LONDON (Alliance News) - London share prices have started Tuesday flat, with the day's major event UK inflation data due at 0930 BST, as investors try to gauge the likely start date for interest rate increases by the Bank of England.
Following that, late Wednesday, the minutes of the latest US Federal Reserve policy-setting meeting will be published.
In the FTSE 250, Bovis Homes is down 2.3% at the open. The housebuilder's shares lost 3.9% on Monday, coming off eight-year highs, after its interim results announcement. Early Tuesday, Liberum has cut the stock to Hold from Buy.
In the FTSE 100, shares in fellow housebuilder Persimmon are up 1.6% after it reported Tuesday a 31% rise in first-half pretax profit.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: flat at 6,546.73
FTSE 250: down 0.1% at 17,594.96
AIM ALL-SHARE: up 0.1% at 751.53
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Hang Seng: down 1.1% at 23,542.62
Nikkei 225: closed down 0.3% at 20,554.47
DJIA: closed up 0.4% at 17,545.18
S&P 500: closed up 0.5% at 2,102.44
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GBP: down at USD1.5573
EUR: flat at USD1.1075
GOLD: up at USD1,119.30 per ounce
OIL (Brent): down at USD48.40 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 Consumer, Retail and Producer Price indices
09:30 UK DCLG House Price Index
13:30 US Housing Starts and Building Permits
13:55 US Redbook index
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Home prices in majority of the Chinese cities increased in July, figures from the National Bureau of Statistics showed. On a monthly basis, home prices rose 31 out of 70 cities surveyed by the government. Prices dropped in 29 cities but remained flat in 10 cities. Compared to the same month of the prior year, house prices climbed in 67 out of the 70 cities during July.
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Firefighters, police, soldiers and officials stood in silence with bowed heads across the port city of Tianjin in a traditional observance of the Chinese date for mourning the dead. Cargo ships sounded horns at the world's 10th-busiest container port as state media broadcast images of rescuers paying their respects to the 114 who died in massive twin explosions at a chemical warehouse last week ago. Seventy people are still missing, including 64 firefighters and five policemen, the Xinhua news agency reported. Specialists had cleared about 150 tons of dangerous chemicals scattered within a radius of 3 kilometres around the blast site as of Monday night, Tianjin deputy mayor He Shushan said.
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The US and the EU led a chorus of international voices offering their sympathies to Thailand after a deadly bombing in Bangkok on Monday night. The US government condemned the violence, while noting that it remained unclear who was behind the blast. Investigations were under way into the bombing, which killed at least 22 and injured 123 people, many of them tourists.
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The foreign ministers of Russia and Iran owarned against outside attempts at ousting Syrian President Bashar al-Assad. Russian Foreign Minister Sergei Lavrov said it is "unacceptable" for foreign governments to want to agree that Assad would leave his post by the end of a transitional period that would allow Syria's opposition to gain power.
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BROKER RATING CHANGES
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Liberum Cuts Bovis Homes To Hold From Buy, Price Target 1,140p
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DEUTSCHE BANK RAISES BOVIS HOMES PRICE TARGET TO 1352 (1270) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Housebuilder Persimmon posted a 31% rise in first-half pretax profit as the company sold more houses at higher prices, driving its total revenue higher, and increased its gross margin substantially. The group said its pretax profit for the six months to the end of June was GBP272.8 million, up from GBP208.9 million a year earlier, as the group's total revenue rose to GBP1.33 billion from GBP1.20 billion and its underlying operating margin rose to 20.5%, a 280 basis point rise year-on-year from 17.7%.
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The US government gave Royal Dutch Shell the green light to begin exploratory oil drilling in the Arctic Ocean off Alaska. The Department of Interior earlier this year granted preliminary approval of Shell's plans, but drilling hadn't begun because a key piece of emergency equipment was not on hand. Shell plans to drill up to six offshore wells in relatively shallow water in the Chukchi Sea 112 kilometres north-west of the village of Wainwright, Alaska. The required piece of equipment arrived in the area earlier this month, clearing the path for Shell to drill.
