23rd Mar 2016 08:18
LONDON (Alliance News) - Shares were flat at the open Wednesday, having recovered some ground late Tuesday following the shock of the Brussels terrorist attacks.
Pay-television provider Sky led FTSE 100 gainers, up 1.3% after being raise to Outperform from Neutral by Exane BNP.
New entrant Paddy Power Betfair was the biggest FTSE 100 decliner, down 2.5%. The betting firm said Chief Operating Officer Andy McCue will leave the group on April 30 in order to "pursue new opportunities". McCue was chief executive of Paddy Power from January 2015 up until its merger with Betfair in February 2016. He joined the Paddy Power business in 2006.
Fellow betting company William Hill easily topped FTSE 250 losers, down 14% and taking peer Ladbrokes with it, down 5.6%. William Hill issued a profit warning after its online business suffered the "worst Cheltenham results in recent history".
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: flat at 6,192.06
FTSE 250: up 0.1% at 16,913.57
AIM ALL-SHARE: up 0.2% at 710.37
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Hang Seng: closed down 0.3% at 20,615.23
Nikkei 225: closed down 0.3% at 17,000.98
DJIA: closed down 0.2% at 17,582.57
S&P 500: closed down 0.1% at 2,049.80
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GBP: down at USD1.4167 (USD1.4208)
EUR: down at USD1.1186 (USD1.1209)
GOLD: down at USD1,234.00 per ounce (USD1,250.44)
OIL (Brent): soft at USD41.38 a barrel (USD41.60)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in GMT)
09:00 Italy wage inflation
10:00 Switzerland ZEW survey
11:00 US MBA mortgage applications
14:00 US new home sales
14:00 Switzerland SNB Quarterly Bulletin
14:30 US EIA crude oil stocks
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Belgian police were hunting for one of the suspects in the bombings in Brussels, as the country held three days of national mourning over the attacks that killed at least 30 people. The suspect in the airport explosions, caught on camera with two other men, had planted a bomb but the device did not explode, Belgian Interior Minister Jan Jambon said. Belgian prosecutors believe his two companions blew themselves up at the airport departure hall. It was "lucky" that the third bomb did not explode, Jambon told US broadcaster CNN. The Islamic State jihadist group claimed responsibility for both attacks in Brussels, one at the main international airport and another just over an hour later at the Maelbeek subway station, close to the headquarters of several European institutions.
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Britain's membership of the European Union contributes to its ability to fight terror plots, the UK Home Secretary has said. Theresa May said access to important shared intelligence would be threatened if there was a vote to leave. Membership of the EU also helped British police catch and extradite criminals, she told The Times shortly before the Brussels attacks. May encouraged voters to consider the referendum issues broadly, but said on security, there were good reasons for the UK to be a member.
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US presidential candidates Donald Trump and Hillary Clinton were the projected winners of their parties' Arizona primaries. The two front-runners in the US presidential race had been expected to win the votes in the south western US state. With 58% of the vote counted, Trump is ahead on the Republican side with 46% of the vote compared with 22% for his closest rival, US Senator Ted Cruz. Ohio Governor John Kasich had 10%.
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Police in eastern China's Shandong province have arrested 37 people in connection with a vaccine scandal, state media reported. Officers are investigating three pharmaceuticals companies, the official Xinhua news agency reported. The authorities said last month that they had arrested two people on suspicion of illegally selling wrongly stored or expired vaccines.
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Ukrainian pilot Nadiya Savchenko, the most famous prisoner of the Ukraine conflict, loudly sang to the judge while being sentenced to 22 years in Russian prison for murder. "Oh judge, what are you judging me for?" she sang to the tune of the traditional Slavic folk song Oh Braids of Mine, a video from the courtroom posted on YouTube showed. The 34-year-old was accused of giving Ukrainian national forces the coordinates for an attack in which two Russian journalists were killed.
