11th Jan 2016 08:13
LONDON (Alliance News) - Continued weakness in Asian stocks left London with a flat to lower open on Monday, with little in the way of economic data or company news to drive trading.
Instead, broker rating changes were behind some early stock movements, with BAE Systems, Standard Life, Whitbread and Sage all benefiting from upgrades.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.2% at 5,901.65
FTSE 250: down 0.2% at 16,707.40
AIM ALL-SHARE: flat at 725.74
----------
Hang Seng: closed down 2.8% at 19,888.50
Nikkei 225: market closed for holiday
DJIA: closed down 1.0% at 16,346.45
S&P 500: closed down 1.1% at 1,922.03
----------
GBP: flat at USD1.4535 (USD1.4531)
EUR: soft at USD1.0892 (USD1.0909)
GOLD: firm at USD1,104.99 per ounce (USD1,104.10)
OIL (Brent): flat at USD32.63 a barrel (USD32.81)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Monday's Key Economic Events still to come
(all times in GMT)
Japan holiday Coming Of Age Day
09:30 EU Sentix Investor Confidence
13:15 Canada Housing Starts
15:30 Bank of Canada Business Outlook Survey
17:40 US Fed's Lockhart speech
----------
UK Prime Minister David Cameron said he is confident he will be able to strike a deal on a renegotiated European Union membership for Britain by next month, paving the way for a summer referendum on whether the UK will remain a member of the bloc, the Financial Times reported. Cameron said there was a "massive prize for Britain" if it could renegotiate its EU membership, adding he felt the "best answer" remained for the UK to continue to be part of a reformed EU. The comments came after a survey from Ipsos Mori found the majority of company leaders in the UK feel leaving Europe would not damage their prospects.
----------
British manufacturers expect 2016 to be a year of tough decisions and more prominent risks, annual Executive Survey from the manufacturers' organisation EEF and financial group Aldermore showed. About 44% of manufacturers say their company faces more risks than opportunities in the year ahead, while only 23% say opportunities outstrip risks. This pessimistic view was shared across sectors and was particularly strong amongst larger companies.
----------
China's consumer price inflation increased marginally in December on a rise in food prices, but it still remained well below the government's target. At the same time, producer prices continued their deep downward trend, giving space for monetary policy adjustment. Consumer inflation edged up to 1.6% as expected from 1.5% in November, the National Bureau of Statistics revealed over the weekend. A similar rate was last seen in September 2015, and was the fastest rate since August 2015. The producer price index dropped 5.9% year-on-year in December, the same rate of decrease as seen in previous four months. Economists had forecast a 5.8% fall for December.
----------
Thousands of people took to the streets of Hong Kong on Sunday to protest at the mysterious disappearance of five booksellers amid suspicions of China's role in the abductions. "This is a matter of utmost gravity and concern to Hong Kong," said lawmaker Alan Leong, who took part in the march that was aimed at putting pressure on Beijing to respond to allegations that the five booksellers had been kidnapped by mainland Chinese security forces from Thailand, Hong Kong and southern China.
----------
Ireland's construction sector expanded at the the quickest pace in five months in December, as new orders continued to grow strongly, survey figures from Markit Economics showed. The Ulster Bank Construction Purchasing Managers' Index rose to 58.6 in December from 55.5 in November.
----------
A defiant President Vladimir Putin defended Russia's positions on Ukraine, NATO expansion and the Crimea in an interview with Germany's Bild newspaper, describing EU sanctions against his country as "absurd". "What the EU is doing with those sanctions is nothing but a theatre of the absurd," Putin said in the interview with Germany's most popular tabloid. The referendum by Crimea in 2014 to separate from Ukraine and join Russia was "democracy, the people's will," he said.
----------
BROKER RATING CHANGES
---------
JEFFERIES RAISES STANDARD LIFE TO 'BUY' ('HOLD') - TARGET 421 (439) PENCE
----------
TRADERS: DEUTSCHE BANK RAISES STANDARD LIFE TO 'BUY' ('HOLD')
----------
TRADERS: DEUTSCHE BANK CUTS ST JAMES'S PLACE TO 'HOLD' ('BUY')
----------
JPMORGAN RAISES BAE SYSTEMS TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 605 (465) PENCE
----------
TRADERS: MERRILL LYNCH RAISES WHITBREAD TO 'BUY'
----------
TRADERS: MERRILL LYNCH RAISES TRAVIS PERKINS TO 'BUY'
TRADERS: MERRILL LYNCH RAISES SAGE GROUP TO 'BUY' ('UNDERPERFORM')
----------
COMPANIES - FTSE 100
----------
Standard Life Investments said it is planning to vote against Royal Dutch Shell's merger with BG Group, saying the terms of the current deal would be "value destructive" for Shell's shareholders. "We have concluded that the proposed terms of the acquisition of BG are value destructive for Shell shareholders. This view is based on the downside risks to Shell’s oil price assumptions plus the tax and operational risks surrounding BG’s Brazilian asset base. Consequently we shall vote against the deal," said David Cumming, head of equities at Standard Life Investments, the investment management arm of Standard Life and a prominent City investor. A meeting for shareholders to vote on the takeover is due to take place on January 27 at Shell, while BG shareholders will vote the next day.
