21st Jan 2016 08:19
LONDON (Alliance News) - London shares opened firmly Thursday, halting a red tide spreading around the world, as a late recovery on Wall Street provided some reassurance to equities investors. Oil prices were flat with Wednesday at the open, but the pound slipped lower against the dollar.
Thursday's main market event is the European Central Bank's policy decision and press conference by President Mario Draghi at 1245 and 1330 GMT, respectively, though no changes are expected.
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 5,716.28
FTSE 250: up 0.7% at 15,752.71
AIM ALL-SHARE: up 0.3% at 676.13
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Hang Seng: closed down 1.8% at 18,542.15
Nikkei 225: closed down 2.4% at 16,017.26
DJIA: closed down 1.6% at 15,766.74
S&P 500: closed down 1.2% at 1,859.33
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GBP: down at USD1.4161 (USD1.4210)
EUR: flat at USD1.0900 (USD1.0912)
GOLD: down at USD1,101.40 per ounce (USD1,102.90)
OIL (Brent): flat at USD27.68 a barrel (USD27.62)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in GMT)
World Economic Forum in Davos, Switzerland
12:45 EU ECB Interest Rate Decision
13:30 US Initial and Continuing Jobless Claims
13:30 US Philadelphia Fed Manufacturing Survey
13:30 EU ECB Monetary policy statement and press conference
15:00 EU Consumer Confidence Preliminary
15:30 US EIA Natural Gas Storage
16:00 US EIA Crude Oil Stocks
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The house price balance in the UK ticked up to 50% in December, the latest report from the Royal Institution of Chartered Surveyors showed. That was in line with expectations and up from 49% in November. The demand for new properties climbed to a three-month high in December, RICS said, which fueled the increase in sellers who were getting their asking price.
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UK manufacturers produced more cars in 2015 than any year since 2005, the Society of Motor Manufacturers and Traders said. Car production grew 3.9% to 1.58 million units in 2015, overtaking pre-recession levels for the first time. A record number of cars, representing 77.3% of total production was exported in 2015. Exports totalled 1.23 million units, up 2.7% on 2014 levels. The US overtook China as UK's largest single export destination, as demand from China declined 37.5%. Meanwhile, EU demand advanced 11.3%, with 57.5% of shipments destined for the continent.
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The European Central Bank is expected to leave interest rates on hold Thursday, but could signal plans for further monetary action in the coming months amid a sharp fall in oil prices and worries about global economic uncertainties. Analysts expect the ECB will announce it will leave its benchmark refinancing rate on hold at 0.05%. Many analysts also believe that Draghi could hint at his press conference at further measures in the coming months, such as expanding the ECB's bond-buying programme or trimming interest rates again if both economic growth and inflation fall short of its forecasts.
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Japan's all industry activity decreased at a faster-than-expected pace in November, after rising in the prior month, figures from the Ministry of Economy, Trade and Industry showed. The all industry activity index fell a seasonally adjusted 1.0% month-over-month in November, in contrast to a 0.9% increase in October, which was revised up from 0.9% spike reported earlier. Economists had expected a 0.8% drop for the month.
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The Trans-Pacific Partnership trade deal is to be signed in Auckland on February 4, the New Zealand government said. New Zealand has issued invitations to ministers from TPP member countries to ink the deal. "Signature will mark the end of the TPP negotiating process," said Trade Minister Todd McClay. "Following signature, all 12 countries will be able to begin their respective domestic ratification processes and will have up to two years to complete that before the agreement enters into force," he said in a statement.
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A bill that would have kept the US from accepting Syrian refugees unless they could have been certified not to be a security threat failed to advance in the US Senate Wednesday. The measure failed 55-43 to clear a 60-vote threshold needed for it to advance to consideration by the Senate amid opposition by members of President Barack Obama's Democratic Party.
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More than 50 million people are bracing for a major winter storm predicted to hit the eastern US Friday that could bring large amounts of snow and heavy wind to the region. The National Weather Service has issued a blizzard watch in effect from Friday afternoon to Saturday night in Washington due to the possibility of heavy snow and high winds.
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BROKER RATING CHANGES
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UBS INITIATES ITV WITH 'SELL' - TARGET 230 PENCE
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TRADERS: MORGAN STANLEY CUTS ROLLS-ROYCE TO 'UNDERWEIGHT' ('EQUAL-WEIGHT')
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Deutsche Bank Upgrades Mitchells & Butlers To Buy From Hold, Target At 430p
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Liberum Initiates Cranswick With Buy, Target At 2,200p
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COMPANIES - FTSE 100
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Education publisher Pearson trimmed its guidance for calendar 2015 and outlined plans to further simplify its business, which will hit its operating profit in 2016. The company now expects to report adjusted earnings per share of between 69 and 70 pence for 2015, down from its previous guidance of the lower end of a range of 70p to 75p. Pearson also outlined guidance for 2016, saying it expects to report adjusted earnings per share before restructuring costs of between GBP580 million and GBP620 million, down from the approximately GBP720 million it is now guiding for 2015, and earnings per share of between 50 and 55 pence. However, Pearson said it expects to propose a total dividend for 2015 of 52 pence per share, up from the 51p it paid in 2014. It plans to sustain its dividend at this level whilst it rebuilds cover.
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Postal operator Royal Mail said its revenue edged higher in the first nine months of its financial year, helped by a strong performance from its GLS logistics business and a continued pattern in the UK of revenue shrinking from letters but growing from parcels. The company said its group revenue for the nine months to December 27 was up 1.0%. The group said its UK revenue was down 1.0% overall, with a 1.0% rise in parcel revenue offset by a 2.0% fall in letters revenue.
