29th Nov 2018 07:45
LONDON (Alliance News) - Stocks in London are set to open higher on Thursday, following substantial gains in the US overnight, after Federal Reserve Chairman Jerome Powell hinted interest rate rises could slow. In UK company news, it was a double-whammy of bad news from Intu Properties as a consortium has decided against making a takeover offer for the FTSE 250 shopping centre owner, the second time it has been jilted this year. At the same time, intu said it will reduce its dividend, starting with its final payout for 2018. Meanwhile, there were some major executive shuffles in the FTSE 100. Unilever Chief Executive Paul Polman will step down and be replaced by the company's Beauty & Personal Care president, while Ashtead boss Geoff Drabble is to leave and be succeeded by the firm's North American unit head.IG says futures indicate the FTSE 100 index of large-caps to open 31.28 points higher at 7,035.80 on Thursday. The FTSE 100 index closed down 12.33 points, or 0.2%, at 7,004.52 on Wednesday.Powell's statement during a speech at the Economic Club of New York marked a departure from his comments in October, when he said that the Fed was a "long way" from neutral."Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy - that is, neither speeding up nor slowing down growth," Powell said Wednesday.The Fed last raised its benchmark US interest rate in September, setting it at a range of 2.00% to 2.25% based on the strong US labour market conditions and low inflation. The US central bank is expected next month to hike again, for the fourth time in 2018."The prospect of a Fed pause was just what the equity market doctor ordered and boosting investor sentiment. Powell's dovish pivot reduces nagging concerns about vigorous interest rate hikes while providing the market with one of the best holiday gifts, a significant bounce in global equity markets," said Stephen Innes, head of trading APAC at Oanda.In the US on Wednesday, Wall Street ended firmly in the green, with the Dow Jones Industrial Average ending up 2.5%, the S&P 500 up 2.3% and Nasdaq Composite up 3.0%.In Asia on Thursday, the Japanese Nikkei 225 index ended up 0.4%. In China, the Shanghai Composite ended down 1.3%, while the Hang Seng index in Hong Kong is down 0.9%.The economic events calendar on Thursday has eurozone consumer confidence data at 1000 GMT and Germany unemployment figures at 0855 GMT and inflation readings at 1300 GMT. In addition, US core personal consumption expenditure, which is the US Federal Reserve's preferred inflation gauge, is due at 1330 GMT. The minutes of the US Federal Open Market Committee will be released at 1900 GMT.After the market close on Wednesday, the Bank of England's annual stress test showed UK banks are strong enough to withstand a disorderly Brexit and the country's financial system is resilient to the wide range of risks it could face.In the 2018 stress-test scenario, UK GDP falls by 4.7%, the UK unemployment rate rises to 9.5%, UK residential property prices fall by 33% and UK commercial real estate prices fall by 40%. The scenario also includes a sudden loss of overseas investor appetite for UK assets, a 27% fall in the sterling exchange rate index and Bank Rate rising to 4%.The BoE said that the seven participating banks, which include Royal Bank of Scotland Group, Barclays, HSBC Holdings, Lloyds Banking Group, Standard Chartered, Nationwide Building Society and Santander UK did not reveal capital inadequacies and were consequently not required to submit a revised capital plan.The stress tests came amid stark warnings on Wednesday from the BoE and the UK government about the impact on the UK economy of a no-deal Brexit.In early company news, Unilever said Chief Executive Paul Polman has decided to retire from the consumer goods giant. Alan Jope, currently Beauty & Personal Care president, has been appointed to the position effective from the start of 2019, with Polman supporting the transition process during the first half of the year. Polman - who has been Unilever CEO for over 10 years - will retire from his role and the board at the end of 2018. A successor to the role of Beauty & Personal Care president will be announced shortly, the company added.In another significant executive change, rental equipment firm Ashtead said Geoff Drabble as decided to step down as CEO at the end of the current financial year on May 1, and retire from the group on November 30, 2019.He will be succeeded by Brendan Horgan, currently chief operating officer and chief executive of Sunbelt Rentals, Ahstead's North American business. The unit accounted for 87% of Ashtead's total revenue generated in its last financial year. Meanwhile, a consortium which had mulled making a formal GBP2.85 billion takeover offer for shopping centre owner Intu said it has decided against such a move. "The consortium is highly appreciative of the cooperation shown by intu's board of directors and management team over the past six weeks. However, given the uncertainty around current macroeconomic conditions and the potential near-term volatility across markets, the consortium is not able to proceed with an offer within a timeframe which is manageable within the confines of the Code timetable," the consortium comprising Peel Group, Olayan Group and Brookfield Property Group said in a statement. Since the consortium first raised the possibility of making an offer for Intu in October, shares in the retail property investor have risen 25%. Earlier this year, in April, peer Hammerson dropped its own GBP3.40 billion takeover bid for Intu, believing the deal was not in the interest of shareholders.Intu, in its own statement, said it remains "confident" in its commercial prospects but warned on its dividend in the short term. Intu said: "Given the heightened macroeconomic uncertainty and the reduced pool of potential buyers at present for UK shopping centres, asset disposals are expected to be challenging to deliver in the next few months. intu therefore intends to substantially reduce the payment of dividends in the short term, starting with the 2018 final dividend."In Johannesburg, shares in dual-listed Intu were down 28% in early trade.Soft drinks maker Britvic posted a rise in annual revenue and profit as the firm manages to navigate the UK soft drinks sugar levy.Revenue for the year to September 30 rose 5.1% to GBP1.50 billion, as pretax profit grew 5.0% to GBP145.8 million from GBP138.8 million last year. The firm bumped up its dividend 6.4% to 28.2p from 26.5p."We have delivered a strong performance in a challenging environment, with good revenue, margin and earnings growth. I am delighted that we have grown our stills brands, demonstrating that our investment in innovation and marketing is beginning to pay off," said Chief Executive Simon Litherland.The FTSE 250 constituent added that it is "successfully" navigating the soft drinks levy, underpinned by the strength of its low- and no-sugar portfolio.Go-Ahead Group backed its full-year expectations after reporting like-for-like revenue growth in its bus and rail operations. Regional Bus like-for-like revenue growth was around 3% in the period from July 1 to November 28. London Bus reported revenue rose 0.5%. Within Rail, passenger revenue growth was 7%."Since GTR's interim timetable was put into place in mid-July, operational performance has improved substantially whilst also operating an additional 200 services per day. Performance on Southern is the best since the start of the franchise," Go-Ahead commented.The transport firm added that Elodie Brian, who spent 10 years at train operator Southeastern, has been appointed interim chief financial officer, starting December 3. The recruitment process for a permanent hire is ongoing, the company added.After its profit warning on Tuesday, Thomas Cook on Thursday confirmed a sharp drop in annual profit as it suspended its dividend. Revenue for the year to September 30 rose to GBP9.58 billion from GBP9.01 billion the year before, but the company swung to a pretax loss of GBP53 million from a GBP43 million profit last year. Underlying earnings before interest and tax, as flagged on Tuesday, fell to GBP250 million from GBP326 million.Pub operator Greene King said interim like-for-like sales were up 2.7%, ahead of the market which was up 1.1%. Revenue for the half to October 14 rose 1.9% to GBP1.05 billion, while pretax profit was up 3.2% to GBP127.7 million. In current trading, Greene King said Pub Company sales were up 2.9% at week 30 of its financial year, while Christmas bookings are "well ahead" of last year.
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BritvicUnileverThomas CookGOG.LINTU.LGreene KingAshtead Group