21st Oct 2015 06:31
LONDON (Alliance News) - London stocks are called for a positive open Wednesday, with investors already focusing on the European Central Bank meeting scheduled for Thursday, while London-listed broadcaster Sky said it has made a "strong start" to its current financial year and computer chip designer ARM also posted a strong set of results.
Sky reported a 10% rise in operating profit to GBP375 million in its first quarter, ended in September, up from GBP347 million a year before, on revenue of GBP2.79 billion, up from GBP2.74 billion. This included 7% revenue growth in the UK and Ireland, and an 11% rise in Germany and Austria, which offset a 4% decline in Italy.
Sky added 134,000 new customers during the quarter, and 937,000 new paid-for subscription products, with 133,000 new broadband subscribers in the UK.
The first quarter results came in ahead of consensus analyst forecasts provided by the company. Consensus showed that analysts expected Sky to report earnings before interest and tax of GBP366 million for the quarter, on revenue of GBP2.78 billion.
Meanwhile, ARM Holdings said it expects to meet market expectations for 2015 dollar revenues, as it reported a rise in pretax profit for the third quarter.
For the quarter to end-September ARM reported a pretax profit of GBP102.9 million, up from GBP79.2 million a year before, as revenue rose GBP243.1 million, up from GBP195.5 million.
IG says futures indicate the FTSE 100 to open higher at 6,369.70 points. The index closed slightly lower at 6,345.13 points on Tuesday, with oil-related stocks limiting the index's progress.
"Yesterday saw another indifferent day on European stock markets, with a slightly lower close as we continue to look towards tomorrow?s ECB rate meeting in Malta," says CMC Markets chief market analyst Michael Hewson.
"The slightly weaker tone appears to have been prompted by a slightly better-than-expected credit conditions report from the ECB yesterday, which suggested that in parts, lending conditions were starting to improve in certain parts of the euro area," adds Hewson.
Lending conditions for businesses eased further in the third quarter, while those for house purchases tightened, results of a survey by the ECB showed Tuesday.
The ECB's quarterly Bank Lending Survey revealed that credit conditions on consumer credit and other lending to households also eased in the third quarter, with competition as the main driver of banks' easing of credit standards for loans to enterprises.
Banks expect further net easing in credit standards on loans to enterprises in the fourth quarter, the survey said. They expect the lending conditions for housing loans to remain largely unchanged, but a modest easing in standards for consumer credit. The survey was conducted among senior loan officers of 141 euro area banks in all Eurozone countries between September 15 and 30.
In the UK on Wednesday, Bank of England Governor Mark Carney speaks at Oxford University at 1800 BST. He is expected to focus on how the UK's EU membership affects the central bank's ability to manage the economy and protect the country's banking sector.
UK's public sector net borrowing data are due at 0930 BST. Lloyds Bank senior economist Hann-Ju Ho looks for net borrowing on the ex-banks measure to be GBP9.8 billion in September, which would be GBP1.2 billion lower than the same month a year earlier.
"Higher borrowing in August and upward revisions to borrowing over April to July, particularly by local authorities, leave year-to-date borrowing in 2015/16 GBP4.4 billion lower against the equivalent five months last year," says Hann-Ju Ho. "Relative to the GBP20.6 billion reduction required to meet the Office for Budget Responsibility?s forecasts for the full financial year, the current run-rate is therefore a little behind schedule."
Wall Street ended lower Tuesday, with the DJIA and the S&P 500 both down 0.1%, while the Nasdaq Composite fell 0.5%.
The main focus in the US Wednesday is likely to be on the Ferrari initial public offering, which is due to accelerate off the starting grid at USD52 a share, valuing the sports car maker at USD10 billion.
In Asia on Wednesday, the Japanese Nikkei 225 index closed up 1.9%. In China, the Hang Seng in Hong Kong is down 0.4% and the Shanghai Composite is down 2.7%.
Elsewhere on the UK corporate front, BHP Billiton, the world's biggest miner, said its iron ore production for the first quarter rose 7% year-over-year to a record 61.32 million tons. The company affirmed its forecast for fiscal 2016 iron ore production of 247 million tons. First-quarter production of metallurgical coal, which is used in steel making, was flat with last year at 10 million tons.
Citigroup upgraded Smiths Group to Buy from Neutral, while Deutsche Bank lifted its rating on Rangdold Resources to Buy from Hold.
In a light economic calendar, in the US, EIA crude oil stocks are due at 1530 BST.
By Daniel Ruiz; [email protected]
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