| Calculus VCT – 0% Initial Fee – Limited Time Offer Calculus Capital is waiving initial fees on its VCT, The move makes the Calculus VCT one of the most attractive in the current marketplace – most providers are charging between 3% and 5%. Find out More | | | London close: Stocks climb on cautious optimism over trade, Brexit | | | | | London stocks recouped more of last month's losses on Tuesday, underpinned by optimism over US-China trade talks, rumours of a delay to the Brexit date and bargain hunting by investors. The FTSE 100 finished slightly off its earlier high, but still up 0.7% at 6,861.60, while the pound was flat against the euro at 1.1128 and down 0.5% against a strengthening dollar at 1.2717. Lifting the mood in the background was reports of a productive round of talks between Chinese and US officials in Beijing, with a US trade delegation member saying talks had gone well and are set to continue on Wednesday. Follow-up cabinet-level talks are also expected later in January. Earlier, President Trump said on Twitter that talks "are going very well". Market analyst Joshua Mahony at IG said stock market gains have been "hugely influenced" by the reports of an extension to the talks. "No doubt, the substantial selloff in play over the past seven months has been hugely influenced by the economic impact of this trade spat, and thus there is reason to believe markets will rise and fall according to how talks progress." On the home front, reports that the UK officials are looking at potentially getting an Article 50 extension were similarly boosting several domestic sectors, including construction and retail. Market analyst Connor Campbell at Spreadex said: "If that is the case, it suggests that a) the government remains doubtful Theresa May's agreement stands any chance of getting through parliament, and b) there really isn't any appetite for a 'no deal' exit." Earlier, a Daily Telegraph report suggested that Prime Minister Theresa May was in secret last-minute talks with EU leaders about possibly extending the 29 March Brexit deadline. However, Brexit Secretary Stephen Barclay was quick to quash the report on Tuesday and stress that the government remains committed to leaving the EU in March. Barclay said he had not spoken to the EU about that and any delay would cause "some very practical issues". On the economic data front, the latest housing figures from Halifax showed house prices surged past expectations in December, but the overall trend remained weak. House prices were up 2.2% compared to a 1.2% decline the month before and well ahead of expectations for a 0.2% increase. On the year, house prices rose 1.3% after a 0.3% increase in November, comfortably beating expectations for a 0.4% jump. Pantheon Macroeconomics economist Samuel Tombs said very little weight should be placed on the jump in Halifax's house prices index in December, pointing out that it is three times as volatile as the Nationwide index. "Looking ahead, surveys indicate that buyer demand has begun to fall sharply again, primarily due to Brexit uncertainty, which should mean that sale prices undershoot asking prices by a greater-than-usual margin. But the decline in risk-free interest rates that Brexit uncertainty also has triggered will feed through to lower mortgage rates soon," Tombs said. On the corporate front, paper and packaging companies DS Smith and Smurfit Kappa were topping the top-flight index as Jefferies saw an opportunity for a re-rating in the European packaging sector as the market is too negative. After the stock market tumbles in the final quarter of last year, analysts were pointing out various bargains to investors, with Melrose Industries and Rotork both boosted by notes from Bank of America Merrill Lynch. Electrocomponents was also on the rise after an upgrade from Jefferies, while Capital & Counties also got a boost from an upgrade to 'add' at Peel Hunt. Pub operator Greene King rallied as it posted a 10.9% jump in like-for-like sales over Christmas and the New Year and expressed confidence over the full year, while Safestore rose as it reported a 135% increase in full-year pre-tax profit. Broadcaster ITV gained as analysts at Liberum suggested that the signing of a five-year partnership between Sky and STV could make a tie-up between ITV and Sky more likely. Retail was a mixed bag. High street stalwarts Next and Marks & Spencer seemed to be boosted by the Brexit news, while Morrisons - the first of the big four supermarkets to report its Christmas trading - was down in the dumps as wholesale growth over the festive period disappointed investors, despite the grocer beating retail forecasts and notching up its fourth consecutive Christmas of growth. The shares also took a knock after data from Kantar Worldpanel showed the group was the second-weakest among its rivals. Morrisons saw its growth slow to 0.1%, with its market share dropping to 10.6% from 10.8%. Tesco and Asda were top of the big four, while Sainsbury's was bottom. Analysts at Bernstein said the 0.6% LFL retail growth figure should be "reassuring" against high comparative growth the year before, slightly up versus consensus of 0.5% and "despite a