(Alliance News) - The resignation of Dave Lewis as Tesco chief headlined a flurry of changes at the top of London-listed companies Wednesday. These also included two founders, Martin Gilbert at Aberdeen and Vernon Hill at Metro Bank.
Tesco, which also issued interim results, was down 0.7% in early trading.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.5% at 7,325.79
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Hang Seng: down 0.1% at 26,067.91
Nikkei 225: closed down 0.5% at 21,778.61
DJIA: closed down 343.79 points, 1.3%, at 26,573.04
S&P 500: closed down 1.2% at 2,940.25
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GBP: flat at USD1.2257 (USD1.2251)
EUR: flat at USD1.0924 (USD1.0930)
Gold: down at USD1,475.73 per ounce (USD1,483.01)
Oil (Brent): firm at USD59.38 a barrel (USD59.28)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
China National Day Golden Week continues. Shanghai closed, Hong Kong open.
0930 BST UK CIPS-Markit Construction Purchasing Managers Index
0930 BST UK narrow money and reserve balances
1000 CEST Germany Ifo joint economic forecast of German economic research institutes
1100 CEST EU quarterly sectoral accounts
0700 EDT US MBA weekly mortgage applications survey
0815 EDT US ADP national employment report
1030 EDT US EIA weekly petroleum status report
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UK Prime Minister Boris Johnson's plan for a Brexit deal will be delivered to Brussels on Wednesday with a message that there will be no delay beyond the October 31 deadline. Johnson will use his speech at the Conservative Party Conference to say "we can, we must and we will" get Brexit done because voters feel they are being "taken for fools" by Westminster's politicians. British officials have made clear to EU counterparts that the legal texts which will be presented to the EU are a final offer and unless Brussels is prepared to engage there will be no more talks until after Brexit.
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UK shop prices continued to fall in September, according to the latest British Retail Consortium-Nielsen shop price index. Shop prices in September fell 0.6% year-on-year, following on from a 0.4% decrease in August. The latest figure marked the steepest rate of decline since May 2018. Non-food prices fell by 1.7% annually in September after a 1.5% fall in August, while food prices grew 1.1%, slower than 1.6% the previous month.
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North Korea fired a presumed submarine-launched ballistic missile from waters off its east coast, South Korea's Yonhap news agency reported, citing the Joint Chiefs of Staff. The projectile, one of two launches reported on the day, was fired from the waters off the port city of Wonsan at 7:11 am local time and flew around 450 kilometres in an easterly direction, according to the JCS. Yonhap reported the body as saying that the projectile reached a maximum altitude of about 910 kilometres, saying that the missile could have travelled much further had it been fired at a lower angle. The Japanese government said one of the two "ballistic missiles" fell into the country's territorial waters, off the western prefecture of Shimane.
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Donald Trump denounced the impeachment inquiry threatening his US presidency as a "coup," as his administration pushed back hard against the investigation. Trump's comments came after Secretary of State Mike Pompeo vowed to prevent or delay five State Department officials from testifying in the investigation probing accusations that Trump abused his office by seeking dirt from Ukraine on a 2020 election rival. "As I learn more and more each day, I am coming to the conclusion that what is taking place is not an impeachment, it is a COUP," Trump tweeted.
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BROKER RATING CHANGES
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RBC CUTS HASTINGS TO 'UNDERPERFORM' (SECTOR PERFORM) - TARGET 170 (190) PENCE
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UBS CUTS DFS FURNITURE TO 'NEUTRAL' ('BUY') - TARGET 230 (260) PENCE
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BERENBERG RAISES RDI REIT TO 'BUY' ('HOLD') - TARGET 140 PENCE
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COMPANIES - FTSE 100
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Grocer Tesco said it saw a strong start to the financial year but also announced the departure of Chief Executive Dave Lewis. Lewis will leave the business next year, said Tesco, to be succeeded by Ken Murphy. Murphy is executive vice president, chief commercial officer & president global brands at Walgreens Boots Alliance and, as he has contractual commitments to his previous employer, his start date at Tesco will be announced in due course. Lewis said he decision to step down was a "personal one", adding that the tenure of a CEO should be "finite" and now is "the right time to pass the baton". "Our turnaround is complete; we have delivered all the metrics we set for ourselves. The leadership team is very strong, our strategy is clear and it is delivering," said Lewis. Revenue for the half year to August 24 rose 0.6% to GBP31.9 billion, while pretax profit increased 6.7% to GBP494 million. Like-for-like group sales were down 0.4%, with the UK & Ireland up 0.1% while Central Europe down 3.1% and Asia reported a 1.3% fall.
