Highlights of the Day
Asian Markets
Equity markets in Asia extended their gains, taking cues from fresh overnight records set by key U.S. indexes as the earnings season kicks off. |
U.S. Markets
All three main U.S. stock benchmarks closed at records on after minutes from the Federal Reserve’s September meeting suggested caution among policy makers on the next interest rate hike. |
Today's News
The competition watchdog has provisionally paved the way for Just Eat to acquire Hungryhouse, saying the merger does not raise concerns. Just Eat paid £200m for Hungryhouse, which it bought from Delivery Hero, back in December of last year. In May, the Competition and Markets Authority (CMA) referred the deal between the online takeaway firms for an in-depth merger investigation, on concerns that the merger could lead to worse terms for restaurants than if they had a choice of either company. The CMA said today that a group of independent panel members had come to the conclusion that, on balance, it is unlikely to result in competition concerns.
House prices in the UK moved higher again in September, the latest survey from the Royal Institution of Chartered Surveyors showed with a house price balance of 6.0%. That was unchanged from the August reading, and it beat expectations for a gain of 4.0%. By region, prices in southeastern England continued to plummet – while they advanced again in the rest of the country, particularly London. The number of sales fell at the fastest rate since July 2016.
N Brown Group saw continued positive trading momentum and market share gains in the six 26 weeks to 2 Sep. Group revenue was up 5.6% at £453.4m, with product revenue up 7.5% and financial services revenue up 1.1%. The group said its three ‘power brands’ all delivered a good performance, with Simply Be the standout with revenue growth of 21.0%. And it said that against a subdued backdrop it delivered significant ladieswear market share gains. Product gross margin was 54.0%, down 190bps year on year, as expected, due to the headwind from exchange rate differences year on year affecting the cost of goods sold.
WH Smith has increased its dividend by 10% to 48.2p a share after reporting a 7% increase in group profit before tax to £140 million in the 12 months to August. Revenue in the travel business rose 9%, overtaking high street revenue for the first time. Profit in travel increased by 10% to £96 million and now represents over 60% of group trading profit. High street profits were flat at £62 million with total revenue falling 5%. Like-for-like revenues were flat overall, with travel up 4% and high street down 4%.
Sky grew its like-for-like revenue by 5% to £3.3 billion in the first quarter, with EBITDA rising 11% to £582 million. Despite pressure on consumer spending and lower spend in UK television advertising, Sky’s Established Business EBITDA rose by 15% to £606 million. 160,000 new customers joined in the first quarter, up 51% from a year ago, and over 800,000 subscription products were added. Pay-as-you-go sports and entertainment buys grew by 12% to 9.6 million. Viewing to Sky channels was up 10% year on year.
Hays has reported another record quarterly net fee performance with further strong, broad-based 13% growth in Continental Europe and Rest of World which compensated for modest growth in the UK & Ireland. It said this was driven by Germany up 15% while 13 other countries grew in excess of 10%. Asia Pacific net fees were up 14% with another strong performance in Australia, up 15%, and a significant acceleration of growth in Asia, where net fees grew by 18%. UK & Ireland saw growth of 1%.
Booker Group’s total sales rose to £2.6bn for the 24 weeks to 8 Sep – up 2.5% on last time with non tobacco up 7.5% and tobacco down 9.0% due to changes in legislation. Like-for-like sales rose by 2.7% with non tobacco like-for-like sales up 7.7%, and tobacco like-for-like sales down 8.7%. Operating profits rose by 9% to £89.1m and pre-tax profits were also up 9% at £88.0m. After-tax profits were up 10% at £74.7m.
Acacia Mining produced 191,203 ounces of gold and sold 132,787 ounces of gold during the third quarter, it confirmed. Sales were below production due to the ban on the export of gold/copper concentrate produced at Bulyanhulu and Buzwagi from the Tanzanian government, though last month production at the latter was switched to from the gold/copper concentrate to gold doré bars, which are not affected by the ban.
