3rd Mar 2016 08:19
LONDON (Alliance News) - Earnings reports were the focus of early trading in London Thursday.
Admiral Group led blue-chip gainers, up 4.6%, after it declared 2015 as "the year of the uncut diamond". The motor insurer lifted its dividend and reported higher annual profit.
Irish building materials group CRH also reported growth in pretax profit and revenue in 2015, driven by acquisitions and a strong US market. The stock was up 4.3%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 16,724.63
FTSE 250: flat at 16,724.63
AIM ALL-SHARE: down 0.1% at 696.22
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Hang Seng: closed down 0.3% at 19,941.76
Nikkei 225: closed up 1.3% at 16,960.16
DJIA: closed up 0.2% at 16,899.32
S&P 500: closed up 0.4% at 1,986.45
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GBP: up at USD1.4087 (USD1.4055)
EUR: up at USD1.0869 (USD1.0831)
GOLD: up at USD1,241.20 per ounce (USD1,237.02)
OIL (Brent): down at USD36.62 a barrel (USD37.17)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in GMT)
08:45 Italy Markit Services PMI
08:50 France Markit Services and Composite PMI
08:55 Germany Markit Services and Composite PMI
09:00 EU Markit Services and Composite PMI
09:30 UK Markit Services PMI
10:00 EU Retail Sales
12:30 US Challenger Job Cuts
13:30 US Initial and Continuing Jobless Claims
13:30 US Nonfarm Productivity and Unit Labor Costs
14:45 US Markit Services and Composite PMI
15:00 US ISM Non-Manufacturing PMI
15:00 US Factory Orders
15:30 US EIA Natural Gas Storage
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The services sector in China continued to expand in February, albeit at a slower pace, the latest survey from Caixin showed with a PMI score of 51.2. That's down from 52.4 in January, although it remains above the line of 50 that separates expansion from contraction.
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After decades of growth at a breakneck pace, China's economy grew by only 6.9% in 2015, the slowest growth in more than a quarter of a century. The growth missed the 7% target that the government had set for the year and is the weakest since 1990. That means this year's annual parliament, set to open Saturday in Beijing's Great Hall of the People, will focus on plans for economic rejuvenation, analysts say. The parliament is expected to approve a proposal for an economic and social development blueprint for 2016 to 2020 that will guide policy at all levels of government and in state-owned enterprises.
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The services sector in Japan continued to expand in February, albeit at a slower pace, the latest survey from Nikkei showed with a PMI score of 51.2. That's down from 52.4 in January.
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Bank of Japan Deputy Governor Hiroshi Nakaso said structural reforms are now required to bring the economy back on sustainable growth path. "Monetary policy to overcome deflation and the structural reform to raise the potential growth rate must be pursued in tandem to bring Japan's economy back on track toward sustained growth," Nakaso told business leaders in Okinawa. "The Bank of Japan has taken monetary easing one step further by introducing "QQE with a Negative Interest Rate," he added. In January, the bank unexpectedly introduced negative interest rate to achieve its 2% inflation target. "I expect the original third arrow of Abenomics, the growth strategy, to fly higher and faster," Nakaso said.
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North Korea fired several short-range rockets off its the eastern coast, South Korea said, just hours after the UN imposed its strictest sanctions ever on Pyongyang. The rockets were fired in the morning from Wonsan on the east coast, and all fell in the sea, a Defence Ministry spokesman said. The sanctions on Kim Jong Un's regime agreed in New York are aimed at stopping North Korea's nuclear and ballistic missile programmes, following a nuclear test and a rocket launch by Pyongyang earlier this year.
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Ireland's service sector activity grew significantly again in February, as rates of expansion in activity and new business remained sharp, survey figures from Markit Economics showed. The seasonally adjusted Purchasing Managers' Index, or PMI, dropped to 62.1 in February from 64.0 in the previous month. However, any reading above 50 indicates expansion in the sector.
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EU and Turkish leaders are due to hold high-stakes migration talks on Monday, amid signs that efforts to stem the crisis are failing, while border fences along the migration route are creating chaos and leaving thousands stranded. Some analysts have expressed little hope that the Brussels talks will deliver a breakthrough in the crisis, which has pitted those backing a European solution - such as Germany and Greece - against countries taking unilateral steps to stem the flows.
