Highlights of the Day
Asian Markets
Most Asian markets closed higher on Tuesday as the dollar nursed overnight losses. Greater China markets, which had slid in the last session, edged higher. |
U.S. Markets
U.S. markets were close for Martin Luther King Jr. Day |
Today's News
Rio Tinto reported that Pilbara iron ore shipments in the fourth quarter of 2017 increased 3% to 90.0 million tonnes, from the fourth quarter of 2016. Total shipments for 2017 of 330.1 million tonnes were in line with guidance.
Royal Dutch Shell said that it agreed to sell a stake in the West Qurna 1 oil field in Iraq to Japan’s Itochu Corp for an undisclosed amount. Shell is also expected to give up its holding in Iraq’s Majnoon oil field later this year, though it will retain its natural-gas interests in the country. Separately, Shell announced a final investment decision on the redevelopment of the Penguins oil and gas field in the UK North Sea.
Coca-Cola announced plans to cut bottle size and to increase price, in order to deal with the introduction of a sugar tax on soft drinks from April this year in the UK. The beverage giant plans to cut the size of 1.75 litre bottles to 1.5 litre and at the same time raise prices by 20p to £1.99. The company will also increase the price of 500ml bottle to £1.25 from £1.09. However, Coca-Cola confirmed that it has no plans to change its classic recipe.
Following the of Carillion, the government said it will take on some contracts and others will be re-tendered to other contractors. Debt-laden Carillion, Britain’s second largest construction employer, appointed the Official Receiver to take over administration of the company after talks with creditors and the government failed to save the business.
Greggs finished 2017 by delivering its 17th consecutive quarter of like-for-like sales growth. Total sales for 2017 grew by 7.4% and company-managed shop like-for-like sales grew by 3.7%. In the fourth quarter company-managed like-for-like sales grew by 3.0%, reflecting the particularly favourable trading pattern in the final quarter of 2016.
JD Sports Fashion said the the positive levels of performance announced in its interim results continued through the second half, including the key Christmas period. It said like-for-like store sales in the second half to date across the group’s combined Sports and Outdoor fascias, including those in Europe, had been maintained at approximately 3% with additional sales growth arising from both material growth in online trade and continuing overseas space expansion.
Ashmore Group’s assets under management rose to an estimated $69.5bn in the three months to the end of December – up 7% from an actual £65.0bn at the end of September. The group had net inflows of $3.6bn and a positive investment performance of $0.9bn. Ashmore said the continued strong net inflows in the quarter were consistent with this stage in the cycle as investors appreciate the high returns available and look to address underweight positions.
Provident Financial said its consumer credit division was expected to report a “pre-exceptional” loss of around £120m, which was at the upper end of guidance provided in August of a loss between £80m and £120m. The loss reflected a “lower-than-expected rate of re-connection through the fourth quarter with those home credit customers whose relationship had been adversely impacted following the poorly-executed migration to the new operating model in July 2017”, the company said.
National Express Group said an initial assessment of new US tax legislation indicated it would lead to a reduction in the company’s effective tax rate from January 1 this year. The company forecast that the rate would reduce to a percentage point figure in the low 20s, down from a previously anticipated high 20s.
Dunelm’s like-for-like sales rose by 3.4% to £255.0m in the 13 weeks to 30 Dec. Total like-for-like sales for the 26 weeks to 30 Dec were up 6.0% at £469.3m. Like-for-like sales in the group’s stores rose by 1.1% in the 13 week period and by 3.5% in the 26 weeks while online like-for-like sales were up 30.5% in the 13-week period and 36.8% over 26 weeks.
BP said the court supervised settlement programme related to the Deepwater Horizon class action is now “winding down”, and it will book a $1.7bn fourth-quarter charge related to the spill. BP said it now expects to take a non-operating charge after tax of around $1.7bn in its fourth-quarter 2017 results for the remaining business economic loss and other claims associated with the settlement programme. This cash impact, it said, will be spread over a “multi-year” period.
Halma said that it expects a positive impact on future post-tax earnings in the US following the recently changes in US taxes. This is mainly due to the reduced US federal corporate income tax rate to 21% from 25% from the start of January.
