(Alliance News) - Stocks in London were called to open higher on Friday, despite a mixed close in New York and a poor showing in Asia.
Investors are hoping the Bank of England is close to the end of its rate hiking cycle, amid dovish rhetoric from the central bank and recent weak economic data.
In further evidence of elevated interest rates doing their job, figures showed that the UK jobs market slowed sharply in August as the weaker economic outlook depressed recruitment activity.
The KPMG and REC UK report on jobs showed permanent hires fell at the sharpest pace in three years, while temp billings contracted for the first time since July 2020.
Claire Warnes, skills and productivity partner at KPMG UK, said: "Despite an increasing pool of candidates this month, the economic outlook is keeping businesses cautious."
In corporate news, Berkeley reconfirmed its full-year guidance. Round Hill Music Royalty Fund agreed a cash takeover offer with Alchemy Copyrights.
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 5.6 points, 0.1%, at 7,447.32
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Hang Seng: down 1.3% at 18,202.07
Nikkei 225: closed down 1.2% at 32,606.84
S&P/ASX 200: down 0.2% at 7,156.70
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DJIA: closed up 57.54 points, or 0.2%, at 34,500.73
S&P 500: closed down 14.34 points, 0.3%, at 4,451.14
Nasdaq Composite: closed down 123.64 points, 0.9%, at 13,748.83
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EUR: up at USD1.0719 (USD1.0702)
GBP: up at USD1.2494 (USD1.2470)
USD: down at JPY147.18 (JPY147.23)
Gold: up at USD1,925.71 per ounce (USD1,919.30)
(Brent): down at USD89.47 a barrel (USD90.31)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
08:30 EDT Canada labour force survey
08:45 CEST France industrial production index
11:00 IST Ireland labour market statistics
11:00 IST Ireland industrial production and turnover
08:30 EDT US export sales
10:00 EDT US wholesale trade
15:00 EDT US consumer credit
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Most businesses are in the dark about a looming "avalanche" of changes in EU/UK trade regulations, an industry group is warning. The British Chambers of Commerce said its research among 700 firms suggested that the vast majority are unaware and unprepared for the changes in EU/UK regulations. More than four in five manufacturers said they do not know about new reporting requirements on exports of goods containing high-carbon steel, and selected other products, to the EU starting in October, and around nine in 10 exporters were either unaware or unprepared for new EU VAT requirements due in January 2025. The BCC said the lack of knowledge and preparation for the changes mean that some traders with the EU could face new delays and unexpected costs.
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The US is "carefully" monitoring China's challenges, US Treasury Secretary Janet Yellen said Friday, as the slowdown in the world's second largest economy raises concerns for global growth. Many are worried about the Asian country's struggles, with the threat of recession in Europe and high inflation in many major economies contributing to a plunge in demand for Chinese goods. "China faces a variety of both short and longer term global challenges, economic challenges that we've been monitoring carefully," Yellen told reporters in New Delhi, ahead of a two-day G20 summit. "That said, China has quite a bit of policy space to address these challenges."
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BROKER RATING CHANGES
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Socgen raises Next to 'buy' (hold) - price target 8,239 (7,034) pence
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Jefferies starts Foresight Sustainable Forestry with 'hold'
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COMPANIES - FTSE 100
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Berkeley reconfirmed its full-year guidance, ahead of its annual general meeting Friday. It expects to deliver at least GBP1.05 billion in pretax profit across the current and next financial years that end on April 30, likely to be slight weighted to financial 2024. Profits for the current year are expected to be split broadly evenly between the first and second half. It added that it remains on track to be working capital neutral over the course of this and the next financial year. "In terms of the sales market, enquiries have stayed at similar levels over the last four months, but the value of underlying private sales reservations is some 35% below last year's rate, reflecting the elevated macro-economic and political volatility. Pricing remains resilient and above our business plan levels, due to the constrained supply of both new-build and second-hand homes to the market, while cancellation rates are stable," Berkeley said.
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COMPANIES - FTSE 250
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Computacenter reported that revenue in the first half of 2023 rose 27% to GBP3.58 billion from GBP2.83 billion a year earlier. Pretax profit jumped 14% to GBP122.8 million from GBP107.8 million. It upped its dividend by 2.3% to 22.6p from 22.1p. Looking ahead, Chief Executive Mike Norris said: "Coupled with this first half performance, we have seen good progress in Q3 to date. Due to the industry returning to normal supply conditions we have seen a significant generation of cash as our inventory has reduced in the first half of 2023. We expect this to continue in the second half which will leave Computacenter with a strong balance sheet by the end of the year."
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Petershill Partners swung to a pretax profit of USD129.3 million in the first half of 2023, from a USD420.1 million loss a year ago. Total income including interest fell to USD138.0 million from USD179.0 million. The board has approved an interim dividend payment of 4.9 cents . Looking ahead, Petershills said acquisitions in 2023 are expected to be at or below the bottom end of the medium-term range of USD100 million to USD300 million per annum, as as it continue to "remain selective" on mergers & acquisition, with no new acquisitions during the first half.
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OTHER COMPANIES
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Round Hill Music Royalty Fund agrees cash takeover offer with Alchemy Copyrights. Round Hill Music said the offer is for USD1.15 a share; a premium of 67% to Thursday price. The acquisition values Round Hill Music at USD468.8 million. Round Hill Music shareholders will receive a quarterly dividend of USD0.01125. They will also receive special dividend of USD0.005. Round Hill Music's board believes acquisition is in shareholders' best interests. Chair Robert Naylor said: "The board is pleased to present this opportunity for liquidity at a premium to both the share price and the IPO price, as well as at a narrow discount to economic net asset value per share. The recommended offer represents excellent value for shareholders."
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Restaurant Group said that Chair Ken Hanna plans to step down as its next annual general meeting during 2024, due to personal reasons. The Liverpool-based operator of casual dining chains will now initiate a comprehensive search process to identify a new chair. Hanna will remain as chair until his successor is appointed, in order "to allow for an orderly handover." Hanna has held the role since the start of 2022.
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By Sophie Rose, Alliance News reporter
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