7th Mar 2019 07:46
LONDON (Alliance News) - Stocks in London are set to open lower on Thursday, with focus on a midday policy decision from the European Central Bank.In early company news, Melrose Industries said its annual results were ahead of prior board forecasts, Aviva said it plans to moderate its rate of dividend growth going forward, and NMC Health said it has seen a strong start to 2019 following double-digit profit growth in 2018.IG says futures indicate the FTSE 100 index of large-caps to open 45.40 points lower at 7,150.60 on Thursday. The FTSE 100 index closed up 0.2%, or 12.57 points, at 7,196.00 on Wednesday."Equity markets in Asia overnight traded lower as investors grew [restless] over the lack of new news in relation to the US-China trade talks," commented David Madden at CMC Markets. In Asia on Thursday, the Japanese Nikkei 225 index closed down 0.7%. In China, the Shanghai Composite ended up 0.1%, while the Hang Seng index in Hong Kong is down 0.9%.Meanwhile, stocks in the US also posted losses, following dispiriting trade data. Wall Street on Wednesday ended lower with the Dow Jones Industrial Average shedding 0.5%, the S&P 500 losing 0.7% and Nasdaq Composite slipping 0.9%."The latest trade figures from the US showed that the trade deficit actually increased to USD59.8 billion, from the revised deficit of USD50.3 billion in November...Imports increased, so US demand is firm, but exports dropped, and that indicates that global demand is cooling," said Madden.In UK company news, asset manager Schroders reported a fall in annual profit though nudged up its dividend gently.Pretax profit fell 15% to GBP649.9 million despite net income before exceptional items rising 3% to GBP2.12 billion. Assets under management and administration fell 6% to GBP421.4 billion with net outflows of GBP9.5 billion, compared to net inflows of GBP9.6 billion in 2017.Schroders lifted up its total dividend by one pence to 114.0p from 113.0p the year before. "There are headwinds facing the industry, but we remain confident in our ability to identify new opportunities across the regions and asset classes in which we operate," the firm said.Melrose Industries said its 2018 results were above previous board expectations despite its loss widening following the acquisition of engineer GKN completing last year.The 2018 figures include eight months' contribution from GKN, which Melrose bought following an acrimonious takeover battle. Revenue for the year totalled GBP8.62 billion, up sharply from GBP2.09 billion in 2017, as Melrose's loss widened to GBP550 million from GBP28 million last year. This was largely due to "significant acquisition related items", most of which arose from GKN.On an adjusted basis, including GKN as if it had been a part of the Melrose group for twelve months, revenue was GBP12.25 billion and pretax profit GPB886 million."The former GKN businesses are proving their potential to offer the outstanding opportunities we expected and much has already been achieved in the short period of ownership," said Melrose Chair Justin Dowley."Despite the current economically uncertain environment, we have every confidence that we will be able to continue to unlock the substantial shareholder value from the former GKN businesses and further improve Nortek," Dowley added. Private healthcare operator NMC Health posted double-digit growth in revenue and profit for 2018.Revenue jumped 28% to USD2.06 billion as pretax profit climbed 22% to USD256.9 million. NMC will pay a final dividend of 18.1p per share, up 39% from 2017's 13.0p. No interim dividend was declared during the year. Adding to this positive 2018 performance, NMC said it has seen a "strong start" to 2019, reinforcing its confidence in achieving year-on-year revenue growth of between 22% to 24%, and earnings growth of around 18% to 20%. Insurance company Admiral said annual profit rose 18% to GBP476.2 million, as net revenue increased 12% to GBP1.26 billion. Admiral raised its full-year dividend by 11% to 126.0p.The company said all its businesses are now operating under European licenses ahead of Brexit."2018 was another pleasing result with rapid growth and record profit for the group," said Chief Executive David Stevens. "It was, however, characterised by some "yes, but's", as well as some unequivocal YES's!""Yes, we delivered record profits and dividends, but we were helped by the UK government's decision to unwind partially the change in the Ogden discount rate from a couple of years ago," he said. "Yes, we grew rapidly pretty much across the board, but growth in the core UK Motor business slowed in the second half as we reduced our competitiveness in the face of rising claims costs."An "unequivocal" 'yes', Stevens said, was the "rapid growth and improved ratios" achieved by its international insurers.Fellow insurer Aviva said it made "steady" progress in 2018 as revenue grew, though it set out plans to moderate its dividend growth rate going forward. Gross written premiums totalled GBP28.66 billion in 2018, up from GBP27.61 billion in 2017, with net earned premiums up to GBP26.25 billion from GBP25.22 billion. However, pretax profit slipped to GBP1.65 billion from GBP2.37 billion. Operating profit, meanwhile, rose 2% to GBP3.12 billion.Aviva's total dividend for 2018 is 30.0p, up 9% from 27.4p in 2017.However, the company added: "We are moving to a progressive dividend policy. Moderating the rate of dividend per share growth will enhance our flexibility to repay debt and invest in business improvement. The future trajectory of the dividend will reflect performance against our strategic objectives."Aviva said that its new policy should "afford the new CEO greater flexibility to implement his strategic agenda while protecting the current dividend per share for our existing shareholders". Maurice Tulloch was named on Monday as the new Aviva chief executive, being promoted from head of its International Insurance arm.The economic events calendar on Thursday has UK Halifax house prices data at 0830 GMT, eurozone GDP readings at 1000 GMT, and the US EIA natural gas storage change report at 1530 GMT.In focus on Thursday is the latest ECB monetary policy decision, due at 1245 GMT, followed by a press conference with President Mario Draghi at 1330 GMT. The decision comes alongside updated macroeconomic forecasts."One thing's pretty certain is that the ECB's new economic growth and inflation forecasts are likely to be downgraded. Last December, the ECB forecast GDP growth of 1.7% for both 2019 and 2020, and headline CPI at 1.6% and 1.7% respectively," commented Lloyds Banking."But the important point, perhaps, is that the downward revisions are likely to be moderate, rather than drastic," continued Lloyds. "There have actually been tentative signs from some business and consumer surveys in early 2019 that sentiment may at last be stabilising. As such, it means that, while the ECB is acknowledging that downside risks have risen, it is not expected to press the panic button."Meanwhile, the UK government suffered a defeat on Wednesday at the hands of peers demanding that the UK stays in a customs union with the EU.The House of Lords backed by 207 votes to 141, majority 66, a Labour-led cross-party move to keep Britain in a tariff-free trade bloc with Brussels.Supporters of the amendment to the Trade Bill argued MPs should have the opportunity to "think again" on the issue. But the government pointed out the elected Commons had already rejected such a proposal.Continued membership of a customs union has been consistently ruled out by the prime minister as it would prevent the UK from negotiating its own trade agreements, separately from the EU.This came after both the UK and EU sides admitted talks in Brussels on efforts to find a way to resolve the difficulties over the Northern Ireland backstop had been "difficult".The European Commission said there was still "no solution" to the impasse over the Irish backstop following a meeting between the EU's chief negotiator Michel Barnier and Attorney General Geoffrey Cox and Brexit Secretary Stephen Barclay.The meeting took place as May prepares for next week's crunch "meaningful vote" in the Commons on her Brexit Withdrawal Agreement.
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