Draft legislation designed to lower the cost of energy bills is set to be published by the government later. The Draft Domestic Gas and Electricity (Tariffs Cap) Bill will give energy regulator Ofgem the power to cap standard variable tariffs. At present about 18 million customers are on some form of default tariff, which can cost hundreds of pounds a year more than the cheapest deals. But the price cap is unlikely to take effect before winter. The cap will be short term, until 2020, and possibly extended to 2023 if Ofgem decides that is necessary, the government said in a statement.
Oil prices eased as U.S. fuel inventories rose despite efforts by OPEC to cut production and tighten the market.
Gold were up slightly up, extending gains from the previous session amid a muted U.S. dollar after minutes from the U.S. Federal Reserve’s September policy meeting revealed low inflation concerns.
Companies Reporting this week
Day |
Companies |
Today: |
WH Smith * Sky * Booker * Citigroup * JPMorgan Chase * Hays |
Tomorrow: |
Man Group * Hargreaves Lansdown * Ashmore * Provident Financial |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,531.0 |
-2.8 |
-0.0% |
UK 250 |
20,161.5 |
-6.3 |
-0.0% |
GER 30 |
12,976.54 |
+5.86 |
+0.1% |
FRA 40 |
5,358.1 |
-4.4 |
-0.1% |
U.S. 30 |
22,872.89 |
+42.21 |
+0.2% |
U.S. 500 |
2,555.2 |
+4.6 |
+0.2% |
OIL (BRENT) |
56.57 |
-0.37 |
-0.7% |
GOLD |
1,294.86 |
+3.14 |
+0.2% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Just Eat |
735.5 |
+32.5 |
+4.6% |
Fresnillo |
1461 |
+17 |
+1.2% |
Easyjet |
1304 |
+15 |
+1.2% |
Provident Financial |
775 |
-25.5 |
-3.2% |
Close Brothers Group |
1436 |
-35 |
-2.4% |
HSBC |
748.4 |
-10 |
-1.3% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
WPP |
HSBC |
Buy |
1362 |
1600 |
Burberry Group |
Deutsche Bank |
Hold |
1895 |
1800 |
Mondi |
Deutsche Bank |
Hold |
1910 |
2150 |
Tesco |
Credit Suisse |
Underperform |
185.55 |
160 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
1:30pm: U.S. PPI m/m |
0.2% |
0.4% |
– |
1:30pm: U.S. Unemployment Claims |
260k |
251k |
– |
3:30pm: ECB President Draghi Speaks |
– |
– |
– |
4:00pm: U.S. Crude Oil Inventories |
-6.0m |
-1.9m |
– |
Sources
http://www.marketwatch.com/story/nikkei-keeps-rising-as-asian-markets-extend-gains-2017-10-11
http://www.marketwatch.com/story/us-stock-futures-fight-for-direction-with-fed-minutes-earnings-on-tap-2017-10-11
http://www.cityam.com/273741/just-eats-hungryhouse-takeover-nearly-good-go-competition
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1507786636061453200.html
http://www.stockmarketwire.com/article/5701165/N-Brown-makes-market-share-gains.html
http://www.stockmarketwire.com/article/5701210/WH-Smith-hikes-divi-as-profits-rise-7pct.html
http://www.stockmarketwire.com/article/5701179/CMA-clears-Just-Eat-Hungryhouse-deal.html
http://www.stockmarketwire.com/article/5701178/Sky-grows-EBITDA-by-11pct-despite-lower-ad-spend.html
http://www.stockmarketwire.com/article/5701159/Record-quarter-for-Hays-despite-modest-UK-growth.html
http://www.stockmarketwire.com/article/5700914/Booker-hikes-dividend-as-sales-rise.html
http://www.bbc.co.uk/news/business-41592200
https://www.reuters.com/article/global-precious/precious-gold-prices-extend-gains-amid-subdued-u-s-dollar-idUSL4N1MN0AY
https://www.reuters.com/article/us-global-oil/oil-drops-on-rising-u-s-crude-inventories-opec-seen-to-extend-cuts-idUSKBN1CH01T
https://www.digitallook.com/news/news-and-announcements/acacia-mining-production-slows-in-third-quarter–2909815.html