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BROKER RATING CHANGES
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EXANE BNP RAISES SKY TO 'OUTPERFORM' ('NEUTRAL') - PRICE TARGET 1250 (1100) PENCE
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HSBC CUTS DIRECT LINE TO 'REDUCE' ('HOLD') - TARGET 350 (382) PENCE
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BARCLAYS RESUMES SAINSBURY WITH 'EQUAL WEIGHT' - TARGET 270 PENCE
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HSBC CUTS SERCO TO 'REDUCE' ('HOLD') - TARGET 86 (77) PENCE
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TRADERS: STIFEL CUTS BERENDSEN TO 'HOLD' ('BUY')
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TRADERS: PEEL HUNT RAISES MOTHERCARE TO 'BUY' ('HOLD')
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COMPANIES - FTSE 100
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Kingfisher reported a drop in profit in its recently-ended financial year as it booked higher exceptional costs and revenue was hit by negative currency movements, but the DIY retailer said it is on track with its turnaround plan. Kingfisher said pretax profit in the year ended January 31 dropped to GBP512 million from GBP644 million the year before, as revenue fell to GBP10.44 billion from GBP11.0 billion. Kingfisher will pay a full-year dividend of 10.1 pence, up 1.0% on 10.0p the year before.
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National Grid said it has appointed Nicola Shaw as a new executive director of the company to lead the company's UK business. Shaw has been the chief executive of High Speed 1 since 2011 and previously was managing director of First Group's European bus division. Shaw will join the company in the third quarter of 2016.
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Paddy Power Betfair said Chief Operating Officer Andy McCue will leave the group on April 30 in order to "pursue new opportunities". McCue was chief executive of Paddy Power from January 2015 up until its merger with Betfair in February 2016. He joined the Paddy Power business in 2006.
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AstraZeneca said its Brilinta drug missed its primary efficacy endpoint in trials treating strokes. The company said the primary endpoint goal of time to first occurrence of any event from a stroke, heart attack or death was not met by the treatment. Fewer events were observed in the Brilinta treatment against the comparison, but the trend was not statistically significant, AstraZeneca said.
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COMPANIES - FTSE 250
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Sporting goods retailer Sports Direct International clarified its trading position following comments from founder Mike Ashley which sent its shares spiralling lower on Tuesday. Sports Direct said Wednesday its adjusted underlying earnings before interest, taxation, depreciation and amortisation would be at or around the bottom end of the guidance issued in January, when it lowered its expectations to between GBP380 million and GBP420 million, from a prior forecast of GBP420 million. Sports Direct had closed down 12% on Tuesday, the worst performer in the FTSE 250, after Ashley, the group's executive deputy chairman, told The Times newspaper in an interview that the company was "in trouble".
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William Hill issued a profit warning for 2016 due to a weaker-than-expected online performance in the year so far. The betting company said in the period to March 20, the online business has been hit by two main factors, including the "worst Cheltenham results in recent history". William Hill said the broader business continues to trade well and is overall in line with its expectations. However, taking the disappointing online performance into account, the group's overall operating profit for 2016 is now expected to be in the range of GBP260 million to GBP280 million. William Hill also confirmed it is in advanced discussions with a partner which would see it invest in gaming software company OpenBet.
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Home emergency cover provider Homeserve said it is on track to meet its expectations for the year to the end of March.
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Property, construction and services company Kier Group said it has been named preferred supplier by Highways England to provide design services on projects in the East Midlands. Kier said the contract, which is in addition to existing deals in place with Highways England, will be worth up to GBP50.0 million over five years, starting from July 1.
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John Wood Group said it has secured a new three-year contract from Royal Dutch Shell PLC to provide industrial services to two processing plants and a marine terminal, all of which are located in Scotland. The company's subsidiary, Wood Group PSN, will provide the services to the St Fergus gas processing plant in Aberdeenshire, alongside the Mossmorran gas processing plant and the Braefoot Bay marine terminal in Fife. This is the second contract that Wood Group has secured from Shell since the start of 2016, after Wood Group Kenny secured a three-year contract to provide specialist consultancy services to Shell's Prelude floating liquefied natural gas project in Australia.
