5M Loss Year Before; Revenue GBP6.0M, Vs GBP5.3M Year Before; Says Trading In 1st 5 Months Of Current FY Stronger Than Year Before
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Greggs FY Sales Up 3.8% To GBP762.4M, Like-For-Like Sales Down 0.8%; Like-For-Like Sales Up 1.2% In H2, Up 2.6% In Q4; Maintains FY Dividend At 19.5P
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Clinigen H1 Pretax Profit GBP9.6M Vs GBP3.7M; Revenue GBP61.8M Vs GBP61.0M; Interim Dividend 1.0p vs 0.6p; On Track For Full Year Expectations
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Quarto FY Pretax Profit USD5.8M Vs GBP7.1M; Revenue USD176.3M Vs USD180.9M; Proposes Dividend of 4.55 Pence
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Wednesday's Scheduled AGMs/EGMs
Bankers Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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