9th May 2016 07:15
LONDON (Alliance News) - Share prices in London started the week on the front foot Monday, following gains by Asian markets and by Wall Street on Friday.
Miners Rio Tinto, Anglo American and Antofagasta led FTSE 100 losers, while easyJet led gainers, up 2.5% after the stock was raised to Outperform by RBC Capital.
In the FTSE 250, troubled security and outsourcing firm G4S led gainers, up 4.9% after issuing a reassuring trading update.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 6,144.94
FTSE 250: up 0.3% at 16,698.95
AIM ALL-SHARE: up 0.2% at 724.53
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Hang Seng: up 0.3% at 20,171.86
Nikkei 225: closed up 0.7% at 16,216.03
DJIA: closed up 0.5% at 17,740.63
S&P 500: closed up 0.3% at 2,057.14
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GBP: soft at USD1.4414 (USD1.4440)
EUR: soft at USD1.1408 (USD1.1423)
GOLD: down at USD1,279.67 per ounce (USD1,292.82)
OIL (Brent): up at USD46.01 a barrel (USD45.77)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in BST)
EU Eurogroup meeting
09:30 EU Sentix Investor Confidence
13:15 Canada housing starts
15:00 US Labor Market Conditions index
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UK Prime Minister David Cameron will warn that Europe's peace could be jeopardised if Britain votes to leave the EU, as he suggests the referendum contest will form a pivotal moment in the continent's history. The prime minister will issue the rallying cry as the EU contest enters a new phase, with both sides stepping up their activities in the run-up to the June 23 vote.
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Jeremy Corbyn appeared to have survived a mauling from UK voters in his first major electoral test as Labour leader, after victory for Sadiq Khan in the London mayoral contest gave a positive spin to an otherwise dismal set of results for the party. As Labour crashed into third place in the Scottish Parliament, lost its overall majority in the Welsh Assembly and became the first opposition in three decades not to gain council seats in a poll of this kind, Corbyn's performance was openly criticised by a number of his MPs. Khan forged what seemed to be an unassailable lead in the first round of voting in London, scooping 44% of first preference votes, to 35% for his Conservative rival Zac Goldsmith. Final confirmation of the result showed that after redistribution of second preferences Khan had garnered 57% support.
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China's exports declined unexpectedly in April after recovering a month ago, while foreign reserves increased for the second straight month on the softening dollar. Exports declined 1.8% annually following a 11.5% increase in March, the General Administration of Customs reported over the weekend. Exports were expected to remain flat in April. Imports dropped 10.9% versus March's 7.6% decrease. The annual fall was bigger than the 4% drop expected by economists. As a result, the trade surplus totalled USD46 billion in April, exceeding the USD40 billion surplus expected by economists.
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Separately, a report from the People's Bank of China released Saturday showed that foreign reserves increased by USD7.1 billion to USD3.2 trillion in April. This was the second consecutive rise in reserves.
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Japan's consumer confidence weakened less-than-expected in April, after improving in the previous month, survey data from the Cabinet Office showed. The seasonally adjusted consumer confidence index fell to 40.8 in April from 41.7 in March. Economists had expected the index to fall to 40.7.
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Members of the Bank of Japan's monetary policy board said that the country's economic recovery continues at the right track, minutes from the board's meeting on March 14 and 15 revealed. The members added that there remain a number of downside risks - most notably among commodity exporters because of low prices, and slowing growth in China. They added that Japanese exports have been sluggish, although domestic demand is expected to continue its upward trend.
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Germany's factory orders recovered at a stronger than expected pace in March, figures from Destatis revealed. New orders in manufacturing climbed 1.9% on a monthly basis in March, reversing a 0.8% fall in February. Economists had forecast a 0.7% rise after prior month's initially estimated decline of 1.2%.
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Ireland's construction activity expanded at the slowest pace in five months in April, survey data from Markit Economics showed. The Ulster Bank Construction Purchasing Managers' Index fell to 56.4 in April from 62.3 in March. However, any reading above 50 indicates expansion in the sector.
