UK Gilt Yields Fall as BOE Raises Rates

1321 GMT - U.K. gilt yields decline, after a brief rise, after the Bank of England raised the key rate by 50 basis points to 4.0% but two members voted to leave rates unchanged. "Today's 50 bps interest rate rise from the Bank of England gets us closer to the end of the monetary tightening cycle in the U.K. - but we're not yet done," says BlackRock chief investment strategist Vivek Paul in a note. Paul is cautious on gilts and prefers short-term U.S. government bonds and investment grade credit which offer high yields at a lower risk level. The 10-year gilt yield is down 17 basis points at 3.156%, following a brief rise to 3.225% immediately after the BOE announcement, Tradeweb data show. The 2-year gilt yield falls to 3.300% after rising to 3.409% straight after the announcement. (miriam.mukuru@wsj.com)

Companies News: 

Airtel Africa 3Q Pretax Profit Fell on Rising Costs

Airtel Africa PLC said Thursday that third-quarter pretax profit fell despite a revenue increase, due to inflationary pressures across its markets.

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Superdry CEO Julian Dunkerton Has No Plans to Take Company Private

Superdry PLC founder and Chief Executive Officer Julian Dunkerton said Thursday that he has no plans to take the company private.

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BT Group Nine-Month Pretax Profit Fell Depreciation Offset Ebitda Growth

BT Group PLC said Thursday that nine-month pretax profit fell due to increased depreciation that offset earnings before interest, taxes, depreciation and amortization growth.

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Cranswick Says 3Q Revenue Grew; Sees In-Line FY 2023 Outlook

Cranswick PLC on Thursday said its full-year outlook remains in line with the board's expectations as it saw revenue growth accelerating in the third quarter of fiscal 2023.

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Shell Joins U.S. Oil Majors in Posting Record 2022 Profit -- WSJ

By Jenny Strasburg

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JTC Sees Double-Digit 2022 Revenue Growth; Ebitda at Top End of Market Views

JTC PLC said Thursday that for 2022 it booked double-digit net organic revenue growth and that underlying earnings before interest, taxes, depreciation and amortization will be at the top end of the range of market expectations

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James Halstead Sees 1H Pretax Profit Slipping But Remains Positive for FY 2023

James Halstead PLC said Thursday that it expects profit for the first half of fiscal 2023 to be slightly hit by continued though improving headwinds, and expectations for the full-year performance remain positive.

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ScS Group 10-Weeks Order Intake Rose; To Meet FY 2023 Market Views

ScS Group PLC said Thursday that like-for-like order intake rose in the last 10 weeks and that it is on track to meet fiscal 2023 market expectations.

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Hotel Chocolat Appoints Jon Akehurst as CFO

Hotel Chocolat Group PLC said Thursday that it has appointed Jon Akehurst as chief financial officer with effect in May 2023.

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Safestyle Sees 2022 Swing to Underlying Pretax Loss, Revenue Rising

Safestyle UK PLC said Thursday that it expects to swing to an underlying pretax loss for the year ended Jan. 1, in-line with market expectations, and revenue to rise.

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Shell Adds $41 Billion in Profit to Record Annual Haul From Oil Majors -- WSJ

By Jenny Strasburg

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BT Group Nine-Month Pretax Profit Fell as Depreciation Offset Ebitda Growth -- Update

BT Group PLC said Thursday that nine-month pretax profit fell due to increased depreciation that offset earnings before interest, taxes, depreciation and amortization growth.

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Renishaw 1H Pretax Profit Fell on Higher Costs

Renishaw PLC said Thursday that pretax profit fell for the first half of fiscal 2023 after it higher costs, and that weaker demand in the semiconductor and electronics sectors was offset by revenue growth from strategic priorities.

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Dillistone Expects to Report 2022 Revenue Growth on Improving Performance

Dillistone Group PLC said Thursday that it expects to report full-year revenue growth for 2022 after improving performance trends continued through the second half.

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Altona Rare Earths Now Raise GBP1.3 Mln Ahead of Delayed AIM IPO

Altona Rare Earths PLC said Thursday that it now plans to raise 1.3 million pounds ($1.6 million) through a share placing ahead of a planned initial public offering on London's junior AIM, after a previous fundraise expired.

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Shell 4Q Net Profit Boosted by Higher LNG, Deferred Taxes -- Energy Comment

Shell PLC on Thursday reported a 54% rise in net profit for the fourth quarter compared with the earlier quarter, which it attributed to higher liquefied natural gas trading and optimization results, favorable deferred tax movements and partly offset by lower realized oil and gas prices, and higher operating expenses. Here's what the energy giant had to say:

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PCI-PAL 1H Revenue Rose, Sees FY 2023 in Line With Views

PCI-PAL PLC said Thursday that first-half revenue rose and that adjusted Ebitda loss was better than expected as the group pipeline continues to grow.