very cautious UK consumer at the end of 2018". However, they noted that the contribution from wholesale missed consensus by 60 basis points, almost all of which was due to the McColl business being transferred after the deal signed early last year. Elsewhere in the retail sector, sportswear specialist Footasylum slumped after warning that full-year earnings would be towards the lower end of analysts' forecasts, while gross margin would be lower than current market expectations as a result of heavy discounting over Christmas. The FTSE Smallcap company said it had seen "some of the most difficult trading conditions in recent years" over the festive period, amid economic uncertainty and weakening consumer sentiment. Lifestyle brand Joules defied the high street gloom, however, as it said it continued to trade well over the festive period, putting on course to achieve its pre-tax profit expectations for 2019. Elsewhere, building materials group SIG dropped after saying it expects profit for 2018 to drop on the back of lower trading revenue amid challenging market conditions. Most of the construction sector was higher, however, boosted by Brexit hopes. Kier was also surging and Babcock climbing after both groups won spots on the North West Construction Hub's high-value framework. Kier was the only listed company to win spots on all three lots, trade magazine Building reported, while Galliford Try and Morgan Sindall were both been dumped by the procurement body from the £1.5bn bidding framework. | | | | | Award winning trading platform For a limited time only we are offering a 2 week FREE Trial of our Trading Alerts. Register now | | | | Top 10 FTSE 100 Risers| Sponsored by Interactive Investor | 
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| | | | | Are you looking for a profitable trading strategy? Do you have 20 minutes a day to follow this strategy? Yes! Then you need to watch this session. In fact for the past 6 months this strategy has been averaging +1275 pips per month! Book A Free Place To Find Out More | | | Europe close: Stocks end higher, but off their best levels | | | | | Somewhat positive news around the ongoing US-China trade talks buoyed shares on Tuesday, helping investors to brush-off the release of very weak readings on German industrial production and euro area business confidence. In particular, markets were encouraged by Chinese President Xi Jinping's decision to send his top economic advisor, Liu He, to the second round of trade talks and by news that Chinese importers had carried out their third largest purchase ever of US soybeans. By the end of trading, the pan-European Stoxx 600 index was up by 0.88% or 3.01 points to 345.89, alongside a jump of 1.15% or 54.10 points for the French Cac-40 to 4,773.27, while the FTSE Mibtel added 0.25% or 46.87 points to 19,000.14. Traders appeared to be somewhat divided regarding the prospects for a US-China trade deal and some economists appeared to echo that caution, with Arend Kapteyn and Pierre Lafourcade at UBS saying: "Unfortunately, things have gotten worse, not better: the DM uptick has disappeared (the US looks stable at around 2.5% but the Eurozone was running close to 0% before the retail sales data), the bounce in Latam is faltering, EMEA is now in outright contraction, and Asia took a leg lower." On a more constructive note, strategists at Deutsche Bank said they now saw 10% upside for European equities by June. "Back then, we argued that PMIs were set to roll over, equities to fall, bond yields to drop and cyclicals & financials to underperform," they said. "This has now played out. 2019 starts as a mirror image of 2018: PMIs have dropped, equities have corrected, bond yields have fallen and defensive sectors have outperformed. Just as early 2018 marked the peak in growth momentum, we think December 2018 was the trough." Be that as it may, stockmarkets finished off their best levels of the session, following a late afternoon report that Beijing and Washington were not yet ready to reach a deal, although progress had reportedly been made. On the economics front, according to the German Ministry of Finance, the country's industrial production shrank in November by 1.9% month-to-month, which was well below the consensus projection for an increase of 0.3%. In year-on-year terms, production fell by -4.7% after a downwardly-revised increase of +0.5% for October. Net revisions to the month-to-month reading were -0.3 percentage points. "This headline is much worse than we expected [...] We now think production fell 1.4% quarter-on-quarter in Q4, only slightly worse than the 1.7% plunge in Q3," said Claus Vistesen at Pantheon Macroeconomics. "In other words, the German manufacturing sector was in recession in the second half of 2018, reflecting in part the fact that the industry hit capacity constraints earlier in the year and rising global uncertainty amid the trade conflict between the U.S. and China." In corporate news, Airbus shares jumped after Reuters reported that the jet manufacturer had "operationally" hit its target for 800 deliveries in 2018. Morrisons finished in the red even as it reported stronger-than-expected retail sales over