Pound Falls After Retail Sales, Seen Vulnerable to EU Trade
The pound falls, hitting a six-week low of 1.3855 against the
dollar after U.K. data showed retail sales fell by 1.4% during May,
raising concerns about a slowing economic recovery. This was below
expectations in a Wall Street Journal poll for a rise of 1.6%, as
demand slowed following an initial rush to buy goods the previous
month after the economy reopened. The currency is also vulnerable
to trade tensions between the U.K. and the EU, with the former
threatening to unilaterally extend a grace period for processed
meat exports to Northern Ireland, ING says. The next few weeks
"could be a vulnerable period" for GBP/USD, which risks falling to
1.3800, ING says.
Victoria Oil & Gas to Issue Up to $7.5 Mln Loan Notes
Victoria Oil & Gas PLC said Friday that it has entered into
a facility agreement with Meridian Capital Ltd. to raise gross
proceeds of up to $7.5 million through the issue of unsecured loan
Unite Group Closes Disposal of London Properties for GBP342
Unite Group PLC said Friday that has sold two London properties
to its London Student Accommodation joint venture with GIC, the
Government of Singapore's real estate portfolio, for 342 million
pounds ($476.3 million).
Braveheart Investment Group Swung to FY 2021 Pretax Profit
Braveheart Investment Group PLC said Friday that it swung to a
pretax profit for fiscal 2021 as total income rose, and that the
board will seek opportunities for enhancing shareholder value as
the year progresses.
Smartspace Software Wins Contract with Gategroup
Smartspace Software PLC said Friday that it has closed a new
contract with Gategroup Holding AG for the use of its SwipedOn
Visitor Management solution across the company's international
Sabien Technology Appoints Athan Fox Chief Scientific
Sabien Technology Group PLC said Friday that Athan Fox has been
appointed chief scientific officer effective immediately.
Lekoil Nigeria Chairwoman, CEO Resign From Lekoil Cayman
Lekoil Nigeria said Friday three of its directors and executives
have resigned from the board of Lekoil Cayman.
Tesco 1Q Retail Sales Growth Slowed, Backs FY 2022 Profit
Outlook -- Update
--Sales growth slowed down in its core U.K. market
Lightsource BP Acquires 703 MW Solar-Project Portfolio in
BP PLC's subsidiary Lightsource bp has acquired a pipeline of
three solar projects in Aragon, Spain, totaling 703 megawatts of
Braemar Likely to Book GBP900,000 Loss if Wavespec Buyer Doesn't
Braemar Shipping Services PLC said Friday that it will likely
book a 900,000 pounds ($1.3 million) non-cash loss from
discontinued operations in fiscal 2022 if the buyer of its Wavespec
business doesn't fulfill obligations.
Serabi Gold Says It Won't Need to Restate Past Financial
Serabi Gold PLC said Friday that it won't need to restate past
financial accounts after finding unauthorized cash withdrawals from
its Brazilian subsidiary Serabi Mineracao SA.
HSBC Hires Former Barclays Banker Ginsburg in Investment Bank
Shake-Up -- Financial News
Of Financial News
Food-Price Inflation Seen Posing Challenge for Tesco
0956 GMT - Tesco must deal with food-price inflation while it
tries to bring down costs which shot up during the coronavirus
pandemic, AJ Bell's Russ Mould says. The FTSE 100 grocer in April
said it expects a strong recovery in profitability this year as the
majority of pandemic-related costs it booked in fiscal 2021 won't
be repeated. However, food inflation poses a fresh challenge as
Tesco has to decide if it can pass on all extra costs to customers
or risk a squeeze on profits, Mould says. "The forthcoming launch
of Russian discount supermarket Mere in the U.K. will add to the
competition, so Tesco needs to be very careful that any changes to
its prices don't alienate its customers," Mould says.
Tesco's 1Q Numbers Point to Normalizing Spending Patterns
0940 GMT - Tesco's 1Q numbers seem to suggest that U.K.
consumers are normalizing their spending patterns and aren't
necessarily reining in expenditure despite lingering economic
uncertainty, Hargreaves Lansdown's Sophie Lund-Yates says. The FTSE
100 retailer said like-for-like general merchandise and clothing
sales rose 10% and 52%, respectively, in the three months to the
end of May after the pandemic hit demand during the same period
last year, Lund-Yates says. "The shakedown in consumer habits
hasn't finished yet, but this early indication could have positive
connotations for other retailers," she says.
