1st Jun 2016 07:20
LONDON (Alliance News) - London stock prices and the pound continued lower Wednesday, after a poll published Tuesday afternoon showed support for the UK leaving the European Union back in the lead. A weak set of Chinese manufacturing figures added to the gloom for equities.
Meanwhile, Tesco overtook rival J Sainsbury to become the supermarket with the slowest sales decline out of the big four UK grocers, in the latest grocery data released by Kantar Worldpanel on Wednesday, though all four continued to lose market share to discounters Aldi and Lidl.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.4% at 6,207.35
FTSE 250: down 0.3% at 17,127.66
AIM ALL-SHARE: down 0.3% at 737.43
----------
Hang Seng: down 0.3% at 20,755.64
Nikkei 225: closed down 1.6% at 16,955.73
DJIA: closed down 0.5% at 17,787.20
S&P 500: closed down 0.1% at 2,096.96
----------
GBP: down at USD1.4481 (USD1.4553)
EUR: flat at USD1.1131 (USD1.1131)
GOLD: firm at USD1,216.62 per ounce (USD1,213.55)
OIL (Brent): down at USD49.39 a barrel (USD50.60)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Wednesday's Key Economic Events still to come
(all times in BST)
08:30 Switzerland SVME PMI
08:45 Italy Markit manufacturing PMI
08:50 France Markit manufacturing PMI
08:55 Germany Markit manufacturing PMI
09:00 EU Markit manufacturing PMI
09:30 UK Markit manufacturing PMI
09:30 UK consumer credit, mortgage approvals, net lending, M4 money supply
12:00 US MBA mortgage applications
13:55 US Redbook index
14:30 Canada RBC manufacturing PMI
14:45 US Markit manufacturing PMI
15:00 US ISM manufacturing PMI and prices paid
15:00 US construction spending
19:00 US Fed Beige Book
21:30 US API weekly crude oil stocks
----------
A new poll from ICM found voters leaning towards the Leave camp, a result which sent shares in London lower in late trade on Tuesday. The poll, conducted on behalf of The Guardian, showed voters split 52% to 48% in favour of Brexit, combining both online and phone surveys. The last time the same survey was carried out, the Remain camp had a ten-point lead in the phone polling. Previous surveys have tended to show voters surveyed online are more in favour of Brexit, but the ICM research found both phone and online methodologies yielding the same result. "Our poll rather unhinges a few accepted orthodoxies," said ICM director Martin Boon. "It is only one poll, but in a rather unexpected reverse of polling assumptions so far, both our phone poll and our online poll are consistent on both vote intentions and on the EU referendum."
----------
Leading Brexit campaigners have unveiled plans to introduce an Australian-style points-based immigration system if the UK votes to leave the European Union on June 23. A statement from Boris Johnson, Michael Gove, Priti Patel, and Gisela Stuart sets out the blueprint for an immigration system which would spell the end of the automatic right of EU citizens to come to live and work in the UK. Instead, the right to come to the UK would be based on skills.
----------
Shop prices in the UK continued to fall in May, the latest survey from the British Retail Consortium showed, tumbling 1.8% on year. That follows the 1.7% decline in April. Non-food deflation was 2.7%, slowing from 2.9% in April, while fresh food prices slid 0.8% versus 0.5% in April. "The fact that today's figures remain deflationary doesn't come as a great surprise. We've experienced a record run of falling shop prices and, for the time being, there's little to suggest that'll end any time soon," said Helen Dickinson, BRC chief executive.
----------
IRELAND MAY FACTORY PMI FALLS TO 51.5 FROM 52.6 IN APRIL
----------
There seems to be no salvation in sight for the Chinese manufacturing sector, as it contracted again in May, the results of a closely watched private survey showed. The Caixin manufacturing Purchasing Managers' Index fell to 49.2 in May from 49.4 in April, data from Markit revealed. The score came in line with economists' expectations. New work decreased for the first time in three months. Respondents cited poor market conditions for the drop in client demand. Moreover, export orders declined at the fastest pace in three months. Elsewhere, the official manufacturing PMI remained unchanged at 50.1 in May, survey from the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed. It was forecast to drop to 50.0.
