7th Dec 2016 08:23
LONDON (Alliance News) - UK share prices opened firm early Wednesday, though sterling slipped by about a cent overnight to trade back below USD1.27.
The move in the pound came as UK Prime Minister Theresa May committed to publishing a Brexit plan before beginning the process of leaving the EU as part of a compromise in which MPs will explicitly back her timetable for pulling out.
Faced with a revolt, the prime minister has allowed up to 40 rebellious Tory backbenchers to back Labour demands for her to set out Britain's negotiating strategy before triggering Brexit.
In return, most are expected to vote for a compromise government amendment in the Commons on Wednesday, which states that May should invoke Article 50 by April to start the process of leaving the EU.
Downing Street stressed it would not affect the government's Supreme Court battle to overturn a ruling that it should obtain parliament's approval before triggering Article 50 because it is a symbolic motion rather than legislation.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.8% at 6,830.54
FTSE 250: up 0.2% at 17,494.47
AIM ALL-SHARE: up 0.3% at 812.98
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Hang Seng: closed up 0.6% at 22,800.92
Nikkei 225: closed up 0.7% at 18,496.69
DJIA: closed up 0.2% at 19,251.78
S&P 500: closed up 0.3% at 2,212.23
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GBP: down at USD1.2622 (USD1.2710)
EUR: soft at USD1.0720 (USD1.0731)
GOLD: down at USD1,168.71 per ounce (USD1,171.38)
OIL (Brent): soft at USD53.55 a barrel (USD53.94)
(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)
UK Supreme Court continues to hear government's Brexit case appeal
0830 UK Halifax house prices
0930 UK industrial and manufacturing production
1200 US MBA mortgage applications
1500 US JOLTS job openings
1500 UK NIESR GDP estimate
1500 Bank of Canada interest rate decision and statement
1530 US EIA crude oil stocks
2000 US consumer credit
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UK Chancellor of the Exchequer Philip Hammond has flown to South Africa for two days of talks to "make the most of the opportunities that lie ahead" as Britain prepares to quit the European Union. The chancellor will have meetings with ministerial counterparts and business leaders aimed at deepening economic ties with the country, which is the UK's biggest export market in Africa. Visits to Japan and South Korea will follow next week as Mr Hammond tours the globe to boost relations with key markets.
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US President Barack Obama urged his country to uphold its values in the fight against terrorism as he prepares to turn over control of the military to his successor Donald Trump. In a final national security address to troops in Tampa, Florida, Obama called on the US to denounce discrimination and torture while respecting religious liberty and civil rights. Obama spoke after meeting with members of the military at US Central Command, which oversees US operations in Iraq, Syria and Afghanistan, and US Special Operations Command.
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NATO foreign ministers signed a deal on closer collaboration with the EU on Tuesday, with the bloc's top diplomat heralding a "new important era" amid lingering uncertainty over the future foreign policies of US president-elect Trump. Trump triggered concern among NATO allies during his presidential campaign when he criticised meagre defence spending among alliance members and said the US - the largest contributor to NATO's budget - might not defend some countries during an attack. EU foreign policy chief Federica Mogherini and NATO Secretary General Jens Stoltenberg tried to lessen those anxieties on Tuesday when they presented a 42-point plan for closer defence work between the EU and the military alliance.
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Germany's industrial production recovered in October, figures from Destatis showed. Industrial production grew 0.3% in October from September, when it declined by revised 1.6%. Excluding energy and construction, industrial production gained only 0.1%. Energy output slid 0.5%, while construction output grew 1.7%.
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The Bank of Japan has not shifted its focus away from expanding the monetary base, Deputy Governor Kikuo Iwata said. "Some argue that the bank's policy focus has shifted from quantity to interest rates under the new policy framework, but such an understanding is inappropriate," he told business leaders in Nagasaki. "Since the introduction of QQE, the Bank has been consistently pursuing powerful monetary easing both in terms of quantity and interest rates, and there is no change in its stance."
