28th Aug 2024 07:37
(Alliance News) - The FTSE 100 was called higher on Wednesday morning, ahead of a handful of data from Europe, and as UK Prime Minister Keir Starmer meets with German Chancellor Olaf Scholz in Berlin to discuss a new partnership.
In early corporate news, Prudential raised its first interim dividend despite a fall in IFRS attributable pretax profit.
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 0.3% at 8,376.30
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Hang Seng: down 1.0% at 17,696.74
Nikkei 225: closed up just 5.94 points at 38,293.91
S&P/ASX 200: closed up just 0.20 points at 8,071.40
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DJIA: closed up just 9.98 points at 41,250.50
S&P 500: closed up 0.2% at 5,625.80
Nasdaq Composite: closed up 0.2% at 17,754.82
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EUR: down at USD1.1140 (USD1.1162)
GBP: down at USD1.3222 (USD1.3230)
USD: up at JPY144.51 (JPY144.27)
Gold: down at USD2,507.10 per ounce (USD2,517.10)
(Brent): down at USD79.54 a barrel (USD80.07)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
10:00 CEST eurozone money supply
08:45 CEST France consumer confidence
12:00 CEST France unemployment
08:00 CEST Germany consumer confidence
10:00 CEST Switzerland economic sentiment index
01:15 EDT US Federal Reserve Governor Christopher Waller speaks
10:30 EDT US EIA crude oil stocks
18:00 EDT US Atlanta Fed President Raphael Bostic speaks
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UK Prime Minister Keir Starmer meets with German Chancellor Olaf Scholz in Berlin on Wednesday to discuss a new partnership between the countries, on his first bilateral trip since taking office last month. The British leader, who will also travel on to Paris, has pledged to rebuild trust with European allies damaged by Brexit, and is set to hold talks with Scholz about launching a new bilateral accord with Germany. Labour had said it would seek a security and defence treaty with Germany if it won the July 4 general election, which it did by a landslide – propelling Starmer to the premiership. The new deal – set to be similar to Britain's 2010 "Lancaster House" treaty with France – will take several months to negotiate and be finalised early next year, according to Starmer's Downing Street office.
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House sellers in the UK who end up needing to slash their asking price typically see their property taking more than twice as long to sell as homes with no price reduction, according to a website. Zoopla, which released the research, said it was important that sellers remain realistic on pricing, particularly if they are serious about moving home. It found that it takes about a month – 28 days – on average to agree a sale where there has been no asking price reduction. But among sellers who have cut the price by 5% or more, the typical time to sell is 73 days. Zoopla said about a fifth of homes on the market had the asking price reduced by 5% or more in August.
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Prosecutors filed a revised indictment of Donald Trump on charges that he tried to overturn the 2020 US election after losing to Joe Biden. The superseding indictment retains the same four charges against Trump but takes into account the recent Supreme Court ruling that a former president has broad immunity from criminal prosecution.
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Negotiations on a ceasefire to end the war in Gaza are continuing in Qatar, a US official said, after an earlier round of talks wrapped up in Cairo amid growing regional tensions. US President Joe Biden's Middle East point man Brett McGurk is in Doha for the talks aimed at halting the 10-month conflict between Israel and Hamas, the official said on condition of anonymity.
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At least 10 Palestinians were killed in Israeli raids and strikes in several towns in the north of the occupied West Bank, a spokesman for the Red Crescent said Wednesday. Two Palestinians were killed in the city of Jenin, four others in a nearby village, and four more in a refugee camp near the town of Tubas, said the Red Crescent's Ahmed Jibril. He added that 15 others had been wounded. The Israeli army said early Wednesday it was carrying out an "operation to thwart terrorism in Jenin and Tulkarm" in the northern West Bank.
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US Vice President Kamala Harris will sit down with CNN this week for her first interview since President Joe Biden dropped his re-election bid. She will be joined by her running mate, Minnesota Governor Tim Walz, in a joint interview with CNN anchor Dana Bash in Savannah, Georgia. The interview will air at 2100 EST on Thursday. Harris has been criticised for not holding news conferences or granting interviews with news outlets since Biden stepped aside on July 21. Donald Trump's campaign has kept a tally of the days she has gone by as a candidate without giving an interview. On Tuesday, the campaign reacted to the news by noting the interview was joint, saying "she's not competent enough to do it on her own".
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BROKER RATING CHANGES
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JPMorgan raises Bunzl price target to 3,660 (3,380) pence - 'neutral'
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Citigroup raises Direct Line to 'buy' (neutral) - price target 223 (208) pence
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Berenberg cuts Base Resources price target to 13 (15) pence - 'hold'
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COMPANIES - FTSE 100
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Prudential raised its first interim dividend by 9.3% despite a 66% fall in IFRS attributable pretax profit to USD394 million in the first half of 2024 from USD1.18 billion a year before. Adjusted operating profit was USD1.54 billion, up 6% from USD1.46 billion. New business profit was down 1% to USD1.47 billion from USD1.49 billion, but the Asia-focused insurer and asset manager said it saw a pick-up in sales momentum in June, which has continued into the second half of the year. It expects new business profit to grow in all of 2024 in line with its objective for 2022-27 of a 15% to 20% compound annual growth rate.
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COMPANIES - FTSE 250
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John Wood Group has signed separate sales agreements for the sale of two businesses, which together are expected to generate net proceeds of around USD165 million this year, including loan notes of up to USD42 million. Accordingly, John Wood has signed for the sale of its stake in Ethos Energy and CEC Controls Co. Combined, these two business contributed USD41 million to Wood's adjusted earnings before interest, tax, depreciation and amortisation in 2023. Wood expects net cash proceeds of around USD125 million from the disposals. In addition, Wood will be issued loan notes by EthosEnergy which, on repayment around five years after completion, will generate further proceeds of up to USD42 million plus interest.
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OTHER COMPANIES
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Focusrite said it expects revenue for the year ending August 31 to be in the region of GBP157 million, down 12% from GBP178.5 million a year prior and in line with current market expectations as overall demand for the company's products "has remained resilient across the portfolio". However, earnings before interest, tax, depreciation and amortisation are now expected to be around GBP25 million, due to the impact of shipping and logistics challenges as well as various pressures on product margins. That would be 32% lower than GBP36.9 million reported for financial 2023. Product introductions were planned for the final quarter but the benefit of these has been offset in August by a significant reduction in stocking policy by a major reseller, Focusrite explained. In addition, port congestion in a number of regions has impacted logistics at the end of the year. Global shipping and freight costs have increased further in the second half of 2024 due to strong global shipping demand and ongoing issues in the Red Sea. The board now expects this trend in shipping and freight costs to continue into 2025.
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By Holly Beveridge, Alliance News senior reporter
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