28th Jan 2016 08:19
LONDON (Alliance News) - Shares in London opened flat Thursday, as market participants digested the US Federal Reserve policy statement issued with an unchanged interest rate decision.
Miner Anglo American led FTSE 100 gainers, up 4.0%, despite reporting a fall in production across most of its commodities during 2015.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 5,998.11
FTSE 250: flat at 16,287.92
AIM ALL-SHARE: up 0.1% at 687.03
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Hang Seng: closed up 0.8% at 19,195.83
Nikkei 225: closed down 0.7% at 17,041.45
DJIA: closed down 1.4% at 15,944.46
S&P 500: closed down 1.1% at 1,882.95
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GBP: flat at USD1.4255 (USD1.4261)
EUR: flat at USD1.0875 (USD1.0868)
GOLD: up at USD1,118.20 per ounce (USD1,116.84)
OIL (Brent): up at USD33.14 a barrel (USD32.45)
(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)
09:00 Italy Wage Inflation
09:30 UK Gross Domestic Product and Index of Services
10:00 Ireland Retail Sales
10:00 EU Business Climate, Consumer Confidence
11:00 UK CBI Distributive Trades Survey
13:00 Germany Consumer Price Index
13:30 US Initial and Continuing Jobless Claims
13:30 US Durable Goods Orders
15:00 US Pending Home Sales
15:30 US EIA Natural Gas Storage change
16:00 US Kansas Fed manufacturing activity
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The Federal Reserve left its benchmark interest rate unchanged amid turbulence on global stock markets. The US central bank held its target range at 0.25 to 0.5% after hiking rates last month from the near-zero range that had been in place for seven years. The unanimous decision was warranted "given the economic outlook," the Fed's monetary policy committee said in a statement. The Fed is "closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation, and for the balance of risks to the outlook."
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Armed members of an anti-government militia continued their protest occupation of a federal wildlife refuge in the US state of Oregon, a day after one of their number was killed and eight arrested, the FBI said. Greg Bretzing, the FBI's agent in charge of law enforcement efforts, told a news conference the arrests were the "first steps" to end the occupation of the Malheur National Wildlife Refuge, which began January 2.
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BROKER RATING CHANGES
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SOCGEN CUTS CENTRICA TO 'SELL' ('HOLD') - TARGET 175 (250) PENCE
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BERENBERG INITIATES MICHAEL PAGE WITH 'BUY' - TARGET 530 PENCE
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BERENBERG INITIATES HAYS WITH 'BUY' - TARGET 150 PENCE
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COMPANIES - FTSE 100
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Drinks giant Diageo said its pretax profit edged up in the first half thanks to better margins and organic growth, though currency weakness meant revenue dipped. Diageo said its pretax profit for the half to the end of December was GBP1.78 billion, compared to GBP1.64 billion a year earlier. Revenue dipped to GBP8.27 billion from GBP8.73 billion in the half, with currency holding back growth and challenging conditions continuing in certain markets, particularly emerging markets. Organic net sales growth in the half, however, was 1.8%, with volume growth of 1.0% overall, while the group's organic operating margins improved thanks to cost improvements in the business and a good performance from its key brands. Diageo said it will pay a dividend for the half of 22.6 pence, up 5.0% year-on-year.
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Anglo American said production fell across most of its commodities during 2015, including its iron ore division in South Africa. The miner said iron ore production from South Africa fell 7% year-on-year in 2015 to 44.9 million tonnes whilst the Minas Rio mine in Brazil produced a total of 9.2 million tonnes in the year after only producing a small amount in 2014. Metallurgical coal production in the year rose 1% to 21.2 million tonnes whilst thermal coal production dropped 2% year-on-year to 33.8 million tonnes. Copper production decreased 5% in 2015 to 708,800 tonnes whilst nickel production was down 19% to 30,300 tonnes.
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SSE said adjusted earnings per share for its full financial year are expected to fall as it lost customers during 2015, but the power utility said its dividend remains safe and will continue to at least grow in line with retail price inflation. SSE said its adjusted earnings per share for the financial year ending on March 31 will come in "at least" at 115.0 pence, which would be down from the 124.1p reported in the previous financial year.
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Coca-Cola HBC said it has promoted its current vice chairman to replace George David, who has been chairman of the company since 1981, when he retires in June. The drinks giant said George David will retire as chairman of the company at the annual general meeting to be held in June, when he will be replaced by current Vice Chairman Anastassis David, who joined the company as a non-executive director in 2006 and was appointed as vice chairman in 2014.
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Engineering support services company Babcock International Group said Chief Executive Peter Rogers will step down at the end of August this year. Babcock said he will be replaced by Archie Bethel, currently the chief executive of the company's Marine & Technology division. Bethel will take on the role of chief operating officer from April 1 before then taking over when Rogers retires.
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Drugmaker AstraZeneca said the US Food & Drug Administration has granted a Breakthrough Therapy designation for Lynparza for the treatment of prostate cancer. The designation for Lynparza for this segment of patients means the US regulator will expedite the review of the test submission data for the drug within 60 days, AstraZeneca said.
