13th Aug 2015 07:18
LONDON (Alliance News) - Despite a third devaluation of the Chinese currency in as many days, shares are higher in London at the open Thursday, amid well-received updates from consumer blue-chips TUI and Coca Cola HBC.
Shares in travel firm TUI are up 9.0%, after it posted higher revenue for the third quarter of its financial year, despite its quarter being clouded by the terrorist attack in Tunisia.
Meanwhile, Coca Cola HBC is up 6.7% after the bottler reported a rise in profit in the first half of its financial year as it benefited from growth in volumes and margins.
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 6,623.53
FTSE 250: up 0.8% at 17,569.08
AIM ALL-SHARE: up 0.2% at 750.07
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Hang Seng: up 0.5% at 24,037.98
Nikkei 225: closed up 1.0% at 20,595.55
DJIA: closed flat at 17,402.51
S&P 500: closed up 0.1% at 2,086.05
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GBP: flat at USD1.5621
EUR: down at USD1.1220
GOLD: down at USD1,121.27 per ounce
OIL (Brent): up at USD49.96 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in BST)
11:00 Ireland Consumer Price Index
12:30 ECB Monetary Policy Meeting Accounts
13:30 US Retail Sales
13:30 US Initial and Continuing Jobless Claims
13:30 US Import Price and Export Price indices
13:30 Canada New Housing Price Index
15:00 US Business Inventories
15:30 US EIA Natural Gas Storage
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China's central bank devalued the yuan for the third time in three days. The People's Bank of China unexpectedly adjusted its daily reference exchange rate by a further 1.1%, setting it at 6.4010 to the US dollar. On Tuesday the bank cut the rate by 1.9%, followed by a 1.6% drop on Wednesday. The central bank has yet to confirm the Thursday adjustment, but the change was listed on the website of the official China Foreign Exchange Trade System.
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House prices in the UK climbed in July, the latest survey from the Royal Institution of Chartered Surveyors showed on Thursday, with a balance of 44%. That beat forecasts for 42% and was up from 40% in June. The increase is the results of supply that cannot keep up with demand, RICS said - adding that the number of properties coming onto the market has declined in six straight months. "More worrying still is the suspicion that the imbalance between supply and demand will lead to even stronger price gains over the next 12 months," said RICS Chief Economist Simon Rubinsohn.
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Applications to frack for oil and gas in the UK are to be fast-tracked under new government measures to crack down on councils that delay on making a decision, the BBC reported. Councils will be told they must rule on applications within the current 16-week statutory timeframe and if they repeatedly delay, ministers might take over the power to decide all future applications in that local area, the BBC said. The government says it will take local views into account, but that developing shale gas is a national priority that must not be held up.
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German inflation slowed as estimated to a 5-month low in July due to lower energy prices, final data from Destatis showed. Consumer price inflation fell to 0.2% from 0.3% in June. This was the lowest rate since February, when prices gained 0.1%. Month-on-month, consumer prices advanced 0.2%, reversing a 0.1% drop in June. Both annual and monthly figures matched flash data published on July 30. Energy prices plunged 6.2% annually in July, while food prices rose 0.4%. Excluding energy, inflation was markedly higher at 1%.
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Core machine orders in Japan skidded 7.9% on month in June, the Cabinet Office said - worth JPY835.9 billion. The headline figure missed forecasts for a decline of 5.1% following the 0.6% increase in May. On a yearly basis, core machine orders climbed 16.6% - also below estimates for an increase of 17.6 and down from 19.3% in the previous month.
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At least 17 people were killed after a large explosion rocked a north-eastern Chinese city, news reports said. Thirty-two people were critically injured, and another 283 in hospital for monitoring, after the blast and fireball in the port city of Tianjin, according to the official Xinhua news agency. Two firefighters were missing and four injured from among 12 crews sent to a warehouse fire late Wednesday, Xinhua said in an earlier report.
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The US military has begun flying manned aircraft from Incirlik Air Base in Turkey against Islamic State targets, the Pentagon said. The airstrikes follow an agreement last month between the US and Turkey that cleared the use of Turkish bases by the US and its partners. Unmanned airstrikes from the base began early this month, the Pentagon said.
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John Kerry this week will become the first US secretary of state to visit Cuba in 70 years, as Washington and Havana take another step in repairing their long-fractured ties. Kerry's visit to the Cuban capital for Friday's flag-raising at the reinaugurated US embassy is a high point in the thaw that was announced in December - after 18 months of Vatican-brokered secret talks.
