25th Jul 2019 11:52
(Alliance News) - London stocks edged higher on Thursday ahead of the European Central Bank, as investors await eagerly to see if the ECB will decide to surprise markets with an interest rate cut this afternoon.The large-cap FTSE 100 index was 6.88 points higher, or up 0.1%, at 7,508.34 Thursday midday. The mid-cap FTSE 250 index was up 71.56 points, or 0.2%, at 19,859.34, while the AIM All-Share was 0.4% higher at 929.76.The Cboe UK 100 index was flat at 12,728.04. The Cboe UK 250 was up 0.1% at 17,714.36, while the Cboe UK Small Companies was down 0.3% at 11,027.43.In Paris, the CAC 40 was up 0.4% while the DAX 30 in Frankfurt was down 0.1%.Markets in Europe were higher as traders focused on the ECB's latest monetary policy decision, due at 1245 BST, with President Mario Draghi holding a conference at 1330 BST."Traders are divided whether the ECB will cut the deposit rate or not, but some sort of dovish update is expected," said David Madden at CMC Markets. "The central bank for the eurozone are mindful the Federal Reserve are likely to cut rates next week, and they might want to get their rate cut in first. On the other hand, the ECB might sit back and wait for the Federal Reserve to act, and shape their policy around the Fed's decision," said Madden.The ECB's announcement comes just after Munich-based Ifo said its Business Climate Index for German fell to 95.7 points in July from 97.5 the month before. "The German economy is navigating troubled waters," the Ifo observed.The euro was quoted at USD1.1135 ahead of the meeting, soft compared to USD1.1141 late Wednesday.Wall Street is pointed to a mixed open on Thursday, with the S&P 500 seen flat and the Dow Jones called up 0.2%, though the Nasdaq is set to shed 0.2%. As earnings in the US continue to roll in, reports are due from online retail giant Amazon, Google owner Alphabet and coffee chain Starbucks on Thursday. In London, the FTSE 100 was higher amid a slew of company reports. Leading the blue-chip gainers was AstraZeneca, up 5.3% as it raised its product sales guidance.In the six months to June 30, the company's product sales totalled USD11.18 billion, a 12% hike, contributing to a 9% revenue rise to USD11.31 billion. At the end of June 2018, product sales totaled USD10.02 billion, with revenue of USD10.33 billion. AstraZeneca now expects product sales for 2019 to increase by a low double-digit percentage. It previously anticipated high single-digit growth. Compass was also among the gainers, up 2.6% after the contract caterer said it expects to report mid single-digit revenue growth in its current financial year following a strong performance in the third quarter.Organic revenue growth was 6.3% in the third quarter, Compass said, with improving performance in Rest of World. For the nine months to June 30 organic revenue grew 6.5%.As a result, the FTSE 100-listed firm now expects to deliver annual organic revenue growth at the top of its 4% to 6% guidance range, with its margin now expected to be flat compared to the prior year's 7.4%. Capping the FTSE 100's gains was Sage Group, sinking 12% after the accounting software firm said it expects recurring revenue in the current financial year to slightly exceed guidance. However, the combined decline in software & software related services and processing revenue will be slightly sharper than that seen in the first nine months.In the nine months to June 30, the company posted organic revenue of GBP1.42 billion, up 5.9% year-on-year. Sage said recurring revenue grew 11% in the nine-month stretch, to GBP405.0 million, and the company attributed this to a weak comparison and favourable UK digital tax submission regulations attracting new customers. The software & software-related services portion of the business declined by 16% to GBP195.0 million. Sage put this down to a focus on "driving high-quality subscription revenue" as well as underperformance in X3 licences and services. When combined with processing revenue, software & software-related services had a revenue fall of 13% in the first nine months. FTSE 250-listed Cobham surged 35% to 165.40 pence after the aerospace and defence firm agreed a GBP4 billion takeover with an indirect subsidiary of funds managed by US private equity firm Advent International Corp.AI Convoy Bidco, the subsidiary in question, has agreed to pay 165 pence in cash per Cobham share. This represents a 34% premium to Cobham's closing price of 123p on Tuesday, and a 50% premium to the three month volume weighted average price of 110p. The company, which makes air refueling and electronic warfare systems, said its directors intend to recommend unanimously that shareholders vote in favour of the deal."Cobham has struggled over the past three years with sales and profits falling back, but there have been more positive signs in recent results," commented Ian Forrest at The Share Centre. "The move by Advent may attract some attention from the government given the defence implications, although the government is rather distracted with a number of other matters at present," said Forrest.Howden Joinery was up 6.7% after the kitchens supplier said revenue and profit rose in the first half of 2019. The group's revenue for the 24-week period until June 15 was GBP652.6 million, up 5.4% year-on-year from GBP619.4 million. Pretax profit rose 14% to GBP78.1 million from GBP68.8 million. Slumped at the bottom of the index was Metro Bank, down 16% after late Wednesday reporting a drop an interim profit and the departure of Chair Vernon Hill. For the six months to June 30, the company reported a rise in total underlying revenue of GBP216.7 million, up 14% from GBP189.8 million the year before. However, statutory pretax profit declined 84% to GBP3.4 million from GBP20.8 million last year and underlying pretax profit fell 44% to GBP13.6 million from GBP24.1 million the year prior.In a separate announcement late Wednesday, the bank said it has started the search to find a new chair to replace US billionaire Hill, who founded Metro Bank in 2010. Metro Bank did not set a timetable for Hill resigning as chair and said he would remain a non-executive director and president of the bank.
Related Shares:
AstrazenecaCobhamHowden JoinerySage GroupMetro BankCompass Group