| | | | | | | | 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 lower as oil prices plunge, investors weigh data The FTSE 100 ended the week lower as oil prices plunged and as stronger-than-forecast US inflation increase the chances of an interest rate hike by the Federal Reserve.
Oil prices slid after data from the Energy Information Administration on Thursday showed US crude inventories rose by 2.1m barrels last week to a peak of 504.1m barrels. It marked the third week of record highs in the past month and added to concerns about the global oversupply.
Brent crude dropped 3.7% to $33.04 per barrel and West Texas Intermediate fell 4.6% to $29.39 per barrel.
US inflation rose more than expected in January as the fall in energy prices eased, the Bureau of Labor Statistics revealed on Friday. The consumer price index increased 1.4% year-on-year last month, beating analysts' estimates for 1.3% growth and marking a considerable pick-up from December's 0.7% gain.
"The pick-up in core CPI inflation to a three-and-a-half-year high of 2.2% in January, from 2.1%, illustrates that rising domestic price pressures won't allow the Federal Reserve to leave interest rates at near-zero levels for that much longer."
Closer to home, better-than-expected data on UK retail sales failed to lift sentiment. UK retail sales jumped 5.2% in January compared to the same month a year ago, beating analysts' estimates for a 3.4% increase. On the month retail sales rose 2.3% in January, surpassing forecasts for a 0.7% gain.
"After an underwhelming Christmas for British retail, economists will be encouraged to see the sector return to growth in January," said Dennis de Jong, managing director at UFX.com.
In company news, Sports Direct was under the cosh after Jefferies called on founder Mike Ashley to take the company private. The bank suggested Ashley use £400m of his own money and £1bn in loans to buy out investors holding the remaining 45% of the retailer.
Shares in Coca-Cola HBC soared after the company reported an increase in full year volumes and earnings despite foreign exchange having an adverse impact on revenues.
ITV gained after it received ministerial approval for its acquisition of UTV Media's television assets.
Essentra rallied after the plastic and fibre products firm saw full year revenue rise 27% on a constant currency to £1.1bn.
Invidior slumped a day after it said profits and sales fell by less than expected as the speciality pharmaceuticals business completed an encouraging first year as a public company since being demerged from Reckitt Benckiser. |
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| Market Movers
FTSE 100 (UKX) 5,939.67 -0.54%
FTSE 250 (MCX) 16,130.74 -0.28%
techMARK (TASX) 3,082.42 -0.34%
FTSE 100 - Risers
Fresnillo (FRES) 949.50p 3.15%
Coca-Cola HBC AG (CDI) (CCH) 1,413.00p 2.84%
Randgold Resources Ltd. (RRS) 6,355.00p 2.50%
Centrica (CNA) 211.10p 1.78%
Provident Financial (PFG) 3,212.00p 1.20%
Carnival (CCL) 3,313.00p 1.16%
Merlin Entertainments (MERL) 435.80p 1.09%
ITV (ITV) 252.20p 1.04%
Reckitt Benckiser Group (RB.) 6,552.00p 1.02%
GKN (GKN) 278.80p 0.98%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 641.00p -3.03%
Worldpay Group (WI) (WPG) 294.80p -2.96%
Sports Direct International (SPD) 399.70p -2.49%
Royal Bank of Scotland Group (RBS) 246.00p -2.34%
Royal Mail (RMG) 439.80p -2.09%
Old Mutual (OML) 171.10p -2.00%
Aberdeen Asset Management (ADN) 238.20p -1.89%
Tesco (TSCO) 183.30p -1.85%
Royal Dutch Shell 'B' (RDSB) 1,559.00p -1.76%
Standard Chartered (STAN) 414.60p -1.71%
FTSE 250 - Risers
Essentra (ESNT) 818.00p 9.73%
AO World (AO.) 181.40p 9.28%
Centamin (DI) (CEY) 85.65p 5.61%
Paddy Power Betfair (PPB) 10,060.00p 4.79%
Rightmove (RMV) 3,740.00p 3.54%
Acacia Mining (ACA) 231.40p 3.35%
Daejan Holdings (DJAN) 6,000.00p 3.18%
Poundland Group (PLND) 181.40p 3.07%
Sophos Group (SOPH) 213.00p 3.05%
Allied Minds (ALM) 324.50p 2.98%
FTSE 250 - Fallers
Indivior (INDV) 154.20p -9.82%
Tullow Oil (TLW) 159.90p -5.83%
Vedanta Resources (VED) 249.40p -5.28%
Evraz (EVR) 64.10p -5.18%
Ophir Energy (OPHR) 74.50p -4.36%
Amec Foster Wheeler (AMFW) 349.10p -4.22%
Jimmy Choo (CHOO) 118.60p -4.05%
Wood Group (John) (WG.) 569.00p -3.97%
Meggitt (MGGT) 377.80p -3.65%
Millennium & Copthorne Hotels (MLC) 377.00p -3.33% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Markets end week of gains in the red European stocks ended Friday weaker after a choppy start to the day, putting a dampener on a week of solid gains as traders cashed in their profits.
