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Footsie up ahead of close; unrest at ITV hits shares

The bulls could not quite push the top-share index above 7,400. Tomorrow they'll have a harder job with ex-div stocks lopping about 14 points off the Footsie
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ITV's humungously well-paid CEO Adam Crozier is departing soon with a fistful of fivers
  • FTSE 100 closes at 7,385, up 43

  • Index spurns chance to return above 7,400 level

  • ITV weak after AGM update, pay revolt expected

  • Small-cap energy companies Cogenpower and Ncondezi power down

Having taken a close peek at the 7,400 level, the blue-chip index turned back to close at 7,385, up 43 on the day.

House builder Barratt Developments PLC (LON:BDEV) rose 2% on its trading update but broadcaster ITV plc (LON:ITV) fell by the same extent following its first quarter update.

Investors headed rapidly for the doors at Cogenpower PLC (LON:CGP), beating a path previously trodden by the company’s auditor.

The low carbon technology energy business revealed last week its working capital position was extremely constrained.

The shares lost ore than half their value at 3.25p.

 

Also powering down was Ncondezi Enery Limited (LON:NCCL), as it said it was in discussions with loan holders regarding an extension of the repayment date.

4.15pm: Tax bill knock for Diageo

Diageo plc (LON:DGE) was a late blue chip faller, shedding 0.6% to 2,277.5p after the drinks giant said it will have to pay £107mln in additional tax and interest for its financial 2015 and 2016 years under HM Revenue & Customs' Diverted Profits Tax regime, but said it will challenge the assessment.

HMRC's Diverted Profits Tax regime, which came into effect in April 2015, is a tax charged at 25% on profits that are considered to be artificially diverted from the UK.

Diageo does not believe it falls into the scope of the regime and said it will challenge the assessment when received, but in order to do this, it will have to pay the full amount up front and then continue to work to resolve the matter with HMRC.

Just 15 minutes ahead of the London close, the FTSE 100 index was up around 44 points at 7,386, holding off the day's peak as US blue chips continued to make dull progress but came off early lows, with the Dow Jones around 6 points lower.

3pm: Footsie near session highs but US stocks fall

The FTSE 100 continued to trade close to session highs in late afternoon trading, extending yesterday’s gains despite opening declines by US stocks.

Around 3.00pm, the UK blue chip index was ahead nearly 40 points at 7,382, just off the day’s peak of 7,383.50, having dipped back to a low of 7,331 early on.

In early trade on Wall Street, the Dow Jones dropped around 52 points to 20,922, while the broader S&P 500 index was down about 3 points at 2,394, and the tech-laden Nasdaq composite shed 7 points.

Some analysts were blaming the New York decline in part on Donald Trump’s surprise firing yesterday of FBI Director James Comey, showing markets are still wary of an unpredictable president.

Chris Beauchamp, chief market analyst at IG, said: “It’s not every day that the US president fires the head of the FBI, so some of what we are seeing could be concerns about the political situation in the US, but overall a lack of macro catalysts and general exhaustion in equities is the main cause of the current drift in European stocks.”

He added: “A failure to hold above 2400 has been a consistent feature of the S&P 500 this week, and this lack of forward momentum should worry investors expecting a continuation of the broader equity rally.”

In London, however, the mood remained rosy helped by some upbeat corporate earnings.

Housebuilders were in demand after Barratt Developments PLC (LON:BDEV) said its full-year profits would be at the top end of its guidance range, and forward sales were at a record level.

Barratt shares gained 3.4% to 617p, just easing off  an 18-month high, with the stock now up 95% from their post-Brexit vote lows.

Elsewhere British Gas-owner Centrica PLC (LON:CNA) bounced 1.5% higher to 202.9p after being one of the worst-performing stocks yesterday when Tory leader Theresa May announced a household energy price cap as part of her manifesto for re-election in June.

On the second line, Vesuvius Plc (LON:VSVS) topped the FTSE 250 gainers, up nearly 9% at 590.5p after the molten metal engineer said it was "cautiously optimistic" about its likely trading performance in 2017 after a "strong" first quarter, with the weak pound continuing to provide a tailwind.

Among the small caps, Anglo Pacific Group plc (LON:APF TSE:APY) added 7% at 114p after it said trading in 2017 will be even better than previously expected after heavy storms in Australia caused another spike in the price of coking coal.

WATCH: Anglo Pacific boss says first quarter 'the sign of a good year ahead' 

And Gulfsands Petroleum plc (LON:GPX) took on 7.5% to 5.38p after the explorer told investors that it has secured an 18 month extension to the Llanos-50 Contract in Colombia.

12.00pm: Cyber hacking soared last year

With high profile cyber hacking victim TalkTalk PLC (LON:TALK) remaining the biggest FTSE 250 faller at lunchtime, down over 10% at 163.4p after a poor trading update, it was an auspicious day for a report to be published on the tech crime.

According to figures from fraud prevention service, Cifas, the number of online accounts to have been hacked by criminals has soared by almost half over the last year.

The group’s annual report, which analysed data from 387 organisations including many major UK brands, found that the number of so-called facility takeovers - when a fraudster poses as a genuine customer to gain control of an account - rose to 22,525 in 2016, up from 15,497 in 2015 across the UK.

