BOE Signals Dovish Note in Commentary After Rate Rise
1318 GMT - Despite a quarter-point rise in rates, the Bank of
England's comments sounded dovish in three key ways, Ruth Gregory,
Capital Economic's deputy chief U.K. economist, says in a note.
Firstly, the monetary policy committee played down February's rise
in core services inflation, saying it still expects inflation to
fall sharply over 2023 and that services inflation is broadly in
line with its expectations. Then it chose not to repeat its
statement that risks to its inflation forecast are skewed
significantly to the upside. Thirdly, it said banking turmoil posed
extra uncertainty to financial and economic outlooks, Gregory says.
It means that while the BOE stopped short of explicitly calling
time on rate hikes, it is clear that it isn't on auto-hike mode,
she says. (edward.frankl@wsj.com)
COMPANIES NEWS:
FinnCap, Cenkos to Merge in All-Share Deal
London-listed investment banks finnCap Group PLC and Cenkos
Securities PLC said Thursday that they have agreed to an all-share
merger under which finnCap will buy Cenkos for 21.1 million pounds
($25.9 million).
---
Safestyle UK Sees 2023 Revenue Below Views Amid Challenging
Consumer Backdrop
Safestyle UK PLC said Thursday that 2023 revenue is anticipated
to come in below current expectations amid a tough consumer
backdrop, and that it swung to a pretax loss in 2022.
---
Wickes 2022 Profit Fell on Non-Recurring Costs; Revenue Rose
Wickes Group PLC Thursday reported a fall in pretax profit for
2022, driven by non-recurring costs, and despite a rise in
revenue.
---
Crest Nicholson Says UK Housing Market Recovering; Early 2023
Sales Improving
Crest Nicholson Holdings PLC said Thursday that a recovery in
customer confidence and housing market activity is under way, with
sales improving in the new calendar year.
---
Inland Homes Shares to Be Suspended on 2022 Results Delay;
Considers Fund Raising
Inland Homes PLC said Thursday that it won't be able to publish
its 2022 results before the March 31 deadline and its shares will
be temporarily suspended, and it is contemplating a fund
raising.
---
C&C Sees FY 2023 Operating Profit Jump; To Resume
Dividends
C&C Group PLC said Thursday that it expects operating profit
for fiscal 2023 to nearly double on the back of increased revenue,
and that it seeks to return to dividend payments and further
capital returns.
---
Playtech Reports Record 2022 Earnings Driven by B2B Markets,
Snaitech
Playtech PLC said Thursday that adjusted pretax profit and
revenue rose in 2022, with record earnings driven by strength in
business-to-business markets and its Snaitech division.
---
Carr's Group FY 2022 Pretax Profit Rose Despite Higher Costs,
Supply-Chain Delays Hitting Engineering Unit
Carr's Group PLC reported Thursday a slight rise in pretax
profit for fiscal 2022 as revenue grew in its specialty agriculture
division, and despite a decline in engineering revenue due to
supply-chain issues and inflationary pressure.
---
Inchcape 2022 Pretax Profit Rise on Strong Sales; Raises
Dividend
Inchcape PLC said Thursday that pretax profit rose in 2022 on
growth across business segments and regional markets, and that it
has proposed a final dividend.
---
Audioboom Swung to 2022 Pretax Loss Despite Record Revenue
Audioboom Group PLC on Thursday reported a swing to pretax loss
for 2022 after booking share-based payment charges and despite
revenue hitting record levels, driven by higher monthly
downloads.
---
ECO Animal Health Sees FY 2023 Earnings Above Market Views;
Shares Rise
Shares in ECO Animal Health Group PLC rose 15% on Thursday after
the company said that it expects revenue and earnings before
interest, taxes, depreciation and amortization for fiscal 2023 to
be slightly ahead of market expectations amid strong performance in
Asia.
