FTSE 100 Little Changed Ahead of BOE Rate Decision

0758 GMT - The FTSE 100 is little changed at 7442 points as investors digest corporate updates and look ahead to the Bank of England's latest policy decision. Next gains 2.5% after the fashion retailer raised its full-year profit forecast following a strong second-quarter. Phoenix Group rises 2.4% after the insurance company announced the acquisition of life insurer Sun Life and a 2.5% dividend increase. Hikma Pharmaceuticals slumps 8.7% after posting weaker first-half profits. Glencore drops 0.9% even after reporting significantly improved first-half profit and topping up shareholder returns as lower copper prices weigh on mining shares. The BOE is largely expected to lift rates 50 basis points to 1.75%, its biggest rise since 1995, in a decision at 1100 GMT. (renae.dyer@wsj.com)

 
Companies News: 

Empiric Student Property Appoints Donald Grant as CFSO Designate, Executive Director

Empiric Student Property PLC said Thursday that it has appointed Donald Grant as its new chief financial and sustainability officer designate and executive director of the group.

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Mears Group 1H Profit Significantly Rose; Hikes Full-Year Expectations

Mears Group PLC said Thursday that its first-half pretax profit significantly rose, and it raised its expectations for the full year.

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Duke Royalty 1Q Normalized Cash Revenue Rose to Record High

Duke Royalty Ltd. said Thursday that it expects to close the first quarter of fiscal 2023 with significantly higher normalized cash revenue, which is expected to increase further in the second quarter.

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City of London Group Appoints Jean Murphy as Chief Executive of Recognise Bank

City of London Group PLC said Thursday that Jean Murphy has been appointed as chief executive of Recognise Bank Ltd., its principal operating subsidiary.

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Instem 1H Revenue Rose, Inflation to Pressure Operating Profit

Instem PLC said Thursday that it expects to report a 40% increase in revenue for the first half of 2022, but that operating profit growth is likely slow due to inflationary pressures.

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Facilities by ADF Sees 1H Revenue Marginally Up on Robust Demand

Facilities By ADF PLC said Thursday that it expects to report revenue for the first half of 2022 that is marginally ahead on year as demand was robust.

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Ironveld Shareholder Withdraws Meeting Request to Remove Chairman, CEO

Ironveld PLC said Thursday that shareholder Richard Jennings, director of Align Research Ltd., has withdrawn his request to call a general meeting of shareholders to remove Chairman Giles Clarke and Chief Executive Martin Eales.

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Sanderson Design Sees 1H Profit In line; Sales to Rise 1%

Sanderson Design Group PLC said Thursday that it expects to report first-half profit in line with management views, with sales rising 1% on year.

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Secure Trust Bank 1H Pretax Profit Fell on Higher Impairments, Cuts Dividend

Secure Trust Bank PLC said Thursday that pretax profit for the first half fell on higher impairment charges, and reduced its dividend payout.

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Mobile Streams FY 2022 Revenue More Than Doubled on Strong Growth

Mobile Streams PLC said Thursday that it expects to report that fiscal 2022 revenue more than doubled due to continued strong growth.

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Falanx Group Expects FY 2022 Revenue Increase on Improved Pipeline; Shares Rise

Falanx Group Ltd. shares rose on Thursday after the company said that it expects to report an increased revenue for fiscal 2022 driven by services revenue and improved pipeline.

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Gym Group 1H Pretax Loss Narrowed on Membership Recovery

Gym Group PLC reported a narrowed pretax loss for the first half of 2022 driven by higher membership following the ease of Covid-19-related restrictions, and said that it expects a robust second half as students return to universities.

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Nightcap FY 2022 Like-For-Like Revenue Rose; Sees Adjusted Ebitda in Line

Nightcap PLC said Thursday that it finished fiscal 2022 with positive trading and that it expects to report a full-year increase in like-for-like revenue of 24%, in line with management expectations.

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BlueRock Diamonds Sells Two Large Stones in July's Tender, Production Rises

BlueRock Diamonds PLC said Thursday that it has sold two large stones in its July tender for a total amount of $121,716, and that production increased over the month.

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Alkemy Capital Shares Rise on Oversubscribed, Premium Share Placing

Shares in Alkemy Capital Investments PLC rose as much as 25% in early trade Thursday after the company said that it has raised 1.2 million pounds ($1.5 million) via an oversubscribed premium share placing which will be used toward a facility in Teesside, U.K.

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ConvaTec 1H Pretax Profit Fell, On Track to Achieve 2022 Views

ConvaTec Group PLC said Thursday that pretax profit for the first half of 2022 fell driven by higher costs, while its revenue grew, and that it expects to achieve its 2022 guidance despite expecting weaker growth in the second half.

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Evraz 1H Revenue Jumped on Higher Coal Prices But Profit Fell on Currency Effects

Evraz PLC on Thursday reported a lower pretax profit for the first half of the year, but revenue and Ebitda grew on the back of higher coal prices.

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STM Group Chairman to Step Down, 1H Business Slower Than Expected; Shares Fall

Shares in STM Group PLC fell 10% on Thursday after it said that Nonexecutive Chairman Duncan Crocker has decided to step down within the next month and that first-half business has continued to be slower than expected due to U.K. new business revenue taking longer to materialize than predicted.

