6th Feb 2017 08:35
LONDON (Alliance News) - Stocks in London were mixed at the open on Monday, with Randgold Resources leading FTSE 100 gainers after the gold miner hiked its dividend by 50%.
Randgold said the increase in payout was on the back of its 2016 production results, as it met the bottom of its target for the year, posting large rises in revenue and profit as a result of higher gold prices and lower costs.
Meanwhile, shares in Ryanair Holdings were lower after the Irish budget airline maintained its full-year earnings guidance but with a very cautious outlook for the final months of its financial year.
The FTSE 100 index was up 2.23 points at 7,190.53. The FTSE 250 was down 0.1% at 18,395.39, and the AIM All-Share was up 0.3% at 896.33.
The BATS UK 100 index was down 0.1% at 12,156.24, the BATS 250 was 0.2% lower at 16,710.65, and the BATS Small Companies was up 0.1% at 10,866.57.
The French CAC 40 stock index was flat and the German DAX 30 was down 0.4%.
The euro's exchange rate is too low for Germany, and the European Central Bank's expansive monetary policy has inflated the German economy's export surplus, the country's Finance Minister Wolfgang Schaeuble Schaeuble told Tagesspiegel newspaper.
"The ECB must make policy that works for Europe as a whole," Schaeuble said in an interview for Sunday's edition of the German newspaper, according to Reuters. "It is too loose for Germany," Schaeuble noted.
The euro was quoted at USD1.0743 at the London equities open, hardly changed from USD1.0780 at the close on Friday.
Schaeuble's comments came after the Financial Times reported on Tuesday last week that the head of US President Donald Trump's National Trade Council, Peter Navarro, believes the euro is like an "implicit Deutsche Mark" whose low valuation gives Germany an advantage over its main trading partners.
ECB President Mario Draghi will speak at the European Parliament in Brussels at 1400 GMT. Also on Monday, eurozone consumer confidence data are at 0930 GMT.
Already released, provisional data from Destatis showed that Germany's factory orders expanded at the fastest pace in more than two years in December. Factory orders climbed 5.2% on a monthly basis in December, in contrast to a revised 3.6% fall seen in November. The monthly growth was the fastest since July 2014, when the rate was 6.6% and also faster than the expected 0.5% increase.
In Asia on Monday, the Japanese Nikkei 225 index closed up 0.3%. In China, the Shanghai Composite ended up 0.5%, while the Hang Seng index in Hong Kong finished 1.0% higher.
Accendo Markets analyst Michael van Dulken said gains in London were limited by weak China Purchasing Managers Index readings, "fuelling fresh debate about the state of the Chinese economy".
Survey results from IHS Markit showed that the Caixin composite output index fell to 52.2 in January from December's 45-month high of 53.5. Although a reading above 50 indicates expansion in the sector, the latest score suggests the slowest pace of expansion since September.
Manufacturing companies reported slower growth in output. Services activity growth also eased, but remained solid in January. The services PMI dropped to 53.1 in January from 53.4 in December.
Back in London, Randgold was up 4.0%. The miner achieved gold production of 1.25 million ounces, the very bottom of its 1.25 million to 1.30 million ounce target range, rising from 1.21 million ounces in 2015. Total revenue for the year rose to USD1.20 billion from USD1.00 billion a year earlier, with overall costs dropping year-on-year to USD819.8 million from USD829.3 million.
Pretax profit in the year increased to USD402.6 million from just USD260.8 million the year before. Profit attributable to shareholders increased to USD247.5 million from USD188.7 million. The African miner hikes its 2016 total dividend by 52% to USD1 per share compared to the 66 cent dividend payout in 2015.
Shares in fellow miner Glencore were up 1.4%, while gold miner Fresnillo was up 0.8%. In the FTSE 250, Hochschild Mining was up 1.9%.
SSE was up 0.4%. The FTSE 100-listed energy generator and supplier said it has provisionally secured agreements under the 2017 capacity market auction to provide a total of 4,451 megawatts of de-rated electricity generation capacity from October 2017 to September 2018.
Meanwhile, National Grid was up 0.2%. The firm said it has started a new share buyback programme with the "sole purpose" of reducing its share capital following the dilution that resulted from the take-up of its scrip dividend offer.
The programme will end "no later" than February 17, and follows the end of the last share buyback programme on January 27. National Grid said it will purchase a maximum of GBP35 million worth of shares, capped at 3.5 million shares, with all purchased shares to be held in the treasury.
Ryanair was down 1.9%. The air carrier maintained its full-year guidance but with a very cautious outlook for the final months of its financial year, as it reported a decline in profit for its third quarter. It said it still expects full-year profit after tax to be EUR1.30 billion to EUR1.35 billion, but said this guidance is heavily dependent on no unforeseen "security events" taking place in the final months of its financial year, ending March 31.
The airline added that, looking to its 2018 financial year, pricing will continue to be "challenging" in a very competitive budget carrier market, but it intends to continue increasing capacity and benefiting from lower unit costs.
Also in the economic calendar, the US labor market conditions index is at 1500 GMT.
By Daniel Ruiz; [email protected]
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RYA.LHochschildNational GridSSERandgold ResourcesFresnilloGlencore