| | | | | | | 10 Ways to Generate Income in Retirement If you have a £250,000 portfolio, download the guide by Forbes columnist and money manager Ken Fisher's firm. It's called "The Definitive Guide to Retirement Income." Click Here to Download Your Guide! Fisher Investments UK 
| | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Monday malaise stifles FTSE as House of Lords debates Brexit bill Equities in London turned in a Monday performance laden with malaise, with Unilever a notable faller as its bid premium evaporated, the US was closed for Presidents Day holiday and lively Brexit discussions began in the UK House of Lords.
The FTSE 100 closed down 0.0% to 7,299.86 and the FTSE 250 ended up 0.21% to 18,746.22. Across Europe, the Euro Stoxx 50 and DAX were up, but the CAC 40 slipped.
"A day without US traders is usually a day for twiddling thumbs in European markets, and today has been no exception," said Chris Beauchamp, chief market analyst at IG.
"Friday's bounce in risk assets has seen no real follow through across European and UK bourses," he said, noting the focus on Unilever.
Unilever sank more than 6% as Kraft Heinz ditched its takeover plans, just two days after it emerged the London-listed consumer goods giant had rejected a $143bn offer.
Unsurprisingly, the FTSE 350 index for personal goods, which features Unilever, was down more than 5%. It was followed by drops of roughly 1% by the 350 indices for household goods and food producers, while that for miners rose by more than 1%.
Blue-chip stocks figuring lower included Reckitt Benckiser, Imperial Brands, Coca-Cola HBC and Tesco. Also falling were housebuilders led by Barratt Developments, and utilities guided by Severn Trent.
Of those heading higher were Royal Bank of Scotland, Rolls-Royce and Hammerson. Miners were led up by Antofagasta and Glencore, and were followed by several insurers and banks.
Meantime, it was the House of Lords' discussion on UK's Brexit Bill that traders focused on, with Prime Minister Theresa May needing this to be passed into law before she can trigger Article 50 of the Lisbon Treaty.
Once that was triggered, UK would have up to two years before it finally quit the bloc, this following last year's divisive referendum that laid the foundations.
"Whilst Parliament decided it was largely down to the Prime Minister to decide when to enact Article 50, there are fears that the House of Lords will attempt to make amendments," said another from IG, market analyst Joshua Mahony.
Overall, however, SpreadEx financial analyst Connor Campbell summed it up when he said that the FTSE was broadly flat, struggling with both Unilever's decline and the pound's rebound.
"Talking of sterling, the currency maintained a half a percent rise against the dollar (likely affected by the US holiday) and 0.3% against the arguably Greece-worried euro," Campbell said.
In corporate news, house-builder Bovis Homes slumped after it reported a 3% drop in full-year pre-tax profit to £155m that fell short of analysts' expectations.
Shares in Interserve tanked after the construction and support services group said exiting the energy-from-waste market was likely to cost £160m, up from a previous provision of £70m.
On the upside, Royal Bank of Scotland rallied after saying it will abandon plans to sell its Williams & Glyn business and instead provide funds to help challenger banks, if a Treasury proposal is accepted by the European Commission.
Retail property group Hammerson gained ground as it said full year adjusted profits rose 9.4% to £230.7m on a jump in net rental income to £346.5m from £318.6m.