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3i Group said its net asset value total return remained solid in the third quarter, with good levels of divestment and acquisition activity. The FTSE 100-listed private equity investor said its net asset value total return for the quarter to the end of December was 7.4%, with its net asset value per share standing at 413.00 pence, against 401p at the end of September.
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J Sainsbury late Wednesday said that it understands that its largest investor, The Qatar Investment Authority, has not yet taken a final position on a renewed bid for Home Retail Group, following press reports that the QIA was close to giving its support. In response to articles from The Times and The Guardian, Sainsbury's said that it understood that the QIA was not the source of the articles, and like any other shareholder would consider any such proposal in detail before making a final decision on its position.
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COMPANIES - FTSE 250
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SSP Group said its new financial year had started well and affirmed its expectations for the full year, as good performances in the UK, Europe and the US offset some weakness in the rest of the world. The company, which operates food and drink concessions in travel hubs, said its total revenue rose 6.2% in the quarter to the end of December on a constant currency basis and was up 4.3% on a like-for-like basis, helped by contract wins in line with its expectations. Total revenue growth on a reported basis was 1.9% in the half, as some currency weakness, particularly for the euro, held back growth.
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Residential landlord Grainger outlined plans to restructure the business to focus on the private rented sector and regulated tenancies, with non-core operations to be sold off. Grainger said it will sell its Retirement Solutions equity release business and the rest of its business in Germany, a move which will cut its annual overheads by around 10%. This also will simplify the structure of the business, Grainger said, adding it will provide more details on these plans when it publishes its interim results in May. The group will exit non-core development assets and will prioritise direct investments rather than fee generation.
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Ocado Group said it has appointed Andrew Harrison, the current deputy chief executive of London-listed Dixons Carphone, as a new non-executive director of the company. The online supermarket said Harrison will join the company as an independent non-executive director at the start of March.
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UK food producer Cranswick said its third quarter trading was in line with its expectations following a good Christmas period for the company. The pork and poultry producer said revenue for the quarter to the end of December rose 5.0%, with volume growth rising 11% following a strong Christmas sales period. The company said it expects market conditions to remain competitive through the balance of its financial year, ending in March, but said it remains confident on its long-term outlook.
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Jimmy Choo said its revenue grew in the fourth quarter of 2015 as it performed well despite the challenging environment for the sector. The luxury goods retailer said its net revenue grew 6.0% in the quarter to the end of December, up 7.0% in constant currencies, driven by a good performance by its shoes, which represent around three-quarters of its total revenue.
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Plastic products company RPC Group said third quarter revenue rose significantly year-on-year, driven by organic growth and acquisitions. RPC said revenue for the quarter to the end of December rose significantly and said its adjusted operating profit also increased in line with its expectations.
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COMPANIES - INTERNATIONAL
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Social networking giant Facebook reported a surge in fourth-quarter profit, driven largely by a 44% jump in revenue. Both earnings and revenues trumped Wall Street estimates, sending shares up by 6% in the after-hours trading. Menlo Park, California-based Facebook's fourth-quarter profit surged to USD1.56 billion or USD0.54 per share from USD701 million or USD0.25 per share last year. Revenue for the quarter jumped 44% to USD5.84 billion from USD3.85 billion last year. Daily active users rose 17% to 1.04 billion on average in December.
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eBay reported quarterly earnings that dropped 28% last year, hurt by stagnant revenues, lower margins and a higher tax rate. The company also said currency rates hurt its results during the quarter. Results for the quarter matched analysts' expectations, but the company gave a disappointing forecast for fiscal 2016. eBay reported income from continuing operations of USD523 million, or USD0.43 per share. That was down from USD729 million, or USD0.59 per share, in the same period last year.
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South Korean conglomerate Samsung Electronics reported a 40% year-over-year decline in profit for the fourth quarter from last year, reflecting sluggish demand for its smartphones and weak chip prices that weighed on its chips business. Looking ahead to 2016, Samsung warned that it expects challenges to maintain its earnings due to a difficult business environment and slowing demand for information technology products. Samsung's fourth-quarter net income was KRW3.22 trillion or USD2.7 billion, down from KRW5.35 trillion in the same quarter last year.
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Deutsche Bank reported its net loss for the fourth-quarter 2015 was EUR2.125 billion, compared to net income of EUR441 million in the prior year. John Cryan, co-chief executive officer, said: "We are focused on 2016 and continue to work hard to clear up our legacy issues. Restructuring work and investment in our platform will continue throughout the year."
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Thursday's Scheduled AGMs/EGMs
BG Group (re merger with Royal Dutch Shell)
Euromoney Institutional Investor
Topps Tiles
Schroder Asia Pacific Fund
Edinburgh Worldwide Investment Trust
Management Resource (re approval of Bachmann plant hire acquisition)
JKX Oil (re Proxima proposals)
Mitchells & Butlers
Henderson European Focus Trust
Equatorial Palm Oil
ITE Group
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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