26th Aug 2016 07:07
LONDON (Alliance News) - Federal Reserve Chair Janet Yellen is to speak at the Jackson Hole event in the US on Friday and all eyes remain on whether she will provide some indication on the future direction of monetary policy.
The speech by Yellen, taking place at 1500 BST, has been keenly anticipated throughout what has been a relatively quiet week in the London market.
CMC Markets' Michael Hewson, however, repeated his view aired earlier in the week that the expectation surrounding Yellen's speech has been "all out of proportion with the likely outcome", with the likelihood her comments will be "fairly benign".
In London, embattled Frankie & Benny's owner Restaurant Group maintained its full-year outlook, having issued a couple of profit warnings in 2016, while concrete block paving firm Marshalls reported profit up just over a fifth in the first half and IT services firm Computacenter said its first half slightly outpaced its expectations.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 6,807.65
FTSE 250: down 0.2% at 17,843.37
AIM ALL-SHARE: up 0.1% at 790.20
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Hang Seng: up 0.5% at 22,927.49
Nikkei 225: closed down 1.2% at 16,360.71
DJIA: closed down 0.2% at 18,448.41
S&P 500: closed down 0.1% at 2,172.47
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GBP: up at USD1.3217 (USD1.3192)
EUR: flat at USD1.1299 (USD1.1279)
GOLD: up at USD1,323.89 per ounce (USD1,322.00)
OIL (Brent): flat at USD49.43 a barrel (USD49.40)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)
0900 Eurozone M3 money supply
0930 UK GDP, business investment
1330 US GDP, goods trade balance
1500 Federal Reserve Chair Yellen's Jackson Hole speech
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UK consumer confidence has risen at its fastest monthly rate in three-and-a-half years as Brexit jitters ease, a survey has found. In a dramatic turnaround from last month, the YouGov/Cebr Consumer Confidence Index has seen its highest monthly bounce since February 2013 of 3.2 points to 109.8. The poll reveals significant increases in people's expectations for their household financial situations and property values over the coming year. Only one measure - job security in the year ahead - has fallen slightly in the last month.
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Brexit will create "real opportunities for growth" in the UK's tourism industry, Prime Minister Theresa May has claimed. The government has announced the first set of winners to receive a share of a GBP40 million fund designed to ensure the nation remains a "world-beating destination" for holidaymakers. Meanwhile, ministers are also publishing a new Tourism Action Plan to propel the UK ahead of its competitors in the race to attract visitors. The Prime Minister said the announcements, made ahead of the August bank holiday weekend, will help make it easier for people to travel beyond London and support the UK's "vitally important" tourism industry.
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Labour leadership challenger Owen Smith has accused incumbent party leader Jeremy Corbyn of being "happy" about the vote for the UK to leave the EU. Smith repeatedly questioned whether Corbyn had voted to remain in the EU in June's referendum, during bad-tempered exchanges at the event in Glasgow. He attacked Corbyn for being "complacent and passive" about the result of the vote, but was heckled by audience members who accused him of being anti-democratic. Smith said he was "gutted" by the EU referendum result, and said he was prepared to fight Brexit by opposing a vote to trigger Article 50 in parliament and by pledging to remain or rejoin the EU in a manifesto for the next general election.
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The death toll from the massive earthquake that razed three towns in central Italy stood at 250 on Thursday, but authorities said they expect the count to rise significantly. Speaking at a press conference in Rome, Immacolata Postiglione, head of the emergency department at the country's civil defence agency, Protezione Civile, said there were 365 people in hospital. Rescue efforts have been complicated by hundreds of aftershocks, with strong 4.3-magnitude temblor rattling affected areas on Thursday. In an interview with the SkyTG24 news channel, Protezione Civile director Fabrizio Curcio said the number of victims could be "worse than the one in L'Aquila," a town where an earthquake killed 309 in 2009.
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BROKER RATING CHANGES
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BERENBERG RAISES BAE SYSTEMS TO 'BUY' ('HOLD') - TARGET 580 (520) PENCE
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BERENBERG RAISES LADBROKES TO 'BUY' ('HOLD') - TARGET 185 (130) PENCE
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TRADERS: MORGAN STANLEY RAISES AMEC FOSTER WHEELER TO 'OVERWEIGHT' ('EQUAL-WEIGHT')
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CITIGROUP CUTS SOUTH32 TO 'SELL' ('NEUTRAL') - TARGET 100 PENCE
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COMPANIES - FTSE 250
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Restaurant operator Restaurant Group said trading remains in line with its full-year expectations as it reported a decline in operating profit and like-for-like sales in the first half of its financial year and swung to a loss on restructuring charges. Restaurant Group, which runs the Garfunkel's and Frankie & Benny's restaurant chains, said like-for-like sales were down 3.9% in the 27 weeks to July 3, but this decline has improved slightly to a 3.7% fall for the first 34 weeks of 2016. Total revenue for the group was up to GBP358.7 million, 3.4% growth year-on-year, primarily thanks to new site openings given the like-for-like fall. Operating profit fell to GBP37.5 million, down 4.4%. Due to exceptional charges booked as the group restructured during the first half, it swung to a pretax loss of GBP22.5 million from a GBP36.9 million profit a year earlier.
