4th Mar 2016 08:42
LONDON (Alliance News) - UK stocks opened higher, with mining stocks leading gains and with advertising and marketing giant WPP and London Stock Exchange Group providing early news focus as they reported 2015 results.
The FTSE 100 was up 0.4%, or 27.35 points, at 6,157.81. The mid-cap FTSE 250 was up 0.2% at 16,780.28, and the AIM All-Share up 0.1% at 697.20. In Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were up 0.3% and 0.2%, respectively.
Shares in WPP rose 1.7%. The company said its pretax profit rose in 2015 despite a currency drag on its revenue, but it said that while 2016 had started well, the general sense of optimism in the industry for the coming year looks misplaced.
The company said its pretax profit for the year to the end of December was GBP1.49 billion, up 2.8% year-on-year from GBP1.45 billion. Pretax profit would have increased 7.3% in constant currencies, WPP said. Revenue rose to GBP12.24 billion from GBP11.53 billion, with billings rising to GBP47.63 billion from GBP46.19 billion. WPP said it saw like-for-like revenue growth in all regions, led by strong growth in its North American business.
WPP will pay a final dividend of 28.78 pence per share, up 8.3% year-on-year, meaning its total dividend will rise to 44.69p, a 17% increase. It noted that represents a payout ratio of 47.7%, up from 45.0%, progressing toward with a target payout ratio of 50% for 2017.
Shares in London Stock Exchange were flat in early trade. The group reported higher annual operating profit and lifted its dividend, as merger talks with German peer Deutsche Boerse continue.
Adjusted operating profit, which is stated before amortisation of purchased intangible assets and non-recurring items, rose by 27% to GBP709.6 million in 2015, as total revenue increased by 72% to GBP2.38 billion. LSE Group declared a final dividend of 25.2 pence per share, resulting in an implied 20% increase in the total dividend to 36.0p per share.
Atlanta-based Intercontinental Exchange, the owner of the New York Stock Exchange, earlier this week revealed its interest in making an offer for LSE, threatening to derail merger talks with Frankfurt's Deutsche Boerse. LSE and Deutsche Boerse have already envisaged a "merger of equals" that would create a European challenger to their US and Asian rivals, in a deal which would see Deutsche Boerse shareholders take a 54.4% stake in a new holding company domiciled in the UK.
"We have recently confirmed that we are in detailed discussions with Deutsche Börse regarding a potential merger of equals. This represents a compelling opportunity to strengthen each other in an industry-defining combination, by creating a global market infrastructure group with significant benefits for our customers and shareholders," LSE Chief Executive Xavier Rolet said Friday.
Miners were again supporting the gains in the FTSE 100, with Glencore up 6.5%, Anglo American up 5.4%, Antofagasta up 4.5%, Rio Tinto up 3.8% and BHP Billiton up 3.7%
Prices in commodities such has iron ore and copper have remained resilient this week, while Brent oil was holding above the USD37 line. Brent was quoted at USD37.07 a barrel shortly after the open, higher than USD36.95 at the London equities close Thursday. US benchmark West Texas Intermediate was at USD34.64 a barrel.
Gold continues its 2016 rally, with the metal quoted at USD1,260.84 an ounce Friday after the equities open, having stood at USD1,257.30 at the close Thursday. Gold miners Randgold Resources and Fresnillo were up 1.7% and 0.7%, respectively.
Elsewhere, BT Group was up 0.8% after Goldman Sachs reinitiated the coverage on the telecommunications giant with a Buy rating.
In the FTSE 250, Kennedy Wilson Europe Real Estate was up 3.9% after the company said it has been notified by the European Public Real Estate Association that it will be added to the FTSE EPRA/NAREIT Global Real Estate Index Series as of March 21.
This comes after it "successfully satisfied the required eligibility criteria" during the Index's March 2016 Quarterly Review.
"Our inclusion in the EPRA index is further recognition of the progress made by the company and will benefit all shareholders. We are very pleased to have reached this milestone as we celebrate two years since our successful IPO," Chief Executive Mary Ricks said in a statement.
Cineworld Group was the worst mid-cap performer, down 3.9%, after UBS initiated the cinema operator with a Sell stance.
Meanwhile, Cobham was down 1.7% after JPMorgan cut the aerospace group to Neutral from Overweight. The downgrade comes a day after the group reported a pretax loss for the year after booking impairments and restructuring charges. However, Cobham increased its dividend in 2015 after reported robust underlying results.
Cobham's losses early Friday were adding to those seen on Thursday, when the stock ended down 7.6%.
US nonfarm payrolls are the main economic data scheduled for Friday, at the end of a week that has seen somewhat weak data from some European countries, such as France and the UK, the US and China, spreading uncertainty about the global economy's strength.
The US jobs data come a day after the US Labor Department showed that first-time claims for US unemployment benefits unexpectedly increased in the week ended February 26. The report said initial jobless claims rose to 278,000, an increase of 6,000 from the previous week's level of 272,000, with economists having expected claims to edge down to 270,000.
Despite the slight data miss, Wall Street ended higher Thursday, rebounding towards the end of the session. The DJIA closed up 0.3%, the S&P 500 up 0.3% and the Nasdaq Composite up 0.1%.
CMC Markets chief market analyst Michael Hewson said nonfarm payrolls expectations are for an improvement to 195,000 in February, from 150,000 in January.
Also expecting the data to improve, Lloyds Bank analyst Rhys Herbert expects a rise in employment of 185,000 in February. Meanwhile, according to FXStreet.com, consensus looks for an increase to 190,000.
The US unemployment rate is widely expected to stay unchanged at 4.9%.
Also in the economic calendar Friday, UK consumer inflation expectations are due at 0930 GMT. In the US, alongside the unemployment report at 1330 GMT is the US trade balance. The Baker Hughes US oil rig count is due at 1800 GMT.
In Asia on Friday, the Japanese Nikkei 225 index finished up 0.3%. In China, the Shanghai Composite closed up 0.5%, while the Hang Seng index in Hong Kong ended up 1.2%.
By Daniel Ruiz; [email protected]
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