---
IDOX Expects Double-Digit Rise in FY 2023 Revenue
IDOX PLC said Thursday that it is well-placed to achieve
double-digit revenue growth in fiscal 2023 thanks to high levels of
recurring revenue, contract renewals, orderbook and a good
acquisition pipeline.
---
SRT Marine Systems Shares Rise on Narrowed FY 2023 Pretax Loss,
UK Contract News
Shares in SRT Marine Systems PLC rose Thursday after it said it
expects to report that pretax loss for fiscal 2023 narrowed as
revenue soared, and that it has agreed on a contract for a new U.K.
Coast Guard project worth 145 million pounds ($177.9 million).
---
Seplat Energy Terminates Consultancy Agreement, Files Suit
Against Former Chair
Seplat Energy PLC said Thursday that it has taken legal action
against its former chair after terminating a consultancy agreement
with its wholly-owned subsidiary and its co-founder with immediate
effect.
---
Serica Energy PLC Completion of acquisition of Tailwind
Energy
TIDMSQZ
---
Zinnwald Lithium' Shares Jump on Premium Fund Raising
Shares of Zinnwald Lithium PLC rose 24% on Thursday after the
company said that it has raised 18.7 million pounds ($23 million)
via the premium share placing first announced late Wednesday.
---
888 Holdings Backs 2022 Guidance; Sees 2023 Earnings Meeting
Market Views
888 Holdings PLC said Thursday that its 2022 results will be
consistent with prior guidance, and it is confident in meeting
market expectations for adjusted earnings for 2023.
---
Osirium Technologies Shares Fall on Widened 2022 Pretax Loss
Shares in Osirium Technologies PLC fell 17% on Thursday after
the company reported a widened pretax loss for 2022 on higher
administrative expenses, despite higher revenue and record
bookings.
---
Pollen Street 2022 Pretax Profit Fell on Higher Costs
Pollen Street PLC said Thursday that 2022 pretax profit fell
after booking higher costs but that it was well-positioned through
its core strategies to drive long-term organic growth.
---
Sopheon Shares Rise on Higher 2022 Profit, Revenue
Sopheon PLC shares rose Thursday after it said its 2022 pretax
profit rose together with revenue, while adjusted earnings beat
market expectations.
---
Hardide Sees 1H Sales Up 7%, But Economic Headwinds Delaying
Customer Orders
Hardide PLC said Thursday that it has experienced growth across
its key markets over the first half of fiscal 2023 with sales 7%
ahead of the same period a year earlier.
---
GB Group Managing Director Nick Brown to Retire
GB Group PLC said Thursday that Group Managing Director Nick
Brown will retire from the board at the end of this month.
---
Marula Mining Hires Consultants, Lawyers, Ahead of London
Listing
Marula Mining PLC said Thursday that it is making continued
progress in its plans to float on London's junior AIM, with the
appointment of technical consultants and a law firm.
---
Gulf Keystone 2022 Pretax Profit Rose on Higher Production, Oil
Price
Gulf Keystone Petroleum Ltd. said pretax profit rose in 2022
thanks to an increase in oil prices and higher production, and that
it has declared a dividend payout.
---
Fragrant Prosperity Signs Preliminary Reverse Takeover Deal;
Shares Suspended
Fragrant Prosperity Holdings Ltd. said Thursday that it has
signed a preliminary deal to buy U.K. based fintech business Hi 55
Ventures Ltd. in a deal that would be classified as a reverse
takeover if it proceeds.
---
SVB UK's Deposit Base Rises After HSBC Takeover, Sky News
Reports
Silicon Valley Bank's U.K. arm has had hundreds of millions of
pounds of deposit inflows after its 1 pound ($1.23) rescue takeover
by HSBC Holdings PLC, Sky News reports.
