| | | | | | | | 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: LSE leads FTSE higher on merger reports The FTSE 100 finished higher on Tuesday, led by the London Stock Exchange after the Intercontinental Exchange confirmed it was considering making a bid for the UK exchange to rival Deutsche Boerse's.
ICE, which owns the New York Stock Exchange, said no approach has been made to the LSE yet.
LSE confirmed it had not received a proposal from ICE and that it was still in discussions with Deutsche Boerse regarding a potential merger.
"Those buying into LSE are hoping that a bigger US appetite for LSE's operations will be rewarded with an even higher offer than the £20bn merger of equals with DB that is currently on the table and which would result in the biggest exchange in Europe; a genuine rival to US markets," said Mike van Dulken, head of research at Accendo Markets.
Meanwhile, investors shrugged off a disappointing manufacturing data in the UK and in China.
The Markit/CIPS manufacturing purchasing managers' index, measuring sector activity in the UK, fell to 50.8 in February from 52.9 in January. It was below economists' expectations for a reading of 52.2 and marked the lowest reading since April 2013. Still, it remained just above the 50 mark that separates expansion from contraction.
"The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England's increasingly dovish stance," said Rob Dobson, senior economist at Markit.
The official China manufacturing PMI dropped to 49.0 in February from 49.4 in January, surprising analysts who had expected no change. Caixin's PMI on manufacturing was released the same day, also showing a worse-than-expected drop. The PMI fell to 48.0 in February from 48.4 in January. Economists had pencilled in an unchanged reading.
In contrast, Markit's Eurozone manufacturing PMI was revised higher at 51.2 in February from a flash estimate of 51.0, ahead of analysts' projections for no change. However it marked a slowdown from the previous month's reading of 52.3.
The unemployment rate in the Eurozone fell to 10.3% in January from 10.4% the month before, better than forecasts for it to remain the same and the lowest level since 2011, giving the European Central Bank some positive news to weigh against poor inflation and confidence data.
In the US, Markit's manufacturing PMI was revised higher than expected in February to a reading of 51.3 from a previous estimate of 51.0. The index was a touch higher than analysts' forecasts of 51.2 but marked a slowdown from 52.4 in January.
The Institute of Supply Management's PMI on manufacturing rose to 49.5 in February from 48.2 in January, beating analysts' estimates of 48.5. US construction spending data also surpassed forecasts. Spending increased by 1.5% on the month to a seasonally-adjusted rate of $1.14bn in January, compared to economists' expectations for a 0.4% rise, the Commerce Department revealed.
Oil prices snapped an earlier rally with Brent crude falling 0.57% to $36.36 per barrel and West Texas Intermediate crude rising 0.29% to $33.85 per barrel at 1635 GMT.
In company news, insurer Direct Line was a high riser after it said gross written premiums from ongoing operations rose 1.7% in 2015 to £3.5bn. The company saw 4.8% growth in its motor division for the year and 7.1% in the fourth quarter.
Rio Tinto gained after the miner said it has sold its 40% interest in the Bengalla coal joint venture in Australia for US$616.7m (£443m).
Equipment rental firm Ashtead slumped as analysts pointed to concerns over the company's plans to cut capital expenditure next year, as it reported a jump in third quarter profit.
