| | | | | | | | Metro Bank IPO: What you need to know In just a couple of weeks, Metro is due to launch its IPO. It’s following in the footsteps of smaller rivals, Aldermore and Shawbrook, who listed last year. Both performing strongly in the months following their IPOs.
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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: FTSE finishes higher as traders weigh UK jobs data The FTSE 100 finished higher on Wednesday after a recovery in oil prices and a mixed report on UK jobs.
Oil prices rallied even as Iran's OPEC envoy, Mehdi Asali, said it was unlikely the nation would join an agreement with other global producers to freeze oil output to address the supply glut.
Iranian oil minister Bijan Zanganeh met with his counterparts from Iraq, Qatar and Venezuela on Wednesday in Tehran.
"Asking Iran to freeze its oil production level is illogical ... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices." Iran's OPEC envoy, Mehdi Asali, was quoted as saying by the Shargh daily newspaper on Wednesday.
Brent crude rose 5.6% to $34.12 per barrel and West Texas Intermediate increased 4.7% to $30.50 per barrel at 1639 GMT.
Meanwhile, the Office for National Statistics revealed the UK unemployment rate remained unchanged at 5.1% in the three months to December, missing expectations of 5.0%.
UK employers added 205,000 jobs to the economy during the three-month period, below forecasts for 225,000 extra people in work. Average weekly earnings rose 1.9%, in line with estimates, marking a slowdown from the previous quarter's 2% increase. Jobless claims in January fell 14,800, ahead of expectations for a 3,000 drop.
Capital Economics said the easing in wages adds to the Bank of England's case to keep interest rates unchanged for the time being. The BoE noted in its Inflation Report earlier in February that wage growth had "eased significantly" more than anticipated.
"The soft UK pay growth shown in today's labour market figures - which is still at odds with the tightening labour market - highlights why the MPC won't be raising rates anytime soon," said Ruth Miller, UK economist at Capital Economics.
Across the pond, US industrial and manufacturing output figures from the Federal Reserve surprised to the upside. Industrial production was up 0.9% in January compared to a month ago, beating analysts' estimates for a 0.4% increase. Manufacturing output rose 0.5% month-on-month in January, ahead of forecasts for a 0.2% gain.
US housing starts figures were less impressive, falling 3.8% in January on the month, trailing estimates for a 2% rise, the Commerce Department revealed. Mortgage applications in the US increased 8.2% in the week to 12 February, according to the Mortgage Bankers Association.
The Federal Reserve releases the minutes of its 26-27 January policy meeting at 1900 GMT, providing more details on its decision to hold interest rates steady. The minutes may offer clues on the next policy change after it raised the benchmark interest rate in December for the first time in nearly a decade.
In company news, Glencore shares gained as it secured early refinancing of a $8.45bn loan facility.
Anglo American advanced as Deutsche Bank and Credit Suisse lifted their targets on the stock following the company's full year results.
Aerospace and defence group Rolls-Royce was on the front foot amid media reports it is considering a bid by activist shareholder ValueAct for a seat on the board.
Auto Trader was a high riser as the company said after a good third quarter it expected full year results would be marginally ahead of current market expectations.
Going the other way, utility stocks were among the biggest fallers, including National Grid, Centrica, Severn Trent and United Utilities Group. |
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| Market Movers
FTSE 100 (UKX) 6,020.99 2.71%
FTSE 250 (MCX) 16,125.31 2.69%
techMARK (TASX) 3,095.65 2.75%
FTSE 100 - Risers
Anglo American (AAL) 460.75p 15.78%
Glencore (GLEN) 118.15p 14.76%
Antofagasta (ANTO) 478.40p 8.58%
Aberdeen Asset Management (ADN) 245.00p 8.17%
InterContinental Hotels Group (IHG) 2,470.00p 7.11%
Legal & General Group (LGEN) 226.70p 7.09%
Rolls-Royce Holdings (RR.) 675.50p 6.97%
BHP Billiton (BLT) 740.00p 6.78%
Sports Direct International (SPD) 419.60p 6.47%
Hargreaves Lansdown (HL.) 1,254.00p 6.09%
FTSE 100 - Fallers
Severn Trent (SVT) 2,107.00p -0.80%
United Utilities Group (UU.) 917.50p -0.05%
National Grid (NG.) 955.30p -0.02%
SABMiller (SAB) 4,175.00p 0.00%
GlaxoSmithKline (GSK) 1,424.00p 0.46%
Rexam (REX) 602.00p 0.75%
Unilever (ULVR) 3,041.00p 0.86%