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Syrian regime forces made rapid inroads in eastern Aleppo, as government ally Russia accused the US of cancelling a key meeting to discuss the fate of the shrinking rebel enclave. Opposition fighters who refused to leave the area would be "eradicated," Russian Foreign Minister Sergei Lavrov said in remarks carried by Russian state news agency TASS. Government forces captured the al-Shaar district and a number of adjoining areas, confining rebels to the southern part of the enclave, the Syrian Observatory for Human Rights said.
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Brazil's Senate rejected a Supreme Court judge's decision to suspend Senate President Renan Calheiros, saying it will keep him in office pending a decision by the full court. The Senate's leadership said it will wait for a verdict by a plenary of the Supreme Court, expected to take place Wednesday, to decide whether to accept Judge Marco Aurelio Mello's suspension of Calheiros, who is charged with embezzlement of public funds.
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BROKER RATING CHANGES
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CREDIT SUISSE RAISES RIO TINTO TO 'OUTPERFORM' (NEUTRAL) - PRICE TARGET 3600 PENCE
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CREDIT SUISSE CUTS BHP BILLITON TO 'NEUTRAL' (OUTPERFORM) - PRICE TARGET 1380 PENCE
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JPMORGAN CUTS UNILEVER TO 'NEUTRAL' (OVERWEIGHT) - PRICE TARGET 3200 (4100) PENCE
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UBS CUTS SHIRE TO 'NEUTRAL' ('BUY') - TARGET 5000 (5600) PENCE
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COMPANIES - FTSE 100
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Payroll software provider Sage Group said it is evaluating options for its North American payments business. Saying it was responding to unspecified press speculation, Sage said it is considering strategic options for the North American payments unit, including a sale of the operation. There is no certainty this will lead to a transaction for the business, Sage said.
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COMPANIES - FTSE 250
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Carillion said the pace of new order intake has declined in the second half, citing changes within UK government departments following the Brexit vote. The construction and support services company said it is performing in line with expectations and expects to report strong revenue growth for 2016. This growth should offset a slightly lower operating margin, Carillion said, noting its full-year operating profit is expected to rise year-on-year. Carillion also said its Canadian subsidiary, Rokstad, has been selected by power and gas utility Manitoba Hydro as the preferred provider for the next phase of its Bipole lll high-voltage transmission line project in Manitoba. The project has an estimated revenue value of GBP120.0 million.
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Stagecoach Group reported a dip in pretax profit for the first half of its financial year but hiked its dividend as it said its expectations for the full year are broadly unchanged. The bus and rail operator said it made a pretax profit of GBP89.5 million in the six months to October 29, down slightly from GBP90.8 million a year before. Revenue edged up to GBP2.00 billion from GBP1.97 billion. Stagecoach declared an interim dividend of 3.80 pence per share, up 8.6% on 3.50p a year prior, reflecting the company's confidence in the long-term prospects for public transport markets.
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Spire Healthcare Group said it has appointed former Allied Healthcare Chief Executive Catherine Mason as chief operating officer, effective from Monday next week. Allied Healthcare was part of London-listed Saga until last December when it was sold to European investment company Aurelius Group. Hospital group Spire confirmed its plans to appoint current Chief Operating Officer Andrew White as chief executive, though said he was currently undergoing a period of sustained medical treatment.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Stockbroker and investment bank Numis Corp said that, despite lower corporate activity, it was able to boost its profit and revenue in its recently completed financial year. Numis reported that for its financial year that ended September 30 it made a pretax profit of GBP32.5 million, up 25% from GBP26.1 million the year prior. Revenue for the period was GBP112.3 million, increased by 15% from GBP98.0 million previously. The company proposed a final dividend of 6.5 pence a share, putting its full-year dividend at 12.0p a share, a 4% hike.
