2nd Dec 2015 08:23
LONDON (Alliance News) - Significant share placings highlighted early stock-market activity in London Wednesday, ahead of a eurozone inflation reading.
Moneysupermarket.com Group and Saga were the two biggest mid-cap fallers, down 6.2% and 5.0%, respectively, after large sales by major shareholders. Moneysupermarket.com also announced that founder Simon Nixon will step down from the board at year end, as he continued to reduce his holding in the price comparison website.
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 6,413.57
FTSE 250: up 0.1% at 17,525.90
AIM ALL-SHARE: up 0.2% at 739.64
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Hang Seng: closed up 0.4% at 22,479.69
Nikkei 225: closed down 0.4% at 19,938.13
DJIA: closed up 1.0% at 17,888.35
S&P 500: closed up 1.1% at 2,102.63
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GBP: firm at USD1.5077 (USD1.5064)
EUR: firm at USD1.0627 (USD1.0619)
GOLD: up at USD1,068.29 per ounce (USD1,066.10)
OIL (Brent): soft at USD44.31 a barrel (USD44.43)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in GMT)
09:30 UK PMI Construction
10:00 EU Consumer and Producer Price indices
12:00 US MBA Mortgage Applications
13:10 US Fed's Lockhart speech
13:15 US ADP Employment Change, Unit Labor Costs and Nonfarm Productivity
14:45 US ISM New York index
15:00 Canada BoC Interest Rate Decision
15:30 US EIA Crude Oil Stocks
16:00 US Fed's Yellen Speech
19:00 US Fed's Beige Book
20:40 US FOMC Member Williams speech
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A top Federal Reserve official said he wants the central back to delay raising interest rates until the economy is on more solid footing. Chicago Fed President Charles Evans sees the US economy growing about 2.5% next year, enough to warrant only very gradual rate hikes once the Fed begins tightening. A federal funds rate below 1% could be appropriate at the end of 2016, he added. Evans delivered his remarks this morning at Michigan State University. The Fed meets December 15-16 to decide on monetary policy.
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US President Barack Obama's clean power plan faced a major challenge at home even as he promoted a new international climate change deal on the world stage in Paris. The US House of Representatives approved two measures that would dismantle Obama's crackdown on carbon dioxide emissions from coal-fed power plants. A clear majority of more than 235 members, most of them Republicans, adopted the same measures approved in November by the US Senate. The votes would dismantle Obama's new rules that require reduction of carbon dioxide emissions from power plants by 32% from 2005 levels by 2030.
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The US plans to send additional special forces to Iraq to aid Iraqi and Kurdish forces against Islamic State militants and will also consider additional forces in Syria, Defence Secretary Ashton Carter said. An expeditionary targeting force in Iraq would eventually conduct raids, free hostages, gather intelligence and capture Islamic State leaders, Carter told the Armed Services Committee in the House of Representatives. He did not provide details about troop levels or where the soldiers would be based.
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Three-way talks aimed at resolving Russian concerns over a free trade agreement struck between the EU and Ukraine failed to deliver a breakthrough, with just a month left before the deal comes into effect. Russia has threatened to impose economic sanctions on Kiev from January 1, the date when the agreement is set to go into force. The start date had previously been delayed by a year to address fears raised by Moscow that the deal could adversely affect its economy. The European Commission - the EU's executive - is steadfast that it will not be postponed a second time.
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BROKER RATING CHANGES
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MORGAN STANLEY RAISES ASTRAZENECA TO 'OVERWEIGHT' ('UNDERWEIGHT') - PRICE TARGET 5300 (4300) PENCE
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Investec Cuts Dixons Carphone To Add From Buy, Keeps Target At 510p
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HSBC INITIATES BODYCOTE WITH 'BUY' - TARGET 675 PENCE
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COMPANIES - FTSE 100
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Enterprise software provider Sage Group said its pretax profit edged lower in its recently-ended financial year due to restructuring costs, but its organic growth hit its target and the group remains confident on its outlook. Sage said its pretax profit for the year to the end of September was GBP275.8 million, slightly down from the GBP278.7 million it made a year earlier, due to higher one-off selling and administrative costs related to restructuring activity to save costs. Stripping out those one-offs, pretax profit rose to GBP358.5 million from GBP340.9 million. Sage will pay a total dividend for the year of 13.10 pence per share, up from 12.12p.
