15th Oct 2015 07:21
LONDON (Alliance News) - Shares have opened higher in London on Thursday, following market gains in Asia and a raft of individual UK company news.
Unilever is leading blue-chips gainers, up 3.5% after the soap and ice cream maker reported a rise in sales in the third quarter of 2015 and said it expects underlying sales to grow at the upper end of its guided range for the full year.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 6,305.52
FTSE 250: up 0.2% at 16,838.88
AIM ALL-SHARE: up 0.1% at 732.74
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Hang Seng: up 1.9% at 22,860.57
Nikkei 225: closed up 1.2% at 18,096.90
DJIA: closed down 0.9% at 16,924.75
S&P 500: closed down 0.5% at 1,994.24
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GBP: up at USD1.5486 (USD1.5442)
EUR: up at USD1.1480 (USD1.1432)
GOLD: up at USD1,182.85 per ounce (USD1,178.05)
OIL (Brent): up at USD49.68 a barrel (USD48.98)
(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 BST)
n/a Ireland Gross Domestic Product
13:30 US Initial and Continuing Jobless Claims
13:30 US Consumer Price Index
13:30 US NY Empire State Manufacturing Index
15:00 US Philadelphia Fed Manufacturing Survey
15:30 US Fed's Bullard speech
15:30 US Fed's William Dudley speech
15:30 US EIA Natural Gas Storage
16:00 US EIA Crude Oil Stocks
21:30 US FOMC Member Mester speech
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US economic activity continued to expand modestly from mid-August through early October, the Fed said in its Beige Book report. Some of the Fed districts expressed concern about the strength of the US dollar on exports and tourism, but housing and consumer spending remained a relative bright spot.
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Japan's industrial output declined more than estimated and tertiary industry activity grew only marginally in August, reports from the Ministry of Economy, Trade and Industry showed. Industrial output fell 1.2% in August from July, which was bigger than a 0.5% drop estimated initially.
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Immigrants will make up half of Switzerland's population by 2030, the nationalist Swiss People's Party (SVP) warned in one of its campaign newsletters for Sunday's parliamentary election. "The SVP is the only party that wants to curb immigration and to end abuse of the asylum system," party chief Toni Brunner declared on the first page. Pollsters say that Switzerland's strongest party is set to become even stronger, with nearly 28% of the votes expected for the SVP, up from the 26.6% of the previous election in 2011. However, Switzerland's complex consensus-oriented political system will prevent the SVP from taking over the government.
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The Syrian regime and its Iranian and Lebanese allies are set to launch an offensive around the key northern city of Aleppo, taking advantage of rebel moves to bolster their front lines in central Syria, sources told dpa. The offensive would first of all seek to relieve a siege by Islamic State fighters on the Kuweires military airbase east of Aleppo, and then focus on areas north of the city, a source close to a coalition led by Lebanese Shiite movement Hezbollah said.
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BROKER RATING CHANGES
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LIBERUM RAISES HARGREAVES LANSDOWN TO 'HOLD' ('SELL') - TARGET 1238 PENCE
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EXANE BNP CUTS SMITHS GROUP TO 'UNDERPERFORM' ('NEUTRAL')- TARGET 830 (1000) PENCE
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TRADERS: HSBC CUTS SERCO TO 'REDUCE' ('HOLD')
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COMPANIES - FTSE 100
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Britain's five biggest lenders will be told on Thursday that they need to find billions of pounds of additional capital as part of industry reforms designed to shield taxpayers in a future industry crisis, Sky News reported. The Bank of England is to deliver the news in the form of a consultation paper to be published on the implementation of the new ring-fencing framework that will be introduced in 2019. Barclays, HSBC Holdings, Lloyds Banking Group, Royal Bank of Scotland Group and Santander UK are the affected banks.
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Unilever reported a rise in sales in the third quarter of 2015 and said it expects underlying sales to grow at the upper end of its guided range for the full year. The maker of consumer products said revenue in the third quarter of the year grew 9.4% to EUR13.4 billion, while rising 11% to EUR40.4 billion in the first nine months of the year. Unilever said growth was helped by soft comparatives in China, strong ice cream sales, and price increases in Latin America. The company added however, that consumer demand remained fragile, while volume growth was "barely positive" in the markets in which it operates.
