10th Feb 2022 07:54
(Alliance News) - Stock prices in London are seen opening slightly higher on Thursday following a strong finish in New York on Wednesday, as investors look ahead to key US inflation data.
In early company news, data analytics provider Relx and dove soap maker Unilever announced share buybacks. The chief executive of 173 year-old insurer Prudential is preparing to step down.
IG futures indicate the FTSE 100 index is to open 11.98 points higher at 7,655.40. The index closed at a two-year high, up 76.35 points, or 1.0%, at 7,643.42 on Wednesday.
Relx said it delivered strong profit growth in 2021 reflecting its strategy of focusing on the organic development of "increasingly sophisticated" analytics.
For 2021, Relx generated revenue of GBP7.24 billion, up from GBP7.11 billion in 2020, with underlying growth of 7%. Pretax profit was GBP1.80 billion, up from GBP1.48 billion in 2020.
Relx raised its annual dividend by 6.0% to 49.8 pence from 47.0p the year before and said it will launch a GBP500 million share buyback in 2022.
Looking ahead, the Anglo-Dutch information firm expects 2022 full year underlying growth rates in revenue and adjusted operating profit, as well as constant currency growth in adjusted earnings per share, to remain above historical trends.
Consumer products maker Unilever hailed the progress of its restructuring programme, as the under-fire firm launched a share buyback programme.
In January, the company announced major changes to organisation to make it simpler and more category-focused. Unilever will be organised around five category-focused business groups, each responsible and accountable for their strategy, growth and profit delivery. The new organisation is expected to generate around EUR600 million of cost savings over two years, it said.
For 2021, Unilever generated revenue of EUR52.44 billion, up from EUR50.72 billion in 2020. The figure was higher than the company-compiled consensus forecast of EUR52.11 billion. Pretax profit rose to EUR8.6 billion from EUR8.0 billion the year prior.
Underlying pretax profit was EUR9.6 billion, up from EUR9.4 billion in 2020. Underlying sales growth was 4.5% in 2021, beating the consensus estimate of 4.3%.
Unilever declared a quarterly dividend of EUR0.4268 per share. It also said it will conduct a share buyback programme of up to EUR3 billion over the next two years, which it expects to commence in the first quarter.
Looking ahead, Unilever expects underlying sales growth in 2022 in the range of 4.5% to 6.5%. It also expects high input cost inflation in the first half of over EUR2 billion. This may moderate in the second half to around EUR1.5 billion, it noted.
Unilever is facing pressure from activist investors, after a failed attempt to buy the consumer healthcare arm of GlaxoSmithKline.
Glaxo peer AstraZeneca early Thursday reported a rise in annual revenue which the drugmaker attributed to its pipeline and commercial delivery, alongside an accelerated strategic transformation through the acquisition of Alexion Pharmaceuticals.
For 2021, revenue rose to USD37.42 billion from USD26.62 billion in 2020.
Looking ahead, for 2022 AstraZeneca guided at constant exchange rates for a high-teens percentage increase in total revenue and a mid-to-high twenties percentage increase in core earnings per share.
Prudential said Chief Executive Officer Mike Wells intends to retire from his role at the insurer at the end of March 2022 and will not stand for re-election as a director at the next annual general meeting.
Prudential said it is conducting a search for a CEO to be based in Asia to succeed Wells, which includes both internal and external candidates.
Wells became CEO in 2015, having first joined the insurer in 1995. Mark FitzPatrick, currently CFO and COO, will become interim CEO when Wells steps down. FitzPatrick has asked the board not to consider him for the permanent CEO role, the company said.
Thursday's economic calendar has the US consumer price index for January and weekly jobless claims at 1330 GMT.
On Wall Street, the Dow Jones Industrial Average closed up 0.8% on Wednesday, the S&P 500 up 1.5%, and Nasdaq Composite up 2.1%.
In Tokyo on Thursday, the Nikkei 225 index closed up 0.4%. In China, the Shanghai Composite ended up 0.2%, while the Hang Seng index in Hong Kong was up 0.1%. The S&P/ASX 200 in Sydney closed up 0.3%.
The upcoming US consumer price index report will likely show another lofty spike in inflation in the first month of the year, the White House warned on Wednesday.
Consumer prices rose by 7% throughout 2021, their fastest pace in four decades, and the Labor Department's consumer price index data set for release Thursday is anticipated to show a large increase compared to January 2021, US President Joe Biden's spokesperson said.
"We expect a high yearly inflation reading in tomorrow's data," White House Press Secretary Jen Psaki told reporters. "Above 7%, as I think some are predicting, would not be a surprise."
Biden's approval ratings last year sank amid the spike in inflation caused by a combination of supply chain snarls, component shortages, and the US economy's rebound from Covid-19.
While the price increases were particularly severe for used cars and energy, particularly gasoline, they also hit items such as food and rent.
A higher reading could pile pressure on the Federal Reserve to embark on a more aggressive tightening campaign - but a weaker figure would temper those worries.
"The inflation data has continued to rise faster than many anticipated and we're now in a situation where central banks are racing to catch up and get to grips with price pressures," said Oanda analyst Craig Erlam.
"Many still expect we'll see an orderly return to inflation targets over the forecast horizon with moderate rate increases, but the risk of inaction becomes far greater than the alternative."
The dollar was higher across the board. The pound was quoted at USD1.3543 early Thursday in London, down from USD1.3551 at the London equities close Wednesday.
The euro was priced at USD1.1424, down from USD1.1437. Against the Japanese yen, the dollar was trading at JPY115.60, up from JPY115.44.
Brent oil was quoted at USD91.23 a barrel Thursday morning, down from USD91.90 late Wednesday. Gold stood at USD1,835.80 an ounce, higher against USD1,830.69.
By Arvind Bhunjun; [email protected]
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