Barclays also suffered heavy losses after it confirmed plans to sell its African business as it announced a drop in full year profit and a large cut to the dividend. |
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| Market Movers
FTSE 100 (UKX) 6,147.61 0.83%
FTSE 250 (MCX) 16,789.49 1.12%
techMARK (TASX) 3,209.03 0.58%
FTSE 100 - Risers
London Stock Exchange Group (LSE) 2,866.00p 7.02%
Direct Line Insurance Group (DLG) 409.60p 5.40%
Legal & General Group (LGEN) 236.30p 4.10%
Worldpay Group (WI) (WPG) 298.60p 4.08%
Prudential (PRU) 1,305.00p 3.78%
Hargreaves Lansdown (HL.) 1,282.00p 3.47%
Aviva (AV.) 452.70p 3.31%
Old Mutual (OML) 175.50p 3.05%
Whitbread (WTB) 4,040.00p 3.03%
Land Securities Group (LAND) 1,039.00p 2.97%
FTSE 100 - Fallers
Ashtead Group (AHT) 844.50p -8.60%
Barclays (BARC) 158.10p -8.11%
Fresnillo (FRES) 938.00p -6.20%
Hikma Pharmaceuticals (HIK) 1,815.00p -3.51%
Randgold Resources Ltd. (RRS) 6,325.00p -2.47%
Glencore (GLEN) 130.50p -2.06%
Royal Bank of Scotland Group (RBS) 220.40p -1.56%
Antofagasta (ANTO) 490.40p -0.73%
BAE Systems (BA.) 510.00p -0.58%
AstraZeneca (AZN) 4,085.50p -0.52%
FTSE 250 - Risers
Greggs (GRG) 1,196.00p 15.56%
Rotork (ROR) 178.70p 12.04%
Allied Minds (ALM) 336.80p 11.49%
Serco Group (SRP) 101.80p 8.88%
Entertainment One Limited (ETO) 171.80p 8.67%
Drax Group (DRX) 246.70p 5.97%
Centamin (DI) (CEY) 97.60p 5.40%
Pets at Home Group (PETS) 279.10p 4.92%
Sophos Group (SOPH) 220.90p 4.69%
Vesuvius (VSVS) 313.50p 4.50%
FTSE 250 - Fallers
Lancashire Holdings Limited (LRE) 552.50p -6.44%
Ocado Group (OCDO) 247.00p -5.00%
International Personal Finance (IPF) 256.00p -4.44%
BGEO Group (BGEO) 1,920.00p -3.52%
St. Modwen Properties (SMP) 317.00p -3.00%
Paddy Power Betfair (PPB) 10,550.00p -2.31%
Enterprise Inns (ETI) 85.05p -2.30%
DFS Furniture (DFS) 312.10p -2.19%
Greencore Group (GNC) 373.20p -1.89% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks jump as S&P 500, US dollar, oil futures gain altitude European stocks pushed higher on Tuesday, shrugging of some weak readings on Chinese manufacturing as stronger oil prices and deal news helped to underpin the mood.
The benchmark DJ Stoxx Europe 600 index finished higher by 1.44%, Germany's DAX was 2.34% firmer and France's CAC 40 gained 1.22%.
West Texas Intermediate crude oil futures rose 2.2% to $34.51 a barrel while Brent crude was 1.48% firmer at $37.12. The Stoxx 600 oil and gas index finished 0.88% higher.
Stocks in Asia ended in the black despite softer-than-expected readings on China's manufacturing sector as investors continued to cheer the People's Bank of China's cut to the reserve requirement ratio and amid stronger oil prices.
The official manufacturing PMI from China's National Bureau of Statistics also disappointed, falling to 49.0 versus 49.4 the month before and forecasts for the same.
"Despite the poor numbers, the major indices across Asia managed to post some fairly solid gains, helping Europe to lift its positive start to the week and push the major European stock markets towards monthly highs. A solid oil price and a raft of M&A data have helped the stocks to push on," said James Hughes, chief market analyst at GKFX.
ISM data drives gains in S&P 500, US dollar
A better than expected reading on the state of the US factory sector also boosted sentiment, driving gains in the dollar alonsgide another move higher in the benchmark S&P 500.
The Institute for Supply Management's manufacturing sector purchasing managers' index edged higher to a reading of 49.5% from 48.2% in the month before. Economists had been expecting a print of 48.5%.
"More evidence that talk of a manufacturing recession - or, even more extreme, a broad recession triggered by a manufacturing downturn - is off the mark. To be clear, this is not a robust report, and we have no real hopes of a sustained strong rebound this year. But the hits from the strong dollar, the slowdown in China and the collapse in capex in the oil sector are all diminishing," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
LSE's suitors lining up
Deal news provided a boost in Europe, with shares in London Stock Exchange sharply higher after Intercontinental Exchange confirmed that it was considering making a bid for the UK exchange to rival Deutsche Boerse's.
In addition, the Wall Street Journal reported on Tuesday that CME Group, which operates the Chicago Mercantile Exchange, was also mulling a takeover bid for LSE.
On the downside, Barclays slumped after announcing a drop in full year profit and a large cut to the dividend. For the year to 31 December, adjusted pre-tax profit slipped 2% to £5.4bn compared with analysts' expectations for around £5.8bn.
Glencore slid after posting a 69% drop in net income for 2015 on the back of weaker commodity prices.