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BROKER RATING CHANGES
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TRADERS: GOLDMAN CUTS G4S TO 'SELL' ('NEUTRAL')
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TRADERS: EXANE BNP CUTS G4S TO 'NEUTRAL' ('OUTPERFORM')
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CITIGROUP CUTS ST JAMES'S PLACE TO 'NEUTRAL' ('BUY') - TARGET 1020 (1000) PENCE
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CITIGROUP CUTS JUPITER FUND TO 'NEUTRAL' ('BUY') - TARGET 490 (480) PENCE
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CITIGROUP RAISES ASHMORE GROUP TO 'BUY' ('NEUTRAL') - TARGET 290 (270) PENCE
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COMPANIES - FTSE 100
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Tourism and travel operator TUI posted higher revenue for the third quarter of its financial year and for the first nine months, despite its quarter being clouded by the terrorist attack in Tunisia. TUI said its earnings before interest, taxation and amortisation rose to EUR130 million from EUR92 million in the third quarter to the end of June and its loss for the first nine months of the year narrowed to EUR239 million from EUR242 million. TUI said it is currently confident of delivering underlying earnings growth of 12.5% to 15.0% for its current financial year, with trading in the summer months so far proving solid. Revenue in the quarter was up to EUR5.08 billion from EUR4.78 billion. The company said its revenue growth was driven by its Cruise, Hotels and Resorts business and a robust performance in the UK, along with higher earnings from its Hotelbeds Group unit.
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Coca-Cola HBC reported a rise in profit in the first half of its financial year as it benefited from growth in volumes and margins, although its revenue was hit by adverse foreign exchange rates. The soft drinks bottling company reported a pretax profit in the six months ended July 3 of EUR164.7 million, up from the EUR129.2 million profit it made in the same period the year before, although revenue did slip to EUR3.15 billion from EUR3.18 billion.
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Glencore said it will book a large impairment related to its assets in Chad in light of the decline in oil prices and slashed its capital expenditure budget for the rest of 2015 as it reported a mixed set of production results in the first half of 2015. The multi-commodity miner said that in light of the sharp decline in oil prices, which caused it to amend its work programme in Chad, it will book a USD790 million impairment related to the assets, and restrict capital expenditure in the country. The miner also cut its capital expenditure budget for the full year. In the first half of 2015, the miner spent USD3.0 billion in industrial capital expenditure, which is now expected to total USD6.0 billion for the full year, down from its previous guidance range of USD6.50 to USD6.80 billion.
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J Sainsbury said it has launched its Tu clothing website so that customers in the UK can view and buy from the collection online. A selection of Tu clothing is already available in over 400 Sainsbury's stores, but only 160 stores carry the full collection. The new online store, which includes womenswear, menswear and childrenswear, allows customers to purchase goods for next day delivery, standard delivery and click and collect. 710 stores will offer the click and collect service, Sainsbury's said.
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COMPANIES - FTSE 250
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Recruitment company Michael Page International said it will pay a special dividend to shareholders after its pretax profit rose on the back of higher revenue and gross profit in the first half. Michael Page said it will pay a special dividend of 16.0 pence per share, having not paid a special dividend a year earlier, in addition to a 5.3% rise in its interim dividend payout to 3.p from 3.42p. Pretax profit for the group rose to GBP40.4 million from GBP35.6 million, as its total revenue rose to GBP530.4 million from GBP512.2 million and its gross profit, or net fee income, rose to GBP280.9 million from GBP263.7 million. Both revenue and gross profit were hit by multiple currency headwinds the group faced in the half, with revenue up by 8.3% in constant currencies and gross profit up by 11%.
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Cineworld Group reported growth in profit in the first half of its financial year, boosted by sales of tickets for a number of new films, including 'Fifty Shades of Grey', which broke box office records. The cinema operator reported a a huge boost in pretax profit in the 26 weeks ended July 2 to GBP46.8 million from GBP13.9 million in the same period the year before, as its revenue grew 22.5% to GBP329.1 million from GBP268.6 million. Cineworld will pay an interim dividend of 5.0 pence, a 31.6% increase on the 3.8p it paid the year before.
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Derwent London reported a 5.0% increase in net rental income in the first half of 2015, driving its profit higher. Derwent London, which owns a portfolio of commercial real estate in central London, said its net rental income amounted to GBP66.9 million in the six months to the end of June, compared with GBP63.7 million in the corresponding period the prior year. Its net asset value, measured on a European Public Real Estate Association basis, increased by 10.9% to 3,226p over the course of the half, driven by a strong rise in property values and improved recurring earnings. Derwent London increased its interim dividend by 8.2% to 12.6 pence per share.
