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LONDON MARKET OPEN: 888 boss leaves, Middle East activities suspended

30th Jan 2023 08:57

(Alliance News) - Stock prices in London opened lower on Monday morning, amid market caution at the start of an important week for interest rate decisions by the world's top central banks.

"Leading into this week and indeed the end of January, there has been a groundswell of optimism based on hopes that inflation has peaked and that central banks will therefore cut their cloth accordingly," said Richard Hunter, head of markets at interactive investor.

The Fed announces its interest rate decision on Wednesday, before the BoE and ECB follow on Thursday.

The FTSE 100 index opened down 45.80 points, 0.6%, at 7,719.35. The FTSE 250 was down 142.09 points, 0.7%, at 19,893.30, and the AIM All-Share was down 1.57 points, 0.2%, at 867.67.

The Cboe UK 100 was down 0.4% at 772.95, the Cboe UK 250 was down 0.5% at 17,339.08, and the Cboe Small Companies was down 0.4% at 14,103.28.

Federal Reserve policy-setters are expected to slow the pace of US interest rate hikes to 25 basis points. The Fed hiked by 50 points - half a percentage point - in December, but had enacted four successive 75 basis point lifts in the meetings prior.

Both the BoE and the ECB are expected to hike by 50 basis points.

On Wednesday, the day before the BoE decision, the UK faces a strike by about half-a-million workers, as disputes over pay, jobs and conditions mount.

Teachers, train drivers, civil servants, university lecturers, bus drivers and security guards from seven trade unions will walk out on Wednesday in what will be the biggest day of industrial action in the UK in over a decade.

Protests will be held across the country on the same day against the government's controversial plans for a new law on minimum service levels during strikes. TUC General Secretary Paul Nowak said Wednesday will be a "really important day" for workers and members of the public to show support for those taking action to defend pay, jobs and services, as well as for the right to strike.

In European equities on Monday, the CAC 40 in Paris and DAX 40 both were down 0.6%.

The pound was quoted at USD1.2380 at early on Monday in London, flat compared to USD1.2383 at the close on Friday. The euro stood at USD1.0880, up against USD1.0857. Against the yen, the dollar was trading at JPY129.89, flat compared to JPY129.87.

In the FTSE 100, Unilever gained 0.6%.

The London-based consumer goods company said it has appointed Royal FrieslandCampina boss Hein Schumacher as its new chief executive.

Schumacher has been CEO of the Amersfoort, Netherlands-based dairy co-operative since 2018. He joined the Unilever board as a non-executive director in October last year.

He will begin as Unilever CEO on July 1, after a one-month handover period. Schumacher will replace Alan Jope, who announced in September 2022 his intention to retire from the London-based consumer goods company.

Chair Nils Andersen said: "Hein is a dynamic, values-driven business leader who has a diverse background of experiences and an excellent track record of delivery in the global consumer goods industry. He has exceptional strategic capabilities, proven operational effectiveness, and strong experience in both developed and developing markets."

Meanwhile, fellow FTSE 100 member Legal & General lost 3.0%. L&G said CEO Nigel Wilson plans to step down after over a decade in post.

Wilson joined the company in 2009 as chief financial officer and was appointed to CEO in 2012. L&G shares have more than doubled since the start of 2012, when they stood around 112p, compared to 252.50p on Monday.

Legal & General said it has begun the process to appoint a successor, considering both internal and external candidates. It added that Wilson has agreed to continue as CEO until his successor starts. It is planned that this process will take around a year.

In the FTSE 250 index, the worst performer was 888 Holdings, down 19% in early trade.

888 said its chief executive has left the company immediately, with the online gaming operator also reporting it has suspended some activities in the Middle East amid a customer compliance probe.

The departure of CEO Itai Pazner comes just over two weeks after the company announced Yariv Dafna would step down as chief financial officer. Dafna is to leave 888 at the end of March.

Non-Executive Chair Jonathan Mendelsohn will take over as executive chair on an interim basis while the gambling firm hunts for a new CEO. 888 did not give a reason for Pazner's sudden departure.

888 also said it has suspended VIP activities in some of its .com markets pending the outcome of an internal compliance investigation.

It explained that some of its best practices have not been followed in regard to know-your-client and anti-money-laundering processes for 888 VIP customers in the Middle East region.

The company currently expects the suspension to have less than a 3% impact on company revenue.

Computer services firm Computacenter gained 8.1%, after it said it ended 2022 with a "record" fourth quarter.

It expects full-year results to be slightly ahead of its guidance.

The company said total revenue, on a gross invoiced income basis, grew by more than 30%, including the effects of acquisitions made in the middle of 2022, and by over 27% in constant currency. It said adjusted pretax profit in the first half of the year against the first half of 2021 was down by 6%; however over the year as a whole pretax profit grew. In 2021, Computacenter brought in GBP248.0 million of pretax profit on GBP6.73 billion in revenue.

"We saw strong demand in all countries from Technology Sourcing product sales which remained extremely buoyant to the end of the year. Our Services revenue performance was strong, whilst our Services margin performance was impacted by the unwinding of Covid-related benefits during the year, and inflationary pressures which we expect to continue into 2023," Computacenter said.

On AIM, RA International surged 25%.

The company said it has won a contract by the UK Foreign, Commonwealth & Development Office to provide construction services for the refurbishment of the British High Commission in Botswana. The contract value is GBP3.3 million with the work expected to be completed by the end of 2023.

Separately, RA has been awarded three task orders for work at the US Navy base on the island of Diego Garcia, worth USD8.2 million.

Chief Executive Soraya Narfeldt commented: "We are delighted to be announcing these contract awards which highlight our position as a trusted, global partner with western government clients, alongside the strength of our offering combining comprehensive, flexible, mission critical support to our clients."

Elsewhere, Ryanair gained 0.1% in Dublin, after it reported a swing to third-quarter profit, with results boosted by higher prices and stronger demand over the Christmas period.

The budget carrier posted revenue of EUR2.31 billion in the three months to December 31, up 57% from EUR1.47 billion a year earlier. Ryanair swung to a pretax profit of EUR212.8 million from a EUR132.8 million loss. It reported a net profit of EUR211 million, swinging from a loss of EUR96 million.

The company hailed "strong travel demand" over the festive period and said fares were 14% higher than pre-Covid levels.

Ryanair still put its pre-exceptional items net profit guidance range to EUR1.33 billion to EUR1.43 billion. That guidance was lifted from EUR1.00 billion to EUR1.20 billion earlier in January.

This would represent a swing from a EUR355 million loss in financial 2022.

It expects to be loss-making in the fourth-quarter, however, due to when Easter falls in 2023.

In Tokyo on Monday, the Nikkei 225 index closed up 0.2%. In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong was down 2.7%. The S&P/ASX 200 in Sydney closed down 0.2%.

New York ended higher on Friday, with the Dow Jones Industrial Average ending up 0.1%, the S&P 500 up 0.3% and the Nasdaq Composite up 1.0%.

Gold was quoted at USD1,922.30 an ounce early Monday, lower than USD1,930.80 late Friday. Brent oil was trading at USD85.84 a barrel early Monday, down from USD86.78 late Friday.

Still to come on Monday's economic calendar, there is a eurozone economic sentiment indicator at 1000 GMT.

The week picks up pace with a eurozone gross domestic product reading on Tuesday and inflation data from the single currency area on Wednesday, in addition to the central bank decisions.

There also are a host of services PMIs, including from the UK, eurozone, US and China, due on Friday.

By Sophie Rose, Alliance News reporter

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