Spire Healthcare reaffirmed its guidance for the full year, including an expectation that it would post revenue of between £929m and £932m. Underlying Ebitda, meanwhile, was expected to be between £149m to £151m and net debt at December 31 around £465m. The company said it would make a preliminary earnings announcement on March 2 and would also issue guidance for 2018 at that time.
Gold edged higher to hold just below a four-month high touched in the previous session, supported by a weaker U.S. dollar languishing near three-year lows.
Oil Prices rose recent gains at around $70 a barrel, a level not seen since 2014’s dramatic oil market slump.
Companies Reporting this week
Day |
Companies |
Tuesday (Trading Updates): |
Ashmore Group * Dunelm Group * Greggs |
Wednesday (Trading Updates): |
Burberry Group |
Thursday (Trading Updates): |
Associated British Foods * Ibstock * William Hill * Experian |
Friday: |
No Companies Reporting |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,768.1 |
-1.0 |
-0.0% |
UK 250 |
20,867.9 |
+35.1 |
+0.2% |
GER 30 |
13,231.05 |
+30.54 |
+0.2% |
FRA 40 |
5,514.3 |
+4.6 |
+0.1% |
U.S. 30 |
25,803.19 |
– |
– |
U.S. 500 |
2,786.2 |
– |
– |
OIL (BRENT) |
69.96 |
-0.30 |
-0.4% |
GOLD |
1,339.20 |
-0.79 |
-0.1% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
AB Foods |
2869 |
+41 |
+1.5% |
Vodafone Group |
229.3 |
+1.3 |
+0.6% |
JD Sports |
390.95 |
+25.45 |
+7.0% |
Royal Bank of Scotland |
293.2 |
-6.9 |
-2.3% |
Antofagasta |
1024.5 |
-14 |
-1.4% |
Kaz Minerals |
941.6 |
-24.2 |
-2.5% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
GKN |
Goldman Sachs |
Neutral |
437.4 |
417 |
AB Foods |
Barclays |
Overweight |
2828 |
3380 |
Reckitt Benckiser |
Citigroup |
Buy |
6770 |
7900 |
Ferguson |
Societe Generale |
Buy |
5590 |
6650 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
10:30am: U.K. CPI y/y |
3.1% |
3.0% |
– |
10:30am: U.K. PPI Input m/m |
1.8% |
0.5% |
– |
10:30am: U.K. RPI y/y |
3.9% |
3.9% |
– |
2:30pm: U.S. Empire State Manufacturing Index |
18.0 |
18.5 |
– |
Sources
http://www.stockmarketwire.com/article/5816749/Greggs-like-for-like-sales-rise-up-for-17th-quarter.html
http://www.stockmarketwire.com/article/5817000/JD-Sports-to-be-ahead-of-forecasts.html
http://www.stockmarketwire.com/article/5817002/Ashmore-AuM-up-7pct-at-69-point-5bn.html
http://www.stockmarketwire.com/article/5817001/Provident-Financial-to-book-pound120m-credit-division-loss.html
http://www.stockmarketwire.com/article/5817010/National-Express-outlines-US-tax-change-benefit.html
http://www.stockmarketwire.com/article/5816998/Dunelm-growth-driven-by-online-sales.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1516090014149386200.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1516088742319327000.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1516083728968937400.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1516084022878940600.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1516085738388989600.html
https://uk.webfg.com/news/news-and-announcements/carillion-contracts-to-be-taken-in-house-or-re-tendered-says-government–3073961.html
https://www.cnbc.com/2018/01/15/asia-markets-currencies-rio-tinto-and-china-markets-in-focus.html
https://www.reuters.com/article/us-global-oil/oil-prices-near-three-year-highs-supported-by-healthy-demand-idUSKBN1F504R?il=0
https://uk.reuters.com/article/global-precious/precious-gold-holds-near-4-mth-peak-buoyed-by-weaker-dollar-idUKL3N1PB1BE
http://www.stockmarketwire.com/article/5816999/Spire-Healthcare-reaffirms-guidance.html