Highlights of the Day
Asian Markets
The Japanese Index hit a two-decade closing high, a milestone for the nation’s long-suffering stock market, driven by stronger earnings, an improved economy and a better environment for shareholders. |
U.S. Markets
U.S. stocks edged lower, pausing after recent gains, after AT&T said it lost subscribers in the last quarter, while banks fell following results. |
Today's News
The UK economy grew at a muted rate in the third quarter of 2017 despite progress in the manufacturing sector, the British Chambers of Commerce says. The number of manufacturers reporting improved domestic sales and orders rose in the quarter to its highest level since early 2015, the BCC said. Export sales and orders in the sector also improved. But in services, domestic sales and orders remained static, as did the sector’s employment expectations. The BCC said its survey also showed the prevalence of recruitment difficulties facing UK businesses, which worsened further during the quarter.
Ryanair is set to challenge a Lufthansa deal to to buy parts of failed German carrier Air Berlin. The budget Irish airline said it would take the €210m deal to European competition authorities. Lufthansa plans to use Air Berlin planes to expand its Eurowings budget airline business. Air Berlin filed for bankruptcy in August after its main shareholder, Etihad, said it would not give further financial support. Flights continued after a transitional loan of €150m from the German government. Germany’s second-largest carrier has since been negotiating with potential buyers for parts of its business.
Provident Financial said it has developed a recovery plan for its struggling home credit business after warning earlier this year that the division would sink to a loss in 2017, but confirmed no dividend will be paid after withdrawing the interim payout. Provident reduced its pretax profit guidance for its Consumer Credit division earlier this year, to a pre-exceptional loss of between £80m to £120m in 2017, from previous forecasts of a £60m profit – as a result of the unsuccessful transition of its home credit sales force from part-time self-employed agents to full time employees.
Ashmore Group said its assets under management jumped 11% in the first quarter of its financial year as appetite for emerging market investment grows. For the three months ended September 30, assets under management grew to $65.0bn from $58.7bn on June 30. This represented a total increase of $6.3bn. $4.3m of this was derived by net inflows and $2.3bn from positive investment performance, the company said. This increased “client engagement” over recent months, the company added, was a result of “strong” gross subscriptions in particular through large institutional mandates in external debt and blended debt which grew 10% and 14% over the period.
GKN said it expects pretax profit for 2017 to be “slightly above” that of 2016, which stood at £292.0m. In the third quarter of the year, GKN reported good sales growth, with the Driveline segment outperforming its market and Aerospace ending up higher in sales than the year before, despite operational challenges for the division in North America, which is expected to incur a £15.0m charge related to revised assumptions on programme inventory and receivables balances. The group’s trading margin in the third quarter was lower than the same period the prior year, as a result of programme transitions and on-going challenges in the US.
Aviva said that it had agreed to exit its Taiwan business through a sales to its joint venture partner. Aviva holds a 49% shareholding in First Aviva Life with the remainder held by First Financial Holding Co Ltd. Aviva will sell its entire stake to First Financial without offering details with regards to price. It is expected to complete in 2018. The sale comes after a strategic review of its Taiwan business at the insurer in which it concluded that the business was not a “central” part of the company’s strategy and that it should “focus on markets where it can achieve scale and profitability or have a distinct competitive advantage,” the company said.
Oil prices rose as both U.S. crude production and inventories declined, pointing towards a tightening market.
Gold rose for a sixth day, buoyed by a weaker dollar, with investors waiting for key U.S. inflation data for clues on the outlook for potential hikes in U.S. interest rates.
Companies Reporting this week
Day |
Companies |
Today: |
Man Group * Hargreaves Lansdown * Ashmore * Provident Financial |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,522.8 |
-33.4 |
-0.4% |
UK 250 |
20,229.0 |
-22.3 |
-0.1% |
GER 30 |
12,997.8 |
+14.9 |
+0.1% |
FRA 40 |
5,359.7 |
-1.1 |
-0.0% |
U.S. 30 |
22,841.01 |
-31.88 |
-0.1% |
U.S. 500 |
2,550.9 |
-4.3 |
-0.2% |
OIL (BRENT) |
56.60 |
+0.35 |
+0.6% |
GOLD |
1,297.18 |
+3.46 |
+0.3% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Provident Financial |
860.75 |
+71.75 |
+9.1% |
Pearson |
630 |
+8 |
+1.3% |
Ashmore |
375.3 |
+22.1 |
+6.3% |
GKN |
322.7 |
-30.1 |
-8.5% |
Easyjet |
1305 |
-16 |
-1.2% |
TalkTalk |
204.5 |
-13.5 |
-6.2% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
Hargreaves Lansdown |
RBC |
Sector Perform |
1541 |
1500 |
Shell |
HSBC |
Buy |
2316.25 |
2500 |
BHP Billiton |
Deutsche Bank |
Buy |
1374.5 |
1650 |
Rio Tinto |
Deutsche Bank |
Buy |
3605 |
4500 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
1:30pm: U.S. PCP m/m |
0.4% |
0.6% |
– |
1:30pm: U.S. Core CPI m/m |
0.2% |
0.2% |
– |
1:30pm: U.S. Retail Sales m/m |
-0.2% |
0.7% |
– |
Sources
http://www.marketwatch.com/story/asian-markets-flirt-with-milestones-as-monthlong-rally-continues-2017-10-10
https://www.reuters.com/article/us-global-oil/oil-rises-on-tighter-u-s-market-strong-china-imports-idUSKBN1CI01K
http://uk.reuters.com/article/usa-stocks/us-stocks-wall-st-slips-as-banks-fall-after-results-att-sinks-idUKL2N1MN1PO
https://www.cnbc.com/2017/10/12/gold-markets-turn-focus-to-us-inflation-data.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1507877564153049600.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1507877518773048100.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1507876728743034700.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1507876102273022600.html
http://www.bbc.co.uk/news/business-41601454
http://www.bbc.co.uk/news/business-41593806