17th Feb 2016 08:16
LONDON (Alliance News) - Stock prices in London were responding to company news and broker rating changes early Wednesday in the absence of any macro-economic drivers.
The market was awaiting UK jobs data later in the morning and the minutes of the most recent US Federal Open Market Committee meeting after the London close.
Glencore was the top early gainer among large caps, up 2.9%, after the miner said it will refinance its USD8.45 billion revolving credit facility earlier than expected.
Just behind was Sainsbury's, up 2.2%, as the grocery stock was upgraded to Outperform from Neutral by Exane BNP.
Rolls-Royce shares were up 1.9%, after the Financial Times reported the engineering company is preparing to grant activist investor ValueAct a seat on its board.
Insurer Old Mutual was the biggest blue-chip loser, down 1.2%, after being downgraded to Neutral from Buy by Goldman Sachs.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 5,891.44
FTSE 250: up 0.5% at 15,781.50
AIM ALL-SHARE: up 0.1% at 672.53
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Hang Seng: closed down 1.0% at 18,924.57
Nikkei 225: closed down 1.4% at 15,836.36
DJIA: closed up 1.4% at 16,196.41
S&P 500: closed up 1.7% at 1,895.58
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GBP: down at USD1.4267 (USD1.4293)
EUR: up at USD1.1171 (USD1.1142)
GOLD: down at USD1,209.80 per ounce (USD1,212.70)
OIL (Brent): soft at USD32.00 a barrel (USD32.28)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in GMT)
09:30 UK ILO Unemployment Rate, Claimant Count and Average Earnings
10:00 EU Trade Balance
10:00 EU Construction Output
10:00 Switzerland ZEW Survey
12:00 US MBA Mortgage Applications
13:30 US Building Permits and Housing Starts
13:30 US Producer Price Index
13:55 US Redbook index
14:15 US Industrial Production and Capacity Utilization
19:00 US FOMC Minutes
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A number of "unsolved problems" remain in the negotiations on reforms demanded by Britain ahead of its in-out referendum, EU President Donald Tusk said Tuesday, as he wrapped up a whirlwind European tour meant to win over other member states. "I have no doubts: there is an extra mile we will have to walk to reach an agreement," he said in Prague after meeting Czech Prime Minister Bohuslav Sobotka. "There are still unsolved problems." British Prime Minister David Cameron met with European Parliament leaders in Brussels. The premier received assurances that the parliament would act "swiftly" on legislation to implement any agreed deal, a British government spokesperson said. But Parliament President Martin Schulz said that he could not give any "guarantee" about the outcome of the democratic process.
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A fragile deal on Tuesday to limit oil production by the world's two largest suppliers - Russia and Saudi Arabia - appears unable to sufficiently prop up prices and reverse a rout that has devastated oil-dependent economies. "A promise to freeze output at what is already at record highs is no basis for a price rally," said Chris Weafer, a senior partner at Russian-focused investment consultancy Macro Advisory. Russia's Energy Ministry said the deal, which also included Qatar and Venezuela, would keep supplies at January levels and is contingent on other producers following suit.
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Core machine orders in Japan advanced 4.2% on month in December, the Cabinet Office said on Wednesday - worth JPY806.6 billion. The headline figure missed forecasts for an increase of 4.7% following the 14.4% decline in November. On a yearly basis, core machine orders skidded 3.6% versus expectations for a fall of 2.8% following the 1.2% gain in the previous month.
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China has deployed two batteries of sophisticated surface-to-air missile launchers to a disputed island in the South China Sea. Satellite imagery from ImageSat International showed two batteries of eight missile launchers on Woody Island, part of the contested Paracel Islands, a US news report said late Tuesday. The news of the missile deployment came as US President Barack Obama met with South-East Asian leaders in California, where they called for "maritime security" and urged "non-militarization and self-restraint" by countries in the region.
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A majority of Virginia voters have an unfavorable opinion of Donald Trump, according to the results of a poll by Christopher Newport University's Wason Center for Public Policy, although the real estate tycoon still leads the Republican primary race in the state. The poll found that Trump leads among likely Republican primary voters at 28%, followed by Sen. Marco Rubio, R-Fla., at 22% and Sen. Ted Cruz, R-Tex., at 19%. The poll also showed former Secretary of State Hillary Clinton leading on the Democratic side, even though Senator Bernie Sanders has a higher favourability rating. Among likely Democratic primary voters, Clinton leads Sanders by 52% to 40%.
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Russia faced intense criticism for its aerial campaign backing the Syrian government after it was accused of hitting hospitals in opposition-held areas. Turkey and France both said Russia had committed war crimes, while UN human rights spokesman Rupert Colville said it appeared that the bombings were a military tactic and could amount to war crimes. Russia formally denied it hit a Doctors Without Borders (MSF) hospital in northern Syria, an area where rebels are ceding ground to both government forces and the Kurdish YPG militia, capitalizing on Moscow's airstrikes.
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BROKER RATING CHANGES
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GOLDMAN CUTS OLD MUTUAL TO 'NEUTRAL' ('BUY') - TARGET 200 (218) PENCE
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EXANE BNP RAISES SAINSBURY TO 'OUTPERFORM' ('NEUTRAL') - TARGET 280 (250) PENCE
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Investec Upgrades Reckitt Benckiser Group To Hold From Sell, Ups Price Target To 6,600p From 5,210p
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NOMURA RAISES NATIONAL EXPRESS TO 'NEUTRAL' ('REDUCE') - TARGET 270 (260) PENCE
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HSBC RAISES ELECTROCOMPONENTS TO 'BUY' ('HOLD') - TARGET 250 (205) PENCE
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HSBC CUTS PREMIER FARNELL PRICE TARGET TO 145 (155) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Glencore said it will refinance its USD8.45 billion revolving credit facility earlier than expected. The miner said it has signed a new revolving credit facility to refinance and replace the existing facility. Glencore said it is currently in the initial pre-syndication phase, and the company has received commitments from its senior banks for USD8.40 billion.