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Marshalls said its trading to date had not been impacted from the heightened uncertainty resulting from the UK's vote to leave the European Union, after its pretax profit rose 21% in the first half of 2016. The concrete paving manufacturer posted a pretax profit of GBP25.1 million for the six months ended June 30, up from the GBP20.8 million a year earlier, as revenue increased slightly to GBP202.4 million from GBP199.1 million. The company said the underlying long and medium-term indicators remain supportive notwithstanding the heightened economic and political uncertainty since the EU referendum. "This increased uncertainty has not impacted underlying trading to date although we continue to monitor closely the wider business environment," said Chief Executive Martyn Coffey.
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IT infrastructure company Computacenter said its half-year results were slightly better than it anticipated in its first-quarter trading update and expects the full year to show "modest progress" in its adjusted pretax profit compared to 2015. Computacenter made a statutory pretax profit for the first six months of 2016 of GBP23.6 million, down from GBP70.7 million for the same period in 2015. However the 2015 profit was affected by a GBP42.2 million gain from the disposal of IT recycling company RDC. The company's adjusted pretax profit for the half-year was GBP25.3 million, down from GBP29.1 million for the first-half of 2015.
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Industrial property investor SEGRO said it is selling its Heston & Airlinks industrial estate near Heathrow Airport to property investment and management company Capital Industrial Four for GBP79.5 million. Warehouse property investor SEGRO said the property is a multi-let industrial estate, comprises of 481,000 square feet of warehouse space across 47 units. The estate has a vacancy rate of around 1.0% and a weighted average lease length to break of 5.4 years. "This disposal reflects both our desire to focus our portfolio on more modern and less management-intensive assets, as well as the continuing, strong investor demand for multi-let warehouse assets in London. We intend to use the proceeds to help fund the development of new warehousing in our core markets," said Chief Investment Officer Phil Redding.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Independent News & Media said its pretax profit grew in the first half of 2016 as exceptional charges booked a year earlier turned to gains and as the company saw revenue increased. The Irish newspaper and media group said it made a pretax profit of EUR19.5 million in the half to the end of June, compared to a EUR13.4 million profit a year earlier. The year prior, the company booked one-off charges of EUR1.7 million, which swung to a EUR1.0 million gain in the first half of 2016. Revenue increased to EUR161.6 million from EUR157.3 million in the half and the group's profit also benefited from 23% growth in digital advertising revenue, a reduction in net interest costs and lower operating expenses.
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Equipment rental firm Lavendon Group said its pretax profit fell in the first half of its financial year due to the restructuring of its German business, but said it was on track for its full year. Lavendon posted pretax profit of GBP12.5 million for the six months ended June 30, down from the GBP13.7 million reported a year earlier, despite revenue rising to GBP134.2 million from GBP119.1 million. Rental revenue grew 13% to GBP127.1 million from GBP112.2 million. Trading since the half year has continued to be in line with our expectations and, whilst mindful of the recent increased economic uncertainty, the board remains confident of making further progress in the second half and delivering on its expectations for 2016," said Chief Executive Don Kenny.
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Tool and equipment hire company Speedy Hire said it has sold its large mechanical plant fleet for GBP14.4 million to Ardent Hire Solutions in a bid to reduce its debt. Speedy Hire said the large plant mechanical fleet includes excavators, dumpers and ride on rollers, of three tonnes or greater, and the fleet generated around GBP3.2 million in revenue for the over the twelve months ended July 31. Speedy Hire said it has also entered into a five-year re-hire agreement, with the option the extend for a further two years, for the large plant assets with Ardent.
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COMPANIES - INTERNATIONAL
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US technology giant Apple is planning a new iPhone feature for Japan that will enable users to pay for mass-transit rides with their smartphones instead of physical payment cards. A future iPhone will include technology called FeliCa, a mobile tap-to-pay standard in Japan developed by Sony Corp, Bloomberg reported quoting people familiar with the matter. The FeliCa chip will let customers in Japan store their public bus and train passes on their iPhones. Users would then be able to tap their phones against the entrance scanners instead of using physical cards.
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Friday's Shareholder Meetings
Bilby
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By Sam Unsted; [email protected]; @SamUAtAlliance
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