The benchmark Stoxx Europe 600 index was down 0.86% to 326.08, Germany's DAX was off 1.07% to 9,362.29 and France's CAC 40 was 0.6% weaker at 4,214.34.
"The winning streak that began late last week and followed through to the first half of this week has been snapped. US Oil back below $30 per barrel juxtaposed against a higher reading on US inflation have added complexity to the next move in US interest rates," said Jasper Lawler, markets analyst at CMC Markers.
"The correlation between equities and oil remains enduringly high."
Oil prices slid even further during late trading in Europe. They were already down significantly after data out Thursday from the US Energy Information showed crude inventories rose by 2.1m barrels last week to 504.1m barrels.
West Texas Intermediate was last down 4.95% to $29.32 a barrel while Brent crude was 3.97% weaker at $32.97. The Stoxx 600 oil and gas index fell 1.16%.
On the corporate front, Allianz slipped 1.73% after the German insurer's fourth quarter profit missed analysts' expectations.
Aegon slid 4.21% after the Dutch insurer's fourth quarter earnings missed consensus forecasts.
AstraZeneca dipped 1.37% despite saying the European Commission has granted marketing authorisation for its Zurampic and Brilique drugs.
Kering, which was in the black earlier in the session, ended the day down 0.56% despite the French luxury goods maker posting better-than-expected fourth quarter revenue.
Air Liquide was one of few in the black at the end of trading, up 0.81% as it continued to ride the news out late on Thursday that it was in talks with Iran to build a large propylene-via-methanol plant.
US inflation data for January came in the afternoon, and was better than consensus predictions. Year-on-year, the consumer price index rose 1.4%, up from 0.7% in December. Economists had picked a rise of 1.3%.
"The dollar is not pushing downgoods prices to the extent signalled by past experience, and that is allowing the clear upward trend in services inflation to drive up the aggregate," said Pantheon Macroeconomics chief economist Ian Shepherdson.
"Investors need to forget all about the idea that a strong dollar means you never need to worry about inflation, and quickly. A March rate hike is still on the table."
Eurozone consumer confidence also came in during the afternoon, and at -8.8 was markedly lower than January at -6.6. Economists had predicted the month's measure to come out at -6.3.
Investors also seemed spooked by figures from Destatis, out early in the day, which showed German producer prices fell more than expected in January.
They were down 0.7% in the first month of 2016, compared with a 0.5% drop in December. Economist predictions of a 0.3% decline were off by a wide margin. |
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| | US Market Report | | US open: Stocks mixed after US inflation rises more than expected US stocks were mixed on Friday as oil prices fell and US inflation came in stronger than estimated.
The Dow Jones Industrial fell 0.34% and the S&P 500 dipped 0.30% but the Nasdaq rose 12% at 1521 GMT.
Oil prices slid after data from the Energy Information Administration on Thursday showed US crude inventories rose by 2.1m barrels last week to a peak of 504.1m barrels. It marked the third week of record highs in the past month and added to concerns about the global oversupply.
West Texas Intermediate crude dropped 3.4% to $29.74 per barrel and Brent slipped 2.9% to $33.29 per barrel at 1519 GMT.
