| | | | | | | | 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: Stocks slide after China inflation miss UK stocks slumped on Thursday as Chinese inflation figures missed forecasts and as a Bank of England policymaker pushed back against some market expectations for a 2019 interest rate hike.
China's consumer inflation increased 1.8% year-on-year in January, compared to 1.6% in December. While it marked an improvement on the previous month, it missed analysts' estimates of 1.9%.
"The pick-up in inflation last month was mostly seasonal," Capital Economics said, referring to the benefits of the Lunar New Year holiday. "That said, underlying price pressures also appear to be edging up which ought to ease deflation concerns."
Meanwhile, BoE deputy governor for financial stability Jon Cunliffe said market pricing for an interest rate in 2019 was not his central view.
Amid risks of a global economic slowdown some analysts have anticipated an increase in borrowing costs would not come for another three years and have seen a case for a rate cut.
"I can't see anything in the economic news over the last three-to-four weeks that would lead to a shift like that," Cunliffe said at an event in Brussels.
"My big picture of the world, I think, hasn't changed with the market-yield curve. I think we are, particularly in the last couple of years, we are in the slow healing process from a financial bust."
The pound strengthened 0.20% at $1.43 at 1643 GMT.
In commodities, the rally in oil prices receded as government data showed a rise in US crude stockpiles. The Energy Information Administration reported crude inventories increased by 2.1 million barrels in the last week, compared to analysts' expectations for a rise of 3.9 million barrels.
The report came in contrast to data from the American Petroleum Institute which showed crude stocks unexpectedly fell by 3.3 million barrels last week.
Brent crude fell 0.46% to $34.34 per barrel and West Texas Intermediate rose 0.45% to $30.80 per barrel at 1648 GMT.
In the US, the Department of Labor showed the number of jobless claims fell by 7,000 to 262,000 in the week ending 13 February. This marked a three-month low and was much better than economists' expectations for a 6,000 increase to 275,000.
The US Conference Board's leading economic indicators fell 0.2% to 123.2 in Janury, in line with consensus forecasts and following a 0.3% decrease in December and a 0.5% increase in November.
Manufacturing conditions in the Philadelphia region remained weak in February, albeit not as bad as expected, according to the latest report from the Federal Reserve Bank of Philadelphia. The diffusion index for current activity rose to -2.8 from -3.5 in January, slightly ahead of consensus estimates for a reading of -3 but marking the sixth consecutive month in negative territory. A reading below zero signals a contraction.
On the company front, Anglo American was under the cosh after its credit rating was downgraded to junk for the third time this week, this time by Standard & Poor's. S&P cut the rating to BB from BBB- with a stable outlook. Fitch had cut it to BB+ from BBB- on Wednesday, while Moody's had downgraded it three notches to Ba3 on Monday.
Centrica's shares gained after it reported full year results that beat expectations.
Pharmaceutical giants AstraZeneca and GlaxoSmithKline were firmly lower as they went ex-dividend, while Standard Life slipped ahead of its full year results on Friday.
BAE Systems rallied after posting full year results that were in line with analysts' forecasts and issued guidance that underlying earnings per share will rise between 5-10% in 2016 as it enters a what it says is an improved business environment.
Go-Ahead was higher after reporting a solid performance across most of its operations in the six months to 26 December with a 6.8% rise in overall revenue to £1.67bn.
Indivior edged higher after reporting a better-than-expected drop in profit in sales in the first full year since being demerged from Reckitt Benckiser.
