LONDON (Alliance News) - Shares prices in London opened generally firm on Thursday, after their positive session the day before, with little economic data to drive trading and with the US closed by the Thanksgiving Day holiday.
Severn Trent, the only FTSE 100 stock reporting Thursday, was up 1.8%. The water utility said pretax profit rose in the first half, and it has had a good start to its current year.
Fellow utility National Grid led blue-chip decliners, down 1.7%, as it went ex-dividend.
Among mid-caps, PayPoint was the biggest loser, down 8.8%, after reporting a big drop in first-half pretax profit due to a goodwill impairment charge.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 6,351.84
FTSE 250: up 0.1% at 17,123.87
AIM ALL-SHARE: up 0.1% at 731.07
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Hang Seng: closed flat at 22,488.94
Nikkei 225: closed up 0.5% at 19,944.41
DJIA: closed flat at 17,813.39
S&P 500: closed flat at 2,088.87
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GBP: flat at USD1.5104 (USD1.5101)
EUR: flat at USD1.0609 (USD1.0611)
GOLD: flat at USD1,071.61 per ounce (USD1,0.71.60)
OIL (Brent): firm at USD45.77 a barrel (USD45.46)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in GMT)
US Thanksgiving Day holiday
09:00 EU Private loans and M3 Money Supply
09:30 UK Financial Stability Report
12:00 Germany Gfk Consumer Confidence Survey
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Turkey's downing of a Russian Su-24 bomber near the Syrian border "looks like a planned provocation," Russian Foreign Minister Sergei Lavrov said. "We have serious doubts that it was unintentional," Lavrov was quoted as saying by TASS news agency. The Russian warplane was shot down by Turkish fighter jets on Tuesday as it returned from a mission in support of Syrian government forces. One pilot died, apparently from Syrian rebel gunfire after he ejected, while the other landed safely and was rescued by Russian and Syrian special forces.
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French President Francois Hollande called on Germany to do more in the fight against the Islamic State in Iraq and Syria during a visit from Chancellor Angela Merkel in Paris on Wednesday. Merkel's visit came nearly two weeks after a series of deadly terrorist attacks rocked the city, leaving 130 people dead and more than 350 injured. "We can't just take measures in France, in Germany, in Europe," Hollande said during a joint press conference held after the two leaders visited a memorial site at the Place de la Republique. "We have to act at the source itself." He said he hoped Germany could "engage more" in Iraq and Syria.
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US President Barack Obama signed a USD607 billion defence budget, after issuing a rare veto of similar legislation last month. The rejected legislation had "failed to authorize funding for our national defense in a fiscally responsible manner," he said in a statement after Wednesday's signing. The revised National Defense Authorization Act includes budget reforms recently agreed between the White House and Congress, where opposition Republicans hold majorities. Obama had objected in October to a provision in the initial legislation to impede the closure of the US military prison at Guantanamo Bay, Cuba.
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Despite recent terrorist attacks overseas, Obama sought to reassure Americans that there is currently no specific or credible threat to the US from the terrorist group known as the Islamic State or ISIS. "Given the shocking images, I know Americans have been asking each other whether it's safe here - whether it's safe to fly or gather," Obama said Wednesday after meeting with his National Security Council. "Right now, we know of no specific and credible intelligence indicating a plot on the homeland," he added. The president urged Americans to go about their usual Thanksgiving activities but also called on them to be vigilant about suspicious activity.
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BROKER RATING CHANGES
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TRADERS: HSBC ADDS ROYAL DUTCH SHELL TO 'EUROPE SUPER TEN'
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TRADERS: JPMORGAN CUTS BHP BILLITON TO 'UNDERWEIGHT' ('NEUTRAL')
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TRADERS: RBC CAPITAL CUTS AVIVA TO 'UNDERPERFORM' ('SECTOR PERFORM')
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Liberum Downgrades Ultra Electronics Holdings To Hold From Buy; Lifts Price Target To 1,950p From 1,900p
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Investec Upgrades OneSavings Bank To Buy From Hold, Target At 375p
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N+1 Lifts Spectris To Hold From Sell, Cuts Target To 1,770p From 2,070p
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SOCGEN RAISES DAILY MAIL TO 'HOLD' ('SELL') - TARGET 725 PENCE
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COMPANIES - FTSE 100
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Water utility Severn Trent said its pretax profit rose in the first half and said it has had a good start to its current year, underpinning expectations it will outperform its targets. The company said its pretax profit for the financial half year to the end of September was GBP186.2 million, compared to GBP137.1 million a year earlier, due to lower financing costs and a cut to operating costs. Severn Trent will pay an interim dividend of 32.26 pence per share, slightly down from the 33.96p it paid a year earlier.
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Tesco said it has reached an agreement to settle a class action commenced in New York on behalf of the holders of the company's American Depositary Receipts. The class action was against Tesco and some of its former directors for alleged breaches of US federal securities laws in connection with its overstatement of commercial income in September 2014. The settlement agreement means Tesco will have to pay USD12 million to settle the class action with no admission of liability and, if confirmed by a federal court in New York, will settle one of two claims before US courts arising from the scandal. The other claim is brought in Ohio by the remaining ADR holders and remains outstanding.