Direct Line racked up healthy gains after the insurer said new rules determining lump sum payouts for injury claims would have less of an impact on the company than it previously thought. |
| | Ethical Bond | | Don't miss this opportunity? Earn 9% p.a Fixed Rate Ethical Bond
An alternative investment product generating electricity from used cooking oil. Download your free report today! |
| Market Movers
FTSE 100 (UKX) 7,299.86 -0.00%
FTSE 250 (MCX) 18,746.22 0.21%
techMARK (TASX) 3,356.27 0.11%
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 258.90p 6.81%
Rolls-Royce Holdings (RR.) 708.00p 6.31%
Hammerson (HMSO) 588.50p 4.25%
Antofagasta (ANTO) 858.50p 2.57%
Merlin Entertainments (MERL) 501.50p 2.39%
Glencore (GLEN) 327.00p 2.36%
BT Group (BT.A) 323.30p 2.28%
Direct Line Insurance Group (DLG) 361.90p 2.26%
Standard Life (SL.) 375.40p 2.23%
Aviva (AV.) 505.50p 1.42%
FTSE 100 - Fallers
Unilever (ULVR) 3,548.00p -6.56%
Pearson (PSON) 642.50p -3.89%
Mediclinic International (MDC) 802.00p -3.14%
Capita (CPI) 514.00p -1.53%
Associated British Foods (ABF) 2,571.00p -1.46%
ITV (ITV) 203.10p -1.17%
Imperial Brands (IMB) 3,737.00p -1.16%
Barratt Developments (BDEV) 514.50p -1.15%
Taylor Wimpey (TW.) 175.60p -1.07%
Standard Chartered (STAN) 765.00p -1.03%
FTSE 250 - Risers
Ascential (ASCL) 317.80p 3.75%
Tullow Oil (TLW) 269.00p 3.74%
OneSavings Bank (OSB) 397.00p 2.53%
Fidessa Group (FDSA) 2,496.00p 2.46%
SIG (SHI) 111.10p 2.40%
Nostrum Oil & Gas (NOG) 470.70p 2.33%
Rank Group (RNK) 208.30p 2.31%
Aberdeen Asset Management (ADN) 270.70p 2.27%
Inmarsat (ISAT) 628.50p 2.20%
AO World (AO.) 160.00p 2.04%
FTSE 250 - Fallers
Bovis Homes Group (BVS) 755.00p -10.23%
BGEO Group (BGEO) 2,920.00p -5.99%
Berkeley Group Holdings (The) (BKG) 2,872.00p -2.25%
Wizz Air Holdings (WIZZ) 1,668.00p -2.23%
Euromoney Institutional Investor (ERM) 1,080.00p -1.82%
Crest Nicholson Holdings (CRST) 529.00p -1.76%
Millennium & Copthorne Hotels (MLC) 422.50p -1.74%
CYBG (CYBG) 269.80p -1.71%
Vesuvius (VSVS) 456.80p -1.62%
Elementis (ELM) 300.10p -1.57% |
| | 
|
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Political news fills US holiday-induced vacuum European equity markets ended on a mixed note - albeit little changed - as political news filled the vacuum left by Wall Street as US markets remain closed in observance of Presidents Day.
Investors were also eyeing a meeting of eurozone finance ministers in Brussels later in the day as they aim to reach a deal on a second review of Greece's stalled €86bn bailout so it does not sour upcoming elections in the Netherlands, France, Germany and possibly, Italy.
By the close of trade, the benchmark Stoxx Europe 600 index was up 0.22% to 371.04 and Germany's DAX rose 0.60% to 11,827.62 but France's CAC 40 edged lower by 0.05% or 2.59 points to 4,864.99.
"Greece stands again, alone, at the centre of a large chessboard. If negotiations were only about Greece, a country of 10m people and an economy the size of Milan or Düsseldorf, then these would have already been completed a long time ago.
"But it is clear to everyone that the approach to dealing with Greece entangles a much wider array of interests than solving the Greek crisis itself - and can be seen as a blueprint for future crises. Understanding the next steps can reveal insights on Europe's next steps towards, or against integration," said Alberto Gallo, head of macro strategy at Algebris.
To take note of, strategists at JP Morgan sounded a bullish note on Germany's Dax, touting the high weighting of Cyclicals in it and the strong reflationary trends in place both globally and domestically.
Meanwhile, oil prices advanced, with Brent crude up 0.55% to $56.12 per barrel and West Texas Intermediate 0.39% firmer to $53.99.
French government debt saw heightened volatility as low trading volumes contributed to sharp swings on its 10-year debt after a fresh poll at the weekend revealed Macron´s lead over rival Marie Le Pen had shortened to 58% to 42%, down from the up to 62% of backing he commanded in earlier tallies.
However, by the end of the day the yield on the benchmark 10-year bond had settled just two basis points higher at 1.06%, albeit after hitting an intra-day high of 1.14%.
In other political news, also over the weekend a poll by Emnid Institute revealed that the centre-left Social Democrats party had increased its lead over chancellor Angela Merkel's CDU party by one percentage point to 33.0%.
