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LONDON BRIEFING: Direct Line sells brokered commercial lines unit

7th Sep 2023 07:45

(Alliance News) - Stocks in London are called lower on Thursday, amid ongoing concerns about the recent rise in oil prices, and its potential implications for interest rates.

In early UK economic news, house prices saw their sharpest monthly decline in August since last November. They also fell sharply year-on-year from their record peak last summer.

In early UK company news, Beazley said it was on track to achieve its annual guidance after growth in the first half. Direct Line agreed the same of its brokered commercial insurance business, and reported a widened interim loss.

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




FTSE 100: called down 25.2 points, 0.3%, at 7,400.94


Hang Seng: down 1.1% at 18,239.43

Nikkei 225: closed down 0.8% at 32,991.08

S&P/ASX 200: closed down 1.2% at 7,171.00


DJIA: closed down 198.78 points, 0.6%, at 34,443.19

S&P 500: closed down 0.7% at 4,465.48

Nasdaq Composite: closed down 1.1% at 13,872.47


EUR: up at USD1.0719 (1.0715)

GBP: down at USD1.2497 (USD1.2500)

USD: down at JPY147.58 (JPY147.67)

Gold: up at USD1,917.64 per ounce (USD1,915.77)

Oil (Brent): up at USD90.26 a barrel (USD90.01)

(changes since previous London equities close)




Thursday's key economic events still to come:


11:00 CEST EU employment report

10:00 CEST Germany Ifo economic forecast

11:00 IST Ireland CPI

09:30 BST UK BoE decision maker panel data

08:30 EDT US unemployment insurance weekly claims report

10:45 CDT US Fed Chicago President Austan Goolsbee speaks

15:30 EDT US Fed New York President John Williams speaks

15:45 EDT US Fed Atlanta President Raphael Bostic delivers remarks at Broward College event

16:30 EDT US foreign central bank holdings

16:30 EDT US federal discount window borrowings

19:00 EDT US Federal Reserve Bank of Atlanta President Raphael Bostic speaks

US Fed Philadelphia President Patrick Harker and Federal Reserve Governor Michelle Bowman speak


UK house prices saw their sharpest monthly fall since last November in August, according to the Halifax House Price Index. Halifax said average house prices in the UK fell 1.9% in August from July, having edged down by a revised 0.4% in July from June. August's decline was steeper than expected, with FXStreet-cited market consensus forecasting a 0.3% drop. Annually, prices fell 4.6% in August, accelerating from the 2.5% fall in July. However, Halifax noted that prices were at a record peak last summer. The average UK home now costs GBP279,569, which is around GBP14,000 lower than the prior year, and back to the level seen in early 2022, Halifax said.


Rishi Sunak has vowed to make Britain "the best place in the world to do business" as he criticised "naysayers" on the economy. The prime minister, who is due to travel to the G20 summit in India at the weekend, also said investors are "flocking" to the UK. Speaking to the Daily Express, he said: "I want to build a country where everyone can look forward with optimism, confident that our children and grandchildren can have a better future with every opportunity to succeed. He will head to New Delhi as negotiations continue over a post-Brexit trade deal, with reports Sunak could be planning a second visit to India this autumn in a bid to finalise an agreement.




Panmure starts Renewi with 'buy' - price target 830 pence


HSBC raises to 'buy' (hold) - price target 305 pence


RBC raises ConvaTec to 'outperform' (sector perform) - price target 300 (215) pence




Beazley said it was on track to deliver full growth and combined ratio guidance, as it reported a record half-year profit. Beazley is the parent company of insurance businesses operating in Europe, North America, Latin America and Asia. In the six months to June, it said insurance written premiums rose to USD2.92 billion from USD2.57 billion a year before, as pretax profit rose to USD366.4 million from USD364.9 million. "Key highlights include significant growth in our North American property business and momentum in cyber across Europe. Our platform strategy and capital position have been important drivers in delivering our ambitious growth targets," said CEO Adrian Cox.




Direct Line Insurance said gross written premiums and associated fees in the first half grew 9.8% year-on-year to GBP1.62 billion from GBP1.47 billion. However, its pretax loss widened to GBP76.3 million from GBP11.1 million, as a reduction in operating profit was partially offset by valuation movements on its investments. It proposed no dividend payment, having paid out 7.6p the prior year. It said it aims to restart dividends once two conditions are met: firstly, when capital coverage improves to the upper end of its agreed range, and secondly, when it returns to organic capital generation in Motor. It also announced the sale its brokered commercial insurance business to RSA Insurance, a subsidiary of Intact Financial Corp, for a GBP520 million initial consideration, with a potential further consideration of up to GBP30 million. It also estimates a capital release of up to GBP270 million. The sale will allow the firm to "focus on retail, personal and direct small business commercial lines, restore the resilience of its capital position and drive the long-term value potential for its customers and shareholders", it said. Looking ahead, it warned of the continuing adverse effects on operating profit from the earn through of previously written Motor business in 2023, but said improved motor margins should help support operating profit improvement in 2024.




Woodside Energy said it has signed non-binding accord with Kansai Electric Power to conduct studies of a potential carbon capture and storage "value chain" between Japan and Australia. Kepco will research the possibility of capturing carbon dioxide emitted from its thermal power plants in Japan and transporting this to Australia. Woodside said it is working on CCS projects in Australia and will study the injection and storage of CO2 delivered from Japan, as well as the potential conversion of it into synthetic methane. Woodside said the partnership will consider the end-to-end technical and commercial factors of creating such a CCS value chain between Japan and Australia.


By Elizabeth Winter, Alliance News senior markets reporter

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Copyright 2023 Alliance News Ltd. All Rights Reserved.

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