21st Mar 2023 07:57
(Alliance News) - Stocks were set to open higher on Tuesday after the buyout of Credit Suisse by UBS at the weekend helped soothe worries of a full-blown banking crisis.
Focus over the next two days will be on the US Federal Open Market Committee, which begins its two-day policy-setting meeting on Tuesday and will announce its next interest rate decision on Wednesday at 1800 GMT.
"Markets have become increasingly divided as to what the FOMC may well do when it comes to interest rates tomorrow, with opinions split between another 25 basis point hike, a pause, and a 25bps rate cut," said Michael Hewson, chief market analyst at CMC Markets.
In local corporate news, DIY retailer Kingfisher reported a slip in annual profit, while data analytics firm YouGov said interim profit more than doubled.
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 43.75 points, or 0.6%, at 7,447.60
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Hang Seng: up 1.4% at 19,261.61
Nikkei 225: Tokyo closed for Vernal Equinox holiday
S&P/ASX 200: closed up 0.8% at 6,955.40
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DJIA: closed up 382.60 points, 1.2%, at 32,244.58
S&P 500: closed up 0.9% at 3,951.57
Nasdaq Composite: closed up 0.4% at 11,675.54
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EUR: soft at USD1.0714 (USD1.0723)
GBP: soft at USD1.2252 (USD1.2270)
USD: higher at JPY131.70 (JPY131.47)
Gold: lower at USD1,975.35 per ounce (USD1,977.65)
(Brent): higher at USD73.00 a barrel (USD72.31)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 CET Germany ZEW indicator of economic sentiment
11:30 GMT UK Chancellor Jeremy Hunt takes questions from MPs
08:30 EDT Canada consumer price index
08:55 EDT US Johnson Redbook retail sales index
16:30 EDT US API weekly statistical bulletin
US Federal Open Market Committee meeting begins
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French President Emmanuel Macron will give a televised interview, his office said Tuesday, after his government fended off two no-confidence votes in parliament after a controversial pensions overhaul that has sparked mass protests. Macron's government used a constitutional measure to adopt the reform, which pushes back the retirement age to 64 from 62, without a vote in the lower-house National Assembly, sparking claims of a "denial of democracy" by angry demonstrators.
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BROKER RATING CHANGES
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Credit Suisse raises Centrica price target to 140 pence - 'outperform'
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Jefferies raises Intertek price target to 4,300 (4,200) pence - 'hold'
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RBC raises Rentokil initial price target to 670 (645) pence - 'outperform'
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COMPANIES - FTSE 100
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Kingfisher reported a sharp drop in profit in its most recently ended financial year but said the performance was in-line with its expectations and guidance against a strong comparator year. In the financial year that ended January 31, the B&Q-owner reported a pretax profit of GBP611 million, down 39% from GBP1.0 billion the year prior. This reflected lower operating profit and the impact of impairments following significant increases in discount rates and revised future projections, the company explained. Sales slipped 0.9% year-on-year to GBP13.06 billion from GBP13.18 billion. Kingfisher maintained its total dividend at 12.40 pence per share.
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Pearson announced it has agreed to sell its Pearson Online Learnings Services to private equity firm Regent. The consideration consists of 28% of POLS positive adjusted earnings before interest, tax, depreciation, and amortization in each calender year for a period of 6-years from completion, and a further contingent payment equal to 28% of the proceeds received by Regent in relation to any monetisation event of POLS following completion. The sale follows a strategic review of the firm's Online Program Management business, the educational publisher said.
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COMPANIES - FTSE 250
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US-focused oil and gas company Diversified Energy recorded an average net daily production of 135 million barrels of oil equivalent in 2022. It reported a pretax loss of USD799.5 million, widened from USD550.9 million in 2021, and a net loss of USD620 million, while revenue inclusive of hedges increased 49% to USD1 billion. Total revenue surged 90% to USD1.92 billion. Chief Executive Rusty Hutson said: "2022 was another productive year for Diversified, growing our high-quality asset base, optimizing our production, continuing our vertical integration, generating significant free cash flow, and returning meaningful capital to shareholders through dividends and share repurchases. This translated into Diversified ranking in the top 20 of total shareholder returns in the FTSE 250 for the year." The company recommended a final quarterly dividend of USD0.044.
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Supermarket Income REIT said it has refinanced its existing loan facilities with Bayerische Landesbank with a new three-year GBP86.9 million term loan. The facility matures in March 2026 and is priced at a margin of 1.65% above the sterling overnight index average which has been fully hedged for the term of the facility using an interest rate swap to a fixed rate of 4.29%, including margin.
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OTHER COMPANIES
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Market research and data analytics firm YouGov reported its interim profit more than doubled and said it was confident its current sales momentum will continue in line with current market expectations for the full-year. For the six months ended January 31, YouGov posted a pretax profit of GBP21.0 million, more than doubled from GBP9.2 million a year previous, as revenue jumped 30% to GBP131.4 million from GBP101.2 million. Looking ahead, YouGov said it expects revenue in-line with current market expectations of GBP265 million for the full-year. Chief Executive Stephan Shakespeare said: "Our demand environment remains robust with increasingly sticky, long-term relationships with existing customers, and growing opportunities for multi-year contracts and trackers with new customers. This sales momentum has continued into the second half of the year, giving us confidence that YouGov can achieve top-line growth for the full year in line with current market expectations."
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Palm oil producer MP Evans reported a drop in annual profit. In 2022, pretax profit fell to USD100.3 million from USD112.5 million in 2021. Costs of sales jumped to USD217.7 million from USD173.0 million and foreign-exchange losses surged to USD3.4 million from just USD820,000. The company also recorded no profit on the sale of land in 2022 compared to USD13.9 million in 2021. Revenue from continuing operations, meanwhile, climbed to USD326.9 million from USD276.6 million. MP Evans added it has made a positive start to 2023, with total crop processed in the first two months of the year 8% higher than the first two months of 2022. The company recommended a final dividend of 30 pence per share, up from 25p a year prior.
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By Heather Rydings, Alliance News senior economics reporter
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