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SABMiller said reported net producer revenue declined in the third quarter of its financial year as the strong dollar continued to harm results, although it grew on an underlying basis, boosted by growth in most of its operating regions. The beer giant, set to be acquired by AB InBev, said group NPR in the third quarter to end-December fell 8% on a reported basis, and by 9% in the nine months of its financial year to date, due to an "adverse translational impact" from the continued depreciation of its key operating currencies against the dollar. On an underlying basis, group NPR grew 7% in the third quarter and 5% in the year to date, while volume rose 4% in the quarter and 2% in the year to date.
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Barclays will shut its cash equities businesses in Asia and will completely exit two markets in the region, The Wall Street Journal reported, citing a memo sent to clients and people familiar with the matter. The bank will close its cash equity research, sales and trading units and its convertible bond trading arm in Asia, the letter said, and will exit Taiwan and South Korea. At least 250 jobs will go in the region as a result of the changes.
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Lloyds Banking Group provided the GBP185 million financing of a designer outlet village at London's O2 Arena, the Financial Times reported, in what is the bank's largest commercial property development loan since the 2008 financial crisis. The loan - fully underwritten by Lloyds - was made to AEG, which is the owner of the O2, and its joint venture partner Crosstree Real Estate Partners.
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St James's Place said it had a strong end to 2015, with net inflows of GBP1.63 billion in the fourth quarter helping the British wealth manager to end the year with higher funds under management in the face of market volatility. Funds under management amounted to GBP58.61 billion at the end of 2015, up from GBP52.01 billion at the end of 2014, as net inflows over the course of 2015 added up to GBP5.78 billion.
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Land Securities Group said it had a solid third quarter across its portfolio, with good footfall in its shopping centres and progress on its developments. The property developer said retailer sales were up 1.2% in the quarter to the end of December on a same-centre basis, as footfall in its shopping centres rose 1.7% year-on-year, bucking the national trend, which saw a 2.3% fall on average, Land Securities. Footfall measures the number of shoppers in stores.
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Drugmaker GlaxoSmithKline is understood to be in talks to set up a joint venture with US chipmaker Qualcomm to develop new technologies for the pharmaceutical industry, the Financial Times reported. Glaxo has hired lawyers to help negotiate the terms of the tie-up, the FT said, citing sources familiar with the matter. The details of the link-up remain unclear, but the FT said it is understood it would focus on pooling resources to develop new technologies to be used in the pharmaceutical sector.
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COMPANIES - FTSE 250
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N Brown Group reported growth in revenue in the third quarter of its financial year, driven particularly by its three 'Power Brands' and over the cyber weekend in November. The online, catalogue and stores retailer, which trades under multiple brands including House of Bath, SimplyBe, Jacamo, and figleaves.com, said group revenue in the 18 weeks to January 2 grew 4.1% on the same period the year before, with like-for-like sales also growing 4.1%.
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Halfords Group reported growth in revenue in the third quarter of its financial year, boosted by a strong performance at its autocentres, a return to like-for-like growth in cycling, and a record day for sales over the Black Friday weekend. The car parts and bicycle retailer said total group revenue in the 15 weeks to January 15 grew 0.4% year-on-year, as 4.1% growth in autocentres offset a 0.3% decline in retail. In the 41 weeks to the same date, total group revenue rose 1.3% as autocentres increased 4.4% and retail was up 0.8%.
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Estate agent Countrywide said its now expects its underlying earnings for 2015 will be slightly ahead of its expectations and maintained its guidance for 2016, even as it continued to feel pressures from the slowdown in the London property market. The company said it saw an encouraging performance in the fourth quarter of 2015, even as it continued to face pressures from a slowdown of housing transactions, particularly in the capital.
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Technology company Laird said it anticipates meeting expectations for 2015, as revenue rose 12%, and it expressed confidence for "another year of growth" in 2016. Laird said its revenue for 2015 rose 12% to GBP630 million from GBP565 million in 2014, with revenue up 1% in its fourth quarter to GBP164 million from GBP163 million.
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Cyber security firm NCC Group said it expects to meet market expectations for its full year, as it reported a fall in pretax profit for its first half on exceptional costs, and raised its interim dividend.For the half year to end-November NCC reported a pretax profit of GBP7.5 million, down from GBP10.6 million a year before, as a rise in revenue to GBP93.5 million from GBP62.3 million was offset by exceptional costs of GBP4.2 million related to acquisitions and an intangible asset write down. NCC proposed an interim dividend of 1.50 pence, up 15% from 1.30 pence a year before.
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COMPANIES - INTERNATIONAL
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Deutsche Bank said it expects to post a loss for the fourth quarter, with significant charges contributing to the red ink. This follows massive charges taken in the third quarter, as the banking giant looks like it will post a full-year loss of more than EUR6 billion. The company also said it saw a decline in fourth-quarter revenues compared to last year. Deutsche Bank blamed challenging market conditions for the weaker top line, especially in its Corporate Banking & Securities unit.
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Taiwan's Foxconn has offered about JPY625 billion to take over Sharp, the Wall Street Journal reported, citing people familiar with the matter. Japanese electronics maker Sharp, which has been bailed out repeatedly by banks, is set to review a competing offer from Innovation Network Corp of Japan, a government-backed investment fund. Foxconn and Sharp declined to comment. INCJ couldn't immediately be reached for comment.
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Thursday's Scheduled AGMs/EGMs
Cardiff Property
Stride Gaming
Styles & Wood Group (re new incentive plan)
Keystone Investment Trust
easyHotel
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By Tom Waite; [email protected]; @thomaslwaite
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