22nd Feb 2016 08:15
LONDON (Alliance News) - HSBC Holdings kicked off the UK bank reporting season on a sour note Monday, posting a fourth-quarter loss and missing 2015 profit expectations. The stock was leading blue-chip losers, down 3.7%, in an otherwise firm market.
Standard Chartered follows on Tuesday, with Lloyds Banking Group on Thursday and RBS on Friday.
Though the pound slipped against the dollar, the London stock market appeared to be taking in its stride the announcement of a June 23 date for the UK's in-out EU referendum and London Mayor Boris Johnson's decision to support the 'Brexit' campaign.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.0% at 6,010.24
FTSE 250: up 0.8% at 16,292.27
AIM ALL-SHARE: up 0.2% at 684.78
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Hang Seng: closed up 0.9% at 19,464.09
Nikkei 225: closed up 0.9% at 16,111.05
DJIA: closed down 0.1% at 16,391.99
S&P 500: closed flat at 1,917.78
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GBP: down at USD1.4215 (USD1.4325)
EUR: down at USD1.1089 (USD1.1121)
GOLD: down at USD1,211.02 per ounce (USD1,230.61)
OIL (Brent): up at USD33.67 a barrel (USD33.07)
(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 GMT)
08:30 Germany Markit Services, Manufacturing and Composite PMI Preliminary
09:00 Italy Consumer Price Index
09:00 EU Markit Services, Manufacturing and Composite PMI Preliminary
11:00 UK CBI Industrial Trends Survey
13:30 US Chicago Fed National Activity Index
14:45 US Markit Manufacturing PMI Preliminary
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London Mayor Boris Johnson, one of the Conservative party's best-known figures, announced he will campaign to leave the EU ahead of a referendum, setting him at odds with Prime Minister David Cameron. Cameron has given Conservative MPs the option of backing his bid to stay in a reformed EU or supporting a so-called Brexit from the bloc in an in-out vote set for June 23. "There is too much judicial activism. Too much legislation coming from the EU," Johnson said. Johnson joins six cabinet ministers who have already lent their support to the Vote Leave campaign.
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The chief of China's top securities regulator has been ousted amid growing criticism of the agency's actions during months of volatility in the country's main stock markets. Xiao Gang, 57, chairman of the China Securities Regulatory Commission since March 2013, was removed from his post as well as that of Communist Party leader of the commission, the official Xinhua news agency reported. Liu Shiyu, chairman of the Agriculture Bank of China, was appointed to replace Xiao as chairman and commission party leader, Xinhua cited the Communist Party Central Committee and State Council as saying.
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Billionaire businessman Donald Trump won the Republican primary in the southern US state of South Carolina, vowing to pick up momentum as the field of candidates narrowed with former Florida Governor Jeb Bush quitting the race. Trump had 32.6% of the vote, state election officials said. His closest rivals Florida Senator Marco Rubio and Texas Senator Ted Cruz battled for second place, with 22.5% and 22.1% of the vote respectively. Meanwhile, former secretary of state Hillary Rodham Clinton beat Vermont Senator Bernie Sanders in a separate Democratic caucus in the western state of Nevada. With 88% of the ballots counted, Clinton had won 52.6% of the vote to 47.3% for Sanders.
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More than 140 people were killed in a series of bomb blasts Sunday in government-held areas of Homs and near the Syrian capital Damascus, as the top US diplomat said a truce in the civil war could come into effect within days. At least 83 people were killed and more than 180 wounded in several blasts in Sayyida Zeinab, a largely Shiite southern suburb of Damascus, according to state news agency SANA.
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The world football community descends on Zurich for the second time in nine months to elect a FIFA president, approve a reform package to restore the credibility of the battered ruling body - and hope for no further arrests of officials. Outgoing Joseph Blatter cannot conduct as originally planned the February 26 extraordinary congress because he has been banned for eight years from football by FIFA's ethics committee in connection with a "disloyal payment" which is also part of a criminal probe. Blatter's era ends after four decades at FIFA, 18 as its president.
