Highlights of the Day
Asian Markets
Most Asian markets closed lower as oil prices firmed after falling in the last session. Meanwhile, technology stocks in the region declined after U.S. shares in the sector sold off. |
U.S. Markets
The technology index posted its biggest one-day drop in more than three months on Wednesday as investors fled high-flying technology stocks and shifted to banks and other pockets of the market that could benefit from improving economic conditions, lower regulations and taxes, and higher interest rates. |
Today's News
Squeezed income, higher inflation and economic uncertainty damped UK consumer sentiment in November, survey data from GfK showed Thursday. The consumer sentiment index fell to minus 12 in November from minus 10 in October. The score was forecast to drop marginally to minus 11. A similar lower reading was last seen in July. “Sadly, there’s no festive cheer in this month’s Consumer Confidence Index,” Joe Staton, head of market dynamics at GfK, said. “This is the second time this year that consumer confidence has matched the worrying minus 12 score seen in July 2016 after the Brexit vote.”
The world again faces a “time of reckoning” after North Korea’s latest test of an intercontinental ballistic missile, US Ambassador to the United Nations Nikki Haley said Wednesday. Haley also told a UN Security Council that US President Donald Trump had called on China to cut off oil deliveries to North Korea. “That would be a pivotal step in the world’s effort to stop this international pariah,” she said. “China can do this on its own or we can take the oil situation into our own hands.”
UK house prices increased at a steady pace in November, figures published by the Nationwide Building Society showed Thursday. House prices increased 2.5% year-on-year in November, the same rate of growth as seen in October. Inflation was forecast to rise to 2.7%. On a monthly basis, house price inflation slowed to 0.1%, in line with forecast, from 0.2%. Low mortgage rates and healthy rates of employment growth are providing support for demand, but this is being partly offset by pressure on household incomes, which appears to be weighing on confidence, Robert Gardner, Nationwide’s chief economist, said.
Marston’s grew its underlying profit before tax by 2.9% to £100.1 million in the year to 30 September, driven by new pubs and bars and a strong brewing performance. Total underlying revenue increased by 9.5%, reflecting the acquisition of the Charles Wells Beer Business (CWBB), the contribution from new openings and pub acquisitions and positive like-for-like sales in the pub business. In the Destination and Premium division, like-for-like sales grew by 0.9% while the profit per pub rose by 9%. Underlying operating profit grew by 2.3% to £88.9 million.
Go-Ahead Group has maintained its full year forecasts for both its bus and rail operations after overall trading for the first four months was in line with its expectations. The group said that regional bus revenue and passenger trends were in line with expectations and London revenue, mileage and peak vehicle requirements were as anticipated, reflecting small net contract losses. Chief executive David Brown said: ‘We continue to engage with Transport for London around key issues for the capital, such as congestion and air quality. Both in and outside of London, we believe buses are the solution to these problems in our towns and cities.
Grainger’s adjusted earnings increased by 40% to £74.4m in the year to the end of September driven by lower finance and operating costs, increased sales profit and rental growth. Pre-tax profits rose to £86.3m. The group said it had delivered a total return of 7.3% as a result of its strong trading performance and valuation growth of its assets. It said total return was supported by an enhanced income return and capital growth which was at a lower rate than last year.
Greene King’s adjusted pre-tax profits fell by 8.0% to £127.9m in the 24 weeks to 15 Oct. Group revenues of £1,031.4m were down by 1.2% and operating profits before exceptional and non-underlying items fell by 7/5% to £188.4m. On a statutory basis, pre-tax profits rose by 33.7% to £123.7. Chief executive Rooney Anand said: ‘The first half was challenging for our managed pubs, but our actions to strengthen performance have produced an improvement since the period end.
Aviva has upped upped its long-term cash flow, earnings and dividend targets and says it has £3bn of excess cash that will be used to pay down £0.9bn debt next year, as well as making bolt-on acquisitions and funding shareholder returns. The life insurer will target operating earnings per share growth of “higher than mid-single digit” percentages from 2019 and by 2020 has upped its dividend pay-out ratio target to 55-60% of operating EPS.
BAE Systems said it had reached an agreement to revise the funding arrangements for its UK pension scheme which will see it increase annual contributions. The aerospace and defence company said that, after consultation with the UK Pensions Regulator, it has reached an agreement with the trustee boards of its UK defined-benefit pension schemes on the 2017 triennial funding valuations and deficit recovery plans. At the end of March, BAE explained, its UK defined-benefit pension schemes had a combined deficit of £2.1bn. This was, it added, “broadly similar” to the position at the last triennial review in 2014.
PayPoint’s revenue fell by 4.1% to £97.6m in the six months to 30 September, following the sales of PayByPhone and Drop and Collect. The number of transactions processed slipped from 337.2m to 295.2m, with transaction value down from £4.9bn to £4.7bn. The previous six month figures include the results of the mobile payments business PayByPhone, which was sold on 23 December 2016, and Drop and Collect before the company’s renegotiation with Yodel, which completed on 16 December.