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Xpediator Shares Rise as 2022 Pretax Profit Seen Ahead of Views

Shares in Xpediator PLC rose 13% on Thursday after the company said that it expects to report 2022 revenue at just below 400 million pounds ($494.9 million) with adjusted pretax profit significantly ahead of previous management guidance of GBP9.0 million.

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Vast Resources Shares Rise on High Court Order for Diamonds Release

Vast Resources PLC shares rose Thursday after it said that the High Court of Zimbabwe has granted a default order against the country's Minister of Mines & Mining Development, relating to historic diamond claims.

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88 Energy Shares Fall on Discounted Share Placing

88 Energy Ltd. shares fell on Thursday after the group said that it expects to raise up to 12.0 million Australian dollars ($8.6 million) via a discounted share placing to strengthen its balance sheet and provide sufficient capital to fund some of its projects.

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Ingenta Sees Increased 2022 Revenue, Earnings on Commercial Division Growth

Ingenta PLC said Thursday that it expects to report increased revenue and adjusted earnings before interest, taxes, depreciation and amortization for 2022, in line with market expectations, thanks to growth at the commercial division.

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Esken Sees FY 2023 Ebitda at Renewables Division Below Guidance on Unplanned Outages

Esken Ltd. said Thursday that fiscal 2023 Ebitda for its Esken Renewables division will be below guidance as biomass plant customers have experienced unplanned outages during the winter months.

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Essentra to Return Around GBP150 Mln to Shareholders via Special Dividend, Buyback Program

Essentra PLC said Thursday that it will return around 150 million pounds ($185.6 million) to shareholders via a special dividend and a buyback program.

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Jadestone 2022 Production Slipped but Revenue Rose on High Oil Prices

Jadestone Energy PLC said Thursday that 2022 production slipped, in line with expectations, though it said it expects to report that revenue rose and that it has made a strong start to 2023.

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Iconic Labs Reduces Credit Claims; In Talks Over Acquisitions

Iconic Labs PLC said Thursday that creditor claims were reduced after the group exit from administration and that it is in talks regarding potential acquisitions.

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Shell Posts $41 Billion Profit, Adding to Industry's Record Haul -- Update

By Jenny Strasburg

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NCC Group 1H Revenue, Pretax Profit Rose on Assurance Performance Across Regions

NCC Group PLC said Thursday that pretax profit and revenue rose for the first half of fiscal 2023 after it booked strong North America and U.K. & APAC Assurance performance.

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Immotion Shares Leap on Planned LBE Business Sale, Return to Shareholders

Shares of Immotion Group PLC rose as much as 79% on Thursday after the company said that it is selling its location-based entertainment business for an enterprise value of $25.2 million and that it will return up to 13.5 million pounds ($16.7 million) of the money to shareholders.

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Heathrow CEO John Holland-Kaye to Step Down

London's Heathrow Airport said Thursday that Chief Executive Officer John Holland-Kaye intends to step down from the board in 2023.

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NCC Group Shares Slide After Company Flags Longer Sales Cycle

Shares of NCC Group PLC fell as much as 20% on Thursday after the company said it has experienced a longer sales cycle since the beginning of the second half of the fiscal year, and now expects to report full-year revenue growth in the single-digits on a constant currency basis.

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Heathrow Airport CEO to Step Down After Turbulent Summer -- Update

By Benjamin Katz

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Shell Posts $41 Billion Profit, Adding to Industry's Record Haul -- 2nd Update

By Jenny Strasburg

 
Market Talk: 

StanChart Looks Less Attractive Than UK Domestic Rivals

1136 GMT - Standard Chartered shares don't look as attractive as those of U.K. domestic rivals, Goldman Sachs says, downgrading the emerging market-focused bank to neutral from buy. The shares have outperformed the European bank sector by 33% since August 2021 on the back of divergent rate hiking paths, which now appear to have played out, Goldman says. Consensus forecasts increasingly appear to reflect the benefit of higher rates, with 2023 net interest income forecasts up 18% over the last year, the bank says. "We see more limited benefit from higher policy rates in Hong Kong," analyst Martin Leitgeb adds in a note, saying Goldman prefers U.K. domestic peers Natwest and Lloyds Banking Group, both of which it rates as buy. (philip.waller@wsj.com)

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Inflation Reduction Act Makes Some U.S. Investments 'Suddenly Interesting,' Shell CEO Says

