10th Mar 2016 08:20
LONDON (Alliance News) - Shares opened mixed in London Thursday ahead of the European Central Bank's monetary policy announcement around noon.
Insurance company Aviva led blue-chip gainers, up 3.1%, after reporting higher annual operating profit for 2015 and lifting its dividend. Coffee shop and hotel chain owner Whitbread was just behind, up 2.2%, after the stock was lifted to Hold from Underperform by Jefferies.
Metro Bank shares began unconditional trading, up 0.7%. The challenger high-street bank was initiated at Buy by Jefferies.
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 6,139.57
FTSE 250: up 0.1% at 16,605.18
AIM ALL-SHARE: up 0.2% at 700.89
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Hang Seng: down 0.1% at 19,984.42
Nikkei 225: closed up 1.3% at 16,852.35
DJIA: closed up 0.2% at 17,000.36
S&P 500: closed up 0.5% at 1,989.26
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GBP: down at USD1.4189 (USD1.4226)
EUR: down at USD1.0962 (USD1.1017)
GOLD: down at USD1,245.68 per ounce (USD1,254.01)
OIL (Brent): down at USD40.55 a barrel (USD40.95)
(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)
1100 Ireland consumer price index
1245 ECB interest rate decision
1330 US initial and continuing jobless claims
1330 ECB monetary policy statement and press conference
1530 US EIA natural gas storage
1900 US monthly budget statement
2115 Canada BoC Governor Poloz speech
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The UK government has dropped plans to extend Sunday trading hours after suffering an humiliating Commons defeat at the hands of Tory rebels, Labour and the SNP. Some 27 Conservatives joined forces with opposition parties to defeat the proposals by a margin of 317 to 286. Ministers had engaged in increasingly desperate efforts to head off the clash, with Prime Minister David Cameron personally trying to woo doubters after the Speaker refused to accept a last-minute compromise amendment.
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The UK economy grew at a slightly slower pace in the three months to February, the National Institute of Economic and Social Research said. Output climbed 0.3% in the three months ended February after logging a growth of 0.4% in the three months to January period. "It looks as if output growth at the start of 2016 has been subdued," Jack Meaning, research fellow at NIESR, said.
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The monthly house price balance in the UK climbed to 50% in February, the Royal Institution of Chartered Surveyors said. That was in line with expectations, and it was up from the downwardly revised 48% in January (originally 49%).
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China's inflation accelerated at the fastest pace since July 2014 reflecting a surge in food prices amid Lunar New Year holidays. Consumer prices increased at a faster pace of 2.3% year-on-year in February following a 1.8% rise in January, the National Bureau of Statistics said. Inflation rose to the fastest since July 2014, while it was forecast to remain unchanged at 1.8%. Still inflation remains below the full-year target of 3%. In 2015, inflation slowed to 1.4%, which was well short of 3% target.
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Producer prices in Japan were down 0.2% on month in February, the Bank of Japan said. That was beneath expectations for a fall of 0.3% following the downwardly revised 1.0% contraction in January (originally -0.9%). On a yearly basis, prices tumbled 3.4% - matching forecasts following the downwardly revised 3.2% decline in the previous month (originally -3.1%).
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BROKER RATING CHANGES
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BERNSTEIN CUTS RBS TO 'MARKET-PERFORM' ('OUTPERFORM') - TARGET 230 (450) PENCE
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GOLDMAN RAISES AUTO TRADER GROUP TO 'BUY' ('NEUTRAL') - TARGET 443 (415) PENCE
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GOLDMAN CUTS ROLLS-ROYCE TO 'NEUTRAL' ('BUY') - TARGET 725 (711) PENCE
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GOLDMAN CUTS RESTAURANT GROUP TO 'NEUTRAL' ('CONVICTION BUY'); CUTS PRICE TARGET TO 525 (805) PENCE
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BERENBERG CUTS RESTAURANT GROUP TO 'HOLD' ('BUY') - TARGET 550 (750) PENCE
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TRADERS: MACQUARIE RAISES INTU PROPERTIES TO 'OUTPERFORM' ('NEUTRAL')
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TRADERS: JEFFERIES RAISES WHITBREAD TO 'HOLD' ('UNDERPERFORM')
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Jefferies Initiates Metro Bank With Buy, 3,000p Price Target
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COMPANIES - FTSE 100
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Aviva said it has entered 2016 from a position of strength after reporting higher annual operating profit for 2015 and lifting its dividend. Operating profit increased 20% to GBP2.67 billion in 2015, the insurer said, versus GBP2.21 billion in 2014, beating company-supplied analyst expectations of GBP2.49 billion. Aviva increased its total dividend per share for the year by 15% to 20.8 pence from 18.1p, slightly below analyst expectations of a 21.2p payment, and said it expects dividend increases to "moderate" in future. The insurer will consider "additional" distributions to shareholders, depending on economic conditions, markets, and having excess capital and liquidity. "We are not there yet," Aviva said.
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Glencore said all available resources have been provided to the search and rescue team that are continuing to look for five people that remain missing following a geotechnical fault at the Katanga operation in the Democratic Republic of Congo. Glencore was told about the incident earlier this week by the operator of the mine, Katanga Mining Ltd, in which it holds a 75.3% stake. A geotechnical failure at the north wall of the KOV open pit mine at the operation has already led to two confirmed deaths, with five still missing.
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Pay-TV provider Sky said it has invested USD6.0 million in US-based video streaming service fuboTV. FuboTV provides subscribers with an over-the-top premium sports TV channels bundle and is the second-largest aggregator and distributor of linear OTT sports content in the US, Sky said.