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Vodafone Group said it has agreed an extension to its strategic partnership with Swiss telecommunications group Swisscom AG for a further four years. The deal gives Swisscom customers roaming benefits, including high-speed data in locations where Vodafone operates a 4G mobile network.
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The chief executive of UK media and communications regulator Ofcom has suggested that something will have to change for BT Group's Openreach network infrastructure business, amid an ongoing review of the UK broadband market by the watchdog, The Independent reported. Sharon White said Ofcom was considering four options for the future of Openreach, but warned keeping the status quo was "unlikely". In addition to a complete spin-off of Openreach as a separate company, White said the other options being considered including maintaining the current arrangement, more deregulation of the system, or adjusting the current system.
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Long-time blue chip Wm Morrison Supermarkets is likely to drop out of the FTSE 100 in Wednesday's quarterly index review, joining aerospace firm Meggitt and outsourcer G4S in demotion to the FTSE 250, replaced by payments company Worldpay Group, logistics company DCC and lender Provident Financial. The index changes will be issued after market close on Wednesday, based on closing prices on Tuesday. The changes come into effect from the start of trading on Monday, December 21.
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COMPANIES - FTSE 250
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Price comparison site Moneysupermarket.com Group said founder Simon Nixon has sold a 5.8% stake in the company through a share placing, almost half of his holding, and the company said he will step down from the board at the end of the year. Nixon placed 32.0 million shares at 305.00 pence per share, raising gross proceeds of GBP98.0 million for Nixon. Shares in Moneysupermarket closed at 328.30p on Tuesday. Following completion of the placing, Nixon will be subject to a lock-up on its remaining shareholding in the company until the announcement of its 2015 results, due in March 2016. His remaining stake in Moneysupermarket.com is around 6.9%.
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Acromas Bid Co sold a 13% stake in over-50s products and services provider Saga to institutional investors, more than had initially been planned and raising GBP290.0 million for the seller. Acromas sold 145.0 million Saga shares at 200.00 pence per share. Saga shares closed at 212.2p on Tuesday. The deal was announced late on Tuesday, but Acromas had initially only intended to sell around 110.0 million shares, or a 10% stake in Saga. Acromas now will hold 32% of Saga following the sale.
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Zoopla Property Group doubled its final dividend as its pretax profit and revenue both increased in the year to the end of September, while its agency membership has continued to grow despite a new challenger in the market. The online property portal said pretax profit for the year to the end of September rose 17% to GBP33.6 million, from GBP28.6 million, as revenue increased to GBP107.6 million from GBP80.2 million. Th company will pay a final dividend of 2.5 pence per share, more than double the 1.1p it paid a year earlier, taking its total dividend payout to 3.5p.
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Howden Joinery Group said it has appointed Richard Pennycook as its new chairman to replace outgoing Will Samuel. Samuel will step down after the company's annual general meeting in May 2016. Pennycook has been a non-executive at Howden since September 2013. He is currently the chief executive of the Co-operative Group and sits on the board of housebuilder Persimmon.
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Pub operator Greene King said its pretax profit and revenue rose in the first half thanks to the integration of the Spirit Pub business, though like-for-like sales growth also was solid and the group hiked its interim dividend. Thecompany said its pretax profit for the 24 weeks to October 18 was GBP84.9 million, up from GBP72.0 million, as revenue surged up to GBP917.7 million from GBP614.9 million. Greene King will pay an interim dividend of 8.45 pence, up from 7.95p.