the festive period. Investors were pleased with the company's like-for-like sales growth but disappointed by another relatively weak performance form the core retail arm. Richard Hunter, head of markets at Interactive Investor, said: "The shares have fallen foul of the wider and weaker market environment, having dipped 14% over the last six months, although over the last year the 2.5% decline in the price compares favourably with the FTSE100, which has dropped 11.5% in the corresponding period." Shares of Swiss chemicals group Sika AG also declined, after the company's management tabled an offer to purchase mortar and construction materials maker Parex Ltd. for an enterprise value of €2.04bn. Signify came under selling pressure as well, on the heels of a downgrade to 'neutral' from analysts at Bank of America-Merrill Lynch. Rotork was among the best performing issues after the same same broker upgraded the stock. | | | US open: Positive open on the Street despite sombre jobs report | | | | | US stock opened higher on Tuesday as investors grew hopeful that the latest round of talks between the US and China would ease trade tensions. At 1530 GMT, the Dow Jones Industrial Average 0.62% higher at 23,677.77, while the S&P 500 moved ahead 0.38% to 2,559.40 and the Nasdaq traded 0.24% firmer at 6,839.73. The Dow opened more than 270 points higher but lost some of its earlier momentum as a key report revealed job openings across the US had fallen to its lowest level since the beginning of summer. However, investors remained hopeful and carved out some gains as the second day of talks between Chinese and US officials was set to kick-off in Beijing later on in the day. Early reports out of Beijing state American and Chinese negotiators had reportedly made progress in talks, including on purchases of US goods and services, but the two sides were said to still not be ready to finalise a deal. According to Dow Jones Newswires, citing sources, follow-up cabinet-level talks were expected later in January. Earlier, the US President himself had tweeted: "Talks with China are going very well!" Of the boost in sentiment coming from the talks, Spreadex analyst Connor Campbell said there's every chance markets could be setting themselves up for a disappointment "given that there isn't exactly a lot behind Tuesday's rally - as in a lack of concrete detail leaking out of the meeting rooms in Beijing." "Investors appear to be clinging onto US Commerce Secretary Wilbur Ross' claim that there is a 'very good chance' can agreement can be reached before the end of the ceasefire on March 1," he added. The government shutdown, which has entered its third week, was also on investors' minds as Donald Trump was due to make a speech later from the Oval Office, in which he is expected to argue that an immigration crisis requires his Mexican border wall. In energy news, West Texas Intermediate was 2.14% higher at $49.56 a barrel, while Brent Crude was 1.80% higher at $58.36. On the corporate side of things, Boston Scientific was up 1.22% after the release of its fourth-quarter sales figures and Union Pacific was trading 9.04% firmer after it announced that former Canadian National executive Jim Vena had taken over as COO. On the data front, the latest survey from the National Federation of Independent Business showed that small business confidence in the US remained near historically-high levels in December amid signs of strength in hiring and in companies' inventory planning. But some analysts said the stable headline index masked underlying weakness and rising price pressures. The NFIB's small business confidence gauge slipped by just 0.4 points from the month before to reach 104.4, versus consensus expectations for a reading of 103.5. Meanwhile, a sub-index linked to job openings hit a fresh record high and according to the NFIB plans for inventory investment surged. However, those positives were offset by a decline in expected real sales growth and expected business conditions. Reports of higher worker compensation remained near record levels too, NFIB said. According to the business lobby group: "Critics of the Federal Reserve are popping up everywhere. They say that the Federal Reserve is not paying attention to what financial markets are telling us about the economy. "However, the stock market does not reflect the entire economy. The small business sector represents the other half and it continues its two-year run of record high performance levels, an important consideration." Still, Ian Shepherdson at Pantheon Macroeconomics believed a further decline in business optimism was likely in January. In particular, Shepherdson noted the four point decline seen in the sub-index for companies' capital expenditure plans, which he described as a "big blow", although it remained to be seen if the drop would "stick" or even drop further. Elsewhere, the number of job openings fell to 6.9m in November, according to the Bureau of Labor Statistics. Over the month, hires edged down to 5.7m, quits edged down to 3.4m, and total separations were broadly unchanged at 5.5m. | | | | | Vodafone: RBC Capital Markets downgrades to underperform with a target price