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Saietta Group Raises GBP23 Mln Via Oversubscribed Share Placing

Saietta Group PLC said Thursday that it has now raised 23 million pounds ($27.9 million) via the share placing first announced late Wednesday, which was oversubscribed.

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ScS Group Warns of Lower FY 2023 Orders as Consumer Sentiment Drops

ScS Group PLC said Thursday that it has seen a reduced number of online and in-store visitors in recent months and that it expects lower orders for fiscal 2023 amid higher costs of living and economic uncertainty.

 
Market Talk: 

Hikma's Generic Business Expected to Drive Investor Focus

0855 GMT - The challenges faced by Hikma Pharmaceuticals' generics business will continue to preoccupy investors, Citi analysts say in a research note as shares in the pharmaceutical group fall 9.2%. Despite a robust performance in the injectables and branded divisions, which represent more than 70% of its sales, near-term investor focus is on Hikma's downgraded 2022's guidance of its U.S. generics business caused by pricing pressures and volume erosion amid a competitive environment, they say. The new guidance implies a revenue decline of 18% to 21%, but the company expects to come back to growth in 2023, Citi notes. (michael.susin@wsj.com)

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BOE Unlikely to Dampen Rate Rise Bets, May Welcome Pound Gains

0848 GMT - The Bank of England is unlikely to dampen the market's interest-rate rise expectations at Thursday meeting while sterling's recent strength may be well-received due to high inflation, ING says. "Given high gas prices and a strong dollar--plus BOE remarks that sterling plays a role in monetary conditions--the BOE may be reluctant to push back against tightening expectations today and will probably welcome the 3% bounce in trade-weighted sterling over the last month," ING analysts say in a note. If the BOE reiterates that it's prepared to act forcefully to combat rising inflation after an expected 50 basis points rate rise Thursday at 1100 GMT, EUR/GBP could fall to the 0.8275-0.8300 area from 0.8374 currently, they say. (renae.dyer@wsj.com)

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Glencore Results Should Be Taken Positively, RBC Says

0824 GMT - Glencore reported Ebitda of $18.9 billion for the first half, beating the market consensus of $18.4 billion due to a better marketing performance, RBC's Tyler Broda says in a note. The dividend and capital return was within the consensus range, and will be taken with a sigh of relief from the market, he says. In addition, the cost guidance appears to be very weak, but, excluding lower cobalt payabilities and higher oil prices, most of the increase is driven by by-product volatility which is well understood by the market, Broda adds. The analyst expects the results to drive small net consensus downgrades, but expects the market to take them positively. Shares rise 1.1%. (jaime.llinares@wsj.com)

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Pound Seen Driven by Risk Appetite Rather Than Rate Rise Bets

0806 GMT - The pound's recent appreciation seems driven by improved global investor risk sentiment as opposed to expectations for the Bank of England to raise interest rates more aggressively Thursday, MUFG Bank says. "The recent strengthening of the pound against both the U.S. dollar and euro has not been backed up by short-term yield spreads moving in favor of the U.K.," MUFG currency analyst Lee Hardman says in a note. That suggests market expectations for the BOE to deliver a larger 50 basis points rate rise Thursday are unlikely to have been an important driver of the pound's recent strength, he says. The BOE announces its rate decision at 1100 GMT.(renae.dyer@wsj.com)

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Glencore Reports Strong 1H Results But Raises Cost Guidance

0749 GMT - Glencore has reported a solid set of results for the first half, with Ebitda doubling and 3% ahead of company-compiled consensus expectations, Citi's Ephrem Ravi says in a note. However, the mining company also revised its full-year unit cost guidance. The outlook for copper costs has been increased the most, and zinc, nickel and coal are all up too, the analyst says. "We believe that while mark-to-market momentum from stronger spot coal prices is well understood by the market, cost revisions are likely to partially offset some of the earnings upside for 2022," he says. Shares fall 0.8%. (jaime.llinares@wsj.com)

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Economic Sensitivity Would Argue for 25Bp BOE Rate Rise, but 50Bp Is Likely

0748 GMT - The U.K. economy's heightened sensitivity to higher interest rates versus other economies would argue for a 25 basis-point interest-rate rise by the Bank of England on Thursday, but still a 50 basis-point rise is very likely, Georgina Taylor, multi-asset fund manager at Invesco, says in a note. "It is very likely that they hike by 50bps as a behavioural response to other central banks hiking to stave off inflation and the risk of being seen to being behind the curve," she says. Markets overwhelmingly price in a 50bp BOE rate rise for Thursday, which would bring the bank rate to 1.75%, while a small minority expects only a 25bp increase. (emese.bartha@wsj.com)

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Mondi Shares Slip After Last-Minute Expectations Miss

