Highlights of the Day
Asian Markets
Major Asian markets traded mostly lower despite a solid lead from Wall Street overnight, but Hong Kong stocks bucked the trend. |
U.S. Markets
U.S. stocks continued to march higher, with all three major market indexes touching fresh record highs . |
Today's News
After a strong Christmas trading period in which online sales represented a fifth of total sales, Sainsbury’s said full year profits are now likely to beat the current consensus forecast. Over the 15 weeks to 6 January, the supermarket group increased sales 1.1% on a like-for-like basis, excluding fuel, beating the 1.0% the market was expecting.
There are “areas of serious concern” in Britain’s contracts for differences (CFDs) market, the country’s financial watchdog said on Wednesday following a review, knocking shares of spreadbetting companies, including IG Group and CMC Markets. The Financial Conduct Authority (FCA) said it had sent a letter to all providers and distributors of these products to retail customers to ensure they “pay due regard to the interests of customers and treat them fairly”.
Ted Baker hailed a “good” performance over the Christmas period as it said full-year results should be in line with its expectations. In a trading update for the period from 12 November 2017 to 6 January 2018, the company said retail sales rose 9% or 10.5% at constant currency, with e-commerce sales up 35%, or 36.4% at constant currency, representing 30% of total retail sales.
Paddy Power Betfair has appointed Dan Taylor to the newly-created role of chief executive officer for Europe, and Barni Evans as CEO of its Australian operations, Sportsbet. They will both report to the group CEO, Peter Jackson.
Taylor Wimpey said it would report 2017 full-year results in line with its expectations amid continued robust demand for UK housing. The company said total home completions in 2017 increased by by 5% to 14,541, including joint ventures. Its net private reservation rate for 2017 was 0.77 homes per outlet per week, up from 0.72 in 2016. Cancellation rates remained steady at 13%.
Tullow Oil said its West African production exceeded expectations in 2017 by averaging 89,100 barrels of oil per day. In Europe, meanwhile, working interest gas production performed in line with expectations, with full year net production averaging 5,600 boepd. Tullow said it expected to report revenue of around $1.7bln and gross profit of around $0.8bln for 2017. It also expected to have generated $0.5bln of free cash flow, significantly exceeding a forecast at the start of the year.
Marshalls said it was confident of meeting its 2017 full-year expectations after annual revenue rose by 8%. Revenue for the year through December rose to £430m, from £397m a year earlier. On a like-for-like basis, revenue rose 6%. Sales in the domestic end market, which represented approximately 32%of group sales, were up 12% compared with the prior year period, Marshalls said.
Interserve expects its 2017 performance to be in line with forecasts outlined in October. It said the ‘Fit for Growth’ programme was expected to deliver a £40m-£50m benefit by 2020. It also said that it expected 2018 operating profit to be ahead of current market forecasts and that constructive discussions with lenders over longer-term funding were progressing.
Centamin’s gold production from its Sukari mine in Egypt totalled 544,658 ounces in 2017 – above guidance of 540,000 ounces. Gold production for Q4 2017 was 154,298 ounces – 1.4% down on the previous quarter but 12.8% up on a year ago. The group also achieved record quarterly throughput from the processing plant of 3,072kt, a 2.5% increase QoQ and 4.2% increase YoY. Open pit total material movement was 17.6Mt, a 5% reduction QoQ and 12% increase YoY. Chief executive Andrew Pardey said: ‘We are pleased to report a strong operational finish to 2017 with fourth quarter production of 154,298 ounces, resulting in full year gold production of 544,658 ounces, exceeding guidance of 540,000 ounces.
PageGroup said it expected its annual profit to be ahead of consensus market expectations but in line with the range of market forecasts. Consensus expectations currently point to an annual operating profit of £115m, it said, with a range of £112m-to-£119m. The company also forecast a 14.6% rise in “gross profit” to a record £711.6m, boosted by foreign exchange gains.
Superdry on hiked its interim dividend following double-digit growth in revenue and profit. For the six months ended October 28, Superdry reported a pretax profit of £9.1m, down from £12.7m for the same period the year before, due to a fair value movement on forward contracts. Underlying profit, before the one-off cost, rose by 21% to £25.3m from £21.0m. Revenue for the period rose by 20% year-on-year to £402.0m from £334.0m, buoyed by a 34% rise in wholesale revenue. Retail revenue increased by 13%.