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BROKER RATING CHANGES
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Investec Puts HSBC Price Target Under Review, Reiterates Buy
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JPMORGAN RAISES ESSENTRA TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 926 (955) PENCE
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TRADERS: INVESTEC INITIATES GVC HOLDING WITH 'BUY' - TARGET 545 PENCE
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COMPANIES - FTSE 100
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HSBC Holdings reported a 1.0% increase in annual pretax profit, missing analyst expectations after a loss-making fourth quarter, as the bank grappled with slowing Chinese economic growth, declining commodity and oil prices, and historically low interest rates. HSBC lifted its dividend for the year as a whole to USD0.51 per share from USD0.50, as pretax profit rose to USD18.87 billion in 2015, from USD18.68 billion in 2014. Coming one week after HSBC decided to remain in the UK, rather than move to its historic home of Hong Kong, the results missed analyst expectations of a USD21.78 billion pretax profit, according to consensus estimates compiled by the bank.
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Associated British Foods said the underlying trading outlook for the business remains unchanged for the first half of its financial year, with some progress in adjusted operating profit to be made. The group, which owns discount fashion retailer Primark, as well as British Sugar, said the weakening of sterling in recent weeks, particularly against the euro, means that foreign exchange will hit its results by just GBP10 million for the half year ending February 27, having previously estimated a GBP25 million hit.
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BT Group is set to escape a break-up this week but will face demands from a UK regulator to make its broadband network more open to its rivals, The Sunday Times reported. A report on the future of telecommunications regulator is set to be published this week by Ofcom, the UK's media and communications regulator, and will include proposals set to reshape the industry over the coming decade, including forcing BT to open up its broadband infrastructure network to rivals. Sharon White, Ofcom's chief executive, is, however, set to defy the calls from BT's rivals for its Openreach arm to be spun off, the newspaper said, though will keep the option open to be pursued in the future.
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A group of large overseas investors have teamed up to make a bid for a controlling stake in National Grid's GBP11.0 billion gas pipeline arm, The Sunday Times reported. National Grid, the power grid operator, said last year it will sell up to 80% of its gas distribution unit in order to focus on building up the UK's electricity grid. The auction is not set to start until the spring, but suitors are already positioning themselves to get involved, including Canada's Borealis Infrastructure, Wren House, part of the Kuwait sovereign wealth fund, and the Universities Superannuation Scheme.
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The potential takeover of Home Retail Group by J Sainsbury was disrupted late on Friday after an established international retailer operating within the UK made its own offer for the owner of Argos and Homebase. Frankfurt-listed Steinhoff International Holdings is the owner of bed retailer Benson for Beds and furniture store Harveys in the UK, and has other brands operating in Australasia, Europe and Africa. Steinhoff said it has put forward a proposal to Home Retail seeking its recommendation for a possible all-cash offer, which would be for 175.0 pence per Home Retail share - considerably higher than the deal currently on the table from Sainsbury.
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COMPANIES - FTSE 250
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Bovis Homes Group said both its pretax profit and revenue rose in 2015, after selling more homes at a higher average price. The housebuilder said it sold 3,934 homes in the year to the end of December, up 8.0% year-on-year, at an average selling price of GBP231,600, up from GBP216,600. Bovis said its operating margin improved to over 17%, which should result in its return on capital employed for the year rising to over 18% from 16.2% in 2014. Bovis increased its full-year dividend to 40.0 pence from 35.0p in 2014.
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Veterinary drugs company Dechra Pharmaceuticals said its pretax profit rose in the first half of its financial year on stronger revenue, with good growth in its existing portfolio and encouraging signs from its pipeline. The company said its pretax profit for the six months to the end of December was GBP14.2 million, up from GBP12.6 million a year earlier, as revenue increased to GBP110.7 million from GBP100.9 million. It declared an interim dividend for the half of 5.55 pence per share, up 8.4% year-on-year.
