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LONDON BRIEFING: Trainline launches buyback as revenue rises 19%

14th Sep 2023 07:41

(Alliance News) - Stocks in London are called higher, with all eyes on the interest rate decision from the European Central Bank later in the day.

The ECB will announce its decision at 1315 BST, with many forecasters predicting a final 25 basis point hike. However, some predict the Frankfurt-based central bank might opt to keep rates on hold.

Meanwhile, investors will be eyeing the year's biggest initial public offering in New York later on Thursday.

British chip designer Arm is targeting a valuation of more than USD52 billion for its initial public offering on the Nasdaq exchange.

Arm, whose semiconductor design is integrated into the vast majority of smartphones worldwide, has priced its shares at USD51. This gives it a valuation at the top end of its target range, underscoring the enthusiasm among investors amid an explosion of interest in artificial intelligence.

The company, which is a world leader in smartphone chip design and is owned by the Japanese tech investor SoftBank, has announced it will list on the tech-rich Nasdaq stock exchange under the "ARM" ticker.

In early UK company news, Trainline reported stronger-than-expected interim trading, and launched a new share buyback. Hipgnosis Songs Fund said it would sell off some its catalogues to fund a share buyback and reduce debt.

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 11.8 points, 0.2%, at 7,537.79

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Hang Seng: up 0.2% at 18,053.05

Nikkei 225: closed down 0.2% at 32,706.52

S&P/ASX 200: closed up 0.5% at 7,186.50

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DJIA: closed down 70.46 points, 0.2%, at 34,575.53

S&P 500: closed up 5.54 points, 0.1% at 4,467.44

Nasdaq Composite: closed up 39.97 points, 0.3% at 13,813.58

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EUR: up at USD1.0751 (USD1.0744)

GBP: flat at USD1.2498 (USD1.2496)

USD: down at JPY147.11 (JPY147.42)

Gold: down at USD1,908.89 per ounce (USD1,912.70)

Oil (Brent): up at USD92.45 a barrel (USD92.15)

(changes since previous London equities close)

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ECONOMICS

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Thursday's key economic events still to come:

14:15 CEST EU interest rate announcement

08:30 EDT US PPI

08:30 EDT US retail sales

16:30 EDT US foreign central bank holdings

16:30 EDT US federal discount window borrowings

08:30 EDT US unemployment insurance weekly claims report

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UK house prices declined at their fastest rate since 2009 in August, according to surveyors. The Royal Institution of Chartered Surveyors said net balance of 68% of property professionals reported house prices falling rather than rising, marking the most negative reading since 2009, according to Rics, which pointed to the impact of high mortgage rates. New buyer inquiries also declined further during the month, with a net balance of 47% of professionals reporting fresh inquiries falling rather than rising, deteriorating from a balance of 45% the previous month. New sales instructions also fell, as did newly agreed sales, Rics said.

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Controversial UK government plans to relax environmental rules to boost housebuilding have been scuppered by peers. The House of Lords voted by 192 to 161, majority 31, against scrapping EU-era rules that force developers to mitigate the impact new homes have on river health. Because the contentious reform was introduced at such a late stage in the passage of the Levelling Up & Regeneration Bill through Parliament, it will not return to the Commons as part of so-called parliamentary ping-pong.

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China warned a probe by the EU into Chinese state subsidies for electric cars will have a "negative impact" on trade relations between the bloc and Beijing, according to a commerce ministry statement. "The Chinese side believes that the EU's proposed investigative measures are to protect its own industry in the name of 'fair competition'... and will have a negative impact on China-EU economic and trade relations," the statement said.

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BROKER RATING CHANGES

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JPMorgan raises Rio Tinto to 'neutral' (underweight) - price target 6,000 (5,440) pence

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Investec raises Associated British Foods to 'add' (hold) - price target 2195 (1912) pence

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Berenberg cuts DFS Furniture price target to 155 (195) pence - 'buy'

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COMPANIES - FTSE 100

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Smith & Nephew confirmed Rupert Soames will join as chair on Friday as planned. It also announced that BT Group's chief financial officer, Simon Lowth, will join the board as independent non-executive director. Lowth was also CFO of BG Group, AstraZeneca and Scottish Power prior to BT. In addition, Jez Maiden, who retired as finance director at Croda International earlier this year, will also join as an independent non-executive director.

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COMPANIES - FTSE 250

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Online rail ticket seller Trainline reported faster-than-expected growth in the first half of its financial year. In the period to August 31, total net ticket sales jumped 23% year-on-year to GBP2.65 billion, driving revenue up 19% to GBP197 million. It reconfirmed its guidance expectations for the financial year as a whole. It also announced a new capital allocation framework, and launched a share buyback of up to GBP50.0 million to take place over the next 12 months.

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Hipgnosis Songs Fund said it was selling off 29 of its catalogues to Hipgnosis Songs Capital to fund a share buyback programme and reduce its debt. The proposals are designed to re-rate its share price and narrow the discount, HSF said. The music intellectual property rights investor will sell the catalogues for USD440 million in cash, and some non-core songs for around USD25 million. It will then buy back up to USD180 million of its own shares, and repay USD250 million of its drawings under its revolving credit facility. "These disposals are of the smallest magnitude possible that would provide the required capital to execute on this strategy, whilst ensuring that the ongoing investment case for Hipgnosis Songs Fund remains intact by protecting the strength of the remaining portfolio," HSF said.

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OTHER COMPANIES

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THG, the e-commerce retail group, reported a weaker first half of 2023. Revenue fell to GBP969.3 million from GBP1.07 billion a year before, as pretax loss widened to GBP133.0 million from GBP108.2 million. "Our strategy of supporting our consumers through 2022, sacrificing margins in the short-term, is bearing fruit," said CEO Matthew Moulding, pointing to the firm's adjusted Ebitda and cash figures. Its Beauty division has returned to growth since the start of August. The company said revenue momentum exiting the third quarter gives it confidence in continuing revenue growth of 0% to minus 5% in the year as a whole.

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By Elizabeth Winter, Alliance News senior markets reporter

Comments and questions to [email protected]

Copyright 2023 Alliance News Ltd. All Rights Reserved.

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