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LONDON BRIEFING: TP ICAP sizes up possible Parameta minority IPO

12th Mar 2024 07:48

(Alliance News) - London's FTSE 100 is set for a confident open, as eyes turn to a key bit of US inflation data, the final consumer price reading before the next Federal Reserve decision.

"There are several factors warning of a second blip in US disinflation that could eventually lead to a further softening in dovish Federal Reserve expectations. One of them is the jump in gasoline prices in February, another is the change in CPI calculation and the third is the rising inflation expectations," Swissquote analyst Ipek Ozkardeskaya commented.

Ahead of the Bank of England's rate call next week, meanwhile, numbers showed the UK unemployment rate unexpectedly picked up in the three months to January, while the pace of wage growth eased.

According to the Office for National Statistics, the nation's unemployment rate in three months to January increased to 3.9%, from 3.8% in the three months to December.

The jobless rate was expected to remain at 3.8% for the period, according to FXStreet cited consensus.

The ONS said average earnings excluding bonuses rose 6.1% on-year in the period, the pace of growth easing from 6.2% in the three months to December, where it had been expected to remain. Including bonuses, growth eased to 5.6% from 5.8%. According to FXStreet, only a slowdown to 5.7% was expected.

In early UK corporate news, Persimmon reported an annual earnings fall but noted encouraging signs as 2024 kicked off. TP ICAP said it is mulling a minority initial public offering of its Parameta unit.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called up 0.9% at 7,736.43

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Hang Seng: up 3.2% at 17,117.37

Nikkei 225: down 0.1% at 38,797.51

S&P/ASX 200: up 0.1% at 7,712.50

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DJIA: closed up 46.97 points, 0.1%, at 38,769.66

S&P 500: closed down 0.1% at 5,117.94

Nasdaq Composite: closed down 0.4% at 16,019.27

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EUR: up at USD1.0937(USD1.0923)

GBP: up at USD1.2805 (USD1.2801)

USD: up at JPY147.29 (JPY146.89)

GOLD: down at USD2,176.65 per ounce (USD2,184.09)

(Brent): up at USD82.51 a barrel (USD82.36)

(changes since previous London equities close)

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ECONOMICS

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Tuesday's key economic events still to come:

11:00 GMT UK Bank of England MPC member Catherine Mann speaks

12:30 GMT US CPI

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The UK government has committed to building new gas power stations to avert what ministers described as the "genuine prospect of blackouts". In a speech at Chatham House, Energy Secretary Claire Coutinho will outline the need for unabated gas power in the electricity system beyond 2030, which the government said would still mean the UK was on track to meet targets to cut emissions to zero overall by 2050. Ahead of the speech, UK Prime Minister Rishi Sunak said the UK needed to meet its goals to cut emissions by nearly four-fifths by 2035, on the way to the 2050 goal, in a "sustainable way that doesn't leave people without energy on a cloudy, windless day". In her speech, Coutinho is expected to say: "There are no two ways about it. Without gas backing up renewables, we face the genuine prospect of blackouts. Other countries in recent years have been so threatened by supply constraints that they have been forced back to coal."

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EU states endorsed controversial rules to cover app workers in the so-called gig economy, after weeks of wrangling over the watered-down text. A majority of countries represented by EU employment and social affairs ministers meeting in Brussels backed a deal in sufficient numbers to overcome resistance from heavyweights France and Germany. The agreed new set of rules, which still need to be formally approved including by the European Parliament, would allow each EU country to decide its own criteria for reclassifying a gig worker as an employee.

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BROKER RATING CHANGES

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SocGen raises Informa price target to 1,030 (860) pence - 'buy'

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HSBC raises Nichols price target to 1,350 (1,300) pence - 'buy'

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COMPANIES - FTSE 100

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Housebuilder Persimmon reported a decline in earnings for 2023, but said home completions topped forecasts, and it has started the new year in line with expectations. Persimmon said revenue in 2023 fell 27% to GBP2.77 billion from GBP3.82 billion. Pretax profit declined 52% to GBP351.8 million from GBP730.7 million. It maintained its annual dividend at 60 pence per share. "The board's intention is to at least maintain the 2023 dividend per share in 2024, with a view to growing this over time as market conditions permit," it said. Legal home completions totalled 9,922 in 2023, down about a third from 14,868 in 2022, but "ahead of our initial guidance", it said. Looking to 2024, it said: "We have started the year in line with expectations, with our recent marketing campaign generating a significant number of leads for our sales teams. Enhanced competition in the mortgage market and wage growth have contributed to improved affordability albeit it continues to be constrained, particularly for first time buyers, and demand for homes remains varied across the country."