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Burberry Group said its second quarter was hit by a challenging environment for the luxury goods industry, particularly in China, and said it will take further cost-control actions in the second half to minimise the impact on its profit for the full year. Still, the group said it expects its adjusted pretax profit for the full year to be in line with analyst expectations, despite the tough environment. Burberry said its retail revenue was up 2% on an underlying basis in the first half to the end of September to GBP774.0 million, with like-for-like sales growth of 1.0% in the period.
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Anglo-Australian miner BHP Billiton said it has priced USD3.25 billion in subordinated fixed-rate reset notes in the dollar market. BHP said the note issue has been completed in two tranches, one of USD1.0 billion and one of USD2.25 billion. The dollar issuance follows euro and sterling deals announced late Wednesday. BHP said it had priced EUR2.0 billion of subordinated fixed rate reset notes in the euro market across two trances, and GBP600 million of subordinated fixed rate reset notes in the sterling market. The proceeds of all the note issuances will be used for general corporate purposes including, but not limited to, repaying BHP's debt, the company said.
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BHP also has said it has no plans to cut production and denied that a series of recent mine closures will spur higher commodity prices, days after peer Glencore slashed its zinc production by a third, the Financial Times reported. Arnoud Balhuizen, head of marketing at BHP, said that the Anglo-Australian mining group would not reduce output because its operations were generating cash, even as some rivals struggle with commodity prices close to six-year lows.
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Hundreds of workers in the investment banking arm of HSBC Holdings have had their pay cut by 10% and have been ordered to take two weeks of unpaid leave by the end of the year, The Times reported. The bank, currently under pressure to cut costs, told staff about the changes last week and is understood to have told managers that there would be no exceptions to the cuts, The Times said. The move is understood to effect financial analysts and others in core parts of the investment bank, as well as IT workers.
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Tesco said it has agreed to sell 14 Spenhill development sites in London, the South East and Bath for GBP250.0 million. The development sites are suitable for mixed-use and residential development and have been sold to clients advised by Meyer Bergman, the European real estate investment manager. Spenhill is Tesco's property arm.
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Supermarket J Sainsbury said it will close its mobile phone service from January 2016, having only launched the joint venture with Vodafone Group back in 2013. According to The Times, the service has added only 150,000 customers since its launch and Sainsbury's has decided to pull out of the market due to the slow take-up, with plans for the Mobile by Sainsbury's service to go dark on January 15, 2016.
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Retailer Marks & Spencer Group said it has launched a loyalty scheme as part of plans to revive its underperforming General Merchandise business. M&S said SPARKS will be launched in the UK on Thursday next week and will help to convert customers into members who will then be offered rewards by the retailer on its food, fashion, home and beauty products. The General Merchandise unit, which primarily sells clothing and homeware products, has been struggling in recent years, failing to meet expectations in its 2015 financial year and disappointing with a like-for-like sales decline in the first quarter of the current year, which reversed improved sales in the fourth quarter of the previous financial year.
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Switzerland's Basilea Pharmaceuticals said it has signed an exclusive distribution and supply deal with London-listed Hikma Pharmaceuticals for Basilea's Zevtera antibiotic. Under the terms of the agreement, which will cover the Middle East and North Africa region, Hikma's Hikma Pharmaceuticals LLC unit will hold the rights to register, distribute and market Zevtera across the region. The financial terms of the agreement between the two were not disclosed.
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COMPANIES - FTSE 250
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WH Smith reported a rise in pretax profit in its recently-ended financial year, boosted by strong sales in its travel division, and it said its struggling high street business also picked up in the second half. The books and stationery retailer reported an 8% rise in pretax profit in the year ended August 31 to GBP121 million from GBP112 million the year before, as revenue grew 1% to GBP1.18 billion from GBP1.16 billion but like-for-like sales remained flat.
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Ashmore Group reported a 13% drop in assets under management during the opening quarter of its financial year, hit by net outflows of USD4.0 billion and negative investment performance of USD3.8 billion. The asset manager said weak sentiment towards emerging markets on fears about China's economy and the prospect of higher US interest rates have enabled it to take on risk at attractive prices. Overall, assets under management fell to USD51.1 billion at the end of September, from USD58.9 billion at the end of June.
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Man Group said it had USD1.4 billion of net inflows in the third quarter, driven by flows into its quant strategies, although overall funds under management fell due to negative investment movements of USD2.7 billion and a USD600,000 hit from the strength of the US dollar.
