The FTSE 100 edged lower on Tuesday, by 0.03% at 7,542.77
points, with today's U.S. inflation data unable to provide any
further impetus ahead of tomorrow's Federal Reserve meeting.
Leading the fallers was Hargreaves Lansdown, down 6.7% after the
U.K. Financial Conduct Authority penned a letter to investment
platforms and money managers raising concerns over earned interest
on client accounts. Shares in Abrdn and AJ Bell also took a tumble
as a result. "Today's move appears to be kneejerk in nature as none
of the companies indulge in the behavior that the FCA is most
concerned about," CMC Markets UK analyst Michael Hewson says in a
market comment.
COMPANIES NEWS:
AstraZeneca to Buy Icosavax for Up to $1.1 Bln
AstraZeneca said it would buy U.S.-based clinical-stage
biopharmaceutical company Icosavax for up to $1.1 billion in a deal
that expands its vaccines and immune therapies late-stage
pipeline.
---
S&U Reports Net Receivables Growth Despite Challenging
Environment
S&U said it has made steady but more cautious progress
despite challenging tax and regulatory burdens for the half year
reflecting a lack of consumer confidence amid an inflationary
environment.
---
Chemring Pretax Profit Fell on Higher Costs; Performance in New
Year in Line With Views
Chemring Group said that fiscal 2023 pretax profit fell after
booking higher costs, and that its performance in the current year
has been in line with the board's expectations.
---
Shaftesbury Capital COO Chris Ward Steps Down
Shaftesbury Capital said Tuesday that Chief Operating Officer
Chris Ward will step down from the board on December and will not
be replaced.
---
Morgan Sindall Finance Director to Retire
Morgan Sindall said that its finance director Steve Crummett
will retire from the company with effect from the end of next
year.
---
Sosandar Backs Views After Robust Autumn Performance
Sosandar said that autumn sales have been robust and that it
continues to perform in line with expectations for fiscal 2024.
---
Smartspace Software's Shares Soar on Skedda Holdings Bid Valuing
it at GBP25 Mln
Shares in Smartspace Software jumped after Skedda Holdings said
it has made a cash offer for the company valuing it at 25.0 million
pounds ($31.4 million), a significant premium to the prevailing
share price.
---
Smartspace Software Doesn't Support Skedda's GBP25 Mln Takeover
Proposal
Smartspace Software said it doesn't currently support Skedda
Holdings' latest 25 million pound ($31.4 million) takeover
proposal.
---
Icosavax Shares Take Flight on Takeover by AstraZeneca
Shares of Icosavax jumped nearly 50% in premarket trading
Tuesday after the vaccine developer agreed to be acquired by
pharmaceutical giant AstraZeneca in a deal worth up to $1.1
billion.
---
FCC to Acquire Urbaser's U.K. Subsidiary in $500 Mln Deal
Fomento de Construcciones y Contratas said that its
environmental-services unit has agreed to buy Urbaser's U.K.
subsidiary in a deal valued at an estimated 398 million pounds
($499.8 million), including debt.
---
NVent Electric Raises Quarterly Dividend by 8.6%
NVent Electric's board has raised the electrical connection and
protection solutions provider's quarterly dividend by 8.6%, to 19
cents from 17.5 cents.
MARKET TALK:
Above-Average Gain Expected from Bonds in 2024, Pictet AM
Says
1426 GMT - Bonds should deliver above-average gains in 2024, due
to higher coupon income, weaker nominal GDP growth and a gradual
shift in central bank monetary policies toward modest easing, Arun
Sai, senior multi asset strategist at Pictet Asset Management, says
in a note. According to Pictet's forecasts, U.K. and U.S. benchmark
government bonds are likely to outperform other developed market
peers, while emerging local currency bonds are likely to be the
overall winner with an expected return of more than 12% in U.S.
dollar terms, the strategist says. Emerging market dollar
denominated debt should also outperform given that its current
yield stands at 9%, the highest in the sovereign bond market and
some 200 basis points above its 10-year average, he says.
(emese.bartha@wsj.com)
---
Chemring's Growth Story Underpinned by Strong Results,
Outlook
1326 GMT - Chemring's strong fiscal 2023 results, positive
outlook, record order intake and ambitious capital investment
program underpin analysts' expectations for future growth, Shore
Capital analyst Jamie Murray says in a note. Demand for the defense
company's products remains high, with record order intake of GBP756
million and a decade-high backlog of GBP922 million, while
multi-year visibility for its countermeasures and energetics
segment is at unprecedented levels, Murray says. Furthermore, its
GBP120 million investment program at the energetics division,
combined with the fast-growing Roke division, points to its
compelling growth story, Murray says. "We encourage investors to
buy the shares to gain exposure to a well-run business, with
structural tailwinds and excellent products," he says. Shares are
up 0.8% at 330 pence. (anthony.orunagoriainoff@dowjones.com)
---
On the Beach's Positive Outlook Prompts Upgrades
1308 GMT - On the Beach sees positive momentum across its core
and premium segments after a period of investments, Liberum
analysts Anna Barnfather and Nishant Dahad say in a note. The
online holiday retailer's marketing costs have reduced to 38% from
45% of core U.K. segment revenue, which means it could now deliver
faster profit growth against the backdrop of strong consumer demand
for holidays, the analysts say. "After two solid updates we are
feeling more confident in the positive outlook with... costs
stabilized to drive more operating leverage," the analysts say.
