17th Mar 2016 08:24
LONDON (Alliance News) - Dovish guidance from the US Federal Reserve and subsequent weakness in the dollar lifted London stocks, together with oil and gold, at the open Thursday.
Meanwhile, two FTSE 100 chief executives announced departure plans, as drugmaker GlaxoSmithKline said Andrew Witty will retire from March 2017 and miner Rio Tinto said Sam Walsh will do the same this coming July.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 6,208.12
FTSE 250: up 0.6% at 16,848.72
AIM ALL-SHARE: down 0.1% at 709.60
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Hang Seng: closed up 1.2% at 20,503.81
Nikkei 225: closed down 0.2% at 16,936.38
DJIA: closed up 0.4% at 17,325.76
S&P 500: closed up 0.6% at 2,027.22
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GBP: up at USD1.4284 (USD1.4104)
EUR: up at USD1.1270 (USD1.1082)
GOLD: up at USD1,267.00 per ounce (USD1,228.57)
OIL (Brent): up at USD41.05 a barrel (USD40.16)
(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)
08:30 Switzerland SNB interest rate decision
09:00 Italy trade balance
10:00 EU trade balance
10:00 EU consumer price index
10:00 EU construction output
12:00 UK BoE interest rate decision and asset purchase facility
12:00 UK Bank of England minutes and MPC vote
12:30 US current account
12:30 US initial and continuing jobless claims
12:30 US Philadelphia Fed Manufacturing Survey
12:30 Canada wholesale sales
14:00 US JOLTS job openings
14:00 US Conference Board leading indicator
14:30 US EIA natural gas storage
23:50 Japan BoJ monetary policy meeting minutes
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The US Federal Reserve left its benchmark interest rate unchanged at a range of 0.25 to 0.5 percentage points, citing global economic and financial developments that "continue to pose risks". According to newly issued assessments by members of the central bank's monetary policy committee, their median forecast for the benchmark rate is 0.875% by the end of the year. Three months ago, the median projection was for a rate of 1.375 by the end of 2016. Fed Chair Janet Yellen said the global economy is underperforming the central bank's expectations. "Economic growth abroad appears to be running at a somewhat softer pace that previously expected," she said in press conference in Washington.
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Japan posted a merchandise trade surplus of JPY242.769 billion in February, the Ministry of Finance said. That missed forecasts for a surplus of JPY235.0 billion following the JPY648.8 billion deficit in January. Exports were down 4.0% on year in February, shy of estimates for a decline of 3.0% following the 12.9% decline in the previous month. Imports fell an annual 14.2% versus forecasts for 15.8% following the 17.8% contraction a month earlier.
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UK Prime Minister David Cameron is to warn fellow EU leaders of a fresh wave of migrants from Libya this summer, as he makes clear Britain's readiness to assist the new government of the north African state in taking on people-smugglers. The Prime Minister is joining leaders of the other 27 EU states at a summit in Brussels which is set to be dominated by the migration crisis. The European Council will seek to finalise a deal with Turkey under which the EU would accept one Syrian refugee from camps in the country for every irregular migrant returned.
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German Chancellor Angela Merkel called for EU leaders this week to agree to more aid for Turkey to help accommodate millions of refugees, saying the EU had "a real chance" to resolve the region's migration crisis. Merkel will join EU leaders for the two-day summit in Brussels on Thursday to see "whether we can reach an agreement that could give us, for the first time, a real chance of a lasting and pan-European solution to the refugee crisis," the chancellor told the lower house of German parliament. She said that Europe will be defined for years to come by its management of the refugee crisis, adding that its status as a "rich continent" means it must rise to the challenge in unison.
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A Republican presidential debate scheduled for Monday in Salt Lake City, Utah, has been cancelled after frontrunner Donald Trump declined to participate, host Fox News revealed.
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US President Barack Obama issued an executive order imposing new sanctions on North Korea in response to Pyongyang's nuclear test in January and a ballistic missile test last month. The executive order enables the US to implement a UN Security Council resolution passed earlier this month significantly tightening sanctions on North Korea and a new US law on sanctions against the reclusive communist country.
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Brazilian President Dilma Rousseff named her mentor and predecessor, Luiz Inacio Lula da Silva, as her chief of staff. The move comes with Lula under investigation for corruption allegations, while Rousseff is profoundly unpopular amid a severe economic downturn and the same far-reaching scandal in which Lula is caught up, involving billions of dollars in alleged kickbacks by state-owned oil company Petrobras. Rousseff, 68, said that Lula will head Brazil's Casa Civil, an influential post similar to a cabinet chief. Lula's new appointment will make it more difficult for prosecutors to pursue legal actions against him.
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BROKER RATING CHANGES
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DEUTSCHE BANK CUTS DIAGEO TO 'HOLD' ('BUY') - PRICE TARGET 1800 (1950) PENCE
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NOMURA INITIATES SMITH & NEPHEW WITH 'NEUTRAL' - TARGET 1,215 PENCE
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NOMURA CUTS BHP BILLITON TO 'NEUTRAL' ('BUY') - PRICE TARGET 850 (950) PENCE
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COMPANIES - FTSE 100
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GlaxoSmithKline said Chief Executive Andrew Witty will retire from his role in March 2017. The Drugmaker said a formal search for his successor will now begin, with internal and external candidates to be considered. Glaxo separately said its Advair Diskus asthma treatment met its primary endpoint in a study on children aged 4-11 with asthma.