US inflation rose more than expected in January as the fall in energy prices eased, the Bureau of Labor Statistics revealed on Friday. The consumer price index increased 1.4% year-on-year last month, beating analysts' estimates for 1.3% growth and marking a considerable pick-up from December's 0.7% gain.
"The pick-up in core CPI inflation to a three-and-a-half-year high of 2.2% in January, from 2.1%, illustrates that rising domestic price pressures won't allow the Federal Reserve to leave interest rates at near-zero levels for that much longer."
The dollar was up 0.54% against the pound but fell 0.07% against the euro and 0.38% against the yen.
In corporate news, Deere & Co. was weaker after it posted a drop in net income for the first quarter and downgraded its outlook for the full year.
CommScope's shares rallied despite the company announcing it swung to a loss in the fourth quarter.
Applied Materials surged after the chip equipment provider sounded an upbeat note on its profit outlook.
TrueCar plunged as the car-shopping website posted results and revenue outlook that missed analysts' expectations.
Weight Watchers International rallied after a study by the Indiana University School of Medicine showed that Weight Watchers could help prevent diabetes. |
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| | Broker Tips | | Broker tips: Segro, Tullow Oil, BBA Aviation Segro's shares climbed on Friday as Investec reiterated a 'buy' rating, hailing the company's full year results.
The property developer reported its full year net asset value (NAV) rose 21% to 463p a share, while pre-tax profits increased to £686.5m from £654m.
The company said its operating and portfolio performance reflected the active management of its assets, positive market dynamics and the strategic repositioning of its portfolio, which was now almost exclusively focused on industrial and logistics properties.
"Strong numbers (NAV, earnings and dividend are all ahead), impressive operational metrics (4.8% vacancy rate) and a robust balance sheet. Segro's refocused portfolio continues to benefit from structural growth (e-commerce-driven supply chain optimisation) and the cyclical recovery," said Investec analyst Alison Watson.
"We expect this to deliver an above sector average NAV growth outlook. This is coupled with an attractive above sector average dividend yield (3.8% vs 3.2% av). SEGRO has outperformed year-to-date, but de-rated from a 5.8% premium to a 4.1% discount to spot NAV over this period (post 2007 av: 10.3% discount). Reiterate 'buy'."
The target was left at 490p.
Charles Stanley upgraded Tullow Oil to 'hold' from 'sell' given the sharp drop in the share price and potential de-gearing.
The brokerage noted the shares are down 58% over 12 months.
Charles Stanley said that with net debt of $4bn, Tullow has facility headroom of $1.9bn, while banking discussions with regard to March 2016 re-determination have begun.
With an oil price at $34 per barrel and 2016 capital expenditure plans still high, net debt will likely rise again this year, it said, although it pointed out that Tullow acted very early to reset the business to a low oil price environment.
"The TEN project (offshore Ghana) begins production and assuming a recovery in the oil price to $40 per barrel, Tullow could begin to reduce its level of net borrowings in 2017. Further spending reductions ($0.3bn capex is possible in 2017) and disposals could help to de-gear the balance sheet."
It said Tullow has benefited from a strong hedging position, which will continue to lend support this year and the next.
Last year, the realised oil price net of hedging was $67 a barrel compared to a market price of $52 and this year, about 52% of production is hedged at $75 per barrel.
Still, it said the shares remain relatively high risk given volatility and uncertainty surrounding the oil price.
Investec initiated its coverage on BBA Aviation with a 'buy' rating and a target of 225p on Friday.
The broker said the stock has performed poorly since its proposed acquisition of Landmark Aviation was announced last September, "which we believe is largely due to concerns over business and general aviation movements and leverage".
"We address both issues, and highlight that the economic outlook for BBA looks considerably better for the company than for the wider US business jet market," said analyst Sam Bland.
Investec sees BBA Aviation as attractively valued for investors that are bullish on the US economy, Bland said.
The analyst added that while Investec was cautious on the progress of the US economy, it doesn't expect a major slowdown yet.
"Any change to this outlook would cause us to revisit our investment case," Bland said. | | |
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