Compass Group (CPG) 1,226.00p 0.91%
Diageo (DGE) 1,830.00p 1.02%
British American Tobacco (BATS) 3,883.50p 1.03%
FTSE 250 - Risers
Vedanta Resources (VED) 269.30p 11.70%
Fidessa Group (FDSA) 2,270.00p 10.68%
Tullow Oil (TLW) 190.70p 9.98%
Pendragon (PDG) 38.99p 9.83%
Electrocomponents (ECM) 227.50p 8.59%
Savills (SVS) 710.00p 8.40%
Poundland Group (PLND) 163.80p 8.33%
Virgin Money Holdings (UK) (VM.) 312.70p 8.20%
Amec Foster Wheeler (AMFW) 380.10p 8.01%
Sophos Group (SOPH) 206.00p 7.18%
FTSE 250 - Fallers
NMC Health (NMC) 795.00p -2.09%
Evraz (EVR) 68.55p -1.44%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 85.90p -0.46%
Ladbrokes (LAD) 120.60p -0.41%
John Laing Infrastructure Fund Ltd (JLIF) 117.70p -0.34%
BH Macro Ltd. GBP Shares (BHMG) 2,007.00p -0.30%
P2P Global Investments (P2P) 850.00p -0.12%
Jimmy Choo (CHOO) 119.40p -0.00%
Electra Private Equity (ELTA) 3,326.00p 0.00% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks extend bounce, ride gains in oil higher European stocks continued pushing higher on Wednesday, as oil prices recovered and investors sifted through some well-received corporate news.
The benchmark DJ Stoxx Europe 600 index closed up by 2.61%, Germany's DAX was 2.7% higher and France's CAC 40 gained 2.99%.
Oil prices reversed early declines to trade higher after Iran's petroleum minister, Binjar Zangeneh, welcomed the previous day's agreement between Russia and Saudi Arabia to freeze their oil output, describing it as a "positive first step".
On Tuesday, Russia, Saudi Arabia, Venezuela and Qatar agreed to cap oil output at January levels - contingent on Iran and other producers agreeing to it - but this did little to boost prices as market participants had been expecting a production cut.
However, Zangeneh was non-commital on whether the Central Asian country would commit to freezing its own output.
Furthermore, Shargh daily newspaper quoted the country's OPEC envoy, Mehdi Asali, as saying: "Asking Iran to freeze its oil production level is illogical... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices."
Nevertheless, front-month Brent crude oil futures were up 6.9% at $34.57 a barrel on the ICE. This helped to push the Stoxx 600 oil and gas index up 3.21% to 252.1 points.
A gauge of bank stocks advanced 3.24% to 146.35.
Despite the upbeat tone in markets and the recovery in oil, analysts were sceptical.
Capital Economics said that while the deal was important at face value, with the four countries already signed up accounting for around a quarter of world production, there were reasons to be cautious.
The think-tank pointed to the fact the deal is dependent on others joining, and that its success also depends on Russia playing its full part.
Finally, it argued that even if total OPEC output can be capped at its January level, this would still be "exceptionally high".
On the corporate front, French bank Credit Agricole advanced after outlining plans to simplify its ownership structure.
Schneider Electric was also on the front foot. Although the company posted a drop in 2015, it also announced that it would speed up its share buyback programme.
Glencore rallied after it secured early refinancing of a $8.45bn loan facility.
Anglo American surged after Credit Suisse and Deutsche Bank lifted their targets on the stock.
AstraZeneca nudged higher after announcing that it has won fast-track US regulatory approval for a particular application of its most promising cancer drug, Durvalumab.
Sainsbury's was on the front foot after Exane BNP Paribas upgraded the stock to 'outperform' from 'neutral'. |
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| | US Market Report | | US open: Stocks gain ahead of Federal Reserve meeting minutes US stocks advanced on Wednesday as oil prices rose and investors weighed mixed economic data.
The Dow Jones Industrial Average increased 0.82%, the Nasdaq climbed 1.04% and the S&P 500 gained 0.92 at 1500 GMT.
Oil prices were on the rise on hopes that global oil producers would conclude a deal on freezing production after a key meeting in Iran. Iranian oil minister Bijan Zanganeh met his counterparts from Iraq, Venezuela and Qatar in Tehran on Wednesday.
West Texas Intermediate crude rose 2.2% to $29.71 per barrel and Brent gained 2.8% to $33.12 per barrel at 1507 GMT.
In economic data, industrial and manufacturing output figures from the Federal Reserve surprised to the upside. Industrial production was up 0.9% in January compared to a month ago, beating analysts' estimates for a 0.4% increase. Manufacturing output rose 0.5% month-on-month in January, ahead of forecasts for a 0.2% gain.