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Lloyds Banking Group is poised to announce plans to cut around 1,000 jobs as part of a digital-focused restructuring programme the bank tabled last year, the Financial Times reported. The bank is expected to reveal on Thursday details of job losses across the company to cut costs and shift toward providing more digital services. The cuts are part of the 9,000 job cuts and 150 branch closures the bank announced last year as part of a three-year strategy.
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Twelve of the biggest players in interest-rate swap trading were sued for allegedly conspiring to block fund managers from entering the exchange market, according to reports. The reports indicated that the antitrust complaint filed in New York federal court by a public pension fund names most of the biggest US and European investment banks among the defendants as well as trading platforms ICAP Capital Markets and Tradeweb Markets. Big banks have been accused of colluding in other areas of trading such as interbank rates, currencies and credit default swaps. The banks are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Bank of America Merrill Lynch, BNP Paribas, Royal Bank of Scotland, UBS, Barclays, Credit Suisse and Deutsche Bank.
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COMPANIES - FTSE 250
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PayPoint, which offers in-store payment services, reported a considerable drop in first-half pretax profit, as the company booked a GBP18.2 million goodwill impairment charge in relation to the online payments business it is seeking to sell. Pretax profit plunged to GBP3.2 million in the six months ended September 30, compared with GBP22.5 million in the corresponding half the prior year. Paypoint lifted its interim dividend to 14.2 pence per share from 12.4p said the increase "anticipates double digit growth in the dividend for the year as a whole and reflects our confidence in the business and its long term prospects".
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SSP Group said it swung to a profit in its recently-ended financial year as it recovered from losses it made the prior year and revenue rose slightly on the back of new contract openings and higher passenger numbers. SSP, which operates food and beverage outlets in travel locations, said it made a pretax profit of GBP76.8 million in the year ended September 30, after suffering a GBP13.5 million pretax loss the year before when it booked exceptional costs relating to restructuring and its IPO. SSP will pay a final dividend of 2.2 pence, taking the total dividend to 4.3p for the year.
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Property investor LondonMetric Property said its pretax profit dipped in the first half, in line with a lower revaluation gain, though its net asset value per share rose year-on-year and over the course of the half. LondonMetric said its pretax profit for the half to the end of September was GBP64.3 million, compared to GBP69.7 million a year earlier, as its revaluation surplus in the half dipped to GBP47.2 million from GBP52.3 million. The group will pay a flat interim dividend of 3.5 pence per share.
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Oil and gas services company John Wood Group said it has won a contract worth around USD90.0 million with an unnamed international oil company in Iraq. The company said its Wood Group PSN unit will provide project management services for an onshore facility under the three-year contract.
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Marston's said it swung to a profit in its recently-ended financial year as revenue grew amid new pub openings and the recently-integrated Thwaites beer business, part of a three-year transformation plan. The pub company and brewer said it made a pretax profit of GBP31.3 million in the year ended October 3, after suffering a GBP59.2 million pretax loss the year before, as revenue rose to GBP878.6 million from GBP815.3 million. Marston's will pay a final dividend of 4.5 pence, making a total dividend of 7.0p, up 4.5% on the prior year.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Pharmaceutical company Sinclair IS Pharma said it has struck a deal to sell its non-aesthetics business to Alliance Pharma for GBP132.0 million in cash, as its loss for the year to the end of June widened. The company will change its name to Sinclair Pharma PLC. Under the deal, Alliance Pharma will acquire 27 products, materially increasing the scale of its business. Alliance Pharma will cover the consideration for the acquisition through a fully-underwritten share placing to raise GBP78.5 million and with GBP54.2 million to be drawn down through new loans. The placing will comprise the issue of 191.4 million shares in Alliance Pharma at 41.00 pence per share, a 20% discount to its closing price on Wednesday.
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Daily Mail and General Trust said it has sold its online discount business Wowcher to a newly-formed company in which the media group holds a 30% stake. In addition, the new company will acquire the UK and Ireland operations of LivingSocial, an online marketplace which allows users to buy and share things to do in their city. The new company's controlling shareholder will be Exponent Private Equity. DMGT said it will net GBP29.0 million after the proceeds from the sale of Wowcher and its investment in the new company.
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Marine engineering services company James Fisher & Sons said revenue in the four months to the end of October fell amid continued challenges from the tough oil and gas market. The group said revenue for the four-month period was down 4.0% on the year before, with trading conditions for its offshore oil arm still tough, particularly in Norway.
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COMPANIES - INTERNATIONAL
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Volkswagen will have to recall over 125,000 vehicles in South Korea according to an order by the government, over the emissions test scandal, news reports said. The recall is one of many around the world following the revelations in September that the company had cheated on emissions tests for some of the its diesel cars.
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PetroChina plans to sell pipeline stakes for as much as CNY15.5 billion, or USD2.4 billion, as the company seeks to meet year-end profit targets. Beijing-based PetroChina's board approved a plan to sell a 50% stake in Trans-Asia Gas Pipeline to a unit of state-owned China Reform Holdings, according to a statement to the Shanghai stock exchange on Wednesday.
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Thursday's Scheduled AGMs/EGMs
Partnership Assurance (re Just Retirement merger)
Quindell (re name change, capital return)
CVS Group
Netcall
City Natural Resources High Yield Trust
St Ives
Minera IRL (re shareholder group proposals)
Thor Mining
Sarossa
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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