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Meanwhile, Shell also has entered into a framework agreement with China's Guanghui Energy Co to jointly buy and distributed liquefied natural gas, a rare cooperation deal between the FTSE 100-listed major and a local private company in China, Reuters reports. Shell has signed a non-binding framework deal with Guanghui, which is building a gas-receiving terminal in the Qidong of Jiangsu province. The terminal is designed to handle an annual capacity of around 600,000 tonnes in its first phase.
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A number of global banks are facing billions of pounds worth of civil claims in London and Asia over the rigging of currency markets, following the USD2 billion settlement reached in in the US on Friday, the Financial Times reports. Barclays, HSBC Holdings and The Royal Bank of Scotland Group were among nine banks which on Friday reached a USD2 billion settlement with thousands of investors impacted by the rate-rigging who brought a civil case against the banks in New York. Lawyers have warned the US settlement could open the floodgates for an even higher number of claims in London, the world's largest foreign exchange trading hub. Banks potentially will be hit as early as the autumn, with claims already entered with London's High Court from corporate, fund manager and local authority claimants.
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COMPANIES - FTSE 250
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John Wood Group reported a fall in profit in the first half of 2015 as expected but the company reaffirmed its commitment to grow the dividend and reiterated its full year outlook remains unchanged. The oil engineering services company reported an expected fall in profit before tax and exceptional items of USD156.3 million in the first half of 2015, compared to a USD182.4 million profit a year earlier as revenue dropped to USD3.06 billion from USD3.80 billion. Despite the fall in earnings, the company upped its interim dividend to 9.8 cents per share from 8.9 cents per share a year earlier. That is in line with its policy, it said, and it reaffirmed its commitment to increase the dividend per share by a double digit percentage from 2015 onwards. The company has previously announced it would be lowering its headcount, and said this is down 13% from December.
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John Wood Group also said it has won a five-year "multi million dollar" contract with major Royal Dutch Shell to provide services to four onshore oil fields in Gabon. That will be carried out by Wood Group PSN and the deal represents the subsidiary's first major contract in Gabon.
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Engineering services company Amec Foster Wheeler said it has won an extension on its project management consultancy contract for the UZ750 project in the Upper Zakum field in Abu Dhabi. No financial details on the contract were disclosed.
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Cairn Energy said its pretax loss significantly widened in the first half of 2015 as it prepares to spend big in the second half on developing its assets in Senegal and the North Sea. The FTSE 250-listed oil producer reported a pretax loss of USD234.7 million in the first half of 2015, widening from a USD62.1 million loss a year earlier, after the company booked an USD177.1 million impairment against its remaining investment in Cairn India Ltd. The company does not generate any revenue.
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Trading technology and information company Fidessa Group said it has appointed Andy Skelton as its new chief financial officer, with plans for him to take up the role on October 26. Skelton will replace Andy Malpass, who will leave Fidessa in October, having announced he would step down back in February 2014. He will remain an executive director with the company until February 2016. Skelton moves from his role as the deputy chief financial officer at chipmaker CSR, which has just been acquired by US rival Qualcomm.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Contagious Gaming, the company currently in talks with Sportech about a potential merger, late Monday outlined its rationale for its potential takeover offer that could lead to the formation of a "combined, technology-focused, sports wagering company". Last Friday, Sportech said it received an initial proposal from Contagious Gaming and said it would only recommend an offer that was at a premium to its closing share price of 62.63 pence last Thursday and would comprise a majority in cash and the balance in new Contagious Gaming shares. On Monday, Contagious Gaming confirmed it was in talks with Sportech but noted it has not made a firm intention statement under the City Code on Takeovers and Mergers. Under the takeover code the company must either make a firm intention to make an offer by September 11, or walk away.
