LONDON MARKET OPEN: Johnson Matthey Lifted By Brighter Outlook

LONDON (Alliance News) - UK stocks made a higher start to trading on Thursday, with focus on the European Central Bank and the Organization of the Petroleum Exporting Countries which both hold policy meetings later in the day.

Early in London, Johnson Matthey was one of the top FTSE 100 gainers, up 1.6%, as the platinum and chemicals company said it expects a better performance in the current year, after reporting a dip in profit in its financial year to the end of March.

The firm, which makes emission control systems, catalysts and fine chemicals, said pretax profit was GBP386.3 million in the year that ended March 31, down from GBP495.8 million a year earlier, despite revenue rising to GBP10.71 billion from GBP10.06 billion.

Johnson Matthey was hit by challenging conditions for its Process Technologies and Precious Metal Products businesses, which offset a strong performance in its Emission Control Technologies arm and a solid year in its Fine Chemicals division.

The company declared a final dividend of 52.0 pence, taking its total dividend payout up 5.0% year-on-year to 71.5p, as it said it anticipates a strong performance in the current financial year, in line with market expectations.

The FTSE 100 was up 0.2%, or 12.54 points, at 6,204.47. The FTSE 250 was down 0.1% at 17,041.84 and the AIM All-Share was up 0.1% at 738.10.

In Europe, the French CAC 40 and the German DAX 30 were both down 0.2%.

In Asia, the Japanese Nikkei 225 index ended down 2.3% while the Shanghai Composite closed up 0.4%. The Hang Seng is up 0.3%.

Investors attention will be on events in the Austrian capital of Vienna where the ECB and OPEC will host their respective policy meetings. The ECB's monetary policy decision will be announced at 1245 BST, followed by a press conference with President Mario Draghi at 1330 BST. OPEC is expected to hold a press conference at 1500 BST with the president of the conference and the acting secretary general.

Elsewhere in the economic calendar is the UK construction purchasing managers' index at 0930 BST, eurozone producer price index at 1000 BST, and US Challenger jobs cuts at 1230 BST. US ADP employment is at 1315 BST, just before initial and continuing jobless claims at 1330 BST.

Bank of England Governor Mark Carney speaks at the unveiling of the new GBP5 note at Blenheim Palace in Oxfordshire at 1400 BST.

On the London Stock Exchange, ex-dividend stocks were weighing on the FTSE 100, with food, clothing and homewares retailer Marks & Spencer Group, down 3.2% and gas and electric network operator National Grid, down 3.3%.

In the FTSE 250, price comparison service Moneysupermarket.com Group led the fallers after Jefferies downgraded it to Hold from Buy, with a price target cut to 312.00 pence from 440.00p. Early Thursday the stock traded down 7.8% to 305.10p.

Investec shares were down 2.1%, after the Anglo-South African financial services group said it will raise funds through a placing to back a share buyback.

Investec said it plans to raise up to around GBP145.0 million via the placing, which will be carried out through an accelerated bookbuild handled by bookrunner JPMorgan Cazenove.

The funds raised will be used to fund a buyback of sterling and rand preference shares in the company, with any proceeds not directed to this used for general corporate purposes.

In AIM, fastjet reported a narrowed pretax loss in 2015 as revenue grew on an increase in passenger numbers, although the company said that trading in the second half of the year faced a number of challenges which have carried into 2016.

The African low-cost airline said its pretax loss in 2015 narrowed to USD41 million from USD57.8 million in 2014, as revenue rose to USD65.1 million from USD55.4 million.

fastjet said 2015 was a challenging year with revenue hit by a weakening Tanzanian economy and exchange rate, and political uncertainty in the country. As a consequence, consumer spending fell which led to lower ticket sales in the second half of the year.

"Despite the increase in revenues in 2015, the directors believe that the current economic and trading outlook in fastjet's markets remains uncertain. As a consequence, the group expects to continue to experience significant challenges in achieving the increased sales revenue and growth required to be cash flow positive in the short term," fastjet said in a statement.

The stock traded down 12%, making it one of the worst performers in the AIM All-Share.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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