TP ICAP has acquired Coex Partners, an independent agency broker with offices in London, Paris and New York. The initial payment for the acquisition (including settlement of existing shareholder loans) is £7.1m in cash, and performance-related payments may be made at various dates during the next four years. Coex Partners has 55 brokers and provides trade and execution services in listed derivatives and OTC foreign exchange to hedge funds, assets managers and other clients.
GlaxoSmithKline said its subsidiary ViiV Healthcare has begun a phase III study for cabotegravir, used in the prevention of HIV infection in women. The HPTN 084 study will evaluate injections of cabotegravir given every two months compared to daily oral pre-exposure prophylaxis with emtricitabine/tenofovir disoproxil fumarate. Glaxo said the study seeks to enrol 3,200 women between the ages of 18 and 45 in sub-Saharan Africa and is being conducted through a funding collaboration between ViiV, the National Institute of Allergy and Infectious Diseases, and the Bill & Melinda Gates Foundation.
Gold held close to a one-week low hit in the previous session, pressured by upbeat U.S. growth data for the third quarter and Federal Reserve chair Janet Yellen’s bullish view of the economy.
Oil Prices edged up amid low trading volume, ahead of an OPEC meeting in Vienna at which producers are expected to extend a supply-cut deal that came into effect in January with the goal of tightening supplies and propping up prices.
Companies Reporting this week
Day |
Companies |
Thursday: |
Marston’s * Grainger * Greene King * PayPoint * Go-Ahead Group |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,361.9 |
-31.7 |
-0.4% |
UK 250 |
19,942.7 |
-116.9 |
-0.6% |
GER 30 |
13,106.6 |
+44.7 |
+0.3% |
FRA 40 |
5,406.5 |
+8.5 |
+0.2% |
U.S. 30 |
23,940.68 |
+103.97 |
+0.4% |
U.S. 500 |
2,626.1 |
-1.0 |
-0.0% |
OIL (BRENT) |
63.41 |
+0.30 |
+0.5% |
GOLD |
1,282.37 |
-1.27 |
-0.1% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
BAE Systems |
557 |
+13 |
+2.4% |
Aviva |
521 |
+12 |
+2.4% |
Marston’s |
116.25 |
+11.45 |
+10.9% |
Micro Focus |
2435 |
-63 |
-2.5% |
Intertek Group |
5125 |
-100 |
-1.9% |
Sophos Group |
574.5 |
-29 |
-4.8% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
Babcock International |
Goldman Sachs |
Buy |
695.5 |
920 |
Mediclinic International |
Jefferies |
Buy |
559.5 |
616 |
Royal Dutch Shell A |
HSBC |
Hold |
2352 |
2650 |
Paypoint |
JPMorgan |
Overweight |
910 |
1212 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
11:00am: European CPI Flash Estimate y/y |
1.4% |
1.6% |
– |
11:00am: European Core CPI Flash Estimate y/y |
0.9% |
1.0% |
– |
2:30pm: U.S. Unemployment Claims |
239k |
241k |
– |
2:30pm: U.S. Core PCE Price Index m/m |
0.1% |
0.2% |
– |
3:45pm: U.S. Chicago PMI |
66.2 |
62.2 |
– |
Sources
https://www.reuters.com/article/usa-stocks/us-stocks-nasdaq-falters-as-investors-flee-tech-for-banks-idUSL1N1NZ2E3
https://uk.reuters.com/article/global-precious/precious-gold-holds-near-one-week-low-as-stronger-u-s-economy-data-weighs-idUKL3N1O0215
https://uk.reuters.com/article/uk-global-oil/oil-edges-up-ahead-of-opec-meeting-in-vienna-but-uncertainty-lingers-idUKKBN1DU041
https://www.cnbc.com/2017/11/29/asia-markets-opec-meeting-china-pmi-bank-of-korea-pound-in-focus.html
http://www.stockmarketwire.com/article/5762806/TP-ICAP-buys-Coex-Partners.html
http://www.stockmarketwire.com/article/5762768/PayPoint-revenue-falls-4-point-1pct.html
http://www.stockmarketwire.com/article/5762738/Marstons-underlying-pre-tax-profit-grows-2-point-9pct.html
http://www.stockmarketwire.com/article/5762470/Go-Ahead-maintains-full-year-forecasts.html
http://www.stockmarketwire.com/article/5762482/Grainger-adjusted-earnings-up-40pct.html
http://www.stockmarketwire.com/article/5762737/Greene-King-profits-fall-in-challenging-H1.html
https://www.digitallook.com/news/news-and-announcements/aviva-ups-growth-targets-and-unleash-3bn-of-excess-cash–3002008.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1512028522913087600.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1512024408262676100.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1512027393432999700.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1512026012482857300.html