On the data front, there was some encouraging news on Eurozone unemployment.
Figures from Eurostat showed unemployment fell to 10.3% in January from 10.4% the month before, better than forecasts for it to remain the same and the lowest level since 2011.
"After two months of consecutive falls, Mario Draghi will be relieved to see employment data in the Eurozone improve, thanks largely to solid figures from Germany," said Dennis de Jong, managing director at UFX.com.
"The ECB president won't be getting carried away, however, as in the last week alone he has seen particularly poor inflation and confidence data. Wednesday's producer price index numbers are also expected to follow suit."
Data on manufacturing was less inspiring, however. Markit's final Eurozone manufacturing PMI came in at 51.2 in February, up a touch from the flash estimate of 51, but weaker than January's reading of 52.3.
This marked a 12-month low, although the index has remained above the neutral 50 mark for 32 successive months. |
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| | US Market Report | | US open: Stocks rise on better-than-expected US data US stocks rose on Tuesday as better-than-expected manufacturing data in the nation offset a reversal in oil prices.
The Dow Jones Industrial Average rose 0.61%, the Nasdaq increased 0.97% and the S&P 500 gained 0.76% at 1516 GMT.
Markit's US manufacturing purchasing managers' index was revised higher than expected in February to a reading of 51.3 from a previous estimate of 51.0. The index was a touch higher than analysts' forecasts of 51.2 but marked a slowdown from 52.4 in January. A reading above 50 signals expansion while a reading below that indicates a contraction.
The Institute of Supply Management's PMI on manufacturing rose to 49.5 in February from 48.2 in January, beating analysts' estimates of 48.5.
US construction spending data also surpassed forecasts. Spending increased by 1.5% on the month to a seasonally-adjusted rate of $1.14bn in January, compared to economists' expectations for a 0.4% rise, the Commerce Department revealed.
In China, the official manufacturing PMI dropped to 49.0 in February from 49.4 in January, surprising analysts who had expected no change.
Caixin's PMI on manufacturing was released the same day, also showing a worse-than-expected drop. The PMI fell to 48.0 in February from 48.4 in January. Economists had pencilled in an unchanged reading.
However, analysts continued to cheer Monday's decision by China's central bank to cut the required reserve ratio (RRR) for banks by 50 basis points.
Meanwhile, oil prices snapped the rally with Brent crude falling 0.55% to $36.37 per barrel and West Texas Intermediate crude rising 0.23% to $33.83 per barrel at 1522 GMT.
"Whilst a reversal of Brent Crude's $37 per barrel-eyeing growth briefly threatened the global gains a better than expected pair of US manufacturing PMIs gave the market a shot in the arm, ensuring the muscular gains from the morning continued," said Connor Campbell, financial analyst at Spreadex.
New York Federal Reserve President William Dudley on Monday said he remained cautious about raising interest rates in the near term as weaker oil prices weigh on inflation, potentially setting off slowdown in economic growth.
On the company front, Hertz Global was firmer after the car rental company said it swung to a profit in the fourth quarter.
Valeant Pharmaceuticals shares rose, bouncing back from huge losses in the previous session after it confirmed it was under investigation by the Securities and Exchange Commission and withdrew its financial guidance for 2016.
SunEdison tumbled after the renewable energy developer delayed the release of 2015 results, in part due to an internal inquiry over the accuracy of its financial status.
Marathon Oil was also in the red after saying it plans to sell as much as $1.23bn of stock to strengthen its balance sheet. Intercontinental Exchange, which owns the New York Stock Exchange, will likely be in focus after confirming it is considering making a bid for London Stock Exchange to rival Deutsche Boerse's.
Marvell Technology Group jumped after the semiconductor company said it "no fraudulent activity" following an investigation into accounting and internal control matters. |
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| | Broker Tips | | Broker tips: Moneysupermarket, Genel Energy, ITV Moneysupermarket.com was given a boost on Tuesday as Canaccord Genuity lifted its target to 352p from 342p and left its rating at 'hold' after the company reported a rise in full year profit and revenue.
For the year to the end of December, the price comparison service said statutory profit after tax grew 20% to £63.4m as revenue pushed up 14% to £281.7m.
Moneysupermarket pointed to particularly strong growth in the Money and Home Services businesses, while growth in Insurance was lower as a result of strong second half comparatives in the previous year and tougher competition.