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The US economy continued to expand at a modest pace since mid-January, the Federal Reserve said in its Beige Book report. Business contacts across the nation were generally optimistic about future economic growth, but the report revealed tepid conditions in a number of regions. A few districts including New York described economic activity as flat, three districts reported "mixed" activity and Kansas City reported a modest slowdown.
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Federal appeals court judge Jane Kelly is being vetted by the White House as President Barack Obama's potential Supreme Court nominee, according to a report from the New York Times. Citing a person with knowledge of the process, the New York Times said the Federal Bureau of Investigation has been conducting background interviews on Kelly. A former public defender, Kelly currently serves on the US Court of Appeals for the Eighth Circuit. Her nomination to the court was approved unanimously three years ago. However, Republican Senators have repeatedly said they will not hold hearings on any nominee made by Obama, arguing that the decision should be left up to the next president.
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BROKER RATING CHANGES
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GOLDMAN CUTS IMPERIAL BRANDS TO 'NEUTRAL' ('BUY') - PRICE TARGET 3910 PENCE
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BERENBERG CUTS KELLER GROUP TO 'HOLD' ('BUY') - TARGET 950 (1200) PENCE
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COMPANIES - FTSE 100
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Mining giant BHP Billiton announced that Samarco Mineracao and its two shareholders, Vale and BHP Billiton Brasil, have entered into an agreement with Brazilian authorities for the restoration of the environment and communities affected by the Samarco dam failure in November. BHP said Samarco agreed to pay BRL2 billion this year, BRL1.2 billion in 2017 and another BRL1.2 billion in 2018. Annual contributions for 2019, 2020 and 2021 will vary between BRL800 million and BRL1.6 billion depending on project needs. The term of the agreement is 15 years, renewable for periods of one year successively until all obligations under the Agreement have been performed.
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The UK's Financial Conduct Authority said it will investigate six life insurers following a review of the treatment of closed-book customers. The six firms are Abbey Life, Countrywide Assured, Old Mutual, Police Mutual, Prudential and Lloyds Banking Group's Scottish Widows. No conclusion has been reached as to whether there have been any breaches of regulatory requirements, the regulator said, adding that the investigation will not necessarily result in disciplinary action. The investigation could be extended to other firms in the life insurance sector.
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Admiral Group declared 2015 as "the year of the uncut diamond", as the motor insurer lifted its dividend and reported higher profit. Pretax profit rose to GBP368.7 million in 2015, from GBP350.7 million the prior year, as net revenue increased to GBP904.8 million from GBP884.6 million and total expenses fell to GBP525.0 million from GBP529.3 million. Admiral lifted its total dividend for 2015 to 114.4 pence from 98.4p. "I would describe 2015 as: the year of the uncut diamond. When the year started many people thought it would turn out to be a lump of coal. But no, 2015 was no lumpy coal year," Chief Executive Officer Henry Engelhardt said.
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Schroders confirmed that Michael Dobson will succeed Andrew Beeson as chairman, after handing over the role of chief executive to fellow board member and head of investment Peter Harrison. Schroders acknowledged that the UK Corporate Governance Code states that, ordinarily, the chief executive should not go on to be the chairman. But the asset manager said it has consulted its major shareholders to explain the reasoning behind the decision. The succession planning came as Schroders reported higher annual pretax profit in 2015 and raised its dividend. Pretax profit rose to GBP589.0 million in 2015, from GBP517.1 million in 2014, Schroders said, lifting the dividend for the year to 87.0 pence per share from 78.0p the prior year.
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Satellite communications provider Inmarsat proposed an increased dividend for 2015 as it reported a small fall in pretax profit for the year, and outlined expectations for revenue growth in the coming year. Inmarsat reported pretax profit of USD338.0 million, down slightly from USD342.3 million in 2014, as revenue slipped a little to USD1.27 billion from USD1.29 billion. On an adjusted basis, stripping out USD10.8 million in revenue in 2014 from energy-related assets that were sold, revenue was mostly flat. Inmarsat proposed a final dividend of 31.78 cents per share, taking its total dividend for the year to 51.39 cents, up 5% from 48.49 cents a year before.