----------
Housebuilder Taylor Wimpey said trading in 2015 was strong, with the company's total home sales rising, its average selling price higher and its forward sales position growing, leaving it well positioned for this year. The group said it sold 13,341 homes over the course of 2015, up 7.0% year-on-year from the 12,454 it sold a year earlier. Its weekly reservation rate increased for the year and it sold those homes at an average price of GBP230,000 apiece, up from GBP213,000. The group closed the year with a record order book in place, at GBP1.78 billion, compared to GBP1.40 billion at the end of 2014. That equates to 7,484 homes in total, up from 6,601 a year earlier.
----------
Japanese beverage maker Asahi Group Holdings is planning to submit a bid to buy SABMiller's Peroni and Grolsch brands for as much as JPY400 billion, the Yomiuri Shimbun reported.
----------
COMPANIES - FTSE 250
----------
Several shareholders in Home Retail Group, the parent of Argos and Homebase, have demanded more than GBP1.6 billion for the business from J Sainsbury, the Sunday Times reported. According to the newspaper, the supermarket now faces an uphill struggle to acquire Home Retail Group, following news last week that it had made an offer for the company in November. The first offer was thought to have valued Home Retail Group at GBP1.1 billion, according to the report, which said three big shareholders told the Sunday Times they wanted at least GBP1.6 billion. With Sainsbury's likely to sell Homebase if it succeeds with its bid, the report said that homewares retailer Dunelm Group has held talks with private equity firms about buying the DIY chain and carving up its store estate.
----------
Commercial vehicle hire company Northgate said Finance Director Chris Muir will leave the company at the end of March to join furniture and flooring company ScS Group. The search for Muir's successor has started and is progressing well, Northgate said, and it will make an announcement in due course. ScS said Muir will join as chief financial officer on April 4, replacing Ross Turnbull.
----------
Real estate advisor Savills said it saw a strong finish to 2015 and expects its underlying results will come in ahead of its expectations. Savills said some significant commercial deals for a number of businesses globally completed in the final months of the year, and it was boosted by its investment management unit completing the sale of its Potsdamer Platz assets in Berlin, meaning that unit had a stronger-than-expected end to the year.
----------
COMPANIES - LONDON MAIN MARKET AND AIM
----------
Gulf Keystone Petroleum said MOL Hungarian Oil and Gas, the operator of the Akri-Bijeel block in Iraq, has relinquished the licence covering the block. Gulf Keystone owns a 20% stake in the block situated in the Kurdistan region of the country, which is in the exploration and appraisal phase. MOL Hungarian said the decision was the result of a comprehensive assessment of the block potential, and Gulf Keystone confirmed it signed the relinquishment and termination agreement of the production sharing contract that covers the block alongside MOL Hungarian.
----------
Online gaming company GVC Holdings said net gaming revenue continued to grow in the fourth quarter, capping a year of growth for the group in 2015. Net gaming revenue for the group in the fourth quarter was EUR65.5 million, up 10% year-on-year, and for the full year to the end of December it also rose 10%, to EUR247.7 million.
----------
Three London-listed companies working together offshore the Falkland Islands said they have made a new oil discovery whilst confirming a previous discovery after re-drilling one of their wells. Premier Oil, Rockhopper Exploration and Falkland Oil & Gas all confirmed the discoveries from the Isobel deep well located on licence PL004A. Premier Oil is the operator of the licence and re-drilled the Isobel deep well offshore the Islands to a total depth of 3,014 metres, confirming a previously made oil discovery and making a new oil discovery in additional sandstones.
----------
Satellite Solutions Worldwide Group said it has signed an agreement with BT Group to become one of the satellite broadband retail service providers under a new UK government scheme. The scheme, under which the government will roll-out subsidised satellite broadband services to homes and businesses in the UK, will see the government provide funding for the capital cost of the dish and modern equipment, connection fees and installation.
----------
Construction and civil engineering services company Costain Group said that, as part of a joint venture, it has secured a contract from the East Sussex County Council for highways maintenance in the county. Costain has won the deal through a 50:50 joint venture with CH2M. The deal is worth GBP300.0 million to the joint venture over seven years and work is due to start on May 1.
----------
COMPANIES - INTERNATIONAL
----------
New Volkswagen boss Matthias Mueller apologized in Detroit for the carmaker's emissions cheating, in his first visit to the US since taking the helm of the embattled German company. "We know we deeply disappointed our customers, the responsible government bodies, and the general public here in the US. I apologize for what went wrong at Volkswagen," Mueller said. VW is "totally committed to making things right," he said, vowing to win back consumer trust, on the eve of Monday's press opening of the North American International Auto Show in Detroit. Mueller, whose predecessor was sacked following the company's admission in September of the emissions cheating, is scheduled to meet Wednesday in Washington with US Environmental Protection Agency chief Gina McCarthy.
----------
Volkswagen Group announced worldwide deliveries of over 9.93 million vehicles to customers in 2015, down 2% from 10.1 million vehicles in 2014. The company also stated that 2016 will be no less challenging. Volkswagen said it has delivered more than four million units in one year for the first time in the overall European region.
----------
Yahoo! is considering an outright sale of its business, Bloomberg reported. Last month, Yahoo executives put forward a plan to spin off its main Internet business. Now, that idea may be abandoned in favour of a sale, the report said. The company may need a new plan in the face of an expected proxy fight by an activist investor, said the people, who asked not to identified because a final decision hasn't been made. Yahoo still hasn't concluded that it has to sell and hasn't hired a bank to run an official process or contacted potential buyers, report noted.
----------
Monday's Scheduled AGMs/EGMs
Telecity Group (re offer from Equinix)
----------
By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Sage GroupBAE SystemsTravis PerkinsSt James's PlaceWhitbreadSL..L