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Saudi Arabia is understood to be planning a three-way listing of its Aramco oil business, anchored by an attempt to get three oil majors to take strategic stakes in the business, The Daily Telegraph reported. Saudi authorities are hoping to entice ExxonMobil, China's Sinopec and possibly BP into taking stakes in the business, which has been touted at a total enterprise value of USD2.5 trillion. These stakes would back the Saudi government floating the business in London, New York and Hong Kong. The Telegraph said the sale is planned for as soon as 2017 or 2018 and would, in theory, be five times larger than any initial public offering in history.
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Saudi King Salman on Saturday dismissed Ali al-Nuaimi, the country's oil minister since 1995, and replaced him with health minister Khalid al-Falih. The ministers for transport, pilgrimages, and social affairs were also sacked in the partial government reshuffle. Al-Falih, who is chairman and former executive director of the state-owned Aramco oil giant, is to head a renamed Ministry of Energy, Industry and Mineral Resources. The royal palace said the moves were in line with an ambitious development plan, announced two weeks ago, aimed at reducing the kingdom's reliance on oil.
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Australian political parties began their election campaign trail on Monday ahead of the July 2 election. Prime Minister Malcolm Turnbull and opposition leader Bill Shorten headed to the key battleground state of Queensland on the first day of the 52-day campaign, the longest in Australian history. Turnbull's Liberal Party has focussed on jobs, economic growth and defence spending, while Shorten's Labour Party has talked about education, health and higher taxes for big businesses. Latest polls have put the coalition level with the opposition.
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The Greek Parliament voted through the ruling coalition's latest package of reform including pension cuts and income tax hikes, amid clashes late Sunday on nearby Athens streets between police and rioters opposed to the austerity measures. Prime Minister Alexis Tsipras argued that the pension system "can not survive without far-reaching reform." All 153 members of his left-right coalition in the 300-seat chamber voted for the package, in a bid to receive more bailout money from the country's international creditors. Eurozone finance ministers are to meet Monday to discuss negotiations with economically battered Greece.
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A special commission of the Brazilian Senate voted Friday in favour of impeaching President Dilma Rousseff, clearing the way for a vote Wednesday in the full Senate. The committee voted to support the finding of committee representative Antonio Anastasia that all formal and constitutional requirements of the impeachment process had been met. The vote was 15-5. The Senate is now likely to decide Wednesday whether Rousseff should be suspended from office for maximum of 180 days, during a detailed legal examination of the charges against her. Vice President Michel Temer would assume presidential duties during her suspension, including opening the Olympics in August.
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Fire crews fighting the massive wildfire in the western Canadian province of Alberta finally got a Mother's Day present from Mother Nature as cooler temperatures slowed down the advance of the conflagration. Instead of doubling in size as predicted, the fire, which has already destroyed more than 1,600 structures and forced almost 90,000 people to flee their homes, grew by only 5,000 hectares to about 161,000 hectares, Alberta Premier Rachel Notley told reporters Sunday.
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BROKER RATING CHANGES
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TRADERS: JEFFERIES RAISES SMITH & NEPHEW TO 'BUY' ('HOLD')
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TRADERS: RBC CAPITAL RAISES EASYJET TO 'OUTPERFORM'
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TRADERS: EXANE BNP RAISES WEIR GROUP TO 'OUTPERFORM' ('NEUTRAL')
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UBS CUTS RESTAURANT GROUP TO 'NEUTRAL' ('BUY') - TARGET 305 (780) PENCE
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BERNSTEIN RAISES BEAZLEY TO OUTPERFORM (MARKET-PERFORM) - TARGET 380 (370) PENCE
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COMPANIES - FTSE 100
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The recently-appointed chief executive of fund manager Schroders is hunting for a fixed-income fund company to acquire, the Financial Times reported. In an interview with the FT, Peter Harrison, who was appointed CEO in March having previously been head of investments, said Schroders had the "vast majority" of asset classes covered, but there is room to improve its fixed-income franchise. In particular, Harrison highlighted asset-backed securities as an area of interest for Schroders.
