The FTSE-100 finished yesterday's session 0.39% lower at 7,725.43, whilst the FTSE AIM All-Share index was down 0.23% at 1,060.75. In continental Europe, the CAC-40 finished 0.36% lower at 5,493.99 whilst the DAX was down 0.47% at 13,183.96.
Last night in New York, the Dow reached 26,115.63, the S&P 500 climbed to 2,802.56 and the NASDAQ added 1.03% to 7,298.28.
In Asian markets this morning, the Nikkei was 104.97 points lower at 23,763.37 and the Hang Seng was down 32.44 points at 31,950.97.
In early trade today, WTI crude was up slightly at $64.01
China's economy grows by 6.9% in 2017
China's economy grew by 6.9% in 2017 according to official data - the fastest pace in two years. The figure comfortably beats Beijing's official growth target of about 6.5%. China is a key driver of the global economy and so the better-than-expected data is likely to cheer investors around the world.But many China watchers are sceptical about the country's GDP numbers and believe growth is much weaker than the official data suggests. The numbers released on Thursday showed that in the last three months of 2017, the economy grew at an annual rate of 6.8% - slightly higher than analysts had been expecting. A crackdown on risky debt together with an effort to reduce factory pollution dampened growth during the period.
Source: BBC News
Burberry Group (LON:BRBY) 1,619.00p – Buy
Burberry yesterday provided trading update for the 3 months ended 31 December 2017 (‘Q3 FY18’). During the period, reported retail revenue dropped by -2% to £719m, while it advanced by +1% on an underlying basis. On a LFL basis, sales rose by +2% YOY. The growth was led by outperformance in fashion product with good online sales. The group completed to date £242m of £350m share buyback programme for FY18. The group said recent change in US tax legislation is expected to incur one-off (non-cash) tax charge of £10m-£15m in FY18, whilst it will not impact EPS and the effect is likely to be marginally positive from next year. Altogether, management maintained their adjusted operating profit (at constant currencies) expectations and cost savings target for FY18. Burberry is scheduled to release its Preliminary Results on 16 May 2018.
Our view: LFL sales growth of +2% was weaker than expected as benefit from weaker Sterling has now been annualised (UK saw strong sales in comparative period), while performance in China slowed due to cut back on promotional activities. On the other hand, regions such as Korea and Middle East showed improvement in performance which was a positive news. Broadly stable to slight drop in total sales are very much expected as the group is set to transform itself towards luxury and fashion forward segment. More positively, however, the management stated that it expects underlying margin improvement for the FY18 which means after the FX impact, the margin will be sustained. The shares are valued at FY18E and FY19E P/E multiple of 20.2x and 20.0x with dividend yield of 2.5% and 2.6%, respectively. We anticipate reduction in individual US tax rate and positive trend on global economy to be advantageous to Burberry and therefore reiterate our Buy rating on the shares. Given anticipated downgrade in top-end of the consensus, however, we reduced our target price to 1,872p (from 1,980p).