----------
Japan was to reschedule a planned increase in the sales tax in an announcement by Prime Minister Shinzo Abe expected Wednesday, amid the government's failure to stimulate long-term economic growth, a news report said. The increase from 8% to 10% was scheduled for April 2017, but was expected to be postponed to October 2019 in a press conference planned Wednesday evening, Kyodo News agency reported. Sales tax was already raised from the long-standing 5% to 8% in April 2014. The second hike was first set for October 2015, but Abe decided to postpone it due to a slump in consumer spending after the first hike.
----------
The manufacturing sector in Japan continued to contract in May, and at a faster rate, the latest survey from Nikkei showed on Wednesday with a Performance of Manufacturing Index score of 47.7. That's down from 48.2 in April, and it moves further beneath the line of 50 that separates expansion from contraction.
----------
Brazil's unemployment rate has reached a record high of 11.2%, the statistical bureau reported. The jobless rate is the highest since the adoption of new measurement methods in 2012. Brazil has lost 1.5 million jobs in the last 12 months. Unemployment has risen steadily since the beginning of 2015. Brazil is mired in a severe recession. In 2015, Latin America's largest economy saw gross domestic product contract by 3.8%, and a similar drop is expected in the current year. The country recently ranked as the seventh largest economy in the world, but the economic slump and the slide of its currency, the real, has Brazil in danger of dropping out of the top 10.
----------
The US joined North Korea's neighbours in strongly condemning an attempt by Pyongyang to launch a missile. US strategic command systems detected a test of a immediate-range ballistic missile by North Korea and determined that it had failed, White House spokesman Josh Earnest said. Earnest added that the White House had no new assessment on what North Korean leader Kim Jong Un may be "contemplating at this point."
----------
The US advised Americans planning to go to the European Cup football championship and other upcoming events in Europe to be vigilant about the risk of a terrorist attack. The alert issued by the US State Department says there is a risk of potential terrorist attacks throughout Europe, targeting major events, tourist sites, restaurants, commercial centres and transportation systems. The alert mentions the European Cup championship from June 10 through July 10 in France, the Tour de France on July 2-24 and Catholic church's World Youth Day, which is expected to draw up to 2.5 million visitors to Krakow, Poland, on July 26-31.
----------
BROKER RATING CHANGES
----------
DAVY INITIATES WHITBREAD WITH 'OUTPERFORM'
----------
SOCGEN CUTS PRUDENTIAL TO 'HOLD' (BUY) - PRICE TARGET 1400 (1900) PENCE
----------
TRADERS: LIBERUM INITIATES SAGE GROUP WITH 'BUY'
----------
COMPANIES - FTSE 100
----------
Wolseley said it saw "decent revenue growth" in the third quarter of its financial year, despite deflationary headwinds and mixed market conditions, although it noted that recent revenue growth trends have been weaker. The building products company posted revenue of GBP3.66 billion for the three months to April 30, an 11% increase from the GBP3.30 billion reported for the same period a year earlier, which drove trading profit up to GBP230.0 million from GBP195.0 million. "Demand in several of the group's markets remains subdued, and we continue to experience the adverse impact of commodity deflation, particularly in the US," Wolseley said.
----------
Lender HSBC Holdings is cutting senior investment-banking positions as part of ongoing plan to reduce costs across the company, the Bloomberg reported, citing people with knowledge of the matter. Last year, Chief Executive Officer Stuart Gulliver outlined a three-year plan to pare back HSBC's global network by shutting money-losing businesses. The bank is targeting annual cost-saving initiatives of USD4.5 billion to USD5.0 billion by 2017, and the actions are expected to eliminate 25,000 jobs globally.
----------
Anheuser-Busch InBev late Tuesday said it has secured conditional approval for its takeover of rival SABMiller from South African competition authorities. AB InBev is acquiring SABMiller for GBP71.00 billion in a deal which will create by far the largest brewer in the world, with a market share of the global beer market of around a third. AB InBev said the Competition Commission of South Africa has completed its investigation into the deal and recommended the deal be approved with conditions. The Budweiser-owner said the approval, following the regulatory nods from the South African Reserve Bank and European Commission, leaves it on track to secure all necessary approvals for the deal which will allow for the merger to close in the second half.
