12th Feb 2016 08:20
LONDON (Alliance News) - An absence of further bad news from Rolls-Royce sent the stock jump to the top of the FTSE 100 early Friday, up 12%.
The jet engine and power turbine maker left its outlook for 2016 unchanged, as it cut its dividend and reported a drop in underlying pretax profit.
Underlying pretax profit fell to GBP1.43 billion in 2015, from GBP1.62 billion in 2014, coming in ahead of the GBP1.3 billion expected by analysts, as underlying revenue fell to GBP13.35 billion from GBP13.86 billion.
Rolls cut its dividend for the year as a whole to 16.37 pence from 23.10p, slightly ahead of the 16.20p expected by analysts. Chief Executive Warren East said the payment to shareholders will be halved at the next half year.
Meanwhile, Countryside Properties priced its initial public offering at the lower end of its range, giving it a market capitalisation of GBP1.01 billion.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.3% at 5,609.01
FTSE 250: up 0.6% at 15,266.90
AIM ALL-SHARE: flat at 663.76
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Hang Seng: down 1.2% at 18,319.58
Nikkei 225: closed down 4.8% at 14,952.61
DJIA: closed down 1.6% at 15,660.18
S&P 500: closed down 1.2% at 1,829.08
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GBP: up at USD1.4497 (USD1.4444)
EUR: down at USD1.1283 (USD1.1354)
GOLD: down at USD1,238.80 per ounce (USD1,252.73)
OIL (Brent): up at USD31.00 a barrel (USD30.09)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in GMT)
EU EcoFin Meeting
09:00 Italy Gross Domestic Product Preliminary
09:00 EU Gross Domestic Product Preliminary
10:00 EU Industrial Production
13:30 US Retail Sales
13:30 US Import and Export Price indices
15:00 US Reuters/Michigan Consumer Sentiment Index Preliminary
15:00 US Fed's William Dudley speech
15:00 US Business Inventories
18:00 US Baker Hughes US Oil Rig Count
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US Federal Reserve Chair Janet Yellen downplayed the possibility the central bank might soon cut interest rates in a reversal of December's long-awaited tightening. "I have not thought that a downturn sufficient to cause the next move to be a cut was a likely possibility," Yellen told the Senate Finance Committee in her second day of Congressional testimony. Heavy recent losses in the stock market are not the result of the Fed's December rate hike, the first in a decade. Because the Fed reduced accommodation only "by a modest amount," it was "not mainly our policy" that prompted the January swoon. Yellen said the Fed is looking into negative rates, but made no promises that such measures would be taken even if the economy takes a turn for the worse.
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Germany's economy maintained growth momentum in the final three months of 2015, led by domestic demand, preliminary figures from Destatis showed. Gross domestic product grew a seasonally and calendar-adjusted 0.3% from the third quarter, when it rose at the same pace. Growth was in line with economists' expectations. In the second quarter of 2015, the biggest euro area economy grew 0.4%. The first quarter growth was revised to 0.4% from 0.3% reported earlier. On a calendar-adjusted basis, GDP increased 1.3% year-on-year following 1.7% expansion in the previous quarter. Economists had forecast 1.4% growth.
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Germany's consumer price inflation accelerated to an eight-month high in January as initially estimated, latest data from Destatis showed. The consumer price index rose 0.5% year-over-year in January, in line with flash data, faster than the 0.3% increase in December. The latest inflation figure was the highest since May last year, when it was 0.7%.
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Former US Secretary of State Hillary Rodham Clinton tried to regain the upper hand over rival Bernie Sanders in the race for the Democratic Party presidential nomination during a debate that saw the candidates agree more often than disagree. Sanders, a senator from Vermont and self-identified democratic socialist, sought to expand his political appeal to minority voters who make up a larger share of the electorate in upcoming votes in Nevada and South Carolina, after securing a large victory over Clinton in the predominantly white state of New Hampshire on Tuesday.
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This weekend's Munich Security Conference, an annual event attended by hundreds of senior officials from around the world, will focus on rising global instability with Russia at the centre of two major conflicts: Syria and Ukraine. These are "two of the defining conflicts of our time," says the Munich Security Report 2016, published by the summit's organizers. Russia does not expect any breakthrough in Munich, the speaker of Russia's upper house of parliament, Valentina Matviyenko, said this week in comments carried by state media.
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BROKER RATING CHANGES
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Investec Upgrades Standard Chartered To Buy From Hold, Cuts Price Target To 460p From 550p
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TRADERS: UBS CUTS BT GROUP TO 'SELL' ('NEUTRAL')
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TRADERS: CITIGROUP CUTS RIO TINTO TO 'NEUTRAL' ('BUY')
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S&P CAPITAL IQ RAISES SHIRE TO 'STRONG BUY' ('BUY') - TARGET 5900 PENCE
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BARCLAYS RAISES PROVIDENT FINANCIAL TO 'OVERWEIGHT' ('EQUAL WEIGHT')
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TRADERS: GOLDMAN INITIATES CAPITA GROUP WITH 'SELL' - TARGET 1028 PENCE
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TRADERS: HSBC RAISES INVESTEC TO 'BUY' ('HOLD')
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BERENBERG CUTS CAMBIAN TO 'HOLD' ('BUY') - TARGET 60 (200) PENCE
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COMPANIES - FTSE 100
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The UK Competition & Markets Authority said it has fined a number of pharmaceutical companies, including GlaxoSmithKline, for anti-competitive conduct and agreements in relation to the supply of anti-depressant paroxetine. The bulk of the fine was imposed on London-listed GlaxoSmithKline, which shouldered GBP37.6 million of the GBP45.0 million total. Merck KGaA, the former parent of Generics (UK) Ltd, was fined GBP5.8 million. The fines were imposed due to conduct and agreements between 2001 and 2004. Glaxo, which supplied paroxetine branded as Seroxat, agreed to make payments and other value transfers worth more than GBP50.0 million to suppliers of the generic versions of the anti-depressant, which according to the CMA were aimed at delaying the potential entry of generic competitors into the UK market.