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On Wednesday, Sky said it has formed a partnership with youth-focused media company VICE Media LLC to create VICELAND, a new channel to be made available via Sky and its NOW TV platform. The 24-hour channel will be launched in the UK and Ireland in September and will be programmed, developed and produced by VICE's creative team, Sky said.
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COMPANIES - FTSE 250
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Wm Morrison Supermarkets said it swung to a pretax profit in its recently-ended financial year, mainly due to the restructuring costs booked a year earlier, but expressed confidence in its outlook as underlying profit hit its expectations. The grocer, which will rejoin the FTSE 100 later this month, having fallen out late in 2015, said its pretax profit for the year to the end of January was GBP217.0 million, swung from a GBP792.0 million loss a year earlier, when it booked significant costs on the restructuring of its business and store estate. Stripping out those restructuring and store closure costs, underlying pretax profit hit GBP302.0 million, down from GBP413.0 million the year earlier but in line with the company's guidance of GBP295.0 million to GBP310.0 million. Morrisons declared a final dividend of 3.50 pence per share, taking its total dividend to 5.00p, down from the 13.65p it paid out a year earlier.
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Home Retail Group affirmed its profit expectations for its full financial year as like-for-like sales in its Argos catalogue retail business declined, though that decline slowed in the final weeks of the year. Home Retail, which sold its Homebase DIY unit recently and which is subject to competing bids from UK grocer J Sainsbury and South African retail group Steinhoff International Holdings, said like-for-like sales at Argos fell 1.1% year-on-year in the eight weeks to February 27. The final eight-week performance marked an improvement over the second half as a whole. Like-for-like sales were down 2.0% in the full second half and down 2.6% for the full year ended February 27.
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Aldermore Group, which lends to smaller businesses, homeowners and landlords in the UK, on Thursday said annual profit grew as net lending jumped by 28% in 2015 and customer numbers rose by 27% to around 71,000. Pretax profit grew to GBP94.7 million in 2015, the lender said, from GBP50.3 million in 2014.
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Amec Foster Wheeler slashed its dividend after turning to a substantial loss in 2015, and reiterated its dividend this year will fall even further as the downturn in the oil, gas and mining markets continues. The oil and gas services company reported a GBP235.0 million pretax loss in 2015, swinging from a GBP155.0 million profit despite revenue in the year rising 37% to GBP5.45 billion from only GBP3.99 billion last year, boosted by the merger between Amec and Foster Wheeler in late 2013. Amec Foster Wheeler said it will pay a total dividend of 29.0 pence for the full year, a steep drop from the 43.3 pence paid in 2014. Amec Foster also reiterated its statement last November, when it warned that dividends in 2016 will be approximately half that declared in 2014.
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Recruiter Michael Page International posted growth in pretax profit, revenue and gross profit for 2015 but cautioned on a tough trading environment going into 2016, particularly in China. The group said pretax profit for the year to the end of December rose to GBP90.7 million from GBP80.4 million in 2014, as revenue grew to GBP1.06 billion from GBP1.04 billion. The 1.7% growth in revenue would have been 7.1% in constant currencies, but the group took a hit from the weak euro and soft emerging market currencies. Michael Page will pay a final dividend of 7.90 pence per share, up from 7.58p, taking its total ordinary dividend up 4.5% to 11.50p from 11.00p. The overall payout, however, rises to 27.5p due to the special dividend paid earlier in the year.
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Multiplex cinema operator Cineworld Group said its pretax profit and revenue both increased in 2015, driven by operational efficiencies and cost savings, along with a strong film slate. Cineworld's pretax profit increased to GBP99.7 million in the 52 weeks to the end of December from GBP67.3 million in the 53 weeks to January 1, 2015. Cineworld will pay a final dividend of 12.5 pence per share, taking its total dividend to 17.5p, up 30% from 13.5p a year earlier.
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Just Retirement Group and Partnership Assurance Group said their GBP1.6 billion merger to create JRP Group has been approved by UK regulators. Approval was given by the Prudential Regulation Authority and the Financial Conduct Authority.
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COMPANIES - INTERNATIONAL
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Nasdaq said it has agreed to acquire International Securities Exchange or ISE, an operator of three electronic options exchanges, from Deutsche Boerse Group for USD1.1 billion. Nasdaq intends to fund the purchase price through a mix of debt and cash on hand. The agreement excludes ownership interests in Bats Global Markets and in Digital Asset Holdings, which will continue to be owned by Deutsche Boerse. ISE operates three electronic options exchanges: ISE, ISE Gemini and ISE Mercury. ISE's exchanges serve as the venues for more than 15% of trading in US options.
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US home improvement retailer Home Depot has agreed to pay as much as USD19.5 million to settle a class-action lawsuit brought by consumers harmed by a data breach in 2014 that affected more than 50 million cardholders. This includes USD13 million to reimburse shoppers for their out-of-pocket losses. Terms of the preliminary settlement were disclosed in papers filed on Monday with the federal court in Atlanta, where the home improvement retailer is based. Home Depot has also agreed to pay USD6.5 million to fund one and a half years of identity protection services for cardholders.
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Michael Horn is stepping down as chief executive of Volkswagen America, which is mired in a far-reaching scandal over cheating on emissions in diesel-powered vehicles, the company announced. By mutual understanding, Horn's departure would take effect immediately, a company statement said. Hinrich Woebcken, recently named VW's head of the North American region, will take Horn's place. Horn, 54, assumed the top Volkswagen job in the US in January 2014.
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Thursday's Scheduled AGMs/EGMs
Benchmark Holdings
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By Tom Waite; [email protected]; @thomaslwaite
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