LONDON (Alliance News) - London share prices have started Tuesday lower, after PMI data showed contraction of in Chinese manufacturing and ahead of key inflation data from the UK and US.
The FTSE 100 is being led down by Wolseley, Centrica and Kingfisher.
Wolseley, down 3.3%, said its pretax profit fell by two-thirds in the first half of the financial year, as it booked a large impairment due to challenging market conditions in the Nordic region.
Centrica, down 2.4%, has been cut to Sell from Hold by Deutsche Bank, traders say.
Kingfisher, down 2.2%, said the board and a major shareholder of Mr Bricolage have reservations about its acquisition of the DIY chain, whose shares have been suspended in Paris.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 7,017.59
FTSE 250: down 0.3% at 17,505.44
AIM ALL-SHARE: up 0.5% at 719.88
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Hang Seng: closed down 0.4% at 24,399.60
Nikkei 225: closed down 0.2% at 19,713.45
DJIA: closed down 0.1% at 18,116.04
S&P 500: closed down 0.2% at 2,104.42
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GBP-USD: down at USD1.4947
EUR-USD: up at USD1.0959
GOLD: down at USD1,188.11 per ounce
OIL (Brent): down at USD55.53 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 GMT)
08:30 Germany Markit Manufacturing, Service and Composite PMI Preliminary
09:00 EU Markit Manufacturing, Service and Composite PMI Preliminary
09:00 Italy Wage Inflation
09:30 UK Consumer, Retail and Produce Price indices
09:30 UK DCLG House Price Index
10:05 US Fed's Bullard speech
12:30 US Consumer Price Index
12:55 US Redbook index
13:00 US Housing Price Index
13:45 US Markit Manufacturing PMI Preliminary
14:00 US New Home Sales
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British Prime Minister David Cameron has ruled out going on to stand for a third term if he gets elected for a second five-year term at the general election in May. Conservative leader Cameron, who has led a coalition government with the Liberal Democrats through the last five years, told the BBC that he wants to be re-elected for the next five years so that he can finish the job of implementing reforms and improving the economy. "I feel I've got more to bring to this job, I feel the job is half done. The economy is turned round and the deficit is halved down and I want to finish the job. I want to go on with the education reforms and the welfare reforms," he told the BBC.
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German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras ended a five-hour "constructive" meeting, German government spokesman Steffen Seibert said. "The chancellor and the Greek prime minister had a comprehensive discussion in a good and constructive atmosphere about the situation in Greece, the procedures of the EU and future German-Greek cooperation," Seibert said. He gave no further details of the meeting. Tsipras presented Merkel with a list of reforms in the hope of unlocking bailout funds to prevent Greece from running out of cash next month.
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The manufacturing sector in China moved into contraction in March, the latest survey from HSBC Bank showed, with a PMI score of 49.2. That was well shy of forecasts for 50.5, and it was down sharply from 50.7 in February. Now at an 11-month low, the index also dipped below the boom-or-bust line of 50 that separates expansion from contraction. "The HSBC Flash China Manufacturing PMI signalled a slight deterioration in the health of China's manufacturing sector in March. A renewed fall in total new business contributed to a weaker expansion of output, while companies continued to trim their workforce numbers," said Markit economist Annabel Fiddes.
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The manufacturing sector in Japan was barely in expansion in March, the latest survey from Markit Economics revealed, with a PMI score of 50.4. That was well shy of forecasts for 52.0, and it was down from 51.6 in February. It was also the lowest reading since October.
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Developing Asia will see a steady growth this year and next year, underpinned by soft commodity prices and recovery in major industrial economies, the Asian Development Bank said. China's growth is expected to moderate as the economy adjusts to a new normal, while pick-ups in India and other Southeast Asian nations are set to balance the deceleration in China, the Manila-based lender said in a report. The annual economic publication named Asian Development Outlook 2015 predicted 6.3% growth for developing Asia in 2015 as well as 2016. The region expanded 6.3% in 2014.
In December, the ADB had estimated 6.1% growth for 2014 and forecast 6.2% for 2015.
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China's economic growth could ease further in the first quarter of this year from a five-year low logged in the final three months of 2014, a top government think-tank predicted this week. Gross domestic product growth could ease to 6.85% in the first quarter of the year from 7.3% in the fourth quarter of 2014, the Chinese Academy of Social Sciences said.
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The Federal Reserve should probably hike interest rates by the end of the year, Federal Reserve Vice Chairman Stanley Fischer said in New York. "Whether it's going to be June or September, or some later date, or some date in between, will depend on the data," said Fischer to the Economic Club of New York. "We've got two very positive numbers for the first quarter of 2015 and we're waiting for another one," he added, referring to the strong US jobs reports from January and February.
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The US committed to funding peak troops levels for the Afghan military as President Barack Obama considers whether to slow the pace of the US drawdown in Afghanistan. The US Department of Defence will seek to fund the Afghan military at peak troop levels through 2017, Defence Secretary Ashton Carter told reporters after a day of talks between US and Afghan officials at the presidential retreat Camp David. The commitment will keep the number of Afghan soldiers at 352,000, he said after talks with Afghan President Ashraf Ghani and Chief Executive Abdullah Abdullah.