of 125p. easyJet: Berenberg reiterates sell with a target price of 1,010p. Wizz Air Holdings: Berenberg reiterates buy with a target price of 3,600p. Next: HSBC reiterates buy with a target price of 5,900p. BT: Deutsche Bank reiterates hold with a target price of 238p. Dunelm: JP Morgan reiterates neutral with a target price of 635p. Aviva: JP Morgan reiterates overweight with a target price of 493p. Legal and General Group: JP Morgan reiterates underweight with a target price of 239p. Prudential: JP Morgan reiterates neutral with a target price of 1,522p. Joules: Liberum reiterates buy with a target price of 420p. Carnival: Shore Capital Markets upgrades to buy. Footasylum: Liberum resumes hold with a target price of 30p. Greene King: Canaccord reiterates buy with a target price of 600p. Harworth Group: Canaccord reiterates buy with a target price of 140p. Unilever: UBS downgrades to neutral with a target price of 4,400p. Ashtead: UBS upgrades to neutral with a target price of 1,800p. Electrocomponents: Jefferies upgrades to buy with a target price of 700p. WM Morrison Supermarkets: Bernstein reiterates outperform with a target price of 280p. | |
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| Registered Office/Accounts Dept:
Suite 27, Essex Technology Centre,
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| Calculus VCT – 0% Initial Fee – Limited Time Offer Calculus Capital is waiving initial fees on its VCT, The move makes the Calculus VCT one of the most attractive in the current marketplace – most providers are charging between 3% and 5%. Find out More | | | London close: Stocks start week on a mixed note, trade talks in focus | | | | | London stocks finished the first session of the week on a mixed note, with tobacco shares dragged lower by a broker downgrade, but retailer Dunelm sharply higher after a well-received trading update. The FTSE 100 was down 0.39% or 26.54 points at 6,810.88, while the more domestically focused FTSE 250 added 1.01% or 180.27 points to 17,976.15. Sterling was edging up 0.15% against the dollar at 1.27568 and 0.35% lower versus the euro at 1.1125. In the background, investors were eyeing the latest round of trade negotiations between the US and China, with officials from both sides due to meet for talks in Beijing later in the day in what will be the first discussions since Trump and Xi Jinping agreed a temporary truce in December. "Realistically we are unlikely to see any form of tangible breakthrough in the immediate future, with issues such as the protection of intellectual property rights providing a major stumbling block that needs to be overcome," said Joshua Mahony, senior market analyst at IG. On home turf, with the so-called "meaningful vote" on Brexit set to take place in the House of Commons on 15 January, Theresa May was still trying to extract concessions from the European Union to make her deal more palatable for Conservative MPs. Meanwhile Germany's foreign affairs minister Heiko Maas was set to hold talks in Dublin on Tuesday in an effort to find a solution to help May, who insisted over the weekend that she could get assurances from Brussels to ensure ratification of her deal. However, it was not expected that this would involve re-opening the agreement she struck last year. EU officials fear that changing the deal over the Irish issue would invite demands for concessions from other states unhappy with aspects of the text. In the US, meanwhile, the government shutdown entered its third week. As a compromise, Trump promised over the weekend to build his Mexico border wall out of steel instead of concrete and repeated the threat that he may seek the necessary funding by declaring a state of emergency. Broker notes accounted for a lot of the share price action, with Imperial Brands and British American Tobacco among the worst performers on the FTSE 100 as Cowen cut its stance on both stocks to 'market perform' from 'outperform'. Centrica was hit by a downgrade to 'hold' at Jefferies, while St James's Place, Hargreaves Lansdown and Standard Life Aberdeen were lower after downgrades at Deutsche Bank. InterContinental Hotels was weaker after a cut to 'underweight' at Morgan Stanley, HSBC was in the red after a downgrade to 'sell' at Citi and Funding Circle was knocked lower by a downgrade to 'neutral' at Bank of America Merrill Lynch. Equiniti gave up earlier gains to trade a touch lower as it won a contract to run the UK media and telecoms watchdog's scheme to compensate users of radio spectrum that is being cleared for use in 5G mobile services. On the upside, homewares group Dunelm surged as it struck a note of caution about full-year results due to "unprecedented" uncertainty caused by Brexit, but posted 9% growth in total like-for-like sales for the second quarter, with LFL stores revenue up 5.7% year-on-year and online revenue 37.9% higher. The retail sector will be firmly in focus this week as updates are due from Marks and Spencer, Wm Morrison, Sainsbury and Tesco, all of which kicked the week off in the green. CMC Markets analyst Michael Hewson said they could also surprise to the upside, given the numbers from German discount supermarket Aldi