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Cairn Energy and EnQuest said they increased their holdings in the Kraken oil project in the UK North Sea, buying out the third partner on the project. Cairn said it has increased its stake in the project to 29.5% after it bought a further 4.5% interest in the project from First Oil. EnQuest said it had bought another 10.5% stake in the project to raise its total holding to 70.5%.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Bank of Ireland said it plans to pay its first dividend since 2008, as the lender reported a 30% increase in annual underlying profit. Underlying profit rose to EUR1.20 billion in 2015, from EUR921.0 million the prior year, paving the way for Ireland's biggest lender to pay a dividend for 2016, with an initial payment to be made in the first half of 2017.The bank said to expect dividend payments to re-commence at a modest level. The payments will be built over time, towards a payout ratio of around 50% of sustainable earnings.
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Irish insulation provider Kingspan Group said its profit and revenue both surged in 2015, helped in part by the translation effect of the weak euro and strong performances in its core UK and US markets, prompting a big hike to its dividend. Kingspan said its pretax profit for the year to the end of December rose to EUR232.0 million, up from EUR127.5 million a year earlier, as revenue rose to EUR2.77 billion from EUR1.89 billion. Kingspan will pay a final dividend of 17.0 euro cents per share, taking its total dividend for the year up to 25.0 cents, a 54% rise year-on-year.
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Petra Diamonds said it is on track to meet production guidance for the full year, but said its revenue had been hit in the first half its financial year due to lower prices for the diamonds it sold. Petra said its diamond production for the half to the end of December rose 2.0% year-on-year to 1.6 million carats, ahead of its production guidance for the half of 1.5 million carats, leaving the group on track to hit its full year target of 3.3 million to 3.4 million carats.
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COMPANIES - INTERNATIONAL
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Yahoo! will begin approaching potential corporate and private equity buyers as soon as Monday as the company seeks bidders for its core business, Bloomberg reported citing people familiar with the matter. Companies such as Verizon Communications, Comcast and AT&T are among interested parties, as well as buyout firms including Bain Capital Partners, KKR and TPG. The potential first-round bids for the business are unlikely to come in for at least a month, the report said.
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Cisco announced that it will begin collaborating with Ericsson and Intel to develop and trial the industry's first fifth generation mobile networks router. Cisco, Ericsson and Intel are partnering with Verizon within an ecosystem to accelerate the pace of critical 5G innovations. The companies said the solution will offer gigabit-per-second speeds by combining Cisco's enterprise networking innovations with Ericsson's advanced 5G mobile networking technology and Intel's next-generation 5G silicon.
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AT&T said it plans to invest nearly USD10 billion in 2016 to deliver its integrated solutions for businesses worldwide. This investment will bolster the company's network and capabilities to enhance the customer experience, including service delivery and support. AT&T will also expand its platforms and launch new solutions in more places. AT&T continues to expect its overall capital investment for 2016 to be in the USD22 billion range.
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South Korean conglomerate Samsung Electronics unveiled next generation smartphones Samsung Galaxy S7 and Galaxy S7 edge, which will be available starting mid-March. The 5.1-inch Galaxy S7 and 5.5-inch Galaxy S7 edge are constructed with 3D glass and metal.
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Swiss luxury group Richemont confirmed it is making plans to shed up to 350 jobs, marking the first such announcement by a major Swiss watchmaker in the current market slump. Swiss newspaper Le Temps reported that Richemont was considering a reduction of its production capacity and staff numbers in Switzerland, in reaction to the strong Swiss franc and to the downturn in tourism in Europe since November. A spokeswoman for the company that includes the Cartier, IWC Schaffhausen and Montblanc brands told dpa that the report is correct.
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Monday's Scheduled AGMs/EGMs
Kimberly Enterprises
OMG
BlackRock Income Strategies Trust
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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