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Virgin Money said it is on track to realise its targeted returns after seeing mortgage and credit card growth, net interest margins, and return on tangible equity all perform in line with expectations in the first nine months of 2015. The bank is targeting a net interest margin - a key driver of profitability - slightly ahead of 160 basis points at the full-year, and a mid-teens return on tangible equity by the end of 2017, having absorbed a new 8% bank surcharge introduced by the UK government.
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Casinos and bingo hall operator Rank Group said its revenue grew both on a total and like-for-like basis in the first 15 weeks of its current financial year, with a particularly strong performance from its Grosvenor Casinos brand. The company said its total revenue growth in the 15 weeks to October 11 was 7.0%, with 12% of that growth coming from Grosvenor and 1.0% from Mecca, its bingo operation. Like-for-like revenue for the group in the period was up 8.0%, with 12.0% growth from Grosvenor and a 3.0% rise at Mecca. Rank said its remains confident it will meet its expectations for the full year.
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Booker Group reported a rise in profit in the first half of its financial year although sales fell slightly as it was hit by the UK government's ban on tobacco displays in small shops, which came into force earlier in the year. The convenience store chain operator reported a 10% rise in pretax profit in the 24 weeks ended September 11 to GBP74.1 million from GBP67.4 million the year before, although revenue fell 1% to GBP2.24 billion from GBP2.26 billion.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Iraqi oil producer Gulf Keystone Petroleum said it has received a USD12.0 million payment from the regional government of Kurdistan for its Shaikan crude exports. The USD15.0 million payment, USD12.0 million net to Gulf, follows on from a similar payment in September, showing that the government is sticking to its plans of making regular payments to the exporting international oil companies in the region following lengthy payment delays earlier in 2015.
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COMPANIES - INTERNATIONAL
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Online video streaming service Netflix reported a third-quarter profit that halved from last year, hurt largely by higher operating costs even as revenue increased. Netflix added 3.62 million streaming subscribers globally in the quarter, above its forecast of 3.55 million, to end the quarter with 69.17 million subscribers. However, the company was only able to add 880,000 customers in the US during the quarter, well below Wall Street estimates, hurt largely by ongoing transition to the new chip-based credit and debit cards. International subscriber additions were 2.74 million.
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The University of Wisconsin-Madison's licensing arm is seeking USD400 million from Apple for infringing the school's patent on microprocessor technology, according to reports. The Wisconsin Alumni Research Foundation is owed that much, its lawyer told the jury after it found Apple had infringed the patent. Apple's lawyers reportedly argued the amount should be a fraction of the USD110 million Intel paid in 2009 to settle an earlier dispute over the same patent. The patent, issued in 1998, relates to the design of a processor chip to improve its performance.
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Nike provided an overview of its progress on key strategic initiatives to achieve sustainable, profitable long-term growth. During an investor meeting at its world headquarters near Beaverton, Oregon, the company announced a revenue target of USD50 billion by the end of fiscal year 2020. Additionally the company shared its long-term financial model of high single-digit to low double-digit revenue growth, mid-teens earnings per share growth and expanding returns on invested capital.
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Swiss crop chemicals major Syngenta said its third-quarter group sales dropped 12% to USD2.616 billion from USD2.975 billion in the previous year. On a currency-neutral basis, sales were little changed. Sales dropped 19% in Europe, Africa, Middle East, 23% in North America, and 3% in Latin America. The sales drop was 17% in Asia Pacific.
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A nuclear reactor near an active volcano in Japan was put back online Thursday, the second unit to be restarted in the country under updated regulations following a triple meltdown at Fukushima Daiichi atomic power station in 2011. Kyushu Electric Power Co reactivated Reactor 2 at the Sendai Nuclear Power Plant, 1,000 kilometres south-west of Tokyo, about two months after the operator resumed work at Reactor 1. The other 46 reactors in Japan remain offline amid lingering public fears of nuclear power generation following the country's worst-ever atomic accident in March 2011.
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Japanese car giant Toyota Motor announced its plans to reduce carbon emissions by 90% from its production vehicles by 2050. By 2050, Toyota expects its product portfolio to mostly be made up of next-generation vehicles with low or zero CO2 emissions: hybrid, plug-in hybrid, electric, and fuel cell vehicles. According to a report from The Wall Street Journal, Toyota aims to sell 1.5 million hybrid vehicles by 2020 and over 30,000 hydrogen-powered vehicles around the same time.
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Thursday's Scheduled AGMs/EGMs
Filtronic
IG Group Holdings
Mattioli Woods
Rank Group
Renishaw
HellermannTyton
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
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