MARKET TALK:
Carr's Group Shares May See Downward Pressure Once Trading
Resumes
1342 GMT - Although Carr's Group posted a strong set of results
for FY 2022, investors should focus on the agriculture and
engineering company's outlook given the delay to results, Shore
Capital analysts Akhil Patel and Clive Black say in a note. Energy
and raw material costs are plateauing despite being higher
year-on-year, which should support its specialty agriculture
division, while the engineering division's order book of GBP40.6
million is strong, the analysts say. "However, we note the group
has lost its FTSE index status suggesting there may be some
downward pressure on shares once trading resumes," the analysts
say. Shares are currently suspended due to the delay in reporting
fiscal 2022 earnings. (anthony.orunagoriainoff@dowjones.com)
---
Informa Might Face Pressure if Customers Cut Spending
1314 GMT - Informa could take a hit as a bank-lending clampdown
potentially prompts companies to cut spending, Morgan Stanley says,
downgrading the business publisher and event organizer to
equal-weight from overweight. Informa's long-term equity story
remains attractive, driven by factors such as the enduring value of
face-to-face meetings for business development and smart use of
surplus capital in both accretive M&A and share buybacks,
Morgan Stanley says. Still, tighter credit conditions prompted by
ongoing banking-industry dislocation may indirectly affect
Informa's business-event operations, with corporate customers
likely to be more cautious on discretionary operational spending in
2023 and 2024, Morgan Stanley analysts write. The bank also cuts
its price target to 730 pence from 750p. Shares fall 2% to 678p.
(philip.waller@wsj.com)
---
Sterling to Gain if BOE Takes Rates Higher Than Expected
1309 GMT - The Bank of England could raise interest rates
further than expected and is unlikely to revert to cutting rates
any time soon, which should support sterling, Ebury says. The BOE,
which lifted rates by 25 basis points to 4.25% on Thursday, is
likely deliver another 25bps rise in May with a further possible
increase in June before pausing, Ebury strategist Matthew Ryan says
in a note. Rate cuts don't look likely for some time, particularly
given the upside surprise in the latest core inflation data, he
says. "This could be bullish for sterling, as markets see the base
rate ending 2023 only modestly higher than current levels."
(renae.dyer@wsj.com)
---
Pound Trims Initial Post-BOE Gains on Prospect of Pause in Rate
Rises
1258 GMT - Sterling trims its initial gains after the Bank of
England raised interest rates by 25 basis points to 4.25% Thursday
as the central bank's inflation projections indicate it could soon
pause its rate rise cycle, IG says. The BOE might pause rate rises
given its expectations that inflation will fall sharply over the
rest of this year, IG analyst Chris Beauchamp says in a note.
"Traders are right to be sceptical on this, and as with last
night's Federal Reserve [decision] it seems there will be a much
more meeting-by-meeting approach, rather than risking credibility
by sticking dogmatically to a set path." GBP/USD is last up 0.4% at
1.2313 and EUR/GBP falls 0.1% to 0.8844. (renae.dyer@wsj.com)
---
UK Economy Needs New Dynamics to Overcome Underperformance
1256 GMT - The U.K. is in an economic "danger zone" and needs
bold plans to break a high tax and low growth loop, Charles White
Thomson, chief executive officer at Saxo UK, says in a note after
the Bank of England raised the bank rate by 25 basis points to
4.25%. "The U.K. continues to underperform its key counterparties
and have underserved the majority and their aspirations," he says.
He sees the U.K.'s economic situation as increasingly painful and
uninspiring, and says no one should be celebrating recent monthly
GDP growth of an anaemic 0.3% and the avoidance of a technical
recession. In its assessment, the BOE said uncertainties around the
financial and economic outlook had risen.
(emese.bartha@wsj.com)
---
UK Gilt Yields Stay Steady After BOE Rate Rise
1252 GMT - U.K. gilt yields are relatively unchanged after the
Bank of England's 25 basis points rate increase as markets expect
the BOE to pause rate increases going forward. "In monetary policy
terms we are now gradually leaving the theatre of action and
entering a period of circumspection," says AJ Bell head of
investment analysis Laith Khalaf in a note, "This is likely to mean
interest rates plateauing from here, or only modest, less frequent
adjustments being made by the central bank," he says. The U.K.