Despite TalkTalk’s drop today, the FTSE 250 index still managed to gain around 46 points at 19,816, while the FTSE 100 index was up 19 points at 7,361 at midday, near its best levels for the day.

11.15am: Pay revolts pending

Further pay rebellions are expected at annual general meetings today for banking giant Barclays PLC (LON:BARC), insurer Aviva PLC (LON:AV.), and broadcaster ITV PLV (LON:ITV).

They come as the Institute of Directors said today that the government should give investors a bigger say on executive pay for the UK’s biggest companies.

The IoD said that if 30% of investors oppose a directors’ remuneration report at an annual meeting, the company should have another look at its pay policy and allow shareholders a second vote.

Oliver Parry, the head of corporate governance at the IoD, said: “UK corporate governance is highly regarded across the world, but there is still a pressing need to rebuild public trust in big business to work in the long-term interests of investors and employees, rather than the short-term interests of managers.”

ITV remained the top FTSE 100 faller in late morning trading, down 1.7% to 197.3p following a cautious trading update ahead of its AGM. But Barclays shares were up 0.6% at 206.6p, and Aviva gained 0.8% at 539.5p. 

The FTSE 100 index had extended its gains to 18 points at 7,360.

10.30am: Fashion retail upgrades helps FTSE 100

The Footsie had pushed higher by mid morning led by gains in two fashion retailers following broker upgrades, while sterling was fairly dull ahead of tomorrow’s Bank of England meeting and quarterly inflation report.

Around 10.30am, the FTSE 100 index was 12 points, or 0.2% higher at 7,354, near the session peak, adding to gains of over 40 points yesterday.

Wall Street ended mixed overnight, while gains by Asian markets were fairly subdued with little fresh for direction.

Connor Campbell, financial analyst at Spreadex said: “There wasn’t much for investors to work with this morning, the main news being Donald Trump going all Apprentice on FBI director James Comey.”

He added: “ While Comey’s shock dismissal doesn’t technically have any immediate consequences for the market, it is another reminder of the unpredictable and irresponsible nature of Trump’s governance.

“The news has weighed on the dollar, which fell by 0.4% against the pound – with cable continuing to tease 1.30 – and 0.2% against both the euro and the Japanese yen. The Dow futures are also down, shedding another 50 points as the index heads back towards 20900.”

Next Plc (LON:NXT) was the top blue chip gainer, up 2.2% to 4,426p as Investec Securities upped its stance to ‘buy’ from ‘hold’ while raising its target price to 4,750p from 3,900p.

Meanwhile, Citigroup  turned bullish on high street discount fashion firm Primark-owner Associated British Foods plc (LON:ABF) in a note on global clothing retailers, upgrading its rating to ‘buy’ from ‘hold’.

The US bank’s analysts also increased their target price for the clothing retail to sugar and food conglomerate to 3,400p from 3,000p, with AB Foods’ shares gaining 2% to 2,868p in early morning trading.

Positive broker comment also helped high street stalwart Marks & Spencer Group PLC (LON:MKS), which gained 1.2% at 384.6p as both Citigroup and Deutsche Bank raised target prices for the blue chip retailer.

On the downside, broadcaster ITV plc (LON:ITV) was the top FTSE 100 faller, down 1.5% to 197.7p as it warned of a challenging first half in the advertising market after its revenue fell 3% in the first three months of the year to £731mln.

READ: ITV expects first half ad revenue to fall

ITV said it expects another fall in ad revenue of between 15-20% in the second quarter due to a lack of an international football tournament this summer.

8.30am: Flat start for Footsie, but TalkTalk slumps

The FTSE 100 was flat in early deals this morning after a mixed performance overnight on Wall Street, although fresh gains by miners after recent falls provided an underlying prop.

Around 8.20am, the UK blue chip index was just 0.01% higher at 7,343, consolidating after gains of over 40 points yesterday.

Michael Hewson, chief market analyst at CMC Markets UK, said:  “While European markets enjoyed a bit of rebound yesterday they didn’t really come close to reversing the Monday post Macron sell-off that came in the aftermath of Sunday’s confirmation of his winning of the French Presidency, though US markets managed to post more new record highs before slipping back in late trade.”

He added: "This would seem to suggest that while markets are relieved at not having to fret any more about the prospect of a political and populist upheaval in Europe, there is some uncertainty as to whether we can go higher from here or whether we need a brief pullback first.

“Either way investors don’t appear to be too concerned about the risks of sharp selloffs given the low levels seen in various index volatility indicators which are sitting at multi year lows.”

The main corporate feature this morning was an 11% slump by TalkTalk PLC (LON:TALK) shares to 161.9p after the broadband and telecoms provider cut its final dividend as it reported a 3.0% decline in full year revenue due to a continued churn of customers and less people signing up to use its internet services.

READ: TalkTalk shares plunge

Newly appointed chairman, Charles Dunstone, said: “My focus for the company is growth, cash generation and profit - in that order. We will be smart about how we invest, focusing on our fixed network, avoiding other capital intensive distractions. In light of these new priorities, we have also decided to reset the dividend as we look to deliver growth and strong sustainable shareholder returns over the long term."

