FTSE 100 Little Changed Ahead of BOE Rate Decision
0758 GMT - The FTSE 100 is little changed at 7442 points as
investors digest corporate updates and look ahead to the Bank of
England's latest policy decision. Next gains 2.5% after the fashion
retailer raised its full-year profit forecast following a strong
second-quarter. Phoenix Group rises 2.4% after the insurance
company announced the acquisition of life insurer Sun Life and a
2.5% dividend increase. Hikma Pharmaceuticals slumps 8.7% after
posting weaker first-half profits. Glencore drops 0.9% even after
reporting significantly improved first-half profit and topping up
shareholder returns as lower copper prices weigh on mining shares.
The BOE is largely expected to lift rates 50 basis points to 1.75%,
its biggest rise since 1995, in a decision at 1100 GMT.
(renae.dyer@wsj.com)
Companies News:
Empiric Student Property Appoints Donald Grant as CFSO
Designate, Executive Director
Empiric Student Property PLC said Thursday that it has appointed
Donald Grant as its new chief financial and sustainability officer
designate and executive director of the group.
---
Mears Group 1H Profit Significantly Rose; Hikes Full-Year
Expectations
Mears Group PLC said Thursday that its first-half pretax profit
significantly rose, and it raised its expectations for the full
year.
---
Duke Royalty 1Q Normalized Cash Revenue Rose to Record High
Duke Royalty Ltd. said Thursday that it expects to close the
first quarter of fiscal 2023 with significantly higher normalized
cash revenue, which is expected to increase further in the second
quarter.
---
City of London Group Appoints Jean Murphy as Chief Executive of
Recognise Bank
City of London Group PLC said Thursday that Jean Murphy has been
appointed as chief executive of Recognise Bank Ltd., its principal
operating subsidiary.
---
Instem 1H Revenue Rose, Inflation to Pressure Operating
Profit
Instem PLC said Thursday that it expects to report a 40%
increase in revenue for the first half of 2022, but that operating
profit growth is likely slow due to inflationary pressures.
---
Facilities by ADF Sees 1H Revenue Marginally Up on Robust
Demand
Facilities By ADF PLC said Thursday that it expects to report
revenue for the first half of 2022 that is marginally ahead on year
as demand was robust.
---
Ironveld Shareholder Withdraws Meeting Request to Remove
Chairman, CEO
Ironveld PLC said Thursday that shareholder Richard Jennings,
director of Align Research Ltd., has withdrawn his request to call
a general meeting of shareholders to remove Chairman Giles Clarke
and Chief Executive Martin Eales.
---
Sanderson Design Sees 1H Profit In line; Sales to Rise 1%
Sanderson Design Group PLC said Thursday that it expects to
report first-half profit in line with management views, with sales
rising 1% on year.
---
Secure Trust Bank 1H Pretax Profit Fell on Higher Impairments,
Cuts Dividend
Secure Trust Bank PLC said Thursday that pretax profit for the
first half fell on higher impairment charges, and reduced its
dividend payout.
---
Mobile Streams FY 2022 Revenue More Than Doubled on Strong
Growth
Mobile Streams PLC said Thursday that it expects to report that
fiscal 2022 revenue more than doubled due to continued strong
growth.
---
Falanx Group Expects FY 2022 Revenue Increase on Improved
Pipeline; Shares Rise
Falanx Group Ltd. shares rose on Thursday after the company said
that it expects to report an increased revenue for fiscal 2022
driven by services revenue and improved pipeline.
---
Gym Group 1H Pretax Loss Narrowed on Membership Recovery
Gym Group PLC reported a narrowed pretax loss for the first half
of 2022 driven by higher membership following the ease of
Covid-19-related restrictions, and said that it expects a robust
second half as students return to universities.
---
Nightcap FY 2022 Like-For-Like Revenue Rose; Sees Adjusted
Ebitda in Line
Nightcap PLC said Thursday that it finished fiscal 2022 with
positive trading and that it expects to report a full-year increase
in like-for-like revenue of 24%, in line with management
expectations.