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Wealth manager Brewin Dolphin Holdings reported higher profit and an increase in discretionary funds under management over the course of its last financial year, and said that expansion is now on its agenda. Adjusted pretax profit, which strips out one-off items such as the GBP31.7 million impairment charge taken on the termination of a software project in the previous year, increased to GBP62.2 million in the year ended September 30, from GBP58.4 million the prior year. Without the adjustments, pretax profit increased to GBP61.0 million from GBP6.8 million. Brewin lifted its dividend for the year as a whole to 12.0 pence from 9.9p.
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COMPANIES - LONDON MAIN MARKET AND AIM
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De La Rue reiterated that it expects to save more than GBP13.0 million annually from its financial year ending in 2019, after the banknote printer published the results of a review that will reduce print capacity and affect hundreds of jobs. The group is reducing banknote print capacity by 2.0 billion to 6.0 billion per annum, and will halve the number of production lines to four. The plan means the company will no longer print banknotes in Malta, instead focusing on three "centres for excellence" in the UK, Kenya and Sri Lanka. A "centre for excellence" for identity and security print will be created in Malta, as De La Rue targets those markets.
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Cairn Homes late Tuesday proposed issuing a substantial amount of new shares through an accelerated bookbuild to raise funds so it can capitalise on the recovering residential property market in Ireland. The proposition follows from news earlier Tuesday that Cairn had agreed a new four year, EUR150.0 million senior debt facility with Allied Irish Banks PLC, secured against a corporate level debenture, to fund "acquisitions and growth". Cairn is proposing to issue over 46.9 million new shares to both existing and new institutional investors, which represents a smidgen under 10% of its current issued share capital. Cairn shares closed up 1.1% to 1.13 euros per share on Tuesday. The placing price and the final amount of shares that will be issued will be announced once the bookbuild is closed. Based on that closing share price on Tuesday, the placing would raise in the region of EUR53.0 million.
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COMPANIES - INTERNATIONAL
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Facebook Chief Executive Officer Mark Zuckerberg announced plans to give away 99% of his stock in the social network during his lifetime to advance philanthropic causes. The current value of the planned donation is about USD45 billion, Zuckerberg and his wife, Priscilla Chan, said in a letter to their newborn daughter. Separately, the company disclosed in a regulatory filing that Zuckerberg has established a new entity, the Chan Zuckerberg Initiative, LLC, and he will control the voting and disposition of any shares held by such entity. He plans to sell or gift no more than USD1 billion of Facebook stock each year for the next three years and that he intends to retain his majority voting position in the company for the foreseeable future.
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Yahoo! board plans to weigh a potential sale of the company's core business during a series of meetings beginning Wednesday and continuing through Friday, the Wall Street Journal reported citing people familiar with the matter. The board is expected to discuss whether to proceed with a plan to spin off more than USD30 billion in shares of Alibaba Holding Group, find a buyer for Yahoo's core business of Web properties, or both, the report said.
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Citigroup plans to leave its bonus pool unchanged from 2014, joining JPMorgan Chase in a move that puts pressure on their weakened rivals in Europe, Bloomberg reported citing a person familiar with the matter. Citigroup told senior managers Tuesday about the compensation figures, which may yet change depending on how markets perform in the year's final month.
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US sales of Volkswagen cars plunged 25% in November in the wake of a massive emissions cheating scandal, the German automaker said. Sales dropped to 23,882 units in November compared with 31,725 units for all Volkswagen brand vehicles in November last year. The dip in sales reflects the impact of the recent stop of sales for all 2-litre, 4-cylinder TDI vehicles as well as for the 3-litre V6, the company said in a news release. Until now the scandal had not affected sales in the US, which increased slightly in September and October.
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French dairy giant Danone announced it is investing EUR240 million to build a new plant for its Early Life Nutrition business. It said the state-of-the-art facility will be built in Cuijk in the Netherlands, and will start production in late 2017.
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Wednesday's Scheduled AGMs/EGMs
Vernalis
Gemfields
London Finance & Investment Group
Matchtech Group
Telit Communications (re share buyback)
Bioventix
PureCircle
Jubilee Platinum
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
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