UK Plans to Ease Restrictions for Fully-Vaccinated Travelers a
Positive for Spain
0909 GMT - Plans by the U.K. government to allow travelers who
have had two Covid-19 vaccines to skip quarantine upon their return
to England would be very positive for Spain's tourism sector, Banco
Sabadell says. In the case of IAG--which owns British Airways and
Iberia among others--U.K. business represents 33% of global sales
and this would support expectations the group would reach 60%
capacity during 3Q, when compared with 3Q 2019, the Spanish bank
says. For Spanish hotel chain Melia the U.K. represents 14% of
EBIT, whereas for NH hotels the effect would be residual given that
its business model is mostly city hotels, the bank says. Banco
Sabadell has a buy rating on IAG. The company's shares in London
are up 0.2% at 200.70 pence.
Small Decline in UK Retail Sales Isn't a Reason to Worry
0907 GMT - U.K. retail sales unexpectedly fell 1.4% on month in
May but given the biggest fall was in food stores, some of this
might reflect people returning to eating and drinking outside of
their homes, HSBC says. The retail sales decline was mainly driven
by a 5.7% on-month drop in supermarkets. "What we may be seeing is
the beginning of a rotation from spending on goods to spending on
services," Elizabeth Martins, senior economist at HSBC, says. May's
small decline follows a strong April, where volumes rose 9.2%,
meaning levels of spending are still above pre-pandemic levels,
Tesco Says Unchanged Guidance Is Result of Continuing
0903 GMT - Tesco's reiteration of its guidance for fiscal 2022
is purely a reflection of market uncertainty for the rest of the
year, the U.K. grocer's chief executive officer and chief financial
officer say in a call with analysts. CEO Ken Murphy says it is
unclear how Tesco's customers are going to respond to the lifting
of the remaining coronavirus-related restrictions, whether or not
they will be able to travel, what the outlook for the labor market
looks like and what inflation will do. CFO Imran Nawaz says Tesco
delivered a strong first quarter, but guidance hasn't changed
because the market outlook remains uncertain. "None of that
uncertainty has changed in the last six weeks since we last spoke
to the market," Nawaz says.
Soft UK Retail Sales Data Could Signal Weaker Than Expected
Economic Growth for May
0843 GMT - The 1.4% on-month fall in retail sales in May could
suggest that economic growth wasn't as strong as previously
expected that month, Paul Dales, chief U.K. economist at Capital
Economics, says. The drop in goods spending will have taken 0.1
percentage points off GDP in May, which is expected to have risen
by between 1.5% and 2% compared with the previous month, he says.
"As the Covid-19 restrictions continue to be eased, it makes sense
that retail sales will be softer," Dales says, as consumers shift
spending from the shops toward social activities.
UK Retail Spending Recovery Is Expected to Lose Momentum This
0811 GMT - The current quarter's high level of retail spending
in the U.K. is unlikely to be sustained for the rest of the year,
Pantheon Macroeconomics' U.K. chief economist Samuel Tombs says.
Consumer spending is approaching its pre-pandemic level, and
households' real disposable income looks set to fall in 4Q as the
end of the furlough program reduces employment and inflation rises,
he says. U.K. retailers are also likely to take a smaller share of
overall spending compared to the last few months as consumers start
to spend more on services amid the reopening, Tombs says.
Tesco Could Be More Generous to Shareholders Going Forward
0811 GMT - Tesco's progress in reducing debt in recent years
means the U.K. grocer is now in a better position to be
progressively more generous to shareholders going forward, Shore
Capital says. "Management has tended to talk of favoring a share
buyback route as the prime mechanism to distribute surplus cash,
which makes sense at current stock valuation levels to our minds,
the commencement being held back due to understandable concern
about the scope for ongoing costly pandemic controls," Shore says.
If England's full reopening takes place in July, Tesco is more
likely to have scope for a share buyback following its half-year
results in October, Shore says.
Contact: London NewsPlus, Dow Jones Newswires;
(END) Dow Jones Newswires
June 18, 2021 06:28 ET (10:28 GMT)
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