---
BlueRock Diamonds Sells Two Large Stones in July's Tender,
Production Rises
BlueRock Diamonds PLC said Thursday that it has sold two large
stones in its July tender for a total amount of $121,716, and that
production increased over the month.
---
Alkemy Capital Shares Rise on Oversubscribed, Premium Share
Placing
Shares in Alkemy Capital Investments PLC rose as much as 25% in
early trade Thursday after the company said that it has raised 1.2
million pounds ($1.5 million) via an oversubscribed premium share
placing which will be used toward a facility in Teesside, U.K.
---
ConvaTec 1H Pretax Profit Fell, On Track to Achieve 2022
Views
ConvaTec Group PLC said Thursday that pretax profit for the
first half of 2022 fell driven by higher costs, while its revenue
grew, and that it expects to achieve its 2022 guidance despite
expecting weaker growth in the second half.
---
Evraz 1H Revenue Jumped on Higher Coal Prices But Profit Fell on
Currency Effects
Evraz PLC on Thursday reported a lower pretax profit for the
first half of the year, but revenue and Ebitda grew on the back of
higher coal prices.
---
STM Group Chairman to Step Down, 1H Business Slower Than
Expected; Shares Fall
Shares in STM Group PLC fell 10% on Thursday after it said that
Nonexecutive Chairman Duncan Crocker has decided to step down
within the next month and that first-half business has continued to
be slower than expected due to U.K. new business revenue taking
longer to materialize than predicted.
---
Saietta Group Raises GBP23 Mln Via Oversubscribed Share
Placing
Saietta Group PLC said Thursday that it has now raised 23
million pounds ($27.9 million) via the share placing first
announced late Wednesday, which was oversubscribed.
---
ScS Group Warns of Lower FY 2023 Orders as Consumer Sentiment
Drops
ScS Group PLC said Thursday that it has seen a reduced number of
online and in-store visitors in recent months and that it expects
lower orders for fiscal 2023 amid higher costs of living and
economic uncertainty.
Market Talk:
Hikma's Generic Business Expected to Drive Investor Focus
0855 GMT - The challenges faced by Hikma Pharmaceuticals'
generics business will continue to preoccupy investors, Citi
analysts say in a research note as shares in the pharmaceutical
group fall 9.2%. Despite a robust performance in the injectables
and branded divisions, which represent more than 70% of its sales,
near-term investor focus is on Hikma's downgraded 2022's guidance
of its U.S. generics business caused by pricing pressures and
volume erosion amid a competitive environment, they say. The new
guidance implies a revenue decline of 18% to 21%, but the company
expects to come back to growth in 2023, Citi notes.
(michael.susin@wsj.com)
---
BOE Unlikely to Dampen Rate Rise Bets, May Welcome Pound
Gains
0848 GMT - The Bank of England is unlikely to dampen the
market's interest-rate rise expectations at Thursday meeting while
sterling's recent strength may be well-received due to high
inflation, ING says. "Given high gas prices and a strong
dollar--plus BOE remarks that sterling plays a role in monetary
conditions--the BOE may be reluctant to push back against
tightening expectations today and will probably welcome the 3%
bounce in trade-weighted sterling over the last month," ING
analysts say in a note. If the BOE reiterates that it's prepared to
act forcefully to combat rising inflation after an expected 50
basis points rate rise Thursday at 1100 GMT, EUR/GBP could fall to
the 0.8275-0.8300 area from 0.8374 currently, they say.
(renae.dyer@wsj.com)
---
Glencore Results Should Be Taken Positively, RBC Says
0824 GMT - Glencore reported Ebitda of $18.9 billion for the
first half, beating the market consensus of $18.4 billion due to a
better marketing performance, RBC's Tyler Broda says in a note. The
dividend and capital return was within the consensus range, and
will be taken with a sigh of relief from the market, he says. In
addition, the cost guidance appears to be very weak, but, excluding
lower cobalt payabilities and higher oil prices, most of the
increase is driven by by-product volatility which is well
understood by the market, Broda adds. The analyst expects the
results to drive small net consensus downgrades, but expects the
market to take them positively. Shares rise 1.1%.