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Whitbread reported growth in sales in both the 11 weeks and 50 weeks to February 11. The hotel and coffee shop owner said total sales in the 11-period grew 7.7%, while like-for-like sales increased by 1.7%. In the 50 weeks to the same date, total sales were up 10% as like-for-likes rose by 3.2%. Whitbread said it expects to report full-year profit in line with expectations.
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Irish building materials group CRH reported growth in pretax profit and revenue in 2015 driven by acquisitions and a strong US market. The company said its pretax profit for the year to the end of December was EUR1.03 billion, up from EUR761.0 million a year earlier, while revenue rose 25% to EUR23.64 billion from EUR18.91 billion thanks to the significant volume of acquisitions made in the year. CRH said it will pay a flat 44.0 cents final dividend, leaving its total dividend flat at 62.5 cents.
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Builders' merchant Travis Perkins posted lower pretax profit for 2015 despite a rise in revenue, driven by writedowns taken on two acquisitions due to weak market conditions. The group said pretax profit for the year to the end of December was GBP224.0 million, sinking 30% from the GBP321.0 million posted a year earlier. Revenue increased to GBP5.94 billion from GBP5.58 billion, but like-for-like revenue growth slowed to 3.8% from 7.3%. Travis will pay a final dividend of 29.25 pence per share, taking its total dividend up to 44.0p from 38.0p, a 16% year-on-year rise.
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FTSE Russell confirmed late Wednesday the following changes will take effect to its UK indices from the market open on Monday, March 21, following completion of its quarterly review:
FTSE 100 Adds
Paddy Power Betfair
Mediclinic International
Wm Morrison Supermarkets
Informa
FTSE 100 Deletes
Sports Direct International
Aberdeen Asset Management
Smiths Group
Hikma Pharmaceuticals
FTSE 250 Adds
Paysafe Group
KAZ Minerals
McCarthy & Stone
Softcat
FTSE 250 Deletes
Enterprise Inns
Nostrum Oil & Gas
888 Holdings
Poundland Group
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COMPANIES - FTSE 250
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Online household appliances retailer AO World said Non-Executive Chairman Richard Rose will step down from his role once a successor has been appointed. The company expects to announce a successor by the time of its next annual general meeting in July.
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Amec Foster Wheeler said it was awarded a GBP125.0 million contract from BP to build a new refrigeration plant to maintain operations at BP's Forties pipeline system. BP wholly owns the oil and gas liquid transportation and processing system, which has the capacity to move in excess of 1.0 million barrels per day serving the central area of the North Sea, taking product from 50 offshore fields. Amec said the contract covers BP's Refrigerated Liquid Petroleum Gas site in Grangemouth, Scotland, which is part of BP's Kinneil Liquid Petroleum Gas Chilldown project.
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UBM said the US Department of Justice has requested additional information and documentary material regarding some of its PR Newswire products in relation to its sale of PR Newswire to Cision. This USD841 million sale is currently under regulatory review by the Department of Justice, and UBM said it and Cision will "cooperate fully" with the request and will continue to work with the Department of Justice in relation to the review.
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Domino's Pizza Group reported growth in profit in its recently-ended financial year, driven by a strong sales performance, particularly in the UK, and said it will resume share buybacks. The pizza delivery chain said its pretax profit in the year ended December 27 grew to GBP73.2 million from GBP62.1 million the year before, as group revenue rose to GBP316.8 million from GBP288.7 million. Domino's will pay a dividend of 20.75 pence, a 19% increase on the 17.5p it paid the year before, as it announced that it will resume share buybacks, though didn't state the size of the programme.
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COMPANIES - INTERNATIONAL
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German sporting goods giant Adidas Group reported its fourth-quarter net loss attributable to shareholders was EUR44 million, narrower than last year's loss of EUR140 million. Adjusted net loss was EUR28 million, compared to a loss of EUR62 million a year ago. Net sales climbed 15% to EUR4.17 billion from EUR3.61 billion last year. Currency-neutral group sales increased 12%, driven by accelerated momentum at both adidas and Reebok.
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Thursday's Scheduled AGMs/EGMs
Local Shopping REIT
JPMorgan Russian Securities
Impax Asset Management Group
Mercom Oil Sands
Sanderson Group
Coal of Africa (re share issue)
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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