9th Mar 2016 08:22
LONDON (Alliance News) - London shares open slightly lower Wednesday, with the pound, euro, oil and gold also losing ground overnight.
Prudential was the top blue-chip gainer ahead of its full-year results announcement at 0815 GMT but slipped back slightly thereafter, despite reporting a 22% increase in IFRS operating profit to more than GBP4.00 billion in 2015. The insurer declared a 38.78 pence ordinary dividend, up 5%, and a special dividend of 10p.
The stock was up 1.1% soon after the earnings release.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 6,120.41
FTSE 250: down 0.3% at 16,598.44
AIM ALL-SHARE: down 0.1% at 699.28
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Hang Seng: closed down 0.1% at 19,996.26
Nikkei 225: closed down 0.8% at 16,642.20
DJIA: closed down 0.6% at 16,964.10
S&P 500: closed down 1.1% at 1,979.26
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GBP: down at USD1.4189 (USD1.4218)
EUR: down at USD1.0971 (USD1.1042)
GOLD: down at USD1,258.20 per ounce (USD1,268.52)
OIL (Brent): down at USD39.73 a barrel (USD40.03)
(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 industrial and manufacturing production
12:00 US MBA mortgage applications
15:00 US wholesale inventories
15:00 UK NIESR GDP estimate
15:00 Canada BoC interest rate decision and policy statement
15:30 US EIA crude oil stocks
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Wind and rain will continue to batter the UK as severe weather warnings cover southern parts of the country. Commuters are likely to be affected as flooding and difficult driving conditions are expected and severe gales could affect trains. The Met Office has issued yellow warnings - which advise people to "be aware" - of wind and rain affecting southern England and Wales, with the rain warning stretching to the Midlands and Yorkshire. The South West and Wales will see severe gales bringing gusts of up to 70mph on the coast and 50-60 mph to inland areas. Some hill snow is also expected across England and Wales during the morning but this will ease slowly later.
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Japan's M2 money stock climbed 3.1% on year in February, the Bank of Japan said - coming in at 919.3 trillion yen. That was shy of expectations for an increase of 3.2%, which would have been unchanged from the January reading.
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Republican front-runner Donald Trump won two more states - Michigan and Mississippi - setting the stage for a potentially decisive round of intra-party battles next week for the conservative party's presidential nomination. Senator Ted Cruz, Trump's closest competitor, won the primary in the Western state of Idaho. Meanwhile, Democratic front-runner Hillary Clinton rolled to victory in Mississippi on the Gulf Coast but in the Midwest unexpectedly lost to Senator Bernie Sanders in Michigan, leaving the race for the left-leaning party's nomination unresolved.
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A plan by the EU and Turkey aimed at tackling migration flows came under fierce criticism from human rights advocates, even as thousands of asylum seekers remained stranded in Greece. Europe has struggled with an influx of migrants and asylum seekers that brought more than 1 million people to its shores last year, with some 140,000 more following since January. Many are fleeing the war in Syria, but economic migrants have also joined their ranks. Late Monday, EU leaders and Turkish Prime Minister Ahmet Davutoglu agreed to work on a deal under which all migrants reaching Greece from Turkey would be returned to the country, while the EU would directly resettle as many Syrians from Turkey as Ankara took back from Greece.
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BROKER RATING CHANGES
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HSBC CUTS BURBERRY TO 'HOLD' ('BUY') - TARGET 1,500 (1,380) PENCE
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TRADERS: JPMORGAN RAISES SSE TO 'OVERWEIGHT' ('UNDERWEIGHT')
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TRADERS: JPMORGAN RAISES CENTRICA TO 'NEUTRAL' ('UNDERWEIGHT')
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CITIGROUP CUTS SEVERN TRENT TO 'SELL'
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UBS CUTS TULLOW OIL TO 'NEUTRAL' ('BUY') - TARGET 210 PENCE
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BERENBERG RAISES RBS TO 'HOLD' ('SELL') - TARGET 250 PENCE
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TRADERS: INVESTEC CUTS STANDARD CHARTERED TO 'SELL' ('HOLD')
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JEFFERIES CUTS BHP BILLITON TO 'HOLD' ('BUY') - PRICE TARGET 800 PENCE
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COMPANIES - FTSE 100
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AstraZeneca said its MedImmune research and development arm has secured orphan drug designation for its MEDI-551 drug from the US Food & Drug Administration. The drugmaker said MEDI-551 is used to treat patients with neuromyelitis optica, an autoimmune disease of the central nervous system by which the body's immune system attacks healthy cells, most commonly in the optic nerves and spinal cord.
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COMPANIES - FTSE 250
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Security services provider G4S said pretax profit slipped in 2015 due to a goodwill charge on businesses it has sold, as revenue dipped on currency movements and it booked more provisions on legacy contracts in the UK. The world's largest security company by revenue said its pretax profit fell to GBP78.0 million from GBP128.0 million in 2014, hit by a GBP66.0 million goodwill charge it booked on businesses it has sold and on one of its operations in Estonia. G4S will pay a flat final dividend of 5.82 pence per share, meaning its total payout will rise 1.9% year-on-year to 9.41p.