(jaime.llinares@wsj.com)
---
Pound Seen Driven by Risk Appetite Rather Than Rate Rise
Bets
0806 GMT - The pound's recent appreciation seems driven by
improved global investor risk sentiment as opposed to expectations
for the Bank of England to raise interest rates more aggressively
Thursday, MUFG Bank says. "The recent strengthening of the pound
against both the U.S. dollar and euro has not been backed up by
short-term yield spreads moving in favor of the U.K.," MUFG
currency analyst Lee Hardman says in a note. That suggests market
expectations for the BOE to deliver a larger 50 basis points rate
rise Thursday are unlikely to have been an important driver of the
pound's recent strength, he says. The BOE announces its rate
decision at 1100 GMT.(renae.dyer@wsj.com)
---
Glencore Reports Strong 1H Results But Raises Cost Guidance
0749 GMT - Glencore has reported a solid set of results for the
first half, with Ebitda doubling and 3% ahead of company-compiled
consensus expectations, Citi's Ephrem Ravi says in a note. However,
the mining company also revised its full-year unit cost guidance.
The outlook for copper costs has been increased the most, and zinc,
nickel and coal are all up too, the analyst says. "We believe that
while mark-to-market momentum from stronger spot coal prices is
well understood by the market, cost revisions are likely to
partially offset some of the earnings upside for 2022," he says.
Shares fall 0.8%. (jaime.llinares@wsj.com)
---
Economic Sensitivity Would Argue for 25Bp BOE Rate Rise, but
50Bp Is Likely
0748 GMT - The U.K. economy's heightened sensitivity to higher
interest rates versus other economies would argue for a 25
basis-point interest-rate rise by the Bank of England on Thursday,
but still a 50 basis-point rise is very likely, Georgina Taylor,
multi-asset fund manager at Invesco, says in a note. "It is very
likely that they hike by 50bps as a behavioural response to other
central banks hiking to stave off inflation and the risk of being
seen to being behind the curve," she says. Markets overwhelmingly
price in a 50bp BOE rate rise for Thursday, which would bring the
bank rate to 1.75%, while a small minority expects only a 25bp
increase. (emese.bartha@wsj.com)
---
Mondi Shares Slip After Last-Minute Expectations Miss
0736 GMT - Mondi's second-quarter Ebitda was good, rising
on-quarter, but it modestly missed buy-side expectations that were
raised just before the result's publication, explaining the
share-price slip in early trading, Jefferies says. The
paper-and-packaging company's 2Q Ebitda of EUR482
million--excluding Russia--was higher than the first quarter's
EUR460 million and it beat a previous limited market consensus of
EUR440 million to EUR460 million, but buy-side expectations moved
higher just before publication to around EUR500 million, so it
ended up a 4% miss, Jefferies analysts Cole Hathorn and Michele
Filippig say in a research note. That said, "pricing remaining
strong into 2H, and... reassuringly Mondi expects a good year of
progress." Jefferies retains its buy rating and 1,775.0 pence price
target. Shares are down 2.6% at 1,568.0 pence.
(joseph.hoppe@wsj.com)
---
A 50Bp BOE Rate Rise Would Only Mean Catch-Up With Peers
0729 GMT - From an investment perspective, a 50 basis point
interest rate rise by the Bank of England wouldn't necessarily mean
the BOE is about to embark on an accelerated hiking cycle, rather
it is more of a catch-up with the frontloading of policy tightening
by peers, says Robert Alster, chief investment officer at Close
Brothers Asset Management. "It could be joining both the Federal
Reserve and the European Central Bank in frontloading tightening,"
he says. Given the uncertainty around U.K. fiscal policy and
less-than-expected slack in the labor market, the BOE's Monetary
Policy Committee may be ready to take a more hawkish tone, he says,
but adds that forecasts will remain uncertain until the Tory
leadership race is won, and fiscal policies are confirmed.