Tullow Oil tumbled after the oil and gas exploration company said it had identified a potential issue with the turret bearing on the vessel serving its Jubilee field offshore Ghana. |
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| Market Movers
FTSE 100 (UKX) 5,974.54 -0.92%
FTSE 250 (MCX) 16,187.62 0.19%
techMARK (TASX) 3,094.17 -0.14%
FTSE 100 - Risers
Centrica (CNA) 208.00p 7.16%
Rolls-Royce Holdings (RR.) 661.00p 4.67%
International Consolidated Airlines Group SA (CDI) (IAG) 541.50p 2.56%
Persimmon (PSN) 2,045.00p 2.35%
Berkeley Group Holdings (The) (BKG) 3,370.00p 2.25%
Barratt Developments (BDEV) 583.50p 2.01%
Taylor Wimpey (TW.) 183.10p 1.95%
Fresnillo (FRES) 919.00p 1.43%
Randgold Resources Ltd. (RRS) 6,205.00p 1.39%
BAE Systems (BA.) 505.50p 1.24%
FTSE 100 - Fallers
Anglo American (AAL) 432.00p -7.70%
Standard Chartered (STAN) 421.80p -5.48%
Barclays (BARC) 161.75p -3.81%
AstraZeneca (AZN) 4,129.50p -3.51%
Rio Tinto (RIO) 1,888.50p -3.20%
GlaxoSmithKline (GSK) 1,380.00p -3.09%
Royal Dutch Shell 'B' (RDSB) 1,587.00p -3.00%
Royal Dutch Shell 'A' (RDSA) 1,594.00p -2.92%
Sports Direct International (SPD) 409.90p -2.31%
Standard Life (SL.) 338.50p -2.25%
FTSE 250 - Risers
Indivior (INDV) 171.20p 15.91%
Allied Minds (ALM) 318.00p 10.19%
Poundland Group (PLND) 175.80p 7.33%
Go-Ahead Group (GOG) 2,384.00p 6.00%
Nostrum Oil & Gas (NOG) 271.80p 5.92%
Henderson Group (HGG) 231.60p 5.61%
Aveva Group (AVV) 1,415.00p 5.44%
Dechra Pharmaceuticals (DPH) 1,074.00p 4.99%
Countrywide (CWD) 333.70p 4.35%
Cable & Wireless Communications (CWC) 73.35p 4.04%
FTSE 250 - Fallers
Tullow Oil (TLW) 169.80p -11.29%
Petrofac Ltd. (PFC) 745.00p -5.04%
Amec Foster Wheeler (AMFW) 364.50p -4.33%
Millennium & Copthorne Hotels (MLC) 390.00p -3.37%
Mediclinic International (MDC) 873.00p -3.32%
Just Retirement Group (JRG) 125.00p -3.10%
Acacia Mining (ACA) 223.90p -3.07%
Just Eat (JE.) 360.50p -2.88%
Synthomer (SYNT) 290.00p -2.82% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks finish lower in profit-taking European stocks ended on a mixed note on Thursday despite well-received corporate news, amid profit-taking following several sessions of gains.
The benchmark DJ Stoxx 600 index edged up by 0.04% to 328.91, France's CAC 40 was up 0.15% to 4,239.76, while Germany's DAX was 0.92% higher to 9,463.64.
Out on the periphery however, the situation was more downbeat, with Spain's Ibex 35 sporting losses of 0.83% by the close and the FTSE Mibtel retreating 1.53% to 17,112.36.
Markus Huber, senior analyst at Peregrine & Black, said while sentiment has turned positive from neutral over the last couple of days, much of the rebound so far has been caused by bargain hunting rather than any actual fundamental change as far as the outlook for global growth and corporate profits is concerned.
"Although being overbought in the short-term, momentum still seems to be strong with traders preferring to buy dips for now," he said.
Oil prices were in the black, staying positive following a surge in the previous session after Iran unexpectedly backed Saudi Arabia and Russia's plan to freeze production at January levels. Still, Iran did not offer to take any action itself.
West Texas Intermediate was up 0.81% at $30.91 a barrel and Brent crude was 0.52% firmer at $34.68.
On the corporate front, British Gas owner Centrica rallied after its full year earnings beat analysts' expectations.
BAE Systems was also on the front foot its 2015 results met expectations and the aerospace and defence group issued guidance that underlying earnings per share will rise 5% to 10% in 2016.
Air France-KLM flew higher after saying it swung to a profit in 2015, while hotels group Accor gained after posting a profit increase of nearly 11% for 2015.
On the downside, Nestle slumped after reporting a 37% decline in net profit for 2015.
Figures released by the European Central Bank earlier showed the current account surplus in the Eurozone narrowed in December.
The current account balance revealed a surplus of €25.5bn in adjusted terms compared with a revised €26.9bn the previous month.
Surpluses for goods, services and primary income were partially offset by a deficit in secondary income. |
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| | US Market Report | | US open: Stocks rise as oil prices surge; weekly jobless claims fall US stocks advanced on Thursday as oil prices rose and as jobs data showed an unexpected drop in weekly unemployment claims.
The Dow Jones Industrial Average rose 0.29%, the Nasdaq rallied 2.48% and the S&P 500 climbed 0.11% at the opening bell.
Oil prices surged after Iran unexpectedly welcomed Saudi Arabia and Russia's plan to freeze production at January levels. However, Iran did not offer to take any action itself.
West Texas Intermediate crude jumped 3.3% to $31.73 per barrel and Brent crude increased 2.8% to $35.50 per barrel at 1415 GMT.