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AstraZeneca said its drug durvalumab has been granted a breakthrough therapy designation by the US Food and Drug Administration for the treatment of PD-L1 positive urothelial bladder cancer. This designation is given to speed up the development of new drugs that are intended to treat a serious condition, demonstrate a substantial improvement over available therapies, or where there is significant unmet medical need. Durvalumab was granted this designation based on early clinical data from a phase I trial in patients with advanced metastatic urothelial bladder cancer whose tumour has progressed during or after one standard platinum-based regimen.
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Rolls-Royce Holdings is preparing to grant activist investor ValueAct a seat on its board, giving the US-based hedge fund influence over the direction of the business as it seeks to recover from a string of profit warnings, the Financial Times said. ValueAct is the largest shareholder in the engine maker with a 10% stake and has met with other leading investors in the group in recent weeks to assuage concerns about its intentions should it be given a seat on the board. Rolls-Royce told the FT no decision has yet been made on whether to support or reject ValueAct's request for a seat.
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COMPANIES - FTSE 250
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Automotive marketplace operator Auto Trader Group said it has traded well in the past four months and its underlying operating profit it set to come in slightly ahead of market expectations. The FTSE 250-listed company, which floated in London in March last year, said its average revenue per retailer forecourt has been stronger than anticipated in the four months since the end of the first half of its financial year to September 27. Consumer services revenue has also come in ahead, it said. The number of retailer forecourts advertising on its service has been broadly flat, but costs have been well-managed, resulting in better margins, the company said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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KBC Advanced Technologies said it has agreed a deal to be acquired by Yokogawa Electric in a deal that will value it at GBP180.3 million, trumping its previous deal with US software company Aspen Technology. KBC Technologies, a software provider for the oil and gas industry, had previously agreed a GBP158.0 million, or 185.00 pence per share, takeover by Aspen in January. However, the new deal from Tokyo-based Yokogawa is at 210p, a 14% premium to the 185p offer from Aspen. KBC closed Tuesday at 183.38p per share but was up 13% to 207.00p at the open Wednesday.
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Stockbroker and investment bank Panmure Gordon & Co said Chairman Ed Winter will step down from his role after the company's annual general meeting in May. A search for his replacement has started, and the company said it will make a further announcement in due course.
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Online financial trading company Plus500 posted a fall in earnings for 2015 after it was hit by regulatory costs and additional marketing spend, though some of the impact was offset by customer growth. The company said earnings before interest, taxation, depreciation and amortisation in the year to the end of December fell to USD132.9 million from USD145.4 million a year earlier, as Ebitda margin plunged to 48.2% from 63.6%. Plus500 said it will promote Asaf Elimelech to joint chief executive officer from February 28. Elimelech will later become sole chief executive officer. He is currently the chief subsidiaries officer for the company.
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The companies behind the Horse Hill project in southern England said oil has continued to flow from the well following the flowtest launched earlier this week, as the partners began to reap the rewards by shipping their first oil to a nearby refinery. The string of AIM-listed companies involved in the project released the initial results from the flowtest on the Horse Hill-1 well near Gatwick Airport on Tuesday, averaging a production rate of 463 barrels of oil per day over a seven-hour period. On Wednesday, the companies said the production rate dipped slightly to a rate of 456 barrels of oil per day on the second day of testing. However, the companies used a smaller choke on the second day than the first, lowering production but also stabilising the flow.
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Property developer Market Tech Holdings said it has exchanged contracts to acquire a property in King's Cross in north London for around GBP36.7 million in cash. Market Tech, which owns and operates the main Camden market properties in north London, said it has acquired the freehold on 101 Camley Street, located close to the King's Cross redevelopment area. The site has planning consent in place for a mixed-use development including 22,650 square feet of commercial space, along with 91 new homes and 30 affordable or shared ownership properties.
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Metro Bank will cut the size of its upcoming initial public offering by around a fifth following the recent sell-off of shares in the banking sector, the Financial Times reported. The challenger bank informed investors on Tuesday night it will cut the price of the IPO to 2,000 pence per share from 2,400p previously, reducing the amount it will raise from the listing to GBP400.0 million from GBP500.0 million. Metro is understood to be targeting a number of leading asset managers in a bid to raise the funds ahead of its listing in London, expected towards the end of the first quarter.
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COMPANIES - INTERNATIONAL
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French lender Credit Agricole Group reported that its net income group share for the fourth quarter of 2015 rose 16% to EUR1.564 billion from EUR1.349 billion in the fourth quarter of 2014. Excluding the impacts of specific items, net income group share was EUR1.505 billion in the fourth quarter of 2015, up 3.7% compared with the fourth quarter of 2014. Quarterly revenue was EUR8.031 billion, an increase of 9.6% from the prior year.
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Boeing and Okay Airways announced a commitment for 12 737s, including eight MAX 8s, three 737 MAX 9s and one Next-Generation 737-900ER (Extended Range) airplane. The agreement is valued at USD1.3 billion at current list prices. The deal is subject to the approval of the Chinese government. The commitment will mark the first 737 MAX 9 order by a Chinese airline and bolsters Okay Airways' 737 MAX portfolio to 17 airplanes.
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Wednesday's Scheduled AGMs/EGMs
Pressure Technologies
Titon Holdings
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By Tom Waite; [email protected]; @thomaslwaite
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