Senior said that trading in 2017 has been slightly ahead of previous expectations, after a particularly strong November and December. The company added that it will benefit from a one-off reduction in its effective tax rate for 2017, resulting in an adjusted tax rate of 17.5% compared to its previous expectations of 20%. The tax rate in 2018 is expected to return to normal levels. As a result, Senior expects 2017 adjusted earnings per share to be proportionally ahead of expectations.
Gold slipped as a surge in U.S. treasury yields and an ongoing rally in equities dented the precious metal’s safe-haven appeal.
Oil Prices hit their highest levels since 2014 on due to ongoing production cuts led by OPEC as well as healthy demand, although analysts cautioned that markets may be overheating.
Companies Reporting this week
Day |
Companies |
Wednesday: |
Supergroup * Sainsbury (J) |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,729.8 |
-1.2 |
-0.0% |
UK 250 |
20,883.0 |
+8.0 |
+0.0% |
GER 30 |
13,354.88 |
-30.71 |
-0.2% |
FRA 40 |
5,516.7 |
-7.3 |
-0.1% |
U.S. 30 |
25,385.80 |
+102.80 |
+0.4% |
U.S. 500 |
2,751.3 |
+3.6 |
+0.1% |
OIL (BRENT) |
69.13 |
+0.31 |
+0.5% |
GOLD |
1,311.49 |
-1.36 |
-0.1% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Pagegroup |
502.25 |
+31.45 |
+6.7% |
Micro Focus |
2252 |
+51 |
+2.3% |
Royal Bank of Scotland |
286.3 |
+5.8 |
+2.1% |
IG Group |
727.75 |
-51.25 |
-6.6% |
Taylor Wimpey |
200.7 |
-8.2 |
-3.9% |
Persimmon |
2654 |
-61 |
-2.3% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
Royal Bank of Scotland |
Morgan Stanley |
Overweight |
280.50 |
330 |
RELX |
Goldman Sachs |
Buy |
1,698.37 |
2,041 |
Sainsbury (J) |
Goldman Sachs |
Sell |
248.40 |
222 |
Hargreaves Lansdown |
JPMorgan |
Neutral |
1,816 |
1700 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
10:30am: U.K. Manufacturing Production m/m |
0.1% |
0.3% |
– |
10:30am: U.K. Goods Trade Balance |
-10.8bn |
-10.9bn |
– |
2:30pm: U.S. Import Prices m/m |
0.7% |
0.7% |
– |
4:30pm: U.S. Crude Oil Inventories |
-7.4m |
-3.9m |
– |
Sources
https://uk.webfg.com/news/news-and-announcements/paddy-power-betfair-appoints-dan-taylor-as-europe-ceo–3065958.html
https://uk.webfg.com/news/news-and-announcements/ted-baker-hails-good-christmas-trading-retail-sales-up-9–3065935.html
https://uk.webfg.com/news/news-and-announcements/sainsburys-ups-profit-target-as-argos-adds-online-cheer-over-christmas–3065952.html
http://www.stockmarketwire.com/article/5809881/PageGroup-expects-profit-beat.html
http://www.stockmarketwire.com/article/5809809/Taylor-Wimpey-boosts-annual-home-completions-by-5pct.html
http://www.stockmarketwire.com/article/5809820/Tullow-Oil-output-beats-expectations.html
http://www.stockmarketwire.com/article/5809853/Marshalls-FY-sales-up-8pct.html
http://www.stockmarketwire.com/article/5809542/Interserve-FY-to-be-in-line-with-forecasts.html
http://www.stockmarketwire.com/article/5809805/Centamin-FY-output-exceeds-guidance.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1515571697742025900.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1515571411082014700.html
https://www.cnbc.com/2018/01/09/asia-markets-focus-on-currencies-and-china-inflation.html
http://www.nasdaq.com/article/us-stocks-continue-to-make-history-cm902782
https://www.reuters.com/article/us-global-oil/u-s-oil-prices-hit-highest-since-2014-but-analysts-warn-of-overheated-market-idUSKBN1EZ03D
https://in.reuters.com/article/global-precious/gold-inches-down-on-higher-u-s-treasury-yields-idINKBN1EZ04L
https://uk.reuters.com/article/us-britain-regulator-cfd/uk-watchdog-warns-on-spreadbetting-knocking-shares-idUKKBN1EZ0QM