Highlights of the Day
Asian Markets
Stocks continued to stabilize, with Asia-Pacific markets building on Tuesday afternoon’s rebounds that followed a selloff on fears around North Korea’s latest missile launch. |
U.S. Markets
Stocks regained their footing to close higher as investors shook off the tension between the U.S. and North Korea. |
Today's News
Brexit talks are continuing in Brussels after the European Commission president criticised the UK government’s handling of the country’s departure from the European Union. The third day of negotiations opened after Jean-Claude Juncker said it was “crystal clear” that an “enormous amount” of issues needed to be settled before talks on a future trade deal could begin. Junker said the UK “hesitates showing all its cards” but said “none” of the government’s position papers was “satisfactory”. His rebuke to the approach being taken by Prime Minister Theresa May and Brexit Secretary David Davis came after Brussels’ chief Brexit negotiator Michel Barnier said he was concerned about the lack of clarity and insisted “we must start negotiating seriously”.
One in five people struggling with debts has seen their credit card limit automatically increased – a higher proportion than for cardholders in general, a charity has claimed. Citizens Advice said 18% of those struggling financially had seen the limit increased without request, compared with 12% overall. It wants a ban on increases without a cardholder’s explicit consent. The regulator has estimated that 3.3 million people are in persistent debt. In a report published earlier this year, the Financial Conduct Authority (FCA) said that “customers in persistent debt are profitable for credit card firms, who do not routinely intervene to help them”.
Petrofac has cut its interim dividend by 42% to 12.7 cents per share after a decline in commodity prices reduced its cash flow. The company said it intends to target a dividend cover of between 2.0x and 3.0x business performance earnings as it transitions back towards a low capital intensity business model. Business performance net profit fell by 4% to $158 million in the first half.Revenue in the engineering and construction business fell by 20% due to project scheduling and in the integrated energy services division by 37%, or 14% excluding asset sales. Engineering and production services revenue declined 17% reflecting lower activity, utilisation and order intake, as well as the depreciation of sterling. But net profits grew 2% to $51 million. Group net debt was $1.0 billion at 30 June 2017, up from $0.6 billion six months ago.
WH Smith said results for the year to the end of August should hit target and that it continues to see further opportunities for international growth in via the airport market. The Travel division, which operates outlets in train stations and airports, delivered a strong performance for the year and saw the first three Italian stores opened in Rome’s Fiumicino and Ciampino airports, and one in Turin.
Dunelm Group announced that John Browett will be stepping down as chief executive for personal reasons, with immediate effect. The company said it has made good progress over the last two years during Browett’s tenure, but added that the next phase of growth would require “different leadership”. “I would like to thank John for his contribution to the business and the strategic progress made under his leadership, most notably the exciting acquisition of Worldstores,” said Dunelm chairman Andy Harrison.
Workspace has exchanged contracts for the disposal of Zennor Road Industrial Estate in Balham, London, for £30m. The three-acre estate totals 67,000 square feet of net lettable space, with an average rent per square foot of £13.90. It was sold at a premium of 84% to the 31 March 2017 valuation, at a net initial yield of 2.9%. Chief executive officer Jamie Hopkins said: “Zennor Road is the last of our industrial estates earmarked for sale and our portfolio is now entirely focused on business centres and properties which represent refurbishment or redevelopment opportunities.
Micro Focus International said it is planning to convert the $500m cash return into sterling, relating to the planned merger of Micro Focus’ software business segment with Hewlett Packard Enterprise Co. In September 2016, Micro Focus agreed to a reverse takeover of the software arm of Hewlett Packard, which would value the combined company at $8.8bn. The conversion, at the exchange rate of $1.2949 to £1.0000, is expected to result in £386.1m, or 168.03 pence per share held at the record time, which is Thursday. There will also be a share capital consolidation, where Micro Focus shareholders will receive 0.93 new share for each share held on Thursday.
Oil prices were down after a hurricane shut down more than 19 percent of the country’s refining capacity, curbing fuel production and further bloating crude inventories.
Gold prices faded slightly as the latest tensions between the U.S. and North Korea eased slightly.
Companies Reporting this week
Day |
Companies |
Today: |
Petrofac * WH Smith |
Tomorrow: |
Jimmy Choo * Ladbrokes Coral Group * Restaurant Group * Hays |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,371.0 |
+33.6 |
+0.5% |
UK 250 |
19,607.5 |
+79.6 |
+0.4% |
GER 30 |
12,018.77 |
+72.89 |
+0.6% |
FRA 40 |
5063.1 |
+31.2 |
+0.6% |
U.S. 30 |
21,865.37 |
+56.97 |
+0.3% |
U.S. 500 |
2,446.3 |
+2.1 |
+0.1% |
OIL (BRENT) |
51.99 |
-0.01 |
-0.0% |
GOLD |
1,308.08 |
-1.15 |
-0.1% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Unite Group |
695.25 |
+28.75 |
+4.3% |
Ashtead Group |
1640 |
+45 |
+2.8% |
ITV |
155.8 |
+2.8 |
+1.8% |
Acacia Mining |
208.65 |
-6.75 |
-3.1% |
Randgold Resources |
7805 |
-110 |
-1.4% |
Provident Financial |
897 |
-9.5 |
-1% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
AstraZeneca |
Goldman Sachs |
Sell |
4476 |
3800 |
Hammerson |
Morgan Stanley |
Overweight |
568 |
650 |
Nostrum Oil and Gas |
Deutsche Bank |
Hold |
382.95 |
450 |
Ocado |
Citigroup |
Buy |
299.1 |
400 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
9:30pm: U.K. Net Lending to Individuals m/m |
5.6bn |
5.3bn |
– |
1:15pm: U.S. ADP Non-Farm Employment Change |
178k |
185k |
– |
1:30pm: U.S. Prelim GDP q/q |
2.6% |
2.7% |
– |
3:30pm: U.S. Crude Oil Inventories |
-3.3m |
-1.8m |
– |
Sources
http://www.marketwatch.com/story/asian-markets-rebound-shrugging-off-north-korea-tensions-2017-08-29
https://www.cnbc.com/2017/08/29/us-stocks-north-korea-missile.html
https://www.reuters.com/article/us-global-oil-idUSKCN1B903Z
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1504076592300146300.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1504071739309842400.html
http://www.stockmarketwire.com/article/5644516/Petrofac-cuts-divi-amid-weak-commodity-prices.html
https://www.digitallook.com/news/news-and-announcements/workspace-disposes-of-zennor-road-estate-for-30m–2834325.html
https://www.digitallook.com/news/news-and-announcements/wh-smith-expects-to-hit-full-year-targets-as-first-italian-shops-open–2834314.html
http://economictimes.indiatimes.com/markets/commodities/news/gold-silver-trade-lower-on-easing-geopolitical-tensions/articleshow/60288042.cms