Liberum upgrades its rating on the stock to buy from hold, and
raises its target price to 200 pence from 125 pence. Shares are up
3% at 162.80 pence. (anthony.orunagoriainoff@dowjones.com)
---
Hargreaves Lansdown, AJ Bell Benefited Most from Interest on
Client Money, RBC Says
1244 GMT - Hargreaves Lansdown and AJ Bell have earned the most
from interest made on clients money, RBC analyst Ben Bathurst
estimates. The U.K.'s Financial Conduct Authority calculates that
GBP74.3 million of revenue was earned collectively by investment
and self-invested personal pension platforms in June. Of that
amount, Bathurst estimates 23% was generated by Hargreaves and 7%
by AJ Bell. The FCA flagged renewed concerns about interest earned
on customer cash balances and criticized the high percentage of
interest retained by some firms without justification, RBC says.
"Whilst the letter falls short of banning the practice of retaining
client interest, we can envisage extra pressure on revenues from
this source as a result," Bathurst says. AJ Bell and Hargreaves
shares are down 7.77% at 287.40 pence and 7.16% at 710.40 pence,
respectively. (najat.kantouar@wsj.com)
---
Jet2 Seen Well Sheltered From Headwinds
1228 GMT - For Jet2, headwinds from geopolitical conflicts and
higher wage costs are overplayed, HSBC analysts say in a note. The
leisure-travel group isn't directly exposed to the Middle East, and
should be able to pass on higher costs through pricing, they say.
Winter capacity is up 21% with pricing-to-date robust and in line
with 1H trends, while summer 2024 bookings and pricing look
encouraging on the back of a 12% rise in capacity, the analysts
say. "The key risk we see are a sharp fall in bookings, most likely
driven by weakening consumer confidence, which we don't expect in
the current market environment," the analysts say. Shares are down
1.05% at 1,227 pence. (anthony.orunagoriainoff@dowjones.com)
---
U.K. Domino's Pizza's 2024 Could Be Transformational
1228 GMT - Domino's Pizza Group is hinting that 2024 could be a
transformative year, Liberum analysts Wayne Brown and Anubhav
Malhotra say in a note. The pizza chain--the holder of the master
franchise agreement to own, operate and franchise Domino's stores
in the U.K. and Ireland--is focused on core growth and is balancing
well both earnings delivery and returns for stakeholders, they say.
However, the most exciting is the potential to improve standards
and capital reallocation in order to drive franchisee
profitability, they add. "We need to wait for March 2024 to get
more details, but Domino's could be returning to its former glory,"
the analysts add. Shares are down 0.5% at 392.0 pence.
(michael.susin@wsj.com)
---
Pennon Faces Increasing Risks From Water Regulator's Probing of
Subsidiary
1205 GMT - Pennon could see a negative impact from one of its
subsidiaries being probed by the U.K. water-services regulator,
Citi analysts Jenny Ping and Rory Graham-Watson write in a research
note. Additionally to the investigation, the government has sent
letters of warning to CEOs and asked the Environment Agency to set
out plans to reduce sewage spills. These action underline the
pressure on both the government and the regulator--Ofwat--to show a
tough approach towards a highly-politicized sector, the analysts
say. "A dynamic which we think raises the risk going into next
year's key regulatory milestones." Ofwat's probing will likely find
wrongdoings, given a resolution would already have been reached had
there been none, they say, adding that an enforcement action can
reach 10% of relevant turnover. Pennon shares are down 2.7% at
730.50 pence. (christian.moess@wsj.com)
---
European Stocks Trade Mixed; US Eyes Modest Gains
1201 GMT - European stocks trade mixed after upbeat Asia trading
and ahead of an expected slightly higher U.S. open. The Stoxx
Europe 600 falls 0.1% and the Dow drops 0.2%, but the FTSE 100 and
CAC 40 gain 0.4% and 0.1% respectively. Oil shares trade mixed,
with Brent crude dropping 0.3% to $75.82 a barrel. Asia markets
mostly closed higher, with Hong Kong's Hang Seng advancing more
than 1%. IG futures data shows the Dow opening at 36448, versus
Monday's close of 36404. "Markets now await new signals from
today's U.S. inflation report [and] the Federal Reserve's
interest-rate decision Wednesday, with expectations that rates will
remain unchanged in December," market analyst at multi-asset
brokerage XS.com, Rania Gule, writes. (philip.waller@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires;
(END) Dow Jones Newswires
December 12, 2023 12:56 ET (17:56 GMT)
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