18th Feb 2025 07:52
(Alliance News) - London's FTSE 100 is called to open slightly higher on Tuesday, despite the pound perking up after UK labour market data.
The Office for National Statistics said the UK jobless rate in the three months to December was 4.4%, where it stood in the three months to November. The unemployment rate had been expected to pick up to 4.5%, according to FXStreet cited consensus.
The ONS noted the UK jobless rate increased from 4.3% in the three months to September and from 3.9% in the final three months of 2023.
Average yearly growth for regular earnings, so excluding bonuses, was 6.0% in December alone. Growth picked up speed from 5.6% in November. Including bonuses, pay growth picked up to 5.9% in December, from 5.5% in November.
For the three months to December, average regular pay growth was 5.9%, accelerating from 5.6% in the three months to November. Total pay growth was 6.0%, picking up speed from 5.5%. The total pay outcome beat the FXStreet cited consensus of 5.9%, while regular pay growth was in line.
"The UK Labour market tightened a bit more than expected over the Christmas period, with unemployment lower than feared and wages rising. However, we worry that this proves a final festive blowout ahead of a painful spring," Wealth Club analyst Nicholas Hyett commented.
"Rising living wages and an increase in employers national insurance contributions, mean lots of large employers have said they may look to cut wage bills ahead of April. The supermarket sector has already reported job losses, and others are expected to follow as the changes approach."
In early UK corporate news, InterContinental Hotels announced a new share buyback, Antofagasta posted earnings growth and Anglo American has sold its nickel business.
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 0.1% at 8,774.61
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Hang Seng: up 1.2% at 22,888.07
Nikkei 225: up 0.3% at 39,270.40
S&P/ASX 200: down 0.7% at 8,481.00
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US financial markets closed on Monday for Washington's Birthday on Monday.
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EUR: lower at USD1.0469 (USD1.0482)
GBP: slightly higher at USD1.2616 (USD1.2613)
USD: higher at JPY151.90 (JPY151.41)
GOLD: higher at USD2,911.73 per ounce (USD2,898.96)
(Brent): higher at USD75.28 a barrel (USD74.98)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 GMT eurozone ZEW economic sentiment survey
10:00 GMT Germany ZEW economic sentiment survey
13:30 GMT US New York empire state manufacturing index
18:00 GMT US Federal Reserve Vice Chair Michael Barr speaks
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Keir Starmer has urged Donald Trump to provide a "backstop" to any Ukraine peace settlement, insisting it is the only way to deter Russia from attacking the country again. The UK prime minister's appeal to the US president came after European leaders gathered in Paris for emergency talks on the future security of the continent following Washington's push for a deal with Russia. Starmer has said he would be prepared to send peacekeeping troops to Ukraine, but some present at the meeting – including German Chancellor Olaf Scholz – wanted to resist discussing any European force being used to monitor a ceasefire. Speaking after the summit, the prime minister warned that allies – including Britain – will have to "take responsibility" for its security in light of a radically changed US foreign policy. Countries must commit to bolstering both spending and capability as Ukraine's fate has become an "existential question" for Europe, he said, after Washington warned it would reduce its defence commitments on the continent. But Starmer insisted a US security guarantee would be the only way to effectively prevent Moscow from attacking the country again in future. "Europe must play its role, and I'm prepared to consider committing British forces on the ground alongside others if there is a lasting peace agreement," he said. "But there must be a US backstop because a US security guarantee is the only way to effectively deter Russia from attacking Ukraine again." The prime minister will seek to bridge the gap between Europe and Washington as he flies to America for talks with Trump next week, when he will make the case for US security guarantees. "At stake is not just the future of Ukraine. It is an existential question for Europe as a whole, and therefore vital for Britain's national interest," Starmer said on Monday.
