Pound Seen Falling as UK Growth Slows, Brexit Headwinds Rise

Sterling is likely to weaken versus the euro in 2022 as U.K. economic growth slows and Brexit headwinds rise, Bank of America says. "We think that the U.K. is in a unique position of facing two supply shocks: the pandemic and Brexit," BofA forex strategist Kamal Sharma says. So far the U.K. has been able to use the pandemic as cover to explain supply chain issues but an open debate about Brexit's role in the problem will become necessary as the pandemic eases, he says. Meanwhile, the market is aggressively priced for rate rises by the Bank of England, which will be "hard to crystallise," he says. BofA expects EUR/GBP to rise to 0.89 by year-end from 0.8358 currently.

 
Companies News: 

Leeds Group Swung to 1H Pretax Loss, Shares Fall

Shares in Leeds Group PLC fell Monday after the company said it swung to a pretax loss in the first half of fiscal 2022 as its performance was hurt by restrictions across Europe to curb the Omicron coronavirus variant.

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Hurricane Energy Production Met Views, Revenue Rose in 2021

Hurricane Energy PLC said Monday that production met expectations and revenue rose in 2021, and it expects to soon pay off its bond debt.

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Yourgene Health Raises Guidance Again

Yourgene Health PLC said Monday that it expects to beat upgraded market revenue forecasts for the year, its third upgrade since October.

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Clean Power Hydrogen to Raise GBP50 Mln in AIM Float

Clean Power Hydrogen PLC said Monday that it plans to raise 50 million pounds ($68.4 million) and float on London's junior AIM, with trading expected to start early next month.

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Forward Partners Appoints Lloyd Smith as CFO

Forward Partners Group PLC said Monday that it has appointed Lloyd Smith as chief financial officer with effect from March 21.

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Tavistock Investments to Buy Morgans for GBP3.7 Mln

Tavistock Investments PLC said Monday that it has agreed to buy independent financial advisory group Morgan Financial Group Holdings Ltd. for 3.7 million pounds ($5.1 million).

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M.P. Evans 2021 Crop, Production Increased; Announces Special Dividend

M.P. Evans Group PLC said Monday that crop and production increased in 2021 and it has announced a special dividend.

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Oxford BioMedica CEO to Step Down

Oxford BioMedica PLC said Monday that Chief Executive Officer John Dawson will retire from the company.

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M&G Appoints Barclays Treasurer Kathryn McLeland as CFO

M&G PLC said Monday that it has appointed Kathryn McLeland as the new chief financial officer of the company.

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Unilever Sets Out Ambition to Expand in Health Products -- WSJ

Unilever PLC said it wants to significantly expand its footprint in health, beauty and hygiene, and plans to sell off slower-growing parts of its ice cream-to-soap consumer brands empire to fund major acquisitions.

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VTB Bank 2021 Net Profit Rose

VTB Bank said on Monday that net profit and total assets for 2021 rose.

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BlueRock Diamonds Revenue Rose 68% in 4Q

BlueRock Diamonds PLC said Monday that its revenue rose 68% in the fourth quarter, reflecting higher diamond prices.

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Unilever Sets Out Ambition to Expand in Health Products -- Update

Unilever PLC said it wants to push further into health, beauty and hygiene products at the expense of slower-growing food brands, laying out its biggest strategic shift in years after disclosing a $68 billion approach for GlaxoSmithKline PLC's consumer-health business.

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Genflow Biosciences Shares Rise in Stock Market Debut

Shares of Genflow Biosciences PLC rose 31% on Monday as the company started trading on the London Stock Exchange, implying a market capitalization of 30.7 million pounds ($42 million).

 
Market Talk: 

Ashmore Needs Forward Momentum to Realize Value

1314 GMT - Shares in Ashmore Group drop 1.6% after the fund manager said second-quarter assets under management fell $4.0 billion because of negative investment trading of $1.8 billion and net outflows of $2.2 billion. While there is still a small shortfall in AUM relative to estimates, arguably the greater weight on estimates comes from weaker markets this month, Panmure Gordon says. "The company's relative performance is fine, but relative performance when absolute returns are negative is not a great selling point," Panmure analysts say. "There is a growing value argument, rarely the case for Ashmore... but, as ever, some forward momentum is needed."