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Quindell said the UK Financial Conduct Authority has opted to discontinue its investigation into the company in light of a separate investigation that has been launched by the Serious Fraud Office. The FCA had been undertaking an investigation into the insurance technology and outsourcing company's accounts for 2013 and 2014, and on August 5 the SFO informed the company it had opened an investigation into its past business and accounting practices.
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Medical device company Akers Biosciences posted a widened pretax loss for the first half of 2015, mostly as a result of lower revenue and increased investment in its sales and marketing. For the half year to end-June, the company posted a pretax loss of USD3.4 million, widened from a loss of USD1.1 million a year before, as a result of a fall in revenue to USD1.5 million from USD2.5 million, and a rise in sales and marketing expenses.
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Pawnbroker H&T Group said it will raise its interim dividend 67% following an improved performance against a challenging market backdrop in the first half, with pretax profit rising and the group's net debt position falling. H&T, which operates the H&T Pawnbrokers and est1897 brands, said its pretax profit in the first half was up to GBP2.6 million from GBP2.0 million a year earlier, prompting it to hike its interim dividend to 3.5 pence per share from 2.1p a year earlier. The group also saw its net debt fall 34% in the half to GBP8.9 million.
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Car retail and leasing company Marshall Motor Holdings said its pretax profit and revenue both rose in the first half as it increased its new and used sales and posted improved aftersales revenue. Marshall Motor said its pretax profit for the first half to the end of June was GBP10.5 million, up 9.8% from GBP9.5 million it posted a year earlier, as revenue increased to GBP632.5 million from GBP545.4 million, up 16%. On the back of the results, the group, which floated in London in April, said it will pay a maiden interim dividend of 0.58 pence per share.
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John Menzies posted a sharp fall in its first-half pretax profit, hit by restructuring costs in its aviation division, which offset a rise in volumes in the division and higher revenue for the group overall. While the company said its distribution arm performed ahead of its expectations, it slashed its interim dividend as a result of the fall in overall profit. John Menzies said its pretax profit for the half was down to GBP5.8 million from GBP14.2 million a year earlier, driven by the group booking GBP11.2 million in restructuring costs in the aviation arm and contract losses it suffered in 2014. Even stripping out the one-offs, pretax profit fell to GBP17.0 million from GBP20.7 million. The group said its interim dividend payout for the half will be cut to 5.0 pence from 8.1p a year earlier.
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Social housing and care sector support services company Mears Group attacked the UK government's delay to social care reforms as a constraint on its revenue growth, despite posting higher revenue and pretax profit in the first half of the 2015. The group said its pretax profit for the six months to the end of June was GBP14.7 million, up from GBP14.0 million a year earlier. The group said it would pay an interim dividend of 3.10 pence, up from 2.85 pence. Chief Executive David Miles said revenue growth in both divisions has been constrained by a temporary hiatus in new bidding opportunities for social housing maintenance work and by a decision to delay social care reforms by the UK government, which leaves the short-term outlook for the care business looking "negative".
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COMPANIES - INTERNATIONAL
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European plane maker Airbus Group has secured a firm order for 250 A320neo Family aircraft from Indian budget airline IndiGo. The order, Airbus' largest by number of aircraft, is worth around USD26.5 billion at list prices. IndiGo, India's largest domestic airline by market share, has now ordered a total of 530 A320 aircraft with Airbus, thus becoming the European aviation giant's largest airline customer for the Airbus A320-family of aircraft.
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Buzzfeed is launching a joint venture with Yahoo Japan to create a Japanese-language website this year, the US media company said. BuzzFeed will provide "proprietary technology platform, and philosophy and process for developing editorial content and native advertising," company president Greg Coleman said. Yahoo Japan "will advise the joint venture on cultural matters, drive traffic to BuzzFeed Japan and own the sales channel to bring BuzzFeed Japan to market," Coleman said.
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Tuesday's Scheduled AGMs/EGMs
Castings
Qannas Investments
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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