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DS Smith said trading has remained in line with its expectations in the second half and backed its medium-term targets. The packaging company said volume growth has been strong in four months since the start of November, particularly in western and south eastern Europe. Its return on sales and return on average capital employed also improved year-on-year, DS Smith said, leading it to back its medium-term targets and its expectations for the full year to the end of April.
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Restaurant Group posted stronger profit and revenue and hiked its dividend for 2015, but gave a bearish outlook on 2016, with like-for-like sales having fallen so far this year. The restaurant operator said its pretax profit rose to GBP86.8 million in the 12 months to the end of December from GBP84.9 million a year earlier, with revenue rising 7.9% to GBP685.4 million from GBP635.2 million. The group will pay a final dividend of 10.6 pence per share, taking its total dividend up to 17.4p, a 13% rise year-on-year.
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Cairn Energy said it has successfully completed its second appraisal well offshore Senegal, adding it is "delighted" with the test results. The FTSE 250-listed oil and gas company said the SNE-3 well underwent two drill stem tests within the upper reservoirs. The first test produced a maximum flow rate of 5,400 barrels of oil per day and a main flow rate of 4,000 barrels of oil per day, both over a 24 hour period from a 15.0 metre zone.
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Building products distributor SIG said its pretax profit increased in 2015 due to lower one-off costs, but revenue was dragged lower by a challenging European market and a slowdown in the UK repair, maintenance and improvement segment. SIG said pretax profit for the year to the end of December rose to GBP51.3 million from GBP39.0 million in 2014, mainly due to lower amortisation and one-off costs booked by the group. Stripping out those one-offs, underlying pretax profit fell to GBP87.4 million from GBP99.1 million. SIG will pay a final dividend of 2.91 pence per share, taking its total dividend up to 4.60p, up 4.5% from the 4.40p payout in 2014.
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Diploma said it has acquired Cablecraft Ltd, headquartered near Dunstable in the UK, which provides cable accessory products used to identify, connect, secure and protect electrical cables, for up to GBP26.0 million in net cash. The acquired company made a GBP3.5 million pretax profit in 2015, according to Diploma, on revenue of about GBP15.4 million. It said Cablecraft will be immediately earnings enhancing for Diploma.
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Car dealer and mechanic Lookers said pretax profit and revenue grew in 2015 following a strong year in its new and used car franchises. The company said pretax profit rose to GBP62.8 million from GBP59.2 million, as revenue grew to GBP3.65 billion from GBP3.04 billion. Lookers will pay a final dividend of 2.05 pence per share, taking its total dividend to 3.12p, a 10% rise from the 2.84p 2014 payout.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Swiss recruitment group Adecco Group reported net income slipped slightly in the fourth quarter year-on-year and said it has struck a deal to acquire AIM-listed Penna Consulting. Adecco said it has reached an agreement to acquire Penna, a UK-based recruiter, for 365 pence per share, valuing Penna at GBP105.0 million. Penna had revenue of approximately GBP84.4 million for the 12 months ended March 31.
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COMPANIES - INTERNATIONAL
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Japan's Nippon Telegraph & Telephone is in negotiations to buy Perot Systems, the information-technology consulting division of Dell, for several billion dollars, according to reports citing people familiar with the matter. Nikkei newspaper reported that NTT was nearing a deal for the Dell division. The situation was still fluid and the price and scope of the acquisition have yet to be decided. Perot Systems was founded by former US presidential candidate Ross Perot and sold in 2009 to Dell for USD3.9 billion. Dell is in the midst of acquiring storage vendor EMC Corp. for tens of billions of dollars, and a potential sale of Perot Systems could raise cash to help finance the EMC deal.
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Citigroup's first-quarter revenue from trading in equity and fixed-income markets will decline 15% from last year, and quarterly investment-banking revenue will drop 25%, the Chief Financial Officer John Gerspach said at an investor conference. In fixed income, spread products continue to be pressured, while interest rates and currencies are hampered by a tough comparison to last year, Gerspach said. Gerspach noted that Citigroup will set aside USD400 million to cover restructuring costs as the firm continues to adjust its infrastructure and capacity to the sluggish revenue environment.
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Lockheed Martin announced a voluntary layoff program in its Aeronautics business that targets to reduce employment by about 1,000 positions at locations in the US.
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Inditex Group, the Spanish owner of Zara and other fast-fashion retail stores, reported net profit of EUR2.88 billion in fiscal 2015, up 15% from the year before. EBITDA registered growth of 15% to EUR4.70 billion. Net sales increased by 15% to EUR20.90 billion, underpinned by growth in all of the group's geographic regions. Sales growth in local currencies was 15%. Like-for-like sales growth was 8.5%.
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Mail and logistics group Deutsche Post DHL Group reported its consolidated net profit for fourth-quarter 2015 increased by 4.7% to EUR670 million from the previous year's EUR640 million euros. It also confirmed its guidance for 2016.
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Wednesday's Scheduled AGMs/EGMs
No Events Scheduled
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By Tom Waite; [email protected]; @thomaslwaite
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