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Taylor Wimpey Looks Healthy After Bold Strategy

1248 GMT - Taylor Wimpey's bold strategy early in the pandemic--going on a spending spree with the future in mind, enabled by a capital raise--is already beginning to bear fruit, propelling forward an increasingly healthy business, Interactive Investor says. The U.K. house builder's shares remain attractively priced compared to the historical average, but they have languished behind peers because of the previous fundraising, dividend removal, and fears of a weak U.K. economy dragging prices down, Interactive Investor says. "While the shares have yet to recover from these simultaneous blows, investor sentiment towards the company and its prospects is undaunted, and the market consensus of the shares still stands defiantly at a strong buy," the investment platform says. Shares are up 2.8% at 158.25 pence.

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Eurowag Update Seen Indicating a Strong FY 2022

1202 GMT - Eurowag's update for FY 2021 indicates a strong performance despite the supply-chain disruptions and pandemic-related uncertainties, Jefferies says. While these factors could affect the U.K.-listed integrated payments and mobility platform, for FY 2022, Jefferies projects net revenue of around 20% on an on-year basis and an Ebitda margin of around 46% boosted by its individualized pricing model and better mix within its tolls business. As the performance update gave an "early proof" point, the U.S. bank keeps its buy recommendation with a price target of 220 pence. Shares trade 12% higher at 102 pence.

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High UK Power Prices Seen Benefiting RWE, Uniper, Greencoat UKW

1131 GMT - High power prices are the main takeaway from the U.K. electricity market in the fourth quarter of 2021, when generators with merchant exposure are likely to have benefited the most, RBC Capital Markets says. This includes RWE, whose gas-fired plants performed well, suggesting additional earnings from high prices, RBC says. Similarly, Uniper also saw positive CCGT performance, and also benefited from continued coal-fired power production. In addition, Greencoat UKW saw onshore wind generation rise 52%, well exceeding the U.K. average. On the negative side, data for SSE looks less positive, with lower gas, hydroelectric and offshore wind production for the fourth quarter, RBC says.

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Ashmore Has a Lot of Value on the Long-Term Stance

1110 GMT - Ashmore Group's performance update for the quarter shows short-term uncertainty, which has sent its share price down by 25% over the past six months, Peel Hunt says. However, the company still has a lot of value for those looking for a long-term stance, the U.K. brokerage says. "Ashmore today is as strong as ever--there is still significant potential to outperform in the coming years," Peel Hunt says. Shares trade down 1.8% at 284.2 pence.

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GlaxoSmithKline Consumer Healthcare Sale Would Dampen Appetite for Stock

1109 GMT - GlaxoSmithKline's plans to retain but split up its Consumer Healthcare division is widely viewed as an event that could crystallize value, Jefferies says. This is why a potential sale of the division--which comes as the company confirmed reports of acquisition proposals by Unilever--is likely to dampen appetite for the stock, Jefferies says. "At least initially we expect many shareholders would fear a large acquisition and the risk of inferior returns," the investment bank says. The British pharma major has rejected Unilever's proposals and fairly so, given that a GBP50 billion bid reflects a modest 10% acquisition premium, Jefferies says.

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Access Intelligence Hit Hard in Southeast Asia by Covid-19

1059 GMT - For U.K.-based information-and-marketing company Access Intelligence, the effect of Covid-19 has been harsh in Southeast Asia as corporate and public-sector customers reduced spending, finnCap says. The brokerage says that while the company's post-pandemic prospects remain strong, with planned investment set to continue and even accelerate, it lowers its revenue and earnings expectations for fiscal 2022 and fiscal 2023. "We look forward to continuing proof of execution in the U.K. and Australia/ New Zealand, and evidence of recovery in south east Asian customer spend, at which point with a healthy cash buffer throughout the forecast horizon, the valuation can respond and confidently look into 2023 and beyond," it says. FinnCap lowers its target price on the stock to 210 pence from 225 pence. Shares are down 24% at 116 pence.

 

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

January 17, 2022 08:32 ET (13:32 GMT)

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