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Standard Life Aberdeen said Vice Chair Martin Gilbert will not seek re-election at the company's annual general meeting in May next year, and will retire from the investment firm on September 30, 2020. Gilbert, founder of Aberdeen Asset Management, was previously co-CEO at Standard Life before the firm ended its joint leadership structure which had been formed as a result of the merger between Standard Life and Aberdeen Asset Management. In July, the Financial Times had reported that Gilbert would be stepping down from his role to become chair of digital bank Revolut.
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Flutter Entertainment said it has agreed an all-share merger with Sky Bet-owner The Stars Group. Under the agreement, expected the be completed in the second or third quarter of 2020, TSG shareholders will be able to receive 0.2253 Flutter shares for each TSG share held. On a proforma basis, the combined group's annual revenue would have been GBP3.8 billion in 2019, making it the largest online betting and gaming operator globally. The combined group will be incorporated, headquartered and domiciled in Dublin with a premium listing on the London Stock Exchange and a secondary listing on Euronext Dublin. "The combination represents a great opportunity to deliver a step change in our presence in international markets and ensure we are ideally positioned to take advantage of the exciting opportunity in the US through a media relationship with FOX Sports as well as our development of US sports betting through Flutter's FanDuel and TSG's FOX Bet brands," said Flutter Chief Executive Peter Jackson. "We are committed to these two high quality brands to drive the growth of the combined group in the US," he added. Flutter was known as Paddy Power Betfair until changing its name in May.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Metro Bank announced that Chair & Founder Vernon Hill will step down in December. It said that the board's search for a new chair "is progressing well". If the search is not completed by the end of the year, the bank said it will appoint an existing independent non-executive director as interim chair. "The board shares Vernon's view that Metro Bank has now reached a point where an independent chairperson is appropriate to oversee the next stage of our journey," said Senior Independent Director Michael Snyder.
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Ryanair said traffic was up 7.6% in September to 14.1 million passengers from 13.1 million a year before. Rolling annual traffic as a result was up 10% to 150.3 million.
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COMPANIES - INTERNATIONAL
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National Australia Bank said it will book a further AUD1.68 billion, about USD1.13 billion, in charges during the second half of its financial year, related to customer compensation as well as software capitalisation. The Australian lender will book AUD1.19 billion before tax in additional customer remediation charges. The biggest contributor to these compensation payments is the provision for potential customer refunds of adviser fees charged to customers between 2009 and 2018 by self-employed advisers.
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US healthcare giant Johnson & Johnson announced it had reached a USD20.4 million settlement to avoid a much-anticipated trial in Ohio for allegedly fuelling the opioid addiction crisis. Several drugmakers have agreed deals ahead of the trial, due to open this month, which is seen as a national test case for many billions of dollars in settlements. The Johnson & Johnson agreement was with two Ohio counties ravaged by the opioid crisis – Cuyahoga and Summit. The settlement "resolves all of the counties' claims with no admission of liability and removes the company from the federal trial," Johnson & Johnson said in a statement. In August, an Oklahoma judge ordered Johnson & Johnson to pay USD572 million in damages for its role in fostering opioid addiction.
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General Motors has laid off 6,000 workers in Mexico temporarily due to a US labor strike, which has disrupted production at two plants south of the border manufacturing pickup trucks, the company said. The layoffs affect the Silao assembly and transmission plants in central Mexico, where work has been "disrupted as a result of a parts shortage related to the UAW strike," a GM spokesman said. The Silao workers are expected to return to their jobs after the strike, the spokesman said.
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Wednesday's Shareholder Meetings
Kin & Carta
Goodwin
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By Tom Waite; thomaslwaite@alliancenews.com
London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com
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