LONDON MARKET OPEN: B&M European Value falls as SSA Investments sells

(Alliance News) - Stock prices opened lower on Friday following some heavy losses in Asia, with B&M European Value Retail the biggest FTSE 100 faller following a substantial stake sale.

The UK flagship index was down 5.26 points, or 0.1%, at 7,558.59 early Friday. The mid-cap FTSE 250 index was down 93.07 points, or 0.4%, at 22,865.41. The AIM All-Share index was down 3.54 points, or 0.3%, at 1,168.20.

The Cboe UK 100 index was down 0.1% at 750.00. The Cboe 250 was down 0.5% at 20,458.55, and the Cboe Small Companies up 0.2% at 15,767.90.

The CAC 40 stock index in Paris was down 0.6%, while the DAX 40 in Frankfurt was 0.8% lower.

In the FTSE 100, Berkeley Group was the best performer, up 2.0%, after Deutsche Bank upgraded the housebuilder to Buy from Hold.

At the other end of the large-caps, B&M European Value Retail was the worst performer, down 3.7% at 574.57 pence after SSA Investments confirmed that it sold a 4% stake in the variety retailer.

Goldman Sachs International was sole bookrunner for the placing of 40 million shares at 585p each, raising gross sales proceeds of GBP234 million.

SSA owned 109.9 million shares in Luxembourg-based B&M, or an 11% stake. Following the sale, SSA will now own about 7% of B&M.

SSA is the investment vehicle of the Arora family. Simon Arora is B&M's chief executive. The intention to sell the shares was first announced after the London market close on Thursday.

Experian was down 1.8% despite the credit checking agency raising annual guidance and posting double-digit revenue growth in the third quarter.

The Dublin-based firm said third quarter results were at the upper end of expectations, with 14% revenue growth at actual exchange rates. Organic revenue growth was 11%.

Looking ahead, Experian expects organic revenue growth for the full year to be in the range of 12% to 13%, with total revenue growth now expected in the range of 16% to 17%, at constant exchange rates

Experian's previous guidance for financial 2022, outlined in November, was for an organic revenue climb of between 11% and 13%.

Steve Clayton, Hargreaves Lansdown Select fund manager, commented: "Overall, this is a strong report from Experian, but few were expecting anything else. So on a weak day for the wider market, following tumbles on Wall Street overnight, it was always going to be heavy going this morning. Perhaps on a stronger day these numbers would have been better received. Instead the stock is drifting lower by a percent or so in early trading. But when sentiment picks up, Experian is likely to still be growing strongly, which rarely stays out of fashion for long."

In the FTSE 250, Renishaw was the top gainer, up 5.8%, after Goldman Sachs promoted the precision instruments maker to its Conviction Buy List.

Cineworld Group was up 3.0%. The movie theatre operator said it generated positive cash flow in the fourth quarter of 2021 as a result of improvements in revenue.

For the second half 2021, the Brentford, west London-based chain said December group box office and concession revenue was at 88% of 2019, the last period pre-pandemic.

Cineworld said the recovery was driven by an "excellent" slate of movies including the record breaking 'Spider-Man: No Way Home' which it said was the first film to gross more than USD1.5 billion at the box office since the onset of the pandemic.

Looking forward, Cineworld commented that there remains challenges ahead due to the Covid-19 situation, but it remains confident due to a "strong" 2022 film slate.

Cineworld also confirmed that it has served an appeal against the Ontario Superior Court of Justice's decision in the case of Cineplex.

At the other end of the midcaps, Currys was the worst performer, down 4.0%, after the electrical goods retailer broke a string of positive Christmas trading updates by UK retailers.

Currys said the technology market was challenging over Christmas, with uneven customer demand and supply disruption.

For the 10 weeks that ended January 8, group like-for-like revenue fell 5% compared to growth of 4% two years before.

Looking ahead, Currys expects to deliver full-year adjusted pretax profit of around GBP155 million. This would be flat on the year before. It posted adjusted pretax profit of GBP156 million in financial 2021.

In Asia on Friday, the Nikkei 225 index in Tokyo closed down 1.3%. In China, the Shanghai Composite ended down 1.0%, while the Hang Seng index in Hong Kong lost 0.3%. The S&P/ASX 200 in Sydney closed down 1.1%.

The pound was quoted at USD1.3730 early Friday, down slightly from USD1.3738 at the London equities close Thursday.

On the economic front, UK economic growth picked up in November, with gross domestic product exceeding its pre-pandemic size for the first time, according to the Office for National Statistics.

UK gross domestic product advanced 0.9% in November from October, accelerating from month-on-month growth of 0.2% in October. The November print beat the market estimate, cited by FXStreet, of 0.4% growth. The ONS said the monthly figure for GDP is estimated to be above its pre-coronavirus pandemic level of February 2020 for the first time.

However, the figures represented the state of the UK economy prior to the impact of the Omicron variant of Covid-19.

Richard Carter, head of fixed interest research at Quilter Cheviot, commented: "Despite the strong figures in November, storm clouds were gathering in late November and early December with the emergence of the Omicron variant, so it is expected the growth weakens once Omicron feeds through into the numbers.

"While major restrictions were avoided, there's no doubt that consumers would have been exercising more caution than expected in December, with businesses in the hospitality and leisure sector paying the price. Likewise, the UK economy would have lost a significant number of working days in December due to isolations."

The euro was priced at USD1.1470, little changed from USD1.1471. Against the Japanese yen, the dollar was trading at JPY113.80, down from JPY114.05.

Brent oil was quoted at USD84.82 a barrel on Friday morning, flat from USD84.80 late Thursday. Gold stood at USD1,828.50 an ounce, higher against USD1,817.65.

Friday's economic calendar has US retail sales at 1330 GMT.

In Friday's US corporate calendar, major banks Citigroup, JPMorgan and Wells Fargo all report fourth-quarter results, as does asset manager BlackRock.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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