Euro/dollar was flat against the dollar at 1.0616.
In corporate news, Unilever plunged 5.99% as US rival Kraft Heinz ditched its plans to take over the Marmite owner, just two days after it emerged that the London-listed consumer goods firm had rejected a $143bn offer.
Michael Hewson, chief market analyst at CMC Markets, said: "There had been widespread speculation that this bid may well have turned out to be a rather protracted affair given some of the politics involved. Kraft's quick about turn appears to have drawn a line under that, over concerns that any public battle could have the potential to turn increasingly bitter."
On the upside, Royal Bank of Scotland gained 6.81% after saying it will abandon plans to sell its Williams & Glyn business and instead provide funds to help challenger banks, if a Treasury proposal is accepted by the European Commission.
Aerospace and defence group Rolls-Royce advanced 5.05% after Goldman Sachs upgraded it to 'buy' from 'neutral', lifting the price target to 1,030p from 743p and adding the stock to its 'Conviction' list, saying the company has the potential to substantially increase free cash flow between now and 2020.
Steinhoff International rose 4.71% after the Netherlands-listed furniture maker called off talks for a $30bn merger with Shoprite, South Africa's biggest supermarket chain.
On the data front, German producer price inflation rose to 2.4% in January, from 1% last year and more than the 2% expected. Producer prices increased 0.7% in January from 0.4% in December and ahead of the 0.3% forecast.
The annual producer price index rose at its highest rate since March 2012 when it rose 2.6%.
Consumer confidence in the single currency bloc deteriorated in February, the European Union's executive arm said.
The European Commission's consumer confidence index dropped 1.4 points from a reading of -4.8 for January to -6.2 for February. |
| | Join City Index for competitive commissions and spreads, including FX from just 0.5 points. | | We’ve been executing quality trades for over 30 years. Trade shares, indices, commodities and FX across 12,000 markets today from 50p a point with an award-winning Spread Betting service that’s on your side. Losses can exceed deposits. Find out more |
| | US Market Report | | French investigators raid Le Pen's offices The offices of French far-right presidential hopeful Marie Le Pen were raided by investigators at the start of the week.
Her party decried the search, claiming it was a "media operation whose only goal is to disrupt the smooth operation of [her campaign] at a moment when she's made major advances in the polls."
Monday´s events followed the European parliament´s requirement that she repay the €336,146 of public funds she allegedly used to pay aides for fake parliamentary jobs.
Earlier that same day, the latest poll from OpinionWay showed Emmanuel Macron´s lead over Le Pen in hypothetical second round run-off vote had been whittled down to 58% for the former Economy minister and 42% for the leader of France´s National Front. |
| | Banking Sector Outlook for 2017 | | In the first of a two-part series, this report covers the sector and its main players ahead of a barrage of full year results releases. We take an in-depth look at how US & UK Banks fared during 2016, reporting dates and forecasts for 2017, and what early US results have shown us. Get your copy of the Banking Sector Outlook for 2017 today! Losses can exceed deposits |
| | Broker Tips | | Broker tips: Rolls-Royce, Standard Chartered, Pearson, RBS Goldman Sachs has upgraded aerospace and defence group Rolls-Royce to 'buy' from 'neutral', lifting the price target to 1,030p from 743p and adding the stock to its 'Conviction' list, saying the company has the potential to substantially increase free cash flow between now and 2020.
The bank noted cash performance at Rolls-Royce has been disappointing as underlying earnings performance has fallen and the investment burden has risen.
It argued that the diversified nature of the group and the impending accounting changes warrant a cash flow based valuation approach. GS said it expects company-defined free cash flow to improve from £120m this year to £495m in 2018, £1.02bn in 2019 and £1.55bn in 2020.
Goldman said key risks to its price target and view include a weakening of the pound versus the US dollar through this year which would put downward pressure on sales estimates.
In terms of earnings, the impact would be of a lesser magnitude as a result of the substantial hedge book Rolls-Royce has in place, although large moves in $/£ will still affect the share price.
It also pointed to negative momentum in defence spending in the core markets of the UK and the US, as well as major export markets such as Saudi Arabia, as these markets are driving the growth in newer programs which offsets declines in older products.