1136 GMT - The U.S. Inflation Reduction Act is a boon to renewable-energy investment that poses "a broad set of opportunities" in the U.S. for oil giant Shell, the London-based company's Chief Executive Officer Wael Sawan tells reporters on a media call Thursday. "We see now opportunities that we were on the fence on, that are suddenly interesting because of the tax credits," Sawan says, citing areas including blue-hydrogen production and carbon-capture technologies. His comments come in his first quarter as CEO, and as Shell reports record full-year earnings for 2022, a blowout year for big oil-and-gas companies. (jenny.strasburg@wsj.com; @jennystrasburg)

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Strong Company Fundamentals Support Sterling IG Credit

1156 GMT - Sterling-denominated investment grade bonds are an attractive investment due to strong company fundamentals and high levels of yields, says IBOSS senior investment analyst David Winckler in a note. "We like the investment grade U.K. credit market because company fundamentals remain robust, and yields are attractive," he says. The sterling bank credit are also suitable investments as banks in the U.K. are far better capitalized than during the Great Financial Crisis, Winckler says. (miriam.mukuru@wsj.com)

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JTC Seen With Strong Momentum, M&A Potential

1203 GMT - JTC's update points to 2022 Ebitda at the top end of the consensus range, with continued strong organic growth momentum in the business, RBC Capital Markets analyst Andrew Brooke says in a research note. Brooke says the fund administration industry has structural growth potential and consolidation will be a major theme that JTC will play its part in. "In our view, JTC is well positioned given its unique ownership model and jurisdictional reach," he says. RBC has a sector perform rating on the stock with a 820 pence price target. Shares trade up 4.6% at 755.00 pence. (kyle.morris@dowjones.com)

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BOE's Monetary Report Is 'Far Cry' from Earlier Dire Predictions

1217 GMT - The Bank of England's monetary policy report is a "far cry from the rather dire predictions of only a few weeks ago," revealing that the BOE now expects a shorter and shallower recession, Jeremy Batstone-Carr, European strategist at Raymond James Investment Services says in a note. The BOE raised the bank rate by 50 basis points to 4%, as most in the market had expected, but the Monetary Policy Committee was again split with two members voting for unchanged rates and one for a 75bp increase. The markets are eager for the BOE to signal it is close to, or at, its peak rate, the strategist says. (emese.bartha@wsj.com)

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Sterling Trims Losses Only Briefly After BOE Lifts Rates 50Bp

1229 GMT - Sterling trims its losses but only briefly after the Bank of England raised interest rates by 50 basis points to 4.0% although two out of nine members preferred to keep rates unchanged. Some analysts expected a smaller 25bp rate rise. The BOE said inflation is likely to fall sharply over the rest of the year but the outlook is uncertain and it will lift rates further if inflationary pressures persist. GBP/USD initially rises to 1.2386 after the decision from 1.2332 beforehand but has since fallen back down to 1.2284. EUR/GBP briefly falls to 0.8888 from 0.8919 before rising to a fresh four-month high of 0.8950, according to FactSet. (renae.dyer@wsj.com)

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BOE Could Be Nearing End of Rate-Rise Cycle

1238 GMT - The Bank of England is likely to be nearing the end of its interest-rate rising cycle after lifting rates by 50 basis points to 4.0% on Thursday, Killik & Co partner Rachel Winter says. While the market had priced in Thursday's rate decision, many had hoped the BOE would hold off on a further rise given the latest inflation reading registered a slight fall in prices, she says in a note. "The good news is that we do appear to be getting close to peak interest rates, with the market now predicting that our base rate will reach 4.5% this summer before declining." (renae.dyer@wsj.com)

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BOE Could Start Cutting Rates by Year-End

1249 GMT - The Bank of England looks set to raise interest rates only once more, with the possibly of rate cuts before year-end, UBS Global Wealth Management says. It seems the appetite for further outsized rate rises is fading after the BOE lifted rates by 50 basis points to 4.0% on Thursday, although another increase is still likely given the BOE's outlook for growth and inflation, UBS economist Dean Turner says in a note. "We look for one further increase of 25 basis points in March which should mark the top of the cycle," he says. "Furthermore, we believe the door remains open for rate cuts before the year is out." (renae.dyer@wsj.com)

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BOE's Lower Inflation Forecasts Point to End of Interest-Rate Increases

1254 GMT - The new inflation forecasts from the Bank of England suggest policy makers won't need to raise interest rate further over the coming months in order to bring inflation back to the 2% target, Pantheon Macroeconomics chief U.K. economist Samuel Tombs says in a note. The minutes of the meeting didn't include any clear guidance of further interest rate increases, he adds. Still, one last 25 basis-point rate increase in March still can't be ruled out, Tombs says. "But if, as we expect, signs of slowing price rises and accumulating labour market slack continue to emerge in line with its expectations, then the Monetary Policy Committee looks set to keep bank rate at 4% in March, and throughout the rest of this year." (xavier.fontdegloria@wsj.com)