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BROKER RATING CHANGES
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TRADERS: DEUTSCHE BANK CUTS CENTRICA TO 'SELL' ('HOLD')
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UBS INITIATES VIRGIN MONEY WITH 'BUY' - TARGET 450 PENCE
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BERENBERG RAISES INTERNATIONAL PERSONAL FINANCE TO 'BUY' (HOLD) TARGET 600 (525) PENCE
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TRADERS: NUMIS INITIATES VICTORIA OIL & GAS WITH 'BUY'
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TRADERS: MACQUARIE INITIATES FIRESTONE DIAMONDS WITH 'NEUTRAL'
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COMPANIES - FTSE 100
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Land Securities Group said it has exchange contracts for the sale of its 95% stake in Times Square in the City of London for GBP268.4 million. The FTSE 100-listed property company is selling the 380,000 square foot office building to real estate funds managed by US private equity group The Blackstone Group LP.
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Wolseley said its pretax profit fell by two-thirds in the first half of the financial year, as it booked a large impairment due to challenging market conditions in the Nordic region, but its closely-watched trading profit rose on the back of a strong performance in the US, by far its biggest market. The building materials company reported a pretax profit of GBP103 million for the six months to end-January, down from GBP312 million a year earlier, as it booked a GBP245 million impairment for the DT Group business in the Nordics it bought back in 2006. It blamed challenging market conditions in the region and reduced expectations of future profitability at the business. Still, Wolseley raised its interim dividend to 30.25 pence, from 27.50 pence a year earlier.
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COMPANIES - FTSE 250
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John Laing Infrastructure Fund reported a rise in its net asset value per share over 2014 and said it would hike its final dividend for the year. The FTSE 250-listed infrastructure investment fund said its net asset value per share rose 2.3% to 109.3 pence in 2014, with its net asset value increasing GBP69.2 million to GBP887.3 million on the back of new acquisitions it made. Total shareholder return for the year was 12.6%, John Laing Infrastructure said, with a final dividend declared at 3.375 pence per share, up 3.8% year-on-year. The total dividend for the year is 6.5 pence, up from 6.25 pence a year earlier.
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Spire Healthcare Group proposed a maiden final dividend and guided mid-to-high single-digit revenue growth for 2015, as it posted a narrowed pretax loss for 2014 on strong revenue growth in its first results since listing on the London Stock Exchange last July. The independent hospital group proposed a maiden final dividend of 1.8 pence, and said that, as it detailed at the time of its IPO last July, it plans to adopt a progressive dividend policy based on a payout ratio of around 20% of pretax profit. Spire posted a pretax loss of GBP7.0 million in 2014, narrowed from a pretax loss of GBP51.9 million in 2013, as a rise in revenue to GBP856.0 million from GBP764.5 million helped offset GBP54.0 million in exceptional costs primarily relating to its listing and GBP85.9 million in finance costs including interest on loans and bank facilities.
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AG Barr FY Pretax Pre-Items Profit GBP41.9M vs GBP38.1M; Says All Brands Outperformed Market; To Pay Final Dividend Of 9.01p Vs 8.19p; Says New Year Started Slowly, But Confident In Own Prospects
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COMPANIES - LONDON MAIN MARKET AND AIM
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GAME Digital reported lower profits and revenue for the first half of its financial year, after it was hit by difficult trading over the key Christmas period, and it also warned that 2015 has got off to a slower start than it had expected although it's hoping for a pickup in coming weeks. It sweetened the news by declaring a maiden interim dividend of 7.35 pence a share and a special dividend of 14.7 pence, or GBP25 million, a move it said reflected its longer-term prospects and a strong cash position. The video game and console retailer reported a pretax profit of GBP33.2 million for the 26 weeks to January 24, down from GBP33.8 million a year earlier, as revenue slipped to GBP582.1 million from GBP586.4 million.
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Credit provider S&U reported a jump in pretax profit, bolstered by its motor finance and home credit divisions, and the company is confident despite a trio of uncertainties it faces. The lender said it made a GBP23.2 million pretax profit in the year ended January 31, 2015, compared with GBP17.3 million in the prior year, as revenue increased by 23% to GBP74.4 million and administrative expenses increased by 13% to GBP26.0 million.
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Stellar Diamonds said it has sold 4,414 carats of diamonds at an auction in Antwerp in Belgium, generating gross revenue of USD417,122. Stellar, the West Africa-focused diamond miner, said the sale included excellent quality white stones, with a value of USD5,000 per carat achieved for one of the five-carat stones.
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COMPANIES - INTERNATIONAL
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Hong Kong billionaire Li Ka-shing's Hutchison Whampoa announced that the company and Spanish telecom operator Telefonica continue to be in exclusive negotiations on the definitive agreements for the acquisition of Telefonica UK or O2 UK. On January 23, Telefonica and Hutchison Whampoa announced that they have entered into an exclusivity agreement for the sale of its UK mobile business, Telefonica UK or O2, for GBP10.25 billion in cash.
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Swedish apparel retailer Hennes & Mauritz said first-quarter profit increased to SEK3.613 billion from SEK2.649 billion in the previous year. Earnings per share were SEK2.18, compared to SEK1.60 last year. Sales including VAT improved to SEK46.791 billion from SEK37.524 billion.
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Microsoft and Samsung Electronics have expanded their global partnership to bring Microsoft mobile productivity services to more consumers and business customers. Samsung is planning to pre-install Microsoft services and apps on its portfolio of Android devices and will deliver secured mobile productivity for businesses through a new Microsoft Office 365 and Samsung KNOX Business Pack.
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Amazon.com's Twitch said that there may have been unauthorized access to some Twitch user account information. For users protection, Twitch expired passwords and stream keys and disconnected accounts from Twitter and YouTube. Amazon bought Twitch last year for about USD970 million. Twitch is live video platform and community for gamers with more than 100 million unique viewers per month.
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Tuesday's Scheduled AGMs/EGMs
Electronic Data Processing
Interbulk
Low & Bonar
Wynnstay Group
eServGlobal
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
9 Jul 2014 10:35
