22nd Jul 2022 07:55
(Alliance News) - Stock prices in London were seen treading water on Friday, as a central bank-heavy week draws to a close, while a raft PMI readings will provide an updated snapshot of global economic health.
IG futures indicate the FTSE 100 index is to open 8.0 points, or 0.1%, higher at 7,278.51. The blue-chip index closed up 6.20 points, or 0.1%, at 7,270.51 on Thursday. London's benchmark stock index has advanced 1.6% so far this week.
In early UK corporate news, JD Sports backed annual guidance on a day that also brought mixed reports on the country's wider retail sector.
BT received a boost after a planned sports broadcasting joint-venture with Warner Bros Discovery was given a regulatory green light.
Insurer Beazley reported an interim pretax profit fall, though its combined ratio - signifying underwriting profit - was at its best level in seven years.
Ahead of the athleisure retailer's annual general meeting, JD Sports said sales up to late-June, the first five months of its financial year, were 5% higher annually on a like-for-like basis.
It backed full-year guidance, expecting headline pretax profit before exceptional items for the current financial year ending January 28 to be "in line" with financial 2022 year. Pretax profit before exceptional items more than doubled to a record GBP947.2 million in financial 2022 from GBP421.3 million in financial 2021.
JD Sports also updated on governance matters, following a "three-month intensive programme of works".
"The group has now commenced a control, risk and compliance target operating model review. The output from this will be a detailed plan and resource requirements assessment for a programme of works which will ensure compliance with the various regulatory obligations and greater conformity with the Corporate Governance Code," it said.
Earlier in July, JD Sports named Andy Higginson as chair. It is still on the hunt for a chief executive. In May, Peter Cowgill, then executive chair, left the company. JD Sports in July 2021 had bowed to shareholder pressure over its corporate governance, agreeing to split Cowgill's controversial joint role of chair and CEO.
The update from JD Sports came as figures as UK retail sales data for June painted a mixed picture, with the sector seeing a slight Platinum Jubilee holiday boost. The cost-of-living crisis also was evident, however.
According to the Office for National Statistics, UK retail sales volumes fell 5.8% annually in June, worsening from a 4.7% decline in May. The figure was worse than the FXStreet-cited market consensus of a smaller 5.3% fall.
On a monthly basis, sales fell 0.1% in June from May. In May, they had fallen 0.8% from April, and that figure was downwardly revised from a 0.5% fall.
Excluding fuel, retail sales fell 5.9% yearly in June, following a 5.5% decline in May. June's figure, though worse than May's, beat an FXStreet-cited forecast of a 6.3% decline.
On monthly basis, fuel-excluded retail sales were 0.4% higher, defying expectations of a 0.4% decline, and swinging from a 1% fall in May.
Ahead of the retail sales data, a report early Friday showed consumer confidence in the UK remains "severely depressed" as households grapple with soaring food and fuel prices. GfK's long-running consumer confidence index languished at a historic low of minus 41 in July.
The UK's competition watchdog has opted not to refer BT's sports joint-venture with Warner Bros Discovery to a phase two probe.
In May, telecommunications firm BT agreed to a sports broadcasting JV with Warner Bros Discovery. The 50-50 JV will see BT Sports and Eurosport combine.
Insurer Beazley said it "maintained the momentum of the second half of 2021" during the first six months of 2022.
Gross written premiums increased 26% yearly to USD2.55 billion from USD2.04 billion. However, pretax profit declined 87% to USD22.3 million from USD167.3 million.
Expenses increased 23% to USD1.59 billion, figures showed. That number includes a 22% rise in net insurance claims to USD969.6 million.
"A challenging investment environment has impacted profit; however I'm delighted that we have achieved our best combined ratio at a half year since 2015," Chief Executive Officer Adrian Cox said.
The combined ratio improved to 87% from 94% a year prior. Any ratio below 100% signifies an underwriting profit, so the lower the better.
Among other London-listed mid-caps, Jersey-based fund management company JTC is "confident" of meeting market expectations in 2022.
JTC is "delivering within all of its well-established guidance metrics", including net organic revenue growth between 8% and 10%, and an underlying earnings before interest, tax and depreciation margin of 33% to 38%.
Elsewhere, currency manager Record said assets under management equivalents edged lower in the financial first quarter that ended June 30.
They fell 6.3% to USD77.9 billion from USD83.1 billion at the end of March.
"As expected, uncertainty in financial markets linked to both economic and heightened political pressures has continued to have an impact on the value of some clients' underlying portfolios, primarily within our Passive Hedging product," CEO Leslie Hill said.
Market movements detracted USD3.9 billion from AUME, while foreign exchange movement and mandate volatility targeting caused a USD3.3 billion hit.
In New York overnight, the Dow Jones Industrial Average closed up 0.5%, the S&P 500 added 1.0%, and the Nasdaq Composite surged 1.4%.
European equities are called for a calm end to a busy week.
On Thursday, the European Central Bank turned to "frontloading" and lifted interest rates by 50 basis points, despite previously guiding for a quarter percentage point hike. The Bank of Japan earlier on Thursday left rates unchanged, however, as did the People's Bank of China on Wednesday. Minutes released on Tuesday of the Reserve Bank of Australia's latest meeting showed the central bank is eyeing more rate increases.
The action continues next week with the latest Federal Reserve interest rate decision on Wednesday.
Asian shares were narrowly mixed on Friday. In Tokyo, the Nikkei 225 closed 0.4% higher. The S&P/ASX 200 index in Sydney ended touch lower. The Shanghai Composite was down 0.1%. The Hang Seng index in Hong Kong was 0.3% higher.
Japan's private sector showed its slowest expansion in activity in four months in July, as raw material shortages and continued cost increases hindered output and new order inflows, survey data showed Friday.
The au Jibun Bank flash composite purchasing managers' index dropped markedly to 50.6 index points for July from 53.0 points in June, but still remaining over the neutral level of 50.0.
Still to come on Friday are PMI scores due from the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.
The pound was quoted at USD1.1961 early Friday in London, flat from USD1.1958 at the London equities close on Thursday. The euro stood at USD1.0192, stable with USD1.0195. Against the yen, the dollar was trading at JPY137.88, off slightly from JPY137.93.
Brent oil was quoted at USD105.48 a barrel, up from USD103.48. Gold stood at USD1,717.97 an ounce, up from USD1,710.60.
By Eric Cunha; [email protected]
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