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London Stock Exchange Group said BCP York Holdings successfully sold call options over 10 million voting shares in the company. The options represented around 1.9% of the economic and voting interest in LSEG. BCP York is an entity owned by a consortium of certain investment funds affiliated with Blackstone Inc, and including an affiliate of Canada Pension Plan Investment Board, an affiliate of GIC Special Investments Pte Ltd, Thomson Reuters Corp and certain other minority holders. Thomson Reuters would not participate in the call option transaction, however, LSEG had said on Monday.

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COMPANIES - FTSE 250

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Interdealer broker TP ICAP reported an annual revenue rise, said it will launch a new share buyback programme and added that it is mulling a minority float of its Parameta Solutions. Chief Executive Nicolas Breteau said on the market data solutions unit: "The board believes that Parameta's significant growth prospects, and the intrinsic value of the business, are not appropriately reflected in our share price. We are therefore exploring options for unlocking value for shareholders, whilst retaining ownership of the asset, which include a potential IPO of a minority stake in the business." TP ICAP said revenue in 2023 expanded 3.6% to GBP2.19 billion, from GBP2.12 billion in 2022. Pretax profit, however, fell 15% to GBP96 million from GBP113 million. On an adjusted basis, it rose 20% to GBP271 million from GBP226 million. The adjusted figure strips out "significant items" such as amortisation and impairment costs. TP ICAP lifted its final dividend by 27% to 10.0p, and upped its total annual dividend by 19% to 14.8p. It also announced the launch of a GBP30 million share buyback programme, after completing one of the same size in January.

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Domino's Pizza Group reported annual earnings growth and said it has taken full control of an Irish franchise business. Revenue in the 53 weeks to December 31 rose 13% to GBP689.8 million, from GBP600.3 million in the 52 weeks to December 25, 2022. Pretax profit surged 44% to GBP142.3 million from GBP98.9 million. "Last year we continued to make strong strategic progress with 61 new store openings whilst offering our customers compelling value. These efforts delivered an increase in sales and shareholder returns with continued robust profit growth," CEO Andrew Rennie said. It lifted its final dividend by 5.9% to 7.2p from 6.8p, bringing the annual payout to 10.5p, up 5.0%. Looking ahead, it said: The company said it is to acquire the remaining 85% shareholding it does not already own in Shorecal for EUR72 million. It is acquiring the interest from Charles Caldwell, Adrian & Anne Caldwell, and SC Holdings I Ltd, an investment vehicle controlled by Radcliff Management in partnership with the Bronfman Family Office. Domino's Pizza Group said it will also repay outstanding debt on completion, currently totalling EUR19.9 million. The company added: "Shorecal is a leading Domino's franchisee on the island of Ireland, operating 34 of the 99 Domino's stores across the Republic of Ireland and Northern Ireland."

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OTHER COMPANIES

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Aquis Exchange said it will establish a new "real assets market segment". Subject to the regulatory green light, it will launch in the second half of the year and will be available to firms owning assets such as commercial real estate, infrastructure, land and forestry, and debt products in these sectors. The market segment will be named Aram, or Aquis Real Asset Market. It will sit alongside Access and Apex, currently the other two segments on the Aquis Growth Market.

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Old Mutual said it expects strong annual financial performance, underpinned by "exceptional growth" in new business and value of new business. The financial services firm guided for a rise in basic earnings per share of between 27% to 47% for 2023. Old Mutual described growth in results from operations as "robust", driven by "exceptional growth" in new business and value of new business as it continue to gain market share across its segments.

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By Eric Cunha, Alliance News news editor

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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