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COMPANIES - FTSE 250
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Greggs said it increased sales in the first 18 weeks of 2016 as its breakfast and healthier Balanced Choice ranges continued to prove popular and as it carried on refitting and investing in its store estate. The bakery and food-to-go retailer said total sales in the 18 weeks grew by 5.7% year-on-year, while company-managed shop like-for-like sales were up by 3.7%, which it said was driven by its breakfast range, hot sandwiches and Balanced Choice items. Greggs noted that conditions on the high street were softer in March but recovered in recent weeks.
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Funeral services provider Dignity said trading in the first quarter was in line with its expectations as the number of deaths in the UK fell as anticipated. The company said revenue for the 13 weeks to March 25 was GBP81.2 million, compared to GBP85.5 million a year earlier. Underlying operating profit, which strips out one-offs, slipped to GBP31.1 million from GBP35.8 million.
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Security services and outsourcing company G4S said it had a positive start to 2016, with revenue growing and no new provisions booked on onerous contracts. Ashley Almanza, the chief executive of G4S, said the group performed well in the first quarter against a backdrop of macroeconomic uncertainty. This, he said, was reflected by revenue in the first quarter to the end of March growing to GBP1.51 billion from GBP1.44 billion in continuing businesses.
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John Wood Group said it won two new contracts to deliver technical services and expertise to "one of the world's leading international oil companies in Iraq" which are together worth USD140.0 million. The company's subsidiary, Wood Group PSN, will provide front-end engineering design, detailed engineering, project management, procurement services, system completion and commissioning support for operations and start-up on a significant onshore asset in southern Iraq, under the two contracts.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Events company ITE Group appointed a new chief executive as it reported higher interim pretax profit but trimmed its dividend. ITE said Mark Shashoua will become its new chief executive, taking over from Russell Taylor when he stands down on September 1. Shashoua is the chief executive of i2i Events Ltd, a business-to-business events and trade exhibitions company owned by Ascential , the media firm which floated in London in February. The change at the helm comes as ITE said pretax profit for the six months to the end of March grew 36% year-on-year to GBP10.6 million from GBP7.8 million a year earlier, in line with ITE's expectations and benefiting from significantly lower one-off charges. ITE said it will pay a 1.5 pence interim dividend for the half, down from 2.5p a year earlier, as the group sought to restore earnings cover to 2-times.
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COMPANIES - INTERNATIONAL
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Nikkei reported that Honda Motor will recall an additional 20 million-plus Takata-made air bag parts globally, including in Europe where no accidents related to the potentially defective air bag have been reported. The precautionary measure by the biggest buyer of Takata air bags may prompt other automakers to follow suit. The number of parts in the latest recall brings the total number to over 50 million -- including parts the company has already requested. Most are used in passenger-seat air bags. The additional cost is estimated at JPY200 billion, the report said.
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A six-year dispute between Oracle and Alphabet's Google over software copyrights heads back to court Monday for a trial that could lead to billions of dollars in damages and alter the ground rules for modern software, according to reports. It will be the second trial for Oracle's complaint that Google used parts of its Java software without permission. In 2012, a jury found Google infringed Oracle's copyrights, but the judge later ruled the software couldn't be copyrighted. Since then, the case has ping-ponged through appeals courts, including a brief stop at the US Supreme Court.
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United Parcel Service announced that UPS Foundation has signed a partnership with Zipline, a California -based robotics company, and Gavi, the Vaccine Alliance. The partnership will explore using drones to transform the delivery of life-saving medicines like blood and vaccines across the world.
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Monday's Scheduled AGMs/EGMs
Rightster (re name change to Brave Bison)
Fairpoint Group
888 Holdings
Redrow
Woodford Patient Capital Trust
Hg Capital Trust
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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