10-year gilt yield last trades at 3.424% compared to 3.422% prior
to the BOE announcement. The U.K. 2-year gilt yield last trades at
3.376%, compared to 3.375% beforehand. (miriam.mukuru@wsj.com)
---
BOE's Rate Rise Shows Priority Focus on Inflation Fight
1248 GMT - The Bank of England's decision to raise the bank rate
by 25 basis points, following in the Federal Reserve's footsteps,
shows that the Monetary Policy Committee is focusing on its
inflation-fighting mandate rather than financial stability risks,
Jessica Hinds, director in Fitch Ratings' economics team, says in a
note. This stance "will have surely been cemented by the inflation
data earlier this week," she says. While the MPC stated that
further tightening will depend on evidence of more persistent
inflationary pressures, Fitch Ratings' economics team thinks that
the tightness of the labor market will keep services inflation too
sticky for the BOE to be confident that it has done enough.
(emese.bartha@wsj.com)
---
BOE Should Refrain From Guidance Given Inflation Uncertainty
1238 GMT - The Bank of England should refrain from offering
forward guidance about its future rate policy, having frequently
signaled that they expect interest rates to peak at current levels
but then inflation data has proved otherwise, Karen Ward, chief
market strategist, EMEA, at J.P. Morgan Asset Management says in a
note. After February inflation surprised to the upside, the
persistence of inflation looks more worrying in the U.K. than
elsewhere, reflecting that a combination of Brexit, the Covid-19
pandemic and an energy crisis appears to have done more lasting
damage to the supply side of the economy, she says. The central
bank should leave itself degrees of freedom by simply stating they
will do whatever it takes to bring inflation down, she says.
(edward.frankl@wsj.com)
---
BOE Could Lift Rates Further But End of Cycle Nearing
1236 GMT - The Bank of England could raise interest rates
further after Thursday's 25 basis points rise but the end of
monetary policy tightening is nearing, Charles Stanley says. The
U.K. government's budget earlier this month showed the Office for
Budget Responsibility expects inflation to fall to 2.9% by the end
of 2023, compared to 10.4% in February, but this target looks
ambitious, Charles Stanley chief investment officer Garry White
says in a note. "This means there may be at least one more rate
rise ahead, but we are probably close to the top of the cycle," he
says. "However, if this 2.9% target is to be met, interest rates
may not be coming down for quite some time."
(renae.dyer@wsj.com)
---
BOE's Rate Rise Could Be the Last Before a Pause
1235 GMT - The Bank of England "had no choice" but to raise
interest rates by 25 basis points to 4.25% on Thursday given high
inflation but this could mark the final increase before a pause,
says Richard Carter, head of fixed interest research at Quilter
Cheviot, in a note. "It will be hoped this will be the final rate
hike before a period of pause to assess how the rate hikes are
taking effect," he says, noting that the economy is expected to
contract this year. "Inflation is proving sticky so it is hard to
say if this is the end, but consumers up and down the country will
be hoping for some relief when the Bank of England sets rates again
in May." (jessica.fleetham@wsj.com)
---
BOE Will Soon Need to Focus on Banking Sector, Credit
Conditions
1235 GMT - The need to counteract high inflation is "paramount"
for the Bank of England, which raised interest rates by 25 basis
points on Thursday, but it will likely need to turn its focus to
banking sector problems and tightening credit conditions, says Neil
Birrell, chief investment officer at Premier Miton Investors in a
note. "Policy needs to remain flexible," he says. "None of those
issues are going away in a hurry and the tightrope they are walking
with policy has got tighter over the last two weeks."
(emese.bartha@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires;
(END) Dow Jones Newswires
March 23, 2023 10:37 ET (14:37 GMT)
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