earlier on Monday, which reported record Christmas sales. "The big question here is how much did the two young upstarts of Aldi and Lidl steal the big four's Christmas lunch," he said. Sticking with retail, Ted Baker - which was recently rocked by allegations of harassment against CEO and founder Ray Kelvin - was under the cosh ahead of its trading update on Wednesday, as RBC Capital Markets slashed its price target on the outperform-rated sock to 2,000p from 2,500p. On the upside, Petrofac was boosted by an upgrade to 'buy' at Jefferies, while Mediclinic rose on the back of an upgrade to 'overweight' at JPMorgan and Hays gained as HSBC bumped it up to 'buy'. | | | | | Award winning trading platform For a limited time only we are offering a 2 week FREE Trial of our Trading Alerts. Register now | | | | Top 10 FTSE 100 Risers| Sponsored by Interactive Investor |
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| | | | | Are you looking for a profitable trading strategy? Do you have 20 minutes a day to follow this strategy? Yes! Then you need to watch this session. In fact for the past 6 months this strategy has been averaging +1275 pips per month! Book A Free Place To Find Out More | | | Europe close: Rally pauses ahead of China-US trade talks | | | | | European stocks gave back some of Friday's gains as investors eyed the latest trade talks between the US and China. The benchmark Stoxx Europe 600 index was down 0.15% at 342.88, while Germany's DAX dipped 0.18% to 10,747.81 and th Cac-40 gave back 0.38% to 4,719.17. Periphery stocks fared better, with Spain's Ibex 35 adding 0.44% to reach 8,776.30 and the FTSE Mibtel advancing 0.65% to 18,953.27. Officials from the US and China were due to meet for talks in Beijing later in the day in what will be the first discussions since Trump and Xi Jinping agreed a temporary truce in December. James Hughes, chief market analyst at Axi Trader, said: "Although China has already telegraphed that it is happy to resolve the trade spat amicably, it's difficult not to see Beijing as pushing for the best deal here. "The White House is on the back foot, with a potentially damaging government shutdown ongoing and Donald Trump very much seen as the culprit of the recent stock market volatility. The trade deal - assuming it's reached - should be good for stocks, but this point won't have escaped Chinese negotiators." In the US, meanwhile, the government shutdown entered its third week. Trump promised over the weekend to build his Mexico border wall out of steel as a compromise and repeated his threat that he may seek the necessary funding by declaring a state of emergency. "While the direct impact of the shutdown is arguably limited, indirectly the fact that the president is considering bypassing Congress entirely by declaring an emergency highlights the elevated degree of policy paralysis in the US which is a further negative from a growth outlook perspective," Rabobank said. In corporate news, France's Alstom was down following a report in Les Echos that the Alstom-Siemens rail deal is not likely to be approved by European Authorities. Elsewhere, Heineken fizzed lower as Goldman Sachs cut the stock to 'sell' from 'buy'. On the data front, figures out earlier showed Germany retail sales rose 1.4% on month in November, beating expectations for a 0.4% increase. The headline non-working day adjusted year-over-year rate fell to 1.1% from a revised 5.2% in October. Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "German consumers' spending appeared to have picked up in Q4, a bit, though we have to be careful making too much of the retail sales data given their usual volatility. "Two points are important to make at the outset. First, Black Friday almost surely boosted today's headline - seasonals haven't yet caught up to this trend - so we have to expect a reversal in next month's report. Second, the plunge in the headline year-over-year rate is misleading. The fully adjusted rate fell only marginally, by 0.2pp to 0.7%. Factoring in a 0.8% month-to-month dip in December, we estimate that retail sales increased 0.3% quarter-on-quarter in Q4, modest, but significantly better than the 0.5% fall in Q3." Meanwhile, factory orders in the country fell 1% on the month in November, missing consensus expectations for a 0.1% dip. On the year, factory orders were down 4.3% compared to a 2.7% drop in October. Elsewhere, the headline Sentix investor sentiment index for the eurozone slipped to -1.5 in January from -0.3 in December last year, coming in ahead of consensus expectations for a reading of -2.0. The index for the current situation edged up to 18.0 from 20.0 in December, but the expectations index fell to -19.3 from 18.8 last month. "These are levels not seen since the sovereign debt crisis, highlighting just how depressed investor confidence is at the moment," said Vistesen. | | | US open: Small gains at the bell ahead of Sino-US trade talks | | | | | Wall Street trading began with some small gains on Monday as investors awaited the outcome of the latest round of trade talks between the US and China. At 1545 GMT, the Dow Jones was 0.35% higher at 23,515.16, while the S&P 500 had picked up 