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Wizz Air Holdings said underlying net profit in its current financial year should reach the top end of its guidance following a strong performance in the year so far. The Eastern and Central European-focused low-cost airline said underlying net profit in the year ending March 31 should be at the top end of its EUR200 million to EUR210 million guided range, after the strong performance delivered in the first nine months of the year continued into the fourth quarter.
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DFS Furniture said it swung to profit in the first half of its financial year, reflecting lower one-off charges following its listing in London last year. The FTSE 250-listed sofa retailer said its pretax profit for the 26 weeks to January 30 was GBP16.2 million, compared to a GBP14.4 million loss a year earlier when the group booked costs related to its listing in London and to its international expansion. Gross sales for the half increased 7.0% to GBP461.3 million from GBP431.2 million. DFS will pay an interim dividend of 3.5 pence per share, up 13% on the 3.1p payout a year earlier.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Premier Foods said it received an unsolicited takeover approach from US spice company McCormick & Co, which it rejected. It also said it signed a cooperation agreement with Nissin Foods.
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Video games retailer Game Digital said pretax profit and revenue fell in the first half of its financial year as the group struggled against a tough UK market. Game said its pretax profit for the 26 weeks to January 23 was GBP22.5 million, down 32% on the GBP33.2 million posted a year earlier, as revenue declined to GBP549.2 million from GBP585.9 million, off 6.3%. In response to the problems, Game slashed its interim dividend 77% to 1.67 pence per share from 7.35p a year earlier.
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Cairn Homes late Tuesday said it will issue around 157.6 million new shares at a price of EUR1.12 per share under the placing and open offer announced earlier this week to raise a total of EUR176.5 million. The shares to be issued represent 30.5% of the existing issued share capital of the company and 23.4% of the enlarged issued share capital.
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COMPANIES - INTERNATIONAL
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EDF Energy is expecting to make a final investment decision on the Hinkley Point C nuclear reactor in early May, the BBC reported. French Economy Minister Emmanuel Macron has said it would be unlikely that EDF, which is 85%-owned by the French government, would choose not to take part in the project, the BBC reported. EDF was originally expected to make a final investment decision before the end of this month and is yet to outline how it will fund a large majority of the project.
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Credit Suisse announced an increase to its 2018 cost reduction target to at least CHF4.3 billion gross savings from CHF3.5 billion. For 2016, the group aims to achieve CHF1.7 billion in cost savings. The group said it is taking action to lower the cost base of Global Markets by reducing headcount by 2,000. Looking forward, the group said it plans to execute asset and business sales of more than CHF1.0 billion in 2016.
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Nike, the world's largest athletic shoes and apparel maker, said its third-quarter profit rose 20% from a year ago, driven largely by higher revenues and a lower effective tax rate. The company's quarterly earnings trumped analysts' estimates, but its revenues fell short. Beaverton, Oregon-based Nike's third-quarter profit rose to USD950 million from USD791 million a year before. Revenue for the quarter rose 8% to USD8.03 billion from USD7.46 billion last year. Revenue was up 14% on a currency neutral basis.
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Fitch Ratings said major Chinese banks' are likely to see subdued earnings growth in 2016, underscoring its negative sector outlook. Chinese bank's results for 2015 are set to be released next week. Banks are expected to show subdued earnings growth amid margin compression and asset deterioration, the agency said. Fitch forecasts Chinese bank profits to decline this year unless authorities relax the minimum NPL provisioning requirement of 150%. According to Fitch, a combination of interest-rate cuts and worsening asset quality will continue to have an impact on profitability in 2016.
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Wednesday's Scheduled AGMs/EGMs
Safestore Holdings
GW Pharmaceuticals
Pinnacle Technology Group
RM
St Modwen Properties
Premier Veterinary Group
BlackRock Throgmorton Trust
Amino Technologies
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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