----------
COMPANIES - FTSE 250
----------
Cobham set out the terms of its discounted, fully-underwritten rights issue, first announced in April with the aim of shoring up its finances. The company, which serves the aviation, maritime, defence and space sectors, tabled plans for the rights issue in late April after issuing a profit warning for 2016 following weak trading in the first quarter. On Wednesday, Cobham said it will launch a fully-underwritten, one-for-two rights issue to raise GBP506.7 million. The company will issue 569.3 million shares at 89.00 pence per share, a 45% discount to its closing price on Tuesday of 163.49p.
----------
Aerospace and defence contractor Meggitt said it has completed a USD600.0 million private placement to raise funds to refinance credit facilities it secured in 2015. Meggitt said it has placed the notes with 23 US-based investors in seven and ten-year maturities. The transactions has a weighted average maturity of 8.5 years, Meggitt said, and an all-in funding cost of 3.46%.
----------
Events company UBM said it has struck a USD17.6 million cash deal to acquire Content Marketing Institute. Content Marketing Institute produces Content Marketing World, a content marketing sector event which runs in September at the Cleveland Convention Center in the US state of Ohio.
----------
Halfords Group reported a fall in profit in its recently-ended financial year due to exceptional costs, and as the prior year benefited from an extra week, but revenue excluding that extra week increased due to growth in the autocentres division. The car parts and bicycle retailer said its pretax profit in the year ended April 1 fell to GBP79.8 million from GBP83.8 million the year before, as revenue slipped slightly to GBP1.02 billion from GBP1.03 billion. Halfords will pay a total dividend of 17 pence for the year, up from 16.5p the year before.
----------
LondonMetric Property said it is positioning its portfolio to benefit from the rise of online shopping, after its pretax profit almost halved in its financial year due to its valuation surplus coming in much lower than a year earlier. The property investor posted pretax profit of GBP82.7 million for the year ended March 31, down from GBP160.3 million a year earlier. The company said it was offering a dividend of 7.25p per share, up from 7.00p a year earlier.
----------
COMPANIES - LONDON MAIN MARKET AND AIM
----------
Lamprell said it has signed a joint development agreement with three major companies that may lead to a new maritime yard being developed by the group in Saudi Arabia. The London-listed energy services company signed the joint development agreement with Saudi Aramco, the National Shipping Co of Saudi Arabia, and Hyundai Heavy Industries following the memorandum of understanding signed between the group back in January. Saudi Aramco is the national oil company of Saudi Arabia, and the National Shipping Co is also known as Bahri.
----------
COMPANIES - INTERNATIONAL
----------
Japanese mobile carrier SoftBank Group said it will sell at least USD7.9 billion of its shares in Chinese e-commerce giant Alibaba Group Holding in order to boost its liquidity and raise funds to reduce debt. SoftBank, owner of telecom company Sprint Corp, said it will issue USD5 billion in mandatory exchangeable trust securities convertible into American depositary shares of Alibaba, in a private placement to institutional buyers. The company also intends to sell USD2 billion of Alibaba shares back to Alibaba, USD400 million in shares to the Alibaba Partnership, and USD500 million of shares to a major unidentified sovereign wealth fund. The sale of Alibaba shares would be the first by SoftBank since it started to invest in Alibaba in 2000.
----------
Dutch supermarket chain Koninklijke Ahold reported higher profit for the first quarter, as sales grew more than 4%, driven by solid store operations and continued strong increase in online sales.
Net income for the quarter rose to EUR241 million from EUR213 million. Sales grew 4.3% to EUR11.8 billion, while they rose 3.5% at constant exchange rates.
----------
Wednesday's Scheduled AGMs/EGMs
AG Barr
Mears Group
Flowtech Fluidpower
Frontier Resources
Seplat Petroleum Development Co
Proton Power Systems
EnQuest
Infinity Energy
Peel Hotels
----------
By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
PrudentialSage GroupWhitbread