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Anglo-Australian miner Rio Tinto said Chief Executive Sam Walsh will retire from his role in July. Walsh, 66, has been chief executive since 2013 and on the Rio Tinto board since 2009. He will be replaced by Jean-Sebastien Jacques, currently the chief executive of Rio's Copper & Coal business. Jacques will become deputy chief executive, and will join the board, with immediate effect to ensure a smooth transition.
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Royal Dutch Shell said it has signed a memorandum of understanding with Saudi Refining, a unit of Saudi state oil company Saudi Aramco, to divide the assets of their Motive Enterprises joint venture. Under the plans, Saudi Refining will retain the Motiva name and take sole ownership of the Port Arthur refinery in Texas. It will also retain 26 distribution terminals and have the exclusive licence to use the Shell brand for gasoline and diesel sales in Texas, most of the Mississippi Valley, the Southeast and Mid-Atlantic markets in the US. Shell will take sole ownership of the Norco and Convent refineries in Louisiana, nine distribution channels and Shell branding in Florida, Louisiana and the Northeastern region of the US.
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COMPANIES - FTSE 250
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Ted Baker reported growth in profit in its recently-ended financial year, particularly driven by strong sales growth in North America, and said it has received a positive initial reaction to its spring/summer collections. The luxury fashion retailer said its pretax profit in the year ended January 30 rose to GBP58.7 million from GBP48.8 million the year before, as revenue grew to GBP456.2 million from GBP387.6 million. Ted Baker will pay a total dividend of 47.8 pence for the year, up 19% on the 40.3p it paid the year before.
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OneSavings Bank said pretax profit shot higher in 2015 as lending grew and its cost-income ratio improved further. The lender said pretax profit for the year to the end of December grew to GBP105.3 million from GBP63.7 million a year earlier. This was helped by costs associated with its listing in London in June 2014 not repeating. OneSavings said it will pay a final dividend of 6.7 pence per share, taking its total payout for the year to 8.7p, in line with its target dividend policy.
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Shipping services company Clarkson said former shareholders in RS Platou, which Clarkson bought in 2015, have sold shares in Clarkson. The former shareholders sold 2.0 million shares, about a 6.6% stake, at 1,840 pence per share via a secondary placing, which was announced on Wednesday. Clarkson shares closed at 1,840.00p on Wednesday. The sale was worth around GBP36.8 million in total.
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Housebuilder Crest Nicholson Holdings said forward sale revenue was up from last year, as the trading environment "continues to be positive" and sales "have been correspondingly strong". Crest Nicholson Chairman William Rucker said, in a statement to be given at the company's annual general meeting, the housebuilder's cumulative forward sales revenues for 2016 was GBP311.0 million at March 11, 16% higher than GBP269.0 million last year.
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Private hospitals operator Spire Healthcare Group said it swung to a pretax profit in 2015 due to a significant fall in one-off costs, as revenue ticked higher. Spire said it made a pretax profit of GBP73.6 million in the year to the end of December, compared to a GBP7.0 million loss a year earlier when it booked exceptional costs related to restructuring, hospital closures and regulatory and governance costs. It also booked significant finance costs a year earlier due to its listing in London in July 2014. Spire said it will pay a final dividend of 2.4 pence per share, up from 1.8p a year earlier. As it paid an interim dividend in 2015, which it did not in 2014 due to its listing, its total dividend more than doubled to 3.7p from 1.8p.
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Property, residential, construction and services company Kier Group said pretax profit declined in the first half of its financial year, as the cost of the integration of its Mouchel acquisition offset a rise in revenue. The group said pretax profit for the six months to the end of December was GBP18.0 million, a 35% fall from the GBP27.8 million reported last year. Kier hiked its interim dividend by 12% to 21.5 pence per share from 19.2 pence, which it said reflected its confidence in continued growth.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Technology products distributor Premier Farnell said its pretax profit sank in its recently-ended financial year due to a margin squeeze caused by a strong dollar, pricing pressure and a less-favourable sales mix. The company said its pretax profit for the year to the end of January was GBP29.2 million, compared to GBP54.1 million a year earlier, even though revenue increased to GBP982.7 million from GBP960.1 million. Premier Farnell will pay a final dividend of 3.6 pence per share, down 40% year-on-year, meaning its total dividend will fall by the same amount, down to 6.2p, in line with a previously announced rebasing of its dividend payouts.
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COMPANIES - INTERNATIONAL
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Cement giant LafargeHolcim, formed by the combination of French Lafarge and Swiss peer Holcim, reported its fourth-quarter net loss was CHF2.86 billion, including a CHF3 billion impact of asset impairment and other charges. Net sales declined 5.9% to CHF7.44 billion from CHF7.91 billion last year. On a like-for-like basis, net sales grew 1.7%. Looking ahead, the company said 2016 will be a year of progress towards 2018 targets. The company also confirmed 2018 targets.
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Thursday's Scheduled AGMs/EGMs
MySQUAR
Crest Nicholson
Henderson Opportunities Trust
Tern
Empiric Student Property (re issue of equity)
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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