(emese.bartha@wsj.com)
---
Next Seen Able to Deliver Higher Rate of Sales Growth After
2Q
0719 GMT - Next is relatively well positioned in the fashion
industry and has the potential to offer investors a strong online
and cash-returns story after its second-quarter sales update, RBC
Capital Markets says in a research note. Long term, the fashion
retailer should benefit from its broad range and strong omnichannel
offer, with fast, highly automated logistics and a well-developed
customer base, the bank says. "Next faces U.K. consumer headwinds,
however over the cycle we think Next should be able to achieve a
higher rate of sales growth than the 2% that it has achieved
historically," RBC says. The bank has an outperform rating on the
stock and a target price of 6,800 pence a share. Shares are up 1.7%
at 6,866.00 pence. (sabela.ojea@wsj.com; @sabelaojeaguix)
---
Rolls-Royce 1H Numbers Look Acceptable But Civil Benefited From
Retrospective Tailwind
0719 GMT - Rolls-Royce Holdings' first-half numbers look ok on a
headline basis, but the performance in Civil was still boosted by a
significant retrospective catch-up tailwind, Jefferies's equity
analyst Chloe Lemarie says in a research note. The U.K. engineering
company did though reiterate guidance and provide more quantified
targets, despite challenges, she says. "We are disappointed that
Civil margin once stripped of a number of one-offs, remains well
below breakeven," Lemarie says. Jefferies has a hold rating on the
stock with a target price of 1000.00 pence. Shares trade down 5.3%
at 85.99 pence. (kyle.morris@dowjones.com)
---
Serco's 1H Results Show It Is a Good Bet in Uncertain
Markets
0711 GMT - Serco Group's first-half results were ahead of the
increased guidance in its May trading update, with trading profit
and net debt both beating expectations, RBC Capital Markets says.
The U.K. outsourcing company also showed off a robust
pipeline--which was up 40% on year--an 18% increase in the dividend
to 0.94 pence, and a further increase in guidance to reflect a
strong performance in June and July and positive foreign-exchange
movements, RBC analyst Andrew Brooke says in a research note. "We
continue to see Serco as a good place to be in the current
uncertain environment given its defensive nature, high visibility,
strong momentum, balance-sheet strength and undemanding valuation,"
the Canadian bank says. RBC retains an outperform rating and 205
pence price target on the stock. (joseph.hoppe@wsj.com)
---
BOE's QT Details Might Impact Gilt Curve Flattening Outlook
0704 GMT - Details to be provided by the Bank of England about
quantitative tightening may help determine whether the reflattening
of the 10-30-year segment of the gilt curve can persist into
growing supply and fiscal risks from the autumn, Citi's rates
strategists write in a note. The BOE is set to reveal the QT
strategy at Thursday's policy meeting, ahead of active sales,
potentially from September, the strategists say. Despite
uncertainty about QT, there has been a revival in the long end of
the gilt curve, they add. The 10-year U.K. gilt yield is trading at
1.922%, down 0.7 basis points, according to Tradeweb. The BOE's
monetary policy report and interest rate decision are due at 1100
GMT. (emese.bartha@wsj.com)
---
BOE's Outlook, Rate Rise Signals Seen as Key For Sterling
0703 GMT - The Bank of England is widely expected to raise
interest rates by 50 basis points to 1.75% in a policy decision at
1100 GMT Thursday, which shouldn't in itself provide much support
to sterling, Commerzbank says. More important will be the BOE's new
economic projections, along with any signals on future rate rises,
Commerzbank currency analyst Antje Praefcke says in a note. "If the
BOE gives the market the impression that its expectations are too
high, GBP/USD might ease towards 1.20 again." Sterling's losses
against the euro are likely to be limited amid uncertainty over how
much the European Central Bank will lift rates given the looming
energy crisis, Praefcke says. GBP/USD and EUR/GBP are flat at
1.2148 and 0.8370 respectively. (renae.dyer@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires;
(END) Dow Jones Newswires
August 04, 2022 05:18 ET (09:18 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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