US housing starts figures were less impressive, falling 3.8% in January on the month, trailing estimates for a 2% rise, the Commerce Department revealed.
Mortgage applications in the US increased 8.2% in the week to 12 February, according to the Mortgage Bankers Association.
Still to come, the Federal Reserve releases the minutes of its 26-27 January policy meeting at 1900 GMT, providing more details on its decision to hold interest rates steady. The minutes may offer clues on the next policy change after it raised the benchmark interest rate in December for the first time in nearly a decade.
Among corporate stocks, Priceline gained after the travel website operator reported a rise in fourth quarter profit that surpassed expectations.
Fossil Group rallied after the watchmaker posted better-than-estimated quarterly results.
Kinder Morgan was sitting higher after Berkshire Hathaway disclosed a stake in the pipeline operator.
The dollar was higher against most main currencies, rising 0.21% versus the pound, 0.18% against the euro and 0.20% versus the yen. |
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| | Broker Tips | | Broker tips: Anglo American, Rolls Royce, Reckitt Benckiser Anglo American surged as Deutsche Bank and Credit Suisse lifted their targets on the stock following the company's full year results.
On Tuesday, Anglo outlined its promised "radical" overhaul as it announced a pre-tax loss of $5.5bn after $3.8bn of write-down since the half year. The company said it planned to reduce the core portfolio to 16 diamond, platinum group metals and copper assets and announced further cost-cutting measures.
Deutsche Bank raised the price target to 465p from 300p, saying four main issues have now been addressed: commitment to a lower gearing level; an intention to sell some of the bigger, higher quality assets for value; presentation of free cash flow scenarios if spot prices worsen; and most importantly, a higher cost cutting target for 2016.
"We could not have asked for a bigger or more detailed plan - but now we move to timely execution," it said, as it reiterated its 'hold' rating on the stock.
Meanwhile, Credit Suisse lifted its target on Anglo to 470p from 320p, keeping it at 'neutral' as it raised its estimates for 2016 following the results.
"The company needed to act decisively and the cost cutting targets are materially better than we and the market expected, equating to more than a 10% year-on-year reduction in 2016 (excluding FX)."
"If the company delivers on its promises the re-rating could continue, however industry deflation signals ongoing price risks, leverage is high and asset sales carry obvious execution risks."
Rolls Royce faces another challenging year in 2016, said Charles Stanley, although the broker kept its recommendation at 'hold' on Wednesday.
The company last week halved its final dividend to 7.1p per share as underlying full year profit before tax dropped 12% to £1.4bn. It marked the first dividend cut since 1992 and followed five profit warnings in the last two years. Annual group sales fell 1% to £13.4bn.
The marine division, exposed to falling oil prices, dragged on results. The civil aerospace unit was also under pressure as it tried to manage a transition from older, more profitable engines to new turbines.
Charles Stanley said the results were broadly in line with the lower end of City expectations.
"We anticipate another challenging year in 2016 with negative free cash flow stemming from lower profitability due to deterioration in the civil aftermarket (surplus spare parts), weak demand for corporate and business jet engines and continued pressure in offshore markets at Marine (oil price)," said analyst Tina Cook.
"The long-term value embedded in the civil aerospace business remains intact, but Rolls Royce will remain in a tough transition phase over the next few years."
Investec upgraded Reckitt Benckiser to 'hold' from 'sell' and lifted the price target to 6,600p from 5,210p following the company's full year results.
It said the 2015 numbers were comfortably ahead of both its forecasts and consensus expectations, led by another quarter of innovation-driven double-digit growth in Health, while mix, input cost tailwinds and strong cost control delivered better-than-expected margins in the second half.
The brokerage now forecasts organic sales growth of 5.1% in full year 2016, up from 4.2% previously and versus company guidance for between 4% and 5%.
It said Reckitt was one of the few companies in its coverage to be openly looking for acquisition opportunities, adding that this makes sense, given the company's competitive advantage in consumer health.
"Reckitt also has a good track record in terms of bedding in acquisitions, extracting cost synergies and generating revenue synergies and step changing the innovation."
However, it pointed out consolidation is an expensive business, noting Reckitt faces competitors with an equal appetite for these assets, which are in a similar position to generate synergies and are significantly bigger, "so any value destruction from bidding up has a relatively smaller dilutive impact".
Investec highlighted the fact the Pfizer-Allergan deal is due to close in the second half of this year, noting the media speculation as to whether Pfizer's consumer health business will come up for sale.
The brokerage reckons that in the event of a sale, Reckitt would be a likely bidder, but said that as things stand, any possible sale seems some way off with Pifzer indicating it will make a decision on this by end-2018. | | |
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