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Property developer Hammerson said it had completed the acquisition of Grand Central shopping centre in Birmingham, and confirmed it has entered into a joint venture with investment management organisation Canadian Pension Plan Investment Board for ownership of the shopping centre. Hammerson, who had announced the acquisition of Grand Central on January 22, said it had entered into a 50:50 joint venture agreement with the Canadian investor, with Hammerson acting as asset manager on behalf of the joint venture.
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The UK Serious Fraud Office is looking at the activities of a Barclays hedge fund, The Times reported, after allegations that it profited from using confidential information profit on Libor "low-balling" during the financial crisis of 2008-09. The report said the fraud investigators are looking at the Cayman-registered Ricardo Master Fund as part of a broader investigation into Libor rigging. Both the SFO and Barclays declined to comment to The Times.
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COMPANIES - FTSE 250
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Millennium & Copthorne Hotels said it expects to recognise a net charge of around GBP43 million against its pretax profit for 2015. The net charge includes GBP76 million of impairment losses relating to four of M&C's properties located in New York, Rest of Europe and Rest of Asia, offset by net revaluation gains of GBP33 million on its investment properties. M&C will release its full-year results on February 19.
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SEGRO confirmed it is in talks over a possible deal with Roxhill Developments, in a move to strengthen the real estate investment trust's presence in the UK big box logistics market. "The arrangement would involve SEGRO and Roxhill working together over a period of years to develop a number of land sites in the Midlands and South East regions of the UK, which are currently held under option by Roxhill," SEGRO said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Countryside Properties said its initial public offering on the Main Market of the London Stock Exchange was priced at the lower end of its range. The housebuilder and regeneration company said its shares were priced at 225 pence each, at the bottom end of its previously stated 225p to 275p range, giving it a market capitalisation of approximately GBP1.01 billion. The offer comprised 135.0 million shares, equivalent to a total offer size of GBP304.0 million.
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Monitise said its pretax loss widened in the first half of its financial year, after the mobile payments company booked a non-cash impairment charge of GBP166.8 million against the value of its non-cloud intangible assets. Pretax loss widened to GBP210.5 million in the six months ended December 31, from GBP58.4 million the corresponding period the prior year, as revenue fell to GBP33.4 million from GBP42.4 million. The company said it expects to report positive earnings before interest, tax, depreciation and amortisation in the second half of the financial year.
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Oxford Instruments said it has appointed Gavin Hill as group finance director effective from May 9, following the resignation of Kevin Boyd. Hill was group finance director of Synergy Health from April 2010 until its combination with STERIS Corp in November last year. As announced in October, Boyd is moving to Spirax-Sarco Engineering in April to be finance director.
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COMPANIES - INTERNATIONAL
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The chief executive officer of JPMorgan Chase, Jamie Dimon, bought 500,000 shares of the bank's stock. Dimon paid about USD26 million for the shares.
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Visa disclosed a 9.99% stake in mobile payments-processing company Square, which is run by Twitter CEO Jack Dorsey. In November 2015, billionaire investor Leonard Blavatnik had disclosed a 11.4% stake in Square.
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Morgan Stanley agreed to pay about USD3.2 billion to the US Justice Department and several states to resolve civil charges that it misled investors about the quality of mortgage bonds it sold in the run-up to the 2008 financial crisis. The US Justice Department announced that Morgan Stanley will pay a USD2.6 billion penalty to resolve claims related to Morgan Stanley's marketing, sale and issuance of residential mortgage-backed securities.
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American International Group posted a loss for the fourth quarter, while the insurer added investor John Paulson and Samuel Merksamer to its board in order to avoid a proxy fight. The company also lifted its quarterly dividend and announced a USD5 billion share buyback. New York-based AIG reported fourth-quarter net loss of USD1.84 billion or USD1.50 per share, compared with a profit of USD655 million or USD0.47 per share a year ago. Excluding items, operating loss for the quarter was USD1.35 billion or USD1.10 per share, compared with operating profit of USD1.37 billion or USD0.97 per share in the prior year.
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The shares of Boeing fell sharply Thursday after Bloomberg reported that the US Securities and Exchange Commission is investigating whether the company properly accounted for the costs and expected sales of two of its best known jetliners. The probe, which involves a whistleblower's complaint, centers on projections Boeing made about the long-term profitability for the 787 Dreamliner and the 747 jumbo aircraft, the report said citing people familiar with the matter. The SEC enforcement officials have yet to reach any conclusions and could decide against bringing a case, the report noted.
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Sandoz, a Novartis company, announced that it has acquired from Pfizer the rights for the development and commercialization of PF-06438179 (biosimilar infliximab) in the 28 countries that form the European Economic Area. Infliximab is a tumor necrosis factor alpha (TNF-alpha) inhibitor used to treat a range of autoimmune diseases including rheumatoid arthritis (RA) and psoriasis.
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L'Oreal reported full-year 2015 net profit after non-controlling interests of EUR3.30 billion or EUR5.84 per share, down from EUR4.91 billion or EUR8.39 per share last year. Adjusted earnings per share rose to EUR6.18 per share from EUR5.34 per share last year. Full-year sales rose 12.1% to EUR25.26 billion.
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Friday's Scheduled AGMs/EGMs
Tritax Big Box REIT (re placing and open offer)
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By Tom Waite; [email protected]; @thomaslwaite
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