0736 GMT - Mondi's second-quarter Ebitda was good, rising on-quarter, but it modestly missed buy-side expectations that were raised just before the result's publication, explaining the share-price slip in early trading, Jefferies says. The paper-and-packaging company's 2Q Ebitda of EUR482 million--excluding Russia--was higher than the first quarter's EUR460 million and it beat a previous limited market consensus of EUR440 million to EUR460 million, but buy-side expectations moved higher just before publication to around EUR500 million, so it ended up a 4% miss, Jefferies analysts Cole Hathorn and Michele Filippig say in a research note. That said, "pricing remaining strong into 2H, and... reassuringly Mondi expects a good year of progress." Jefferies retains its buy rating and 1,775.0 pence price target. Shares are down 2.6% at 1,568.0 pence. (joseph.hoppe@wsj.com)

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A 50Bp BOE Rate Rise Would Only Mean Catch-Up With Peers

0729 GMT - From an investment perspective, a 50 basis point interest rate rise by the Bank of England wouldn't necessarily mean the BOE is about to embark on an accelerated hiking cycle, rather it is more of a catch-up with the frontloading of policy tightening by peers, says Robert Alster, chief investment officer at Close Brothers Asset Management. "It could be joining both the Federal Reserve and the European Central Bank in frontloading tightening," he says. Given the uncertainty around U.K. fiscal policy and less-than-expected slack in the labor market, the BOE's Monetary Policy Committee may be ready to take a more hawkish tone, he says, but adds that forecasts will remain uncertain until the Tory leadership race is won, and fiscal policies are confirmed. (emese.bartha@wsj.com)

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Next Seen Able to Deliver Higher Rate of Sales Growth After 2Q

0719 GMT - Next is relatively well positioned in the fashion industry and has the potential to offer investors a strong online and cash-returns story after its second-quarter sales update, RBC Capital Markets says in a research note. Long term, the fashion retailer should benefit from its broad range and strong omnichannel offer, with fast, highly automated logistics and a well-developed customer base, the bank says. "Next faces U.K. consumer headwinds, however over the cycle we think Next should be able to achieve a higher rate of sales growth than the 2% that it has achieved historically," RBC says. The bank has an outperform rating on the stock and a target price of 6,800 pence a share. Shares are up 1.7% at 6,866.00 pence. (sabela.ojea@wsj.com; @sabelaojeaguix)

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Rolls-Royce 1H Numbers Look Acceptable But Civil Benefited From Retrospective Tailwind

0719 GMT - Rolls-Royce Holdings' first-half numbers look ok on a headline basis, but the performance in Civil was still boosted by a significant retrospective catch-up tailwind, Jefferies's equity analyst Chloe Lemarie says in a research note. The U.K. engineering company did though reiterate guidance and provide more quantified targets, despite challenges, she says. "We are disappointed that Civil margin once stripped of a number of one-offs, remains well below breakeven," Lemarie says. Jefferies has a hold rating on the stock with a target price of 1000.00 pence. Shares trade down 5.3% at 85.99 pence. (kyle.morris@dowjones.com)

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Serco's 1H Results Show It Is a Good Bet in Uncertain Markets

0711 GMT - Serco Group's first-half results were ahead of the increased guidance in its May trading update, with trading profit and net debt both beating expectations, RBC Capital Markets says. The U.K. outsourcing company also showed off a robust pipeline--which was up 40% on year--an 18% increase in the dividend to 0.94 pence, and a further increase in guidance to reflect a strong performance in June and July and positive foreign-exchange movements, RBC analyst Andrew Brooke says in a research note. "We continue to see Serco as a good place to be in the current uncertain environment given its defensive nature, high visibility, strong momentum, balance-sheet strength and undemanding valuation," the Canadian bank says. RBC retains an outperform rating and 205 pence price target on the stock. (joseph.hoppe@wsj.com)

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BOE's QT Details Might Impact Gilt Curve Flattening Outlook

0704 GMT - Details to be provided by the Bank of England about quantitative tightening may help determine whether the reflattening of the 10-30-year segment of the gilt curve can persist into growing supply and fiscal risks from the autumn, Citi's rates strategists write in a note. The BOE is set to reveal the QT strategy at Thursday's policy meeting, ahead of active sales, potentially from September, the strategists say. Despite uncertainty about QT, there has been a revival in the long end of the gilt curve, they add. The 10-year U.K. gilt yield is trading at 1.922%, down 0.7 basis points, according to Tradeweb. The BOE's monetary policy report and interest rate decision are due at 1100 GMT. (emese.bartha@wsj.com)

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BOE's Outlook, Rate Rise Signals Seen as Key For Sterling

0703 GMT - The Bank of England is widely expected to raise interest rates by 50 basis points to 1.75% in a policy decision at 1100 GMT Thursday, which shouldn't in itself provide much support to sterling, Commerzbank says. More important will be the BOE's new economic projections, along with any signals on future rate rises, Commerzbank currency analyst Antje Praefcke says in a note. "If the BOE gives the market the impression that its expectations are too high, GBP/USD might ease towards 1.20 again." Sterling's losses against the euro are likely to be limited amid uncertainty over how much the European Central Bank will lift rates given the looming energy crisis, Praefcke says. GBP/USD and EUR/GBP are flat at 1.2148 and 0.8370 respectively. (renae.dyer@wsj.com)

 

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(END) Dow Jones Newswires

August 04, 2022 05:18 ET (09:18 GMT)

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