0.57% to 2,546.34 and the Nasdaq was trading 0.86% firmer at 6,796.62. While stocks managed to reverse losses seen immediately after the bell, investors still appeared to be somewhat wary as officials from the US and China were due to meet in Beijing later on in the day for the first discussions between the two since Donald Trump and Xi Jinping agreed a temporary truce in December. James Hughes, chief market analyst at Axi Trader, said: "Although China has already telegraphed that it is happy to resolve the trade spat amicably, it's difficult not to see Beijing as pushing for the best deal here. "The White House is on the back foot, with a potentially damaging government shutdown ongoing and Donald Trump very much seen as the culprit of the recent stock market volatility. The trade deal - assuming it's reached - should be good for stocks, but this point won't have escaped Chinese negotiators." On the macro front, activity in the US services sector deteriorated more than expected in December, according to data released on Monday. The Institute for Supply Management's services index fell to a five-month low of 57.6 from 60.7 in November, missing expectations for a reading of 59.0. The non-manufacturing business activity index slipped to 59.9 from 65.2 in November, reflecting growth for the 113th consecutive month. The new orders index printed at 62.7 in December from 62.5 the month before, while the employment index fell to 56.3 from 58.4. The prices index came 57.6 compared from 64.3 in November. Respondents indicated that there is still concern about tariffs, despite the hold on increases by the US and China. Also, comments reflected that capacity constraints have lessened but employment-resource challenges remain. Elsewhere, the government shutdown entered its third week. Trump promised over the weekend to build his Mexico border wall out of steel as a compromise and repeated his threat that he may seek the necessary funding by declaring a state of emergency. In corporate news, Eli Lilly dipped 0.47% after it said earlier that it had agreed to buy biopharmaceutical company Loxo Oncology for about $8bn in cash. The price represents a 68% premium to Loxo's closing share price on Friday. Loxo soared 66.18% at the bell. Utility operator PG&E Corp shares tumbled 20.53% at the open following reports that the company is exploring a bankruptcy filing and asset sales. Elsewhere, medical implant devices manufacturer Abiomed slipped 1.48% following the release of its third-quarter numbers and steel and metal manufacturer Commercials Metals was 4.28% weaker after its first-quarter earnings. | | | Broker tips: Petrofac, Centrica, Hargreaves Lansdown, St James's Place, Standard Life Aberdeen | | | | | Jefferies energy analyst team giveth and it taketh away on Monday, upgrading Petrofac and downgrading Centrica. The broker feels Petrofac has become an "increasingly well-run business" providing "realistic expectations" within the tough oilfield service market. Pointing to a net cash balance sheet "firmly in sight" and "realistic new awards" required for 2019, the analysts upgraded to 'buy'. While Jefferies expects to see "good results" from Petrofac on 28 February, the broker trimmed its target price on the firm to 590p from 640p. However, the same positives could not be seen over at British Gas owner Centrica, which Jefferies downgraded to 'hold' from 'buy'. Jefferies sees material downside risk to Centrica's 2019-20 earnings, "borderline" credit metrics and "limited" market-to-market benefits of higher commodity prices in the medium-term. "With this, we see a timely disposal of Centrica's 20% nuclear stake as critical to protect its balance sheet against another potential hit." With a "weak" full year trading update from Centrica is expected in February, the target price was cut to 125p from its previous 170p standing. Deutsche Bank downgraded a series of stocks on Monday as it cut its stance on European insurers to 'neutral' from 'overweight'. As far as UK stocks are concerned, it downgraded Hargreaves Lansdown to 'sell' from 'hold' and cut the price target to 1,500p from 1,900p, citing a rich valuation and arguing that retail investment sentiment in the UK will remain subdued due to ongoing political uncertainty, which in turn is likely to weigh on HL's net inflow rate. "We expect Brexit uncertainty to continue into 1Q19 as the UK prepares to leave the EU on 29th March. This is significant as the 1Q of the calendar year is usually the busiest for HL due to the UK tax year-end in April." DB noted that HL already reported a 16% drop in year-on-year net flows for the three months to September and said it expects a further deterioration to this trend. It expects net flows to decline by around 22% to £1.4bn for the three-month period to December 2018 and 21% for the four months to April to £2.6bn. The bank also downgraded St James's Place to 'hold' from 'buy' and reduced the price target to 1,090p from 1,280p, noting its exposure to both markets and UK political risk and also cut Standard Life Aberdeen to 'hold' from 'buy', with the target price trimmed to 295p from 405p. | |
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