Adjusted earnings per share came in at 14.5p from 12.3p the previous year and the group said it will pay a final dividend of 6.6p per share, taking the total dividend for the year to 9.15p from 8p in 2014.
The company said it remained confident of delivering its expectations for the year. The company traded solidly to the end of February, delivering 12% growth, although insurance revenue was down 4% and travel is deteriorating.
"Nonetheless, given continued strong growth in Money, which accounts for 27% of group revenues and rising, we are nudging up our forecasts, with EBITA up from £103.9m to £105.1m," said Investec analyst Simon Davies.
"This drives a 1% uplift in EPS from 15.0p to 15.1p."
The analyst said there was definite scope for further cash returns as Moneysupermarket.com remains committed to a progressive dividend policy and ongoing monitoring of the appropriate capital structure.
The increase in the target represents a 15.0x full year 2017 enterprise value/EBITDA, and 21.2x cash adjusted price earnings ratio.
Citigroup downgraded Genel Energy to 'neutral' from 'buy' and slashed the price target to 120p from 253p.
It pointed to the fact the company has reduced the expected gross ultimate recovery from its Taq Taq field in Iraqi Kurdistan on the back of revised assumptions on the fracture porosity within the Shiranish reservoir at the field.
On Monday, Genel downgraded its assumptions for Taq Taq - its largest oil field - to 356m barrels of oil from 683m.
As a result of the reserve downgrade, Genel also said it expects to record an impairment of around $1bn due to a lower carrying value for the Taq Taq field in its full year 2015 results, which is around 28% of its current equity value.
"Our 'buy' case on Genel was based on a view that despite the political uncertainties in the Kurdistan region, Genel held a significant low cost resource base that was undervalued and remained relevant to the wider industry," Citigroup said.
However, Monday's news changes this investment thesis and makes it more challenging for Genel to fund its Miran gas development, Citi said.
"With continued political uncertainty (and ongoing pipeline issues), we believe Genel could trade at a discount to core NAV in the near-term."
Goldman Sachs marked down its valuation of ITV's shares as a result of the recent de-rating in its US peers and cut the M&A premium it attached to them, although it still saw the company as a potential takeover target.
Interestingly, the broker lowered its 12-month target on the stock from 329p to 297p, in part as it lowered the M&A premium on the stock's valuation from 50% to 30%, with the rest of the shares' value, 70%, now being a function of the company's fundamentals.
The latter also came down as a result of the de-rating of ITV's US peers and was set at 14.5 times' the estimated 2017 P/E, down from 15 times.
"We see more limited NT upside given the lack of major positive earnings momentum and the de-rating of US peers," Goldman said.
The broker also downgraded the stock to 'neutral' and removed it from its Pan-Europe Buy list.
Nonetheless, at a price-to-earnings multiple for 2016 of 12.8 the shares were not "expensive", the analysts said.
Furthermore, the trend towards a rising value of content and convergence between telcos and media made the company a potential M&A target, Goldman said.
Weak prospects for advertising and poor ratings were also set to weigh on programming costs at ITV, Goldman Sachs said in a research note sent to clients.
The latter had seen ITV's audience decline by 4%-5% in 2014/15, while the end of major shows - such as Downton Abbey or Mr.Selfridge - and a change in the Director of Television might result in greater programming reinvestment in the near-term, the broker said.
Nonetheless, the shares were up by 432% since being added to Goldman's Buy list on 12 October 2009, versus an advance of 9.8% for the FTSE World Europe benchmark, analysts Lisa Yang, Otilia Bologan, Sarah Watson and Katherine Tait said in a research note sent to clients.
Goldman was in-line with the company consensus, anticipating 2015 NAR growth of 5.6%, programming costs of £1040m and earnings per share of 16.1p.
However, the broker saw upside to forecasts for ordinary dividends of 5.9p plus an extraordinary pay-out of 7.8p.
For the first quarter of 2015, Goldman anticipated NAR would grow by 1% and for all of 2016 by 3%. The latter was down from a previous projection for a rate of growth of 4.5% and below the consensus estimate for 3.8%.
Programming costs in the first three months of the year were pegged at £1057m.
Earnings per share were now seen reaching 17.8p, 5% less than previously (consensus: 18p).
ITV was also "structurally well-positioned" and had "strong" management, the analysts wrote. | | |
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