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Clothing, accessories and homeware retailer Joules Group said it remains confident on the outlook for its current financial year as it said revenue in the first half grew by 16%. Joules reported revenue for the 26 weeks to November 27 of GBP81.4 million, compared to GBP70.1 million a year before, with good performances from its new products and core ranges and a boost from its expanded estate of shops. Retail revenue from its stores rose 16% year-on-year, with good growth in both physical and online sales, while Wholesale revenue rose 17% thanks to a strong autumn/winter 2016 order book.
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Debt purchasing company Arrow Global Group said its current chief executive officer Tom Drury has decided to step down, to be replaced by former Virgin Money Holdings finance boss Lee Rochford. Arrow said that Rochford will take over as chief executive from January 3, 2017, while Drury will stay on until the end of February 2017 to help with the handover.
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MP Evans Group said late Tuesday it has agreed a USD100.0 million sale of its stake in joint venture PT Agro Muko, as it continues to try to fight off a takeover offer from Kuala Lumpur Kepong. MP Evans said it will sell its 37% stake in PT Agro Muko to Belgian partner Sipef group, which already holds at 47% interest in the company. The company said it proposes a special dividend of 10 pence per share after the sale of the interest.
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COMPANIES - INTERNATIONAL
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US president-elect Trump said Japanese telecommunications giant Softbank will invest USD50 billion in the US. Trump said the investment by the telecommunications and technology conglomerate will create 50,000 new jobs. The announcement came after Trump met with Softbank's billionaire chairman and chief executive Masayoshi Son in New York. There was no confirmation from Softbank, and neither Trump nor Son provided specific details about the investment.
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Plane manufacturer Boeing Co said it is working on subsequent phases of the US Air Force One programme following Trump's call to cancel the next order from Boeing. Boeing said that it is currently under contract for USD170 million to help determine the capabilities of complex military aircraft that serve the unique requirements of the US president. On Tuesday, Trump has asked the US government to cancel the order with Boeing for a new Air Force One, the official air plane for the president, as the costs on the programme were out of control. "Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than USD4 billion. Cancel order!" he tweeted.
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Separately, Boeing said that it agreed to acquire Liquid Robotics, a market leader in autonomous maritime systems and developer of the Wave Glider ocean surface robot, to grow its seabed-to-space autonomous capabilities. Liquid Robotics has about 100 employees in California and Hawaii. The terms of the agreement were not disclosed.
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Credit card giant Mastercard announced that its board has increased the company's quarterly cash dividend to USD0.22 per share, a 16% increase over the previous dividend of USD0.19 per share. The Mastercard board also approved a new share repurchase programme, authorising the company to repurchase up to USD4.00 billion of its Class A common stock. The new share repurchase programme will become effective at the completion of the company's previously announced USD4.00 billion share repurchase program. The company has approximately USD1.3 billion remaining under the current programme authorisation.
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JPMorgan Chase's new Sapphire Reserve credit card will reduce the bank's profit by USD200 million to USD300 million in the fourth quarter, Bloomberg reported citing Chief Executive Officer Jamie Dimon. Dimon reportedly said Tuesday at an investor conference in New York. "The card has been doing great and was embraced by consumers before the bank did any marketing. Now we have to account for acquisition cost in that business." JPMorgan introduced the card in August with a 100,000-point sign-up bonus for customers who spend USD4,000 in the first three months. The points are worth USD1,500 in travel booked through Chase's website. The cards, which carry a USD450 annual fee, were in such demand shortly after the launch that the bank temporarily ran out of the metal it uses to make them.
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The European Commission said it has approved the proposed acquisition of online business networking site LinkedIn by software giant Microsoft. The decision is conditional on compliance with a series of commitments aimed at preserving competition between professional social networks in Europe. As a result, the company has now obtained all of the regulatory approvals needed to complete the acquisition, and the deal will close in the coming days, Microsoft said.
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Wednesday's Shareholder Meetings
YouGov
Bioventix
Octagonal
Greatland Gold
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By Tom Waite; [email protected]; @thomaslwaite
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