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BROKER RATING CHANGES
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HSBC raises St James's Place to 'hold' - price target 1,100 pence
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Morgan Stanley raises Glencore to 'overweight' - price target 470 pence
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COMPANIES - FTSE 100
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InterContinental Hotels Group PLC reported annual revenue growth, announced a USD900 million buyback and said it has made an acquisition. The hotel company said pretax profit in 2024 amounted to USD897 million, a decline of 11% from USD1.01 billion in 2023. Total revenue was USD4.92 billion, a climb of 6.5% from USD4.62 billion. Excluding System Fund and reimbursable revenue, revenue from reportable segments rose 6.8% in 2024 to USD2.31 billion, just shy of the company-compiled consensus of USD2.32 billion. Operating profit from reportable segments increased 10% to USD1.12 billion, in line with consensus. "Thanks to the hard work and dedication of our teams around the world, 2024 was an excellent year of financial performance, strong growth and important progress against a clear strategy that is unlocking the full potential of our business for all stakeholders," Chief Executive Officer Elie Maalouf said. Revenue per available room growth was 3.0% for the year, and 4.6% for the final-quarter alone. InterContinental Hotels Group lifted its total dividend by 10% to 167.6 cents per share from 152.3 cents. It upped its final dividend by 10% to 114.4 cents. In addition, it announced that it will kick off a USD900 million. The CEO added: "We enter 2025 with confidence in further capitalising on our scale, leading positions and the attractive long- term demand drivers for our markets, all of which supports the ongoing successful delivery of our growth algorithm." The firm also announced a deal to acquire the Ruby brand and related intellectual property for an initial EUR110.5 million. "Ruby is a premium urban lifestyle brand for modern travellers in must-visit city destinations and provides hotel owners with space-efficient designs and an attractive, flexible concept that IHG expects to rapidly expand globally," it added. It has been acquired from Ruby Sarl. "Established in 2013, the Ruby brand currently operates 20 hotels (3,483 rooms) in major cities across Europe and has another 10 pipeline hotels (2,235 rooms). There are 9 hotels open in Germany (across Cologne, Dusseldorf, Frankfurt, Hamburg, Munich and Stuttgart), 3 in the UK in London, 3 in Austria (Vienna), 2 in Switzerland (Geneva and Zurich), and 1 in each of Italy, Ireland and the Netherlands. The pipeline hotels are set to open over the next three years across more European cities including Edinburgh, Marseille, Rome and Stockholm."
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Antofagasta reported a rise in annual earnings and the miner said it is encouraged by the demand outlook for copper, a commodity the "world needs more of". Antofagasta's pretax profit in 2024 amounted to USD2.07 billion, a 5.4% rise from USD1.97 billion in 2023. Revenue improved 4.6% to USD6.61 billion from USD6.32 billion. "We have delivered another year of strong revenue growth and cash flow generation, and our Ebitda margin widened to 52%, maintaining our position at the top-end of our peer group of pure-play copper producers. Copper's unique role in energy security and electrification means that the world needs more of it, and our projects are on track to deliver industry-leading levels of responsible copper supply growth. Our strong balance sheet enables us to invest in profitable growth for the medium and long term," CEO Ivan Arriagada said. Antofagasta cut its annual dividend by 13% to 31.4 cents from 36.0 cents. It trimmed its final dividend by 3.3% to 23.5 cents. It noted its payout ratio was 50% of underlying earnings. The CEO added: "We are encouraged by the outlook for copper as demand remains strong and global constraints, such as grade decline, ore hardness and capex inflation, are steadily limiting existing supply expansions."