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Ophir Energy said it has increased its full year production guidance and slashed its spending for the rest of the year as the company tries to restructure the company for a USD50 per barrel environment after swinging to a substantial pretax loss in the first half of 2015. The FTSE 250-listed oil and gas company said it swung to a large YSD123.3 million pretax loss in the first half of 2015 from a USD589.4 million profit as revenue came in at USD86.5 million compared to nil a year earlier.
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Residential property company Grainger said trading has been strong in the first ten months of its financial year and said it is seeking to sell its wholly-owned residential property assets in Germany. Grainger said it has appointed investment bank Lazard to advise on the sale of its residential property assets in Germany. The group said the sale will allow it to focus on its operations in the UK and take advantage of the currently robust residential property market in Germany.
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COMPANIES - LONDON MAIN MARKET AND AIM
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London-listed investment vehicle Nomad Foods said it has reached a deal to acquire the Continental Europe operations of frozen foods company Findus Sverige for around GBP500 million in cash and shares. Nomad said it has reached a deal with Findus' private equity owners, including Highbridge Principal Strategies, Lion Capital LLP and Sankaty Advisors, to acquire Findus' businesses in Sweden, Norway, Finland, Denmark, France, Spain and Belgium. The deal will not include Findus' Young's Seafood Ltd brand in the UK. Nomad is the owner of of Iglo Foods, the owner of the Birds Eye frozen foods brand, which it acquired for EUR2.6 billion in June before then floating on the London market.
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Marketing services and book publishing company St Ives said it has struck a deal to acquire retail business consultancy Fripp Sandeman and Partners for an undisclosed price. St Ives said the deal will boost its specialist consultancy services operation and said the business will be integrated into its strategic marketing business.
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The private equity owner of D&D Restaurants, the business founded by Terence Conran, is being prepared for a potential public listing, Sky News reports. Sky said LDC, the private equity owner of D&D which acquired a controlling stake in 2013, is lining up Zeus Capital to oversee a flotation of the business. The timing and valuation of the deal have yet to be finalised, Sky said, citing sources. D&D is the owner of a number of London's most prominent restaurants, including Bluebird, Coq d'Argent and Skylon.
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COMPANIES - INTERNATIONAL
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Swiss foods giant Nestle said its first-half net profit fell to CHF4.517 billion from CHF4.634 billion in the previous year. Sales for the period were CHF42.843 billion, compared to CHF42.981 billion in the prior year. Organic growth was 4.5%, composed of 1.7% real internal growth and 2.8% pricing. Nestle said that in India withdrawal of Maggi noodles resulted in negative organic growth which will continue into the second half. The firm said it is engaging fully with the authorities as it works to relaunch the product.
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German utility major RWE reported Thursday its first-half net income was EUR1.74 billion euros, 70% higher than last year's EUR1.02 billion. During the first half, RWE's EBITDA fell 7%, in line with expectations, to EUR3.2 billion, while its operating result was down 11% to EUR2.0 billion. The main contributing factor was the continued decline in margins in conventional electricity generation. The company now expects that the UK supply business will close the year significantly below last year, even though a moderate improvement in earnings had previously been expected.
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German steel giant ThyssenKrupp reported that profit attributable to stockholders was EUR199 million for the third quarter, sharply higher than EUR40 million in the prior-year quarter. Net sales for the quarter grew 4% to EUR11.18 billion from EUR10.72 billion in the same quarter last year. Order intake for the quarter was up 5% year-over-year.
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Cisco Systems, the world's largest computer networking gear maker, said its fourth quarter profit rose 3.2% from last year, helped by higher revenue and improved gross margin. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.
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Chinese PC maker Lenovo said its first-quarter net earnings to equity holders dropped 51% to USD105 million from USD214 million a year ago, hurt by increased expenses. Its sales for the quarter rose 3% to USD10.72 billion from USD10.34 billion last year. Excluding foreign exchange impacts, sales were up 10% percent year-over-year. Lenovo said it faced significant declines in the global PC and tablet markets, as well as slowing growth and increasing competition - especially in China - in smartphones.
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News Corp reported a slip to loss in the fourth quarter, hurt by lower advertising revenue at its news and information segment, impairment charges and a stronger dollar, partly offset by growth in the digital real estate and book publishing businesses. However, excluding one-time expenses, News Corp posted a profit that surpassed Wall Street estimates, while revenue missed expectations. The New York-based media company reported fourth-quarter net loss to common stockholders of USD379 million, compared with a profit of USD12 million last year.
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Thursday's Scheduled AGMs/EGMs
DJI Holdings
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
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Jupiter Fund ManagementSt. Ives PLCOPHR.LCoca-Cola HBCGFS.LAshmoreSt James's PlaceGlencoreGrainger plcSainsbury'sDerwent LondonCINE.LDJI.L