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LONDON BRIEFING: Bunzl profit up; Rio Tinto sells copper project stake

29th Aug 2023 07:49

(Alliance News) - Stocks in London are called to open higher on Tuesday, following a long bank holiday weekend.

In early economic news, UK shop price inflation decelerated further in August, data showed on Tuesday, presenting some "better news for consumers".

According to the latest British Retail Consortium-NielsenIQ tracker, the annual shop price inflation rate cooled to 6.9% in August from 8.4% in July. This was below the three-month average of 8.0% and the lowest rate since October 2022.

Food inflation slowed to 11.5% in August from 13.4% in July, while non-food inflation remained at 4.7%.

In UK company news, Bunzl reported higher interim revenue and profit. Meanwhile, Rio Tinto is selling its majority stake in a large copper project in Peru.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called up 28.2 points, 0.4%, at 7,366.78

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Hang Seng: up 1.9% at 18,475.63

Nikkei 225: closed up 0.2% at 32,226.97

S&P/ASX 200: closed up 0.7% at 7,210.50

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DJIA: closed up 213.08 points, or 0.6%, at 34,559.98

S&P 500: closed up 27.60 points, 0.6%, at 4,433.31

Nasdaq Composite: closed up 114.48 points, or 0.8%, at 13,705.13

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EUR: up at USD1.0817 (USD1.0783)

GBP: up at USD1.2627 (USD1.2571)

USD: up at JPY146.42 (JPY146.27)

Gold: up at USD1,923.55 per ounce (USD1,906.88)

(Brent): up at USD83.64 a barrel (USD83.57)

(changes since previous London equities close)

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ECONOMICS

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Tuesday's key economic events still to come:

09:00 CEST Spain retail sales

08:55 EDT US Johnson Redbook retail sales index

09:00 EDT US house price index

10:00 EDT US consumer confidence index

10:00 EDT US labor turnover survey

16:30 EDT US API weekly statistical bulletin

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Travel disruption could last for days after flights were cancelled leaving thousands of passengers stranded following an air traffic control technical fault. Holidaymakers were hit by bank holiday travel delays, which started on Monday after a UK air traffic control failure meant flight plans had to be input manually by controllers. By Monday afternoon, 232 flights departing UK airports had been cancelled and 271 arriving flights, according to aviation analytics firm Cirium. This equates to about 8% of all expected departures and 9% of expected arrivals, Cirium added. National Air Traffic Services, the country's leading provider of air traffic control, said at 3.15pm that it had "identified and remedied" the technical issue affecting its systems and it was working with airlines and airports to support affected flights.

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BROKER RATING CHANGES

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UBS cuts HSBC to 'neutral' (buy) - price target 615 (710) pence

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Barclays raises Bluefield Solar Income Fund to 'overweight' (equal weight) - price target 132 (147) pence

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Barclays raises Britvic to 'overweight' (equal weight) - price target 1,100 (1,000) pence

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COMPANIES - FTSE 100

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Bunzl reported revenue of GBP5.91 billion in the six months ended June 30, up 4.5% from GBP5.65 billion a year earlier. The London-based distribution services company's pretax profit increased by 6.9% to GBP317.1 million from GBP296.6 million. The company upped its interim dividend by 5.2% to 18.2p from 17.3p. Also, Bunzl said it has signed an agreement to acquire a business in Poland, and also acquired a business in the Netherlands. The acquisition in Poland is the company's first in the country and, upon completion, will increase the number of countries that Bunzl operates in to 32. In July, Bunzl signed an agreement to acquire Safety First, one of the largest distributors of Personal Protective Equipment products in Poland to a range of end markets. Also in July, Bunzl acquired EcoTools, a Netherlands based specialist online distributor of tool accessories and industrial consumables to customers across the Benelux region.

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Rio Tinto and First Quantum Minerals have completed a joint venture deal for La Granja project in Peru. Rio Tinto said La Granja is one of the largest undeveloped copper deposits in the world. First Quantum has acquired a 55% stake in the project for USD105 million. It will invest up to a further USD546 million into the joint venture to sole fund capital and operational costs to take the project through a feasibility study and toward development. Rio Tinto acquired the La Granja Project from the Government of Peru in 2006 and carried out an extensive drilling programme that significantly expanded the declared resource and understanding of the orebody, and established partnerships with host communities, local and national governments.

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Standard Chartered on Monday said it has struck a deal to sell its aviation finance leasing business to the Public Investment Fund, Saudi Arabia's sovereign wealth fund. PIF-owned AviLease will buy the StanChart unit for USD700 million, StanChart explained. The lender had said in January that it was exploring its options for the business. AviLease will also fund the repayment of roughly USD2.9 billion worth of net intra-group financing from StanChart, the FTSE 100 constituent said. It added: "On completion of the transaction, Standard Chartered will record an estimated gain of approximately USD300 million and an increase in common equity tier 1 capital ratio by around 19 basis points. Standard Chartered expects to include the net proceeds from the transaction within the overall management of the capital and liquidity position of Standard Chartered and its subsidiaries."

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COMPANIES - FTSE 250

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PureTech Health reported revenue of USD3.2 million in the first half of 2023, down from USD7.0 million a year earlier. The US-based biotherapeutics company's pretax loss however narrowed to USD13.7 million from USD56.0 million. Founder & Chief Executive Officer Daphne Zohar, said: "The first half of 2023 has been a strong period across both our Founded Entities and Wholly Owned Pipeline. We have achieved important clinical and financial milestones, while executing on our mission of giving life to new classes of medicine to change the lives of patients with devastating diseases."

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IG Group said that its Chief Executive Officer June Felix has stepped down, due to "her health situation". The London-based, contracts-for-difference trading platform said she will step down as CEO immediately and leave the company on September 29. The board has appointed Russell Reynolds to undertake a comprehensive search process and expects to appoint a permanent CEO in the coming months. In the meantime, Charlie Rozes will continue in his current role as acting CEO and chief financial officer. Chair Mike McTighe said: "We thank her for the significant contribution she has made over the past eight years as a board member and especially as Group CEO for almost five years. During her tenure as CEO, the company has successfully pursued a strategy to diversify the business while at the same time strengthening its core OTC business resulting in a doubling of the Group's revenue and profit over the period."

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OTHER COMPANIES

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Workers at two of Chevron's major natural gas plants in Australia are set to go on strike next week, the US energy giant said Tuesday, threatening up to 5% of global LNG supplies. Chevron has been told the strikes will start September 7 at its Gorgon and Wheatstone facilities in Western Australia, an announcement that has spooked markets already upended by Russia's invasion of Ukraine. The company said it would "continue to take steps to maintain safe and reliable operations in the event of disruption at our facilities". "We will also continue to work through the bargaining process as we seek outcomes that are in the interests of both employees and the company," it told AFP in a statement. The Offshore Alliance, which represents Chevron's highly unionised workforce, said the strikes would "escalate each week until Chevron agrees to our bargaining claims" and that the company's efforts to date had been "inept and incompetent".

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By Sophie Rose, Alliance News reporter

Comments and questions to [email protected]

Copyright 2023 Alliance News Ltd. All Rights Reserved.

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