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BOE Statement Indicates Caution, Points to Data Dependence

1258 GMT - The Bank of England's statement accompanying a 50 basis-point rate rise indicates a central bank that is cautious and looking for more data to direct them on future policy action, Fredrik Repton, portfolio manager with the global fixed income and currency management teams at Neuberger Berman, says in a note. The labor market is stronger than they had expected and they have revised up forecasts for the economy as a whole, but the BOE now expects inflation to drop markedly due the base effects in energy prices, he says. "Thus, it has removed the reference to forceful with regards to increasing interest rates and this is perhaps the biggest takeaway before the press conference as market participants reads this as dovish." (emese.bartha@wsj.com)

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BOE Expected to Keep Raising Interest Rates Amid Tight Labor Market

1259 GMT - The Bank of England is expected to continue to increase interest rates to at least 4.50% from the current 4.00%, J.P. Morgan Asset Management chief market strategist for EMEA Karen Ward says in a note. "Even though headline inflation is likely to fall in the coming months, on the back of stable energy prices, we do not expect core inflation to weaken materially as wages continue to put upward pressure on costs and final prices," she says. The U.K. has a problem of labor supply as half a million people left the workforce during the Covid-19 pandemic and may not return in the short-term, she says. "At times like these, the bank has to make the 'unpopular' choice," Ward says. (xavier.fontdegloria@wsj.com)

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European Stocks Stay Higher After BOE Rate Rise

1302 GMT - European stocks broadly maintain gains after the Bank of England raised U.K. interest rates, though sterling compounded losses. The Stoxx Europe 600 gains 0.4%, the FTSE 100 rises 0.5%, the CAC 40 edges 0.1% higher and the DAX jumps 1.1%. Brent crude drops 0.7% to $82.23 a barrel. IG futures data show the Dow opening at 33933, versus Wednesday's close of 34092. The pound drops against the euro and the dollar as the BOE increased rates by 0.5% percentage points to 4%, but implied that they might have peaked. "We retain a cautious view on U.K. and European stocks in the face of downside risks to GDP and corporate earnings growth relative to consensus expectations," HSBC Global Asset Management strategist Hussain Mehdi writes. (philip.waller@wsj.com)

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Sterling Could Fall, Gilt Yields Rise After Rate Decision

1309 GMT - Sterling may fall in the near-term and yields of U.K. government bonds, or gilts, may rise slightly after the Bank of England's policy decision Thursday, Aviva Investors says. With the BOE anticipating a shorter and shallower recession and saying inflation risks are "skewed significantly to the upside," gilt yields should rise but not materially given expectations for inflation to ease, Aviva head of rates Ed Hutchings says in a note. "Sterling may well begin to struggle in the near-term, and with the sizeable amount of gilt issuance to come, plus on-going quantitative tightening, 2023 could also be somewhat more challenging for the gilt market." The BOE voted 7-2 to lift rates by 50 basis points on Thursday. (renae.dyer@wsj.com)

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BOE's Tightening Cycle Looks Close to Its End

1309 GMT - The Bank of England's messaging suggests the bank is laying the groundwork for the end of the current cycle of interest-rate increases, ING developed markets economist James Smith and senior rates strategist Antoine Bouvet say in a note. Lower inflation forecasts, muted language about future interest-rate hikes and warnings about economic growth suggest the peak level of the deposit rate is close, they say. Still, Thursday's interest rate increase isn't likely to be the last amid still-high wage growth, ING says. "We think the BOE will be less rapid to turn to rate cuts than the Federal Reserve, given core inflation is likely to prove stickier," they say. "That suggests policy easing is unlikely for at least a year." (xavier.fontdegloria@wsj.com)

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BOE Outlook Uncertain, Premature to Expect Rate Rises to End

1311 GMT - The outlook for U.K. inflation and interest rates remains uncertain and it's too early to conclude that the Bank of England will soon stop raising rates, Marcus Brookes, chief investment officer at Quilter Investors says in a note. "Calling this the beginning of the end of rate hikes still feels a little premature," he says after the BOE raised interest rates by 50 basis points to 4.0%. Inflation is "stubbornly high" and the BOE is "keen to reinforce that the job is far from done," he says. "It may be the Bank of England is happy to allow a shallow, but prolonged, recession take place in order to tame inflation." Investors should stay "patient and diversified," he says. (jessica.fleetham@wsj.com)

 

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

February 02, 2023 08:57 ET (13:57 GMT)

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