13th May 2016 07:19
LONDON (Alliance News) - Shares opened lower in London Friday, with fewer than 20 FTSE 100 stocks in the green, as the market continued to digest the Bank of England's warning of a possible recession in the UK in the event of Brexit.
Coca-Cola HBC was one the worst performers in early trade, down 3.5%, after a trading update saying its volumes were broadly stable in the first quarter, with good growth in emerging markets offsetting a weaker performance in developing and emerging countries.
Meanwhile, Apple announced it has invested USD1 billion in Chinese ride-hailing company Didi Chuxing.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.6% at 6,070.00
FTSE 250: down 0.3% at 16,609.37
AIM ALL-SHARE: down 0.1% at 724.61
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Hang Seng: down 1.5% at 19,610.38
Nikkei 225: closed down 1.4% at 16,412.21
DJIA: closed up 0.1% at 17,720.50
S&P 500: closed flat at 2,064.11
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GBP: down at USD1.4397 (USD1.4476)
EUR: down at USD1.1339 (USD1.1389)
GOLD: up at USD1,274.26 per ounce (USD1,268.22)
OIL (Brent): up at USD47.63 a barrel (USD47.03)
(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)
08:45 France nonfarm payrolls preliminary
10:00 Italy consumer price index
10:00 Italy gross domestic product preliminary
13:30 US retail sales
13:30 US producer price index
13:30 UK MPC member Weale speech
15:00 US Reuters/Michigan consumer sentiment index preliminary
15:00 US business inventories
18:00 US Baker Hughes US oil rig count
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Bank of England Governor Mark Carney should be fired for warning that Brexit may trigger recession, a Tory MP has said. Commons Treasury select committee member and prominent Leave campaigner Jacob Rees Mogg reacted with anger to the governor's intervention, insisting he had become unacceptably partisan following the Bank's Monetary Policy Committee announcing it believed withdrawal from the EU could lead to an economic downturn. However, Prime Minister David Cameron insisted it was the central bank's job to warn of risks to security. And he accused the Leave camp of "celebrating insecurity" after prominent backer Peter Hargreaves said the stimulus provided by uncertainties outside the EU would be "fantastic".
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There are "serious risks" of further mis-selling scandals erupting in the UK financial services industry and stronger action is needed to tackle problems with the culture of firms, MPs have warned. The Public Accounts Committee also said it is a "failure of the system of regulation and redress" that claims management firms have made up to GBP5 billion from PPI (payment protection insurance) payouts. This is compensation that could - and should - have been paid to the victims of mis-selling, the report said. It warned that the pension freedoms introduced last year which give people aged over 55 more choice over how to use their retirement pots could be a "potential trigger" for future mis-selling on a mass scale.
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A no-confidence vote against the French government in parliament's lower house failed to find a majority, leaving the way open for disputed labour market reforms. A total of 246 members of the lower house voted in support of no-confidence, short of the needed absolute majority of 288 votes. Facing insufficient support for the reforms within his own ranks, Prime Minister Manuel Valls had fallen back on a constitutional quirk that allows for the adoption of legislation without a parliamentary vote, as long as the National Assembly fails to pass a vote of no-confidence. The amendment that prompted the no-confidence vote includes measures aimed at easing regulations on working hours and changing the rules governing dismissal compensation, which the government says gives more rights to workers, such as support for young people.
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The German economy gained pace in the first quarter, data published by Destatis showed. Gross domestic product expanded 0.7% sequentially in the first quarter, faster than the 0.3% growth in previous three months and 0.6% growth forecast by economists. GDP climbed 1.3% on a yearly basis, weaker than the 2.1% expansion seen in the previous quarter. On a calendar-adjusted basis, GDP growth improved to 1.6% from 1.3%.
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Germany's consumer prices declined as estimated in April, final data from Destatis showed. Consumer prices slid 0.1% on a yearly basis in April, following a 0.3% rise in March. The annual rate matched flash estimate. The statistical office had corrected the preliminary press release issued on April 28 after detecting errors in the publication.
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Brazil's acting president Michel Temer called for a "government of national salvation" after a Senate impeachment vote that suspended President Dilma Rousseff from office. In his first presidential address to the nation, Temer, Rousseff's former vice president and leader of the centrist Brazilian Democratic Movement, said the country's political parties and people urgently needed to unite to "pacify the nation and unify Brazil." During the next six months, the Senate will investigate the allegations against Rousseff and then conduct another vote, which would require a two-thirds majority to permanently remove her from office.
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Boston Fed President Eric Rosengren wants to gradually raise interest rates this year despite April's weak jobs report. "It was a bit below market expectations, (but) it still reflected relatively strong employment growth at a time when the US economy is close to what most economists consider full employment," Rosengren said Thursday.