"Despite the fact that many members have nodded to keep their production at January levels or in other words at their record levels, the supply and demand equation will take some time to balance," said Naeem Aslam, chief market analyst at AvaTrade.
"The Brent price has failed to break above its recent high of $36 despite the recent OPEC meeting. It appears that the price requires an astounding catalyst to break above this level and the upcoming crude inventory data due today could provide this."
The Energy Information Administration will report crude oil stocks data at 1600 GMT.
Meanwhile, the Labor Department revealed jobless claims fell 7,000 to 262,000 in the week ending 13 February. This marked a three-month low and was much better than economists' expectations for a 6,000 increase to 275,000.
Pantheon Macroeconomics said: "It's too soon to draw any definitive conclusions, but we think the data are consistent with the idea that the underlying trend in claims is more or less steady in the low 270s. Job losses among exporters and the oil sector are too small to make much difference to the aggregate number, given the strength of the domestic services economy."
Less inspiring figures from the Federal Reserve Bank of Philadelphia showed manufacturing conditions in the Philadelphia region remained weak in February, albeit not as bad as expected. The diffusion index for current activity rose to -2.8 from -3.5 in January, slightly ahead of consensus estimates for a reading of -3 but marking the sixth consecutive month in negative territory. A reading below zero signals a contraction.
In corporate news, IBM was on the front foot after Morgan Stanley upgraded the stock to 'overweight'.
Chip maker Nvidia was also in the black after its full year revenue beat expectations.
On the downside, Wal-Mart shares slumped in pre-market trade after the retailer's fourth quarter sales missed expectations.
Perrigo was also under pressure after the drug maker's fourth quarter profit fell short of analysts' estimates. |
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| | Broker Tips | | Broker tips: Glencore, Rolls-Royce, Hammerson Glencore's shares declined on Thursday after Citi cut its target to £1.40 from £1.50, reflecting lower commodity price forecasts.
Citi said its estimates for 2016 earnings before interest, tax, depreciation and amortisation falls by 5.1% to $7.8bn (£5.35bn).
Glencore is expected to generate free cash flow of $3.8bn in 2016. Net debt is forecast to come in at $25.4bn for 2015 and $20.8bn by the end of 2016 compared to the company's target of $18-19bn.
Citi hailed Glencore's early refinancing of a $8.45bn loan facility which was due to expire in May.
"We think it is a positive step and shows the commitment of the banks to Glencore and also removes some near-term liquidity concerns. Our NPV declines to £2.70 from £2.90; we lower our TP to £1.40 from £1.60. Buy," said Citi analyst Heath Jansen.
JPMorgan Cazenove upgraded Rolls-Royce to 'neutral' from 'underweight' and lifted the price target to 690p from 395p.
It said although many headwinds remain, news flow over the next six months is biased to the positive.
JPM said it had been expecting the aerospace and defence group to cut its guidance when it reported last week.
However, this was not the case and management was more prudent with its November 2015 guidance than JPM thought.
Last week, Rolls-Royce cut its final dividend by 50% - the first dividend cut in 25 years - as it announced a drop in full year underlying profit that was not as bad as some had feared.
"We cannot rule out further EPS downgrades if macro conditions deteriorate, and/or certain industry trends deteriorate (eg. the number of parked RR aero engines increases); but this looks much less likely in the next six months," JPM said.
It said that while RR looks very expensive based on its depressed earnings in the next few years, many investors now appear willing to value the stock on potentially much higher profits towards the end of this decade or early the next.
JPMorgan said the company's new management was making progress, with financial disclosure and communications with investors and analysts improving.
"A new cost reduction plan is in place; however, we think much greater cost reduction is needed if RR is to achieve its 2020-2025 profit targets."
Exane BNP Paribas downgraded Hammerson to 'neutral' from 'outperform' and cut the price target 9% to 260p, saying balance sheet constraints will cap future earnings growth.
It noted the company has delivered the leading funds from operations/share growth amongst its peers since becoming a retail specialist REIT.
However, Exane argued that this was no longer sustainable due to a balance sheet which is now stretched relative to self-imposed loan-to-value and net debt/EBITDA limits.
"We see FFO growth slowing rapidly post- 2016 as disposals are used to fund long-dated development projects," it said.
The bank said an estimated 2016 funds from operations yield of 5.2%, growing at 4% compound annual growth rate is no stand-out in terms of income attractiveness.
"Below average total returns also provide little reason for a re-rating on NAV grounds. As such, we struggle to make the case for owning Hammerson over Klepierre at this point in the cycle and downgrade to neutral." | | |
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