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Anglo American has struck a deal to sell its nickel business for up to USD500 million to resources firm MMG. MMG, which has operations in Australia, Botswana and Peru, will pay USD350 million on completion. There is also a potential price-linked earnout of USD100 million and a contingent consideration of USD50 million hinging on a final investment decision on development projects. "The nickel business includes two ferronickel operations in Brazil - Barro Alto and Codemin - and two high quality greenfield growth projects - Jacare and Morro Sem Bone," Anglo American said. CEO Duncan Wanblad added: "The sale of our nickel business after a highly competitive process marks a further important milestone towards simplifying our portfolio to create a more highly valued copper, premium iron ore, and crop nutrients business. Today's agreement, together with those signed in November 2024 to sell our steelmaking coal business, is expected to generate a total of up to USD5.3 billion of gross cash proceeds, reflecting the high quality of our steelmaking coal and nickel businesses. MMG is well-respected as a safe and responsible operator and we believe our agreement represents a strong outcome not only for our shareholders, but also for our employees and Brazilian stakeholders. We will work together to ensure a successful transition."
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COMPANIES - FTSE 250
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Plus500 announced a new share buyback and the trading platform provider reported growth in 2024 earnings. Pretax profit edged up 0.3% to USD337.2 million from GBP336.2 million, while revenue rose 5.8% to USD768.3 million from USD762.2 million. "We are delighted to announce a strong set of results for FY 2024. Our strong performance was driven by our market-leading proprietary technology, our international brand recognition, and our robust operating fundamentals. We leveraged our proprietary marketing technology to significantly increase our customer acquisition by 30% year-on-year and by 46% in Q4 2024 versus Q3. Our commitment to continued strategic investment has established the foundations for growth in future years," CEO David Zruia said. Plus500 announced a new USD110.0 million share buyback. It also announced a USD0.4025 final dividend and a USD0.8213 special dividend. It had paid a USD0.3911 final dividend and USD0.5551 special dividend a year prior. The CEO added: "Building on the group's strong operational and financial performance, we are pleased to announce today significant shareholder returns of USD200.0 million, comprising share buybacks of USD110.0 million and dividends of USD90.0 million, which takes our total shareholder returns to USD2.5 billion since our IPO in 2013."
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Assura said a private equity takeover proposal "materially" undervalues the care property investor. Kohlberg Kravis Robert on Monday had said Monday Assura rejected four bid proposals. KKR said the latest proposal was 48 pence per share in cash, valuing all of Assura's equity at GBP1.56 billion. Assura said Tuesday: "The board confirms that it considered the proposal carefully with its advisers and concluded that it materially undervalued the company and its prospects and therefore rejected it unanimously. No further proposal from KKR has been received." It added: "The board remains confident in the long-term prospects of the company and believes that Assura is strongly positioned to create value for shareholders. Shareholders are advised to take no action."
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OTHER COMPANIES
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BHP Group reported considerable profit growth in the first half with the company increasing its copper and iron ore output. The miner said profit attributable to shareholders multiplied to USD4.42 billion in the first half ended December 31 from USD927 million a year prior. Revenue declined 7.5% to USD25.18 billion from USD27.23 billion. Expenses excluding net finance costs fell 18% to USD16.37 billion from USD19.98 billion. BHP revenue fell short of company-compiled consensus of USD25.21 billion. Underlying earnings before interest, tax, depreciation, and amortisation fell 11% to USD12.36 billion from USD13.88 billion a year prior, which the miner put down to the lower revenue. The Ebitda outturn narrowly beat consensus of USD12.35 billion, however. BHP cut its interim dividend by 31% on-year to 50 cents per share from 72 cents. Chief Executive Officer Mike Henry said: "The strength of the result demonstrates BHP's operational resilience and its ability to perform through the cycle, with standout production performances in the half from Escondida, [Western Australia Iron Ore] and [BHP Mitsubishi Alliance]. WAIO has maintained its lead as the lowest-cost iron ore producer globally, a testament to our ongoing work to drive productivity at our operations. We continued to invest in growth, including USD3.2 billion in potash and copper, and have now also successfully completed the USD2.0 billion formation of Vicuna Corp, a 50/50 joint venture with Lundin Mining to develop the combined Filo del Sol and Josemaria copper projects in an exciting prospective region in Argentina."
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By Eric Cunha, Alliance News news editor
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