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While House Speaker Paul Ryan described his meeting with Donald Trump on Thursday as "encouraging," he stopped short of endorsing the presumptive Republican presidential nominee. Speaking at a press conference after the meeting, Ryan said he talked with Trump about their differences but also about how to unify the Republican Party. "It's very important that we don't fake unifying, we don't pretend unification, that we truly and actually unify so we are full strength in the fall," Ryan said.
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BROKER RATING CHANGES
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TRADERS: MACQUARIE CUTS RSA INSURANCE TO 'UNDERPERFORM' ('NEUTRAL')
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TRADERS: JEFFERIES CUTS SMITHS GROUP TO 'HOLD' ('BUY')
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TRADERS: MACQUARIE INITIATES MATTIOLI WOODS WITH 'OUTPERFORM' - TARGET 807P
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COMPANIES - FTSE 100
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Royal Dutch Shell said it estimates around 2,100 barrels of oil have leaked from its subsea wells in the Gulf of Mexico, forcing the oil giant to shut-in production from four wells that flow to the company's Brutus platform. The Bureau of Safety and Environmental Enforcement, which is based close by in New Orleans, said the oil sheen is around two miles by thirteen miles in size and around 97 miles south of Port Fourchon, which is Louisiana's most southern port.
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Soft drinks bottler Coca-Cola HBC said reported volumes were broadly stable in the first quarter, with good growth in emerging markets offsetting a weaker performance in developing and emerging countries. The company said total volumes grew 0.1% in the quarter to the end of March, with developing markets volumes up 1.9% and emerging markets growing 1.3% year-on-year, offsetting a 2.7% decline in established markets volumes. Net sales revenue, however, declined 2.7% in the quarter, primarily driven by currency weakness. In constant currencies, net sales revenue increased 2.0%.
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Brewer Anheuser-Busch InBev said that it has entered into an agreement with Brazil's Ambev to transfer SABMiller's Panamanian business to Ambev, in exchange for which Ambev has agreed to transfer to AB InBev its business in Colombia, Peru and Ecuador. This will allow AB InBev to focus on countries where the SABMiller businesses it acquires are well established, and allow Ambev to initiate operations in Panama through the established SABMiller business and further expand its businesses in Central America, the companies said. The transaction is conditional on the successful closing of the proposed acquisition of SABMiller by AB InBev, a combination of brewing giants.
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British Land Co said it and joint venture partner Oxford Properties have secured a new tenant for the Leadenhall Building in the City of London, known as 'The Cheesegrater'. The pair have signed a lease agreement with Clydesdale Bank, part of CYBG, for Level 15 at the building, which is now 98% let or under offer.
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COMPANIES - FTSE 250
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Investment vehicle Wizard sold the majority of its stake in software company Micro Focus International via a placing, raising GBP362.0 million in the process, Numis Securities said. Wizard sold 24.1 million Micro Focus shares, 11% of the company's equity, in the placing at 1,505.00 pence per share. Following the sale, which was run by Numis together with Credit Suisse Securities (Europe), Wizard will hold a 2.6% stake in Micro Focus.
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Ground engineering firm Keller Group said it has struck a GBP62.0 million deal to acquire the freehold on a processing and warehousing facility in Avonmouth, new Bristol. Keller has acquired the property from GJ3 and GJ4, pursuant to a previously-announced contract dispute related to a project completed in 2008.
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COMPANIES - LONDON MAIN MARKET AND AIM
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The UK Financial Conduct Authority is understood to be probing suspicious share trades made ahead of wild fluctuations in the share price of Premier Foods, Sky News reported. The City regulator has written to the company and its advisers in recent days to inform them it will seek a review into trading activity in Premier's stock. The focus is understood to be on the period earlier this year when Premier, which owns Mr Kipling cakes and Oxo gravy, was the subject of an ultimately failed takeover approach from US spices and flavourings maker McCormick & Co.
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Ferries operator Irish Continental Group said it saw growth in cars, freight and terminal lifts in the first four months of 2016 year-on-year. Total revenue for the period grew to EUR91.4 million, up 7.4% year-on-year. The company said the year had started well, and trading conditions remain favourable.
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COMPANIES - INTERNATIONAL
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Apple said it has invested USD1 billion in Chinese ride-hailing company Didi Chuxing, a move that comes as Apple's sales in its second-largest market are falling. "We decided to make the investment for a number of strategic reasons, including the chance to learn more about certain segments of the China market," Apple CEO Tim Cook told Xinhua news agency. Didi Chuxing, formerly known as Didi Kuaidi, said in a statement that this is the single largest investment the company has ever received. Didi Chuxing is also backed by Chinese internet giants Alibaba and Tencent.
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Alibaba Group Holding and SoftBank announced the establishment of SB Cloud Corp to launch cloud computing services in Japan that utilize technologies and solutions from Alibaba Cloud, the cloud computing arm of Alibaba Group. SB Cloud will open a new data center in Japan.
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Friday's Scheduled AGMs/EGMs
Brammer
Derwent London
Tribal Group
Tyman
Brady
Thalassa Holdings
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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