LONDON MARKET OPEN: Plus500 rises after strong half, positive outlook

(Alliance News) - Stock prices in London opened lower on Tuesday, with property companies at the foot of the FTSE 100 following a downbeat broker note on the sector, while Plus500 rose after hailing its first-half performance.

The UK flagship index was down 30.56 points, or 0.4%, at 7,166.03. The FTSE 250 index was down 73.18 points, or 0.4%, at 18,763.48. The AIM All-Share index was down 2.45 points, or 0.3%, at 881.67.

The Cboe UK 100 index was down 0.2% at 711.15. The Cboe 250 was down 0.4% at 16,305.07, and the Cboe Small Companies was 0.1% lower at 13,219.89.

In mainland Europe, the CAC 40 stock index in Paris was down 0.6%, while the DAX 40 in Frankfurt was down 0.7%.

In the FTSE 100, United Utilities was up 0.4%. The water company agreed to sell its renewable energy business, United Utilities Renewable Energy, to FTSE 250-listed SDCL Energy Efficiency Income Trust for an enterprise value of GBP100 million.

SDCL was down 0.8%.

United Utilities said it has developed a portfolio of solar, wind and hydro renewable assets since 2014 and noted the UURE unit comprises 69 megawatts of renewable generation assets across 70 sites. Following the sale, the assets will continue to provide long-term green energy to its regulated water & wastewater business, United Utilities Water.

At the other end of the large-caps, British Land was the worst performer, down 3.2%, after RBC Capital downgraded the property company to 'underperform' from 'sector perform'.

Property peer Land Securities was down 2.2% after RBC cut the stock to 'sector perform' from 'outperform'.

In the FTSE 250, Plus500 was the best performer, up 3.0%, after the contract-for-difference trading provider said it delivered a strong operational performance during the first half of 2022.

For the six months to June 30, revenue was USD511.4 million, up 48% from USD346.2 million last year. Earnings before interest, tax, depreciation and amortisation was USD305.3 million, up 63% from USD187.6 million. Ebitda margin was 60% in the first half, up from 54% a year before.

Plus500 added 57,275 new customers during the first half, up from 136,980 customers a year before. However, active customers were 216,928, down 35% from 333,940.

Looking ahead, Plus500 said it remains "highly confident" about its performance for 2022, and anticipates that revenue and Ebitda for the current year will be ahead of current market expectations.

At the other end of the midcaps, Hammerson was the worst performer, down 6.5%, after RBC downgraded the shopping centre operator to 'underperform' from 'sector perform'. Great Portland Estates was down 2.6%, as Goldman Sachs cut the property stock to 'neutral' from 'buy'.

Softcat was down 2.2%. The IT services provider promoted Chief Financial Officer Graham Charlton to CEO with effect from August 1, 2023.

Charlton will replace Graeme Watt as CEO who will, in turn, succeed Martin Hellawell as non-executive chair. Hellawell will step down from the role and board upon Watt's succession. Softcat also said a search for a CFO to succeed Charlton has commenced, and it will consider external as well as internal candidates.

New York ended lower on Monday. The Dow Jones Industrial Average closed down 0.5%, the S&P 500 down 1.2%, and the Nasdaq Composite down 2.3%.

In Asia on Tuesday, the Nikkei 225 index in Tokyo closed down 1.8%. In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong was down 1.3%. The S&P/ASX 200 in Sydney ended up 0.1%.

Worries about a fresh Covid flare-up in China - fuelling fears of another round of lockdowns - added to the downbeat mood and comes just as investors prepare for a big week of economic data and US bank earnings that could have huge implications for markets.

The US Federal Reserve's sharp interest rate hikes in recent months have sent the dollar soaring against rivals. The euro is particularly under pressure, as the European Central Bank moves more slowly in tightening monetary policy and as the region faces a severe energy crisis caused by the Ukraine war.

Sanctions on oil imports from Russia and Moscow's warnings that it will shut off gas to Europe have led economists to predict the eurozone will fall into recession, pushing the euro to a 20-year low and close to parity with the greenback.

The euro was priced at USD1.0005 early Tuesday in London, down from USD1.0087 late Monday. The last time the euro was at parity against the buck was in late 2002, early in the single currency's life.

The pound was quoted at USD1.1850 early Tuesday, down from USD1.1898 at the London equities close Monday. Against the yen, the dollar was quoted at JPY137.27 in London, marginally lower against JPY137.31.

Brent oil was trading at USD104.85 a barrel Tuesday morning, down sharply from USD106.35 on Monday evening. Gold stood at USD1,735.26 an ounce, lower against USD1,738.10.

In the international economics calendar on Tuesday, there is the German ZEW indicator of economic sentiment at 1000 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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