24th Apr 2018 07:40
LONDON (Alliance News) - Stocks in London are seen opening higher on Tuesday after reports of strong first-quarter performances from St James's Place and the London Stock Exchange, while Melrose Industries said GKN's performance prior to its acquisition ran below market expectations.
IG futures indicate the FTSE 100 index will open 16.13 points higher at 7,415.00. The blue chip index closed up 0.4%, or 30.70 points at 7,398.87 on Monday.
In early UK corporate news, FTSE 100 wealth manager St James's Place said it saw strong momentum in the first quarter of 2018, following a record year for new business in 2017.
For the three months ending March 31, funds under management were up GBP89.91 billion compared to GBP79.84 billion in the first quarter of last year. Net inflows rose to GBP2.60 billion against GBP1.99 billion in the corresponding period. Gross inflow of funds came in at GBP3.91 billion compared to GBP3.23 billion, while funds under management at group level rose to GBP89.91 billion versus GBP79.84 billion.
"We continue to see a growing market for trusted face-to-face financial advice and believe St. James's Place remains ideally placed to meet this need. This growing market, together with the strong start we have made to 2018, reinforces our confidence in our ability to achieve our stated objective of 15-20% growth in gross inflows during 2018 and beyond," said Chief Executive Andrew Croft.
London Stock Exchange Group said it saw a strong performance in the first quarter of 2018 with double-digit sales growth for Information Services, LCH and Capital Markets units.
For the quarter ending March 31, the group said total income rose 13% year-on-year to GBP520 million and also up 13% as well on an organic, constant-currency basis. Total revenue across LSEG's main divisions comprising of Information Services, LCH and Capital Markets were up 16%, 18%, and 14% respectively.
The stock exchange operator also said that incoming Chief Executive David Schwimmer will take the reins on August 1.
"We continue to invest in new product initiatives while maintaining a focus on improving efficiencies as we work to deliver on our financial targets. The group is strategically well placed to further develop its many growth opportunities, working in partnership with our customers," said Chief Financial Officer David Warren.
FTSE 250-listed Melrose Industries said the first quarter performance of newly-acquired engineer GKN was "as expected by Melrose" below the levels seen in the corresponding period in 2017.
For the quarter ending March 31, Melrose said GKN's first quarter sales declined marginally, coming in at GBP2.60 billion compared to GBP2.61 billion in the first quarter last year. GKN's first quarter operating profit was GBP181.5 million, lower than GBP215.1 million in the corresponding period. GKN's operating profit margin was 7.0%, down from 8.2%, the industrial turnaround specialist added.
"While this gives Melrose a lower starting point for GKN than current market consensus opinion, Melrose allowed for further underperformance by GKN prior to its ownership in its acquisition assumptions, and remains confident it will be able to deliver on all the statements it made during the offer period over the medium term, including creating significant shareholder value by improving the performance of the GKN businesses over time and being a responsible owner for all stakeholders," Melrose said.
Sterling was flat at USD1.3944 early Tuesday, against USD1.3945 at the London equities close on Monday.
In domestic political news, the UK must give Brussels a clear Brexit blueprint to allow negotiations to move forward, according to the EU chief leading the exit talks.
All those involved "know where the EU stands" but "more clarity" is still needed from the UK, Michel Barnier said.
In a speech in Hannover he said it was up to the UK government to come up with its vision for the future that either finalised or changed the UK's red lines.
"It is now up to the UK to come up with its vision for the future, which should confirm the UK's red lines or adapt them," he said.
In the economic events calendar on Tuesday there are Germany's Ifo Business Climate Index data at 0900 BST, Italy consumer confidence at 0900 BST, UK public sector finance data and CBI quarterly industrial trends survey figures at 0930 BST and 1100 BST respectively. In the afternoon there is the US housing price index and new home sales data at 1400 BST and 1500 BST, respectively.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.1%, S&P 500 flat and Nasdaq Composite ending 0.3% lower.
In late corporate news, Google's parent company Alphabet exceeded analysts' expectations on Monday by reporting a 73% jump in year-on-year profits in the first three months of the year thanks to advertising sales and lower taxes.
Profit of USD9.40 billion was partly due to a change in accounting methods, but operating income still grew from USD6.60 billion to USD7 billion.
Total revenue grew by 26% to USD31.10 billion, with the majority coming from Google, which has seen a boom in its mobile advertising business.
The Japanese Nikkei 225 index ended up 0.9% early Tuesday. In China, the Shanghai Composite is up 1.8%, while the Hang Seng index in Hong Kong is up 0.9%.
In US company news later on Tuesday soft drinks giant Coca-Cola and construction equipment maker Caterpillar will report earnings before the New York open.