Continued declines in sanctioned offshore capex would pressure future revenues in the Marine division from the Offshore exposed business lines.
Standard Chartered Bank
Analysts at JP Morgan downgraded their recommendation on Standard Chartered stock, emphasising that its shares were an "imperfect play" on the US interest rate cycle and how the 'bullish' scenario for the shares required a medium-term perspective.
"Relative to US banks, these banks are imperfect plays on US rates" the investment bank said.
The reason for that was that rate hike cycle in the States needed to be perfectly timed to 'thread-the-needle' between its positive impact on the lender´s net interest margin and the negative impact it might have on asset quality in Emerging Markets, analyst Raul Sinha said in a research note sent to clients.
That was also true of HSBC, whose stock was changing hands at 1.2 times´ P/TNAV.
Furthermore, StanChart shares had already rallied by 80% and HSBC´s by 54% over the past 12 months.
Hence, the risk-reward trade-off looking out over the next year was now less "compelling", Sinha said.
At 0.8 times' price-to-tangible next asset value stock in StanChart was also more geared to delivering improved earnings, as oppossed to the removal of capital concerns, dividends and mergers and acquistions.
Sinha downgraded its recommendation on shares of StanChart from 'overweight' to 'neutral' but stayed at 'neutral' on HSBC.
However, in the case of HSBC JP Morgan raised its target from 600p to 670p.
"We believe that under CEO Bill Winters, StanChart is pursuing a more sustainable LT recovery strategy, albeit one that will take time to deliver, also less cyclically geared."
Pearson
Education publisher Pearson was under the cosh on Monday as Liberum highlighted concerns about the company's cash flow.
Pearson, which is due to report full-year 2016 results on Friday, has already stated its headline results and given guidance for 2017, so Liberum said there shouldn't be any major surprises.
"However, we expect the details of its 2016 results to concern the market particularly around cash flow. We also do not see further major cost savings as a risk to our sell case."
Liberum noted that at the full-year 2015 results presentation, Pearson emphasised that its underlying cash conversion rate for 2015 was 95% as opposed to the reported 60% as there had been a number of 'one-off' issues at the group.
"The implication was that 2016 should see an improvement in the reported rate. However, when it reports numbers, we expect the cash flow numbers to look weak and to raise further questions about their cash flow profile."
Liberum also pointed to goodwill and said it expects to see more significant writedowns. It said given that goodwill is a reflection of future expectations of cash flow, this would suggest a more negative long-term picture.
The brokerage said there are two areas where there could be risk to its bearish call into the FY numbers: Pearson could announce a new cost-saving programme and/or disposals, particularly around its 47% stake in Penguin Random House.
Liberum reiterated its 'sell' rating and 360p price target on the stock.
Royal Bank of Scotland
If Royal Bank of Scotland retains the Williams & Glyn business, as proposed, it will bring a return to dividends closer and lift earnings in 2019, according to analysts at Morgan Stanley, JP Morgan Cazenove and others on Monday.
RBS confirmed on Monday the statement it released late on Friday, that as it could not sell its Williams & Glyn business it will instead set up a fund to help challenger banks at an estimated cost of £750m that will be taken in this coming Friday's 2016 results.
The plan has been proposed by the Treasury to the European Commission in order to allow RBS to satisfy the remaining State Aid obligations from its 2008 state bailout.
Morgan Stanley said retaining the 300 W&G branches could add around 10% to earnings per share by 2019.
"If the new set of measures is adopted then RBS has a path to clearing one of three remaining hurdles to eventual return of capital," analysts said, with the settlement of US residential mortgage-backed security (RMBS) and a clean stress test being the other two that still remain.
JP Morgan Cazenove said the new proposal as helpful for RBS but potentially disappointing for banks which might have benefitted from a forced sale of W&G, such as CYBG.
Cazenove's upgraded its 2019 estimated EPS by 12% but forecasts a 100 basis-point hit to the bank's tier-one capital levels.
Together this results in the price target being lifted to 210p from 185p, which still results in 13% downside from current levels. | | | | To advertise in the Euro Markets Bulletin please contact [email protected] |
| | | | | | | To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49 | |
No comments:
Post a Comment