13th Feb 2019 07:45
LONDON (Alliance News) - Stock prices in London are set to open in positive territory on Wednesday following constructive newsflow about US-China relations. "Trump saying that there could be some leeway with the March 1st trade truce deadline if the two sides were close to a deal was music to the ears of the market. Whilst there have been positive reports regarding the trade talks investors were getting nervous of the nearing deadline and no solid evidence of progress," said Jasper Lawler, head of research at London Capital Group."Negative sentiment is unwinding, and investors are showing that they are prepared to put risk back on the table," Lawler said. "For sentiment to remain positive we will need to see evidence of a deal in March. However, for now markets are willing to let this pass."In early UK company news, Smurfit Kappa swung to an annual loss due to the political turmoil in Venezuela, while Galliford Try said it expects an annual outturn towards the higher end of analyst forecasts, and Tullow Oil forecast a rise in production for the year ahead. IG says futures indicate the FTSE 100 index of large-caps to open 31.76 points higher at 7,164.90 on Wednesday. The FTSE 100 index closed up 4.03 points, or 0.1%, at 7,133.14 on Tuesday, and is currently 0.9% higher since the week began. "Stocks were also on the front foot after a partial government shutdown was averted...With this headwind moving quickly into the rear-view mirror investors are moving their money out of safe havens and back into riskier assets," said LCG's Lawler.US President Donald Trump is studying a proposal by a bipartisan group of legislators to avert another federal government shutdown, but said on Tuesday that he is not happy with what he has seen and will make demands of his own.However, the president indicated another shutdown does now seem less likely.Much of the shutdown hinges on funding for Trump's plan to vastly expand the wall on the US-Mexico border, which Democrats say is not needed, while many Republicans insist a barrier is integral to border security.The 35-day shutdown in December and January, the longest ever, saw 800,000 federal workers affected, along with a host of essential services, including employees of health suppliers and the aviation industry.In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average rising 1.5%, the S&P 500 up 1.3% and Nasdaq Composite closing 1.5% higher. In Asia on Wednesday, the Japanese Nikkei 225 index closed up 1.3%. In China, the Shanghai Composite ended up 1.8%, while the Hang Seng index in Hong Kong is up 1.1%.In UK company news, Irish paper and packaging firm Smurfit Kappa swung to an annual loss due to its Venezuelan operations. Revenue for 2018 rose 4% to EUR8.95 billion, as earnings before interest, taxes, depreciation and amortisation climbed 25% to EUR1.55 billion. Ebitda consensus for the year had lay at around EUR1.53 billion.However, the company swung to a pretax loss of EUR404 million from a profit of EUR576 million the year before as it booked EUR1.27 billion in exceptional costs relating to the deconsolidation of Venezuela operations.During the third quarter of 2018, the government of Venezuela took control of Smurfit Kappa Carton de Venezuela's business and operations. As a result, Smurfit was no longer able to exercise control over its Venezuelan business and consequently deconsolidated the operations.On a pre-exceptional basis, Smurfit Kappa posted a pretax profit of EUR938 million versus EUR601 million last year. Smurfit raised its final dividend by 12% to 72.2 cents per share, bringing its total dividend to 97.6 cents, up 11% year-on-year.Home furnishings retailer Dunelm said it remains confident in delivering an annual result in line with forecasts after a rise in interim profit. Revenue for the six months to December 29 rose 1.2% to GBP551.8 million, with like-for-like revenue 6.9% higher, as pretax profit climbed 24% to GBP70.0 million. The retailer proposed an interim payout of 7.5p, up 7.1% on last year's 7.0p."We traded well through our key Winter Sale period and remain pleased with our performance to date," said Chief Executive Nick Wilkinson. "As previously highlighted, we are cautious about the outlook for the remainder of the financial year due to the continuing political uncertainty in the UK. We are confident in delivering market expectations for the full year assuming no material change in the macro-economic environment."Housebuilder Galliford Try said revenue and profit fell in its first half, but the firm nonetheless expects an annual outturn towards the higher end of consensus. Group revenue for the six months to the end of December fell 4% to GBP1.34 billion, with pretax profit declining in step with this, down 4% to GBP53.8 million. Galliford cut its dividend by 18% to 23p. Despite the decline in interim profit, the construction firm expects a full-year result "towards the upper end" of analyst consensus. "The group enters the second half of the year with a solid foundation, underpinned by a strong balance sheet and our focus on high-quality earnings which will drive further margin improvements over time. Our mix of residential development creates a robust proposition in more uncertain markets," said Galliford. Galliford booked a GBP26 million charge in the period related to the Aberdeen Western Peripheral Route, which was set back by the collapse of partner Carillion. "The final impact of AWPR on the group's financial results will be determined by the result of the significant claim on this contract, in respect of which the board continues to pursue constructive discussions with the client," Galliford said. Tullow Oil said revenue rose in 2018 as it swung to a profit, and forecast production to improve in 2019.Revenue for 2018 came in at USD1.86 billion, up from USD1.72 billion the year before, as the company swung to a pretax profit of USD260.5 million from a USD285.9 million loss in 2017.The oil and gas exploration firm has recommended a final dividend of 4.8 cents per share. Tullow said its west Africa oil assets performed "strongly" in 2018 and delivered net production of 88,200 barrels of oil per day. Working interest gas production averaged 1,800 barrels of oil equivalent per day, giving overall group net production of 90,000 barrels a day.In 2019, overall group net production is expected to be in the range of 94,000 to 102,000 barrels per day. Hochschild Mining said operations at its Peruvian Arcata precious metal mine have been suspended and it has been placed on care and maintenance. "This decision has been expected but is still disappointing for the organisation. Arcata was the company's first mining operation and started producing in 1964. It has been an excellent operation with an outstanding workforce and supportive communities but the continuing low silver price over some years and current geological conditions leaves us no option," said Chief Executive Ignacio Bustamante.Shore Capital has agreed to buy Stockdale Securities for up to GBP8.9 million.Stockdale serves an institutional and corporate client base, said Shore, offering corporate advisory and corporate broking, equity research, sales and trading services to institutional investors. Stockdale is focused on small and mid-cap companies and listed investment funds. Shore's is making an initial cash payout of GBP4.9 million plus a maximum deferred cash consideration of up to GBP4.0 million. The acquisition is expected to create London's fourth largest corporate broking and advisory business by number of retained Main Market and AIM quoted businesses, Shore said.In the economic calendar on Wednesday is UK consumer price inflation at 0930 GMT, with producer prices due at the same time. At 1000 GMT is industrial production from the eurozone, followed by the US consumer price index at 1330 GMT.Ahead of the UK inflation data, the pound was quoted at USD1.2918 versus USD1.2890 late Tuesday. The consumer price index is seen rising 1.9% in January on an annual basis, slowing from the 2.1% growth seen in December.Meanwhile, UK Prime Minister Theresa May is facing a fresh attempt by a cross-party group of MPs to prevent a no-deal Brexit if she cannot reach an agreement with Brussels by mid-March.The group, including Labour MP Yvette Cooper and Tory former minister Oliver Letwin, have said they are ready to table an amendment enabling Parliament to force ministers to seek a delay if there is no deal in place.There was speculation at Westminster some ministers opposed to a no-deal break could be prepared to resign to support the amendment when it comes to a vote in two weeks' time.
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