Dunstone started as chairman this month along with new chief executive Tristia Harrison, following the departure of Dido Harding.

 

Proactive news headlines…

Trinidad oil and gas firm LGO Energy PLC (LON:LGO) is set for a re-launch, with a new chief executive appointment and a name change. Neil Ritson is to step-down as chief executive and chairman, to be replaced by Leo Willem Koot who joins as executive chairman effective immediately.

Caspian Sunrise Plc (LON:CASP) told investors that it has now spudded the 144 well on the BNG asset in Kazakhstan.The 144 well is the fourth well focussed on the MJF structure, where three producing wells are yielding 1,200 barrels oil per day. Around half of the MJF production comes from the 143 well, which is the most recent. Well 144 is planned to drill down to 2,500 metres, with the target at a depth of 2,200 metres, and the drill programme is expected by the end of the second quarter. It is anticipated that the well will cost some US$1.5mln.

Cloud-based IT group Nasstar Plc (LON:NASA)  has been named as one of '1000 Companies to Inspire Britain' in the London Stock Exchange's 2017 report published today.  A showcase for the UK's fastest-growing and most dynamic small and medium sized businesses, companies need to show consistent revenue growth over a minimum of three years that significantly outperforms industry peers to be included.

Avacta Group Plc (LON:AVCT) is set for patent protection for its Affimer technology in China, one of the world’s largest therapeutic antibody markets. The principal patent protecting the Affimer technology has been accepted, said the company. Counterparts to this patent have already been granted in the US, Europe and Japan.

Tekcapital PLC (LON:TEK) executive chairman Clifford Gross said continued investment remains the right policy for the intellectual property specialist. Revenues rose to US$765,000 in the year to November 2016 from US$407,000, with the majority of sales coming from technology transfer services following the acquisition last year of Vortechs.

Gulfsands Petroleum plc (LON:GPX) has told investors that it has secured an 18 month extension to the Llanos-50 Contract in Colombia. Llanos is one of two key asset areas for the group, the other is the Putumayo contract area.

Antibiotic developer Motif Bio Plc (LON:MTFB) has appointed three new doctors to its scientific advisory board. David Huang, chief medical officer of Motif Bio said: "We are delighted to welcome these three outstanding scientific leaders to our Clinical Advisory Board. Each of them brings specific expertise that will be invaluable as we develop and prepare to commercialise iclaprim for patients with serious and life-threatening infections."

Digital marketing group Be Heard PLC (LON:BHRD) has made a good start to 2017 with its MMT arm in particular growing strongly as group cross referrals start to impact, executive chairrman Peter Scott told its annual meeting. He highlighted business wins with Cath Kidston, BDO and Brakes at agenda21, PPG, Sense, Save the Children and Gowling WLG at MMT Digital and Clyde & Co, the Society of Petroleum Engineers and ACCA at Kameleon. 

Healthcare investor Netscientific PLC’s (LON:NSCI) portfolio company ProAxsis has further strengthened its intellectual property portfolio after securing a second licensing agreement with the Queen’s University of Belfast. The agreement gives ProAxsis the exclusive intellectual property rights for its ProteaseTag technology, which enables the measurement of active protease biomarkers of disease.

Keywords Studios PLC (LON:KWS) has announced its latest acquisition, snapping up content management software specialist XLOC Inc. The AIM quoted video games services group is paying US$900,000 for this new acquisition, with US$700,000 paid in cash.

Oracle Coalfields PLC (LON:ORCP) has taken encouragement from a neighbouring coal-fired power station project in Pakistan reaching financial close. The AIM-listed group is seeking finance to build its own coal-fired power station at Block V1 in Thar Province and said the nearby power project (on Block II) is someway down the road to construction.

DekelOil Plc (LON:DKL) has confirmed that it is in talks over a potential deal which would be classed as a ‘substantial transaction’. The West Africa palm oil group revealed it is working on a deal to acquire majority ownership of Norpalm, which has a vertically integrated palm oil operation in West Ghana.

Anglo Pacific Group plc's (LON:APF TSE:APY) trading in 2017 will be even better than previously expected after heavy storms in Australia caused another spike in the price of coking coal. The price had already surged compared to a year ago, but the storms in Australia  affected both infrastructure and supplies, a combination that during the second quarter sent them soaring above the levels Anglo anticipated at the beginning of 2017.

Nigeria focussed Lekoil Ltd (LON:LEK) told investors that the first crude cargo from the Otakikpo Marginal Field, in OML 11, has now been lifted by a subsidiary of Shell. The 120,000 barrels of oil was lifted by Shell Western Supply and Trading Limited, and Lekoil expects to receive payment within the next month.

Concepta PLC (LON:CPT) has signed a first distribution agreement in China for its women’s fertility treatment myLotus. For an initial three year period, Chinese firm ThinkBrio will distribute myLotus in LiaoNing province with the opportunity to expand into other territories if the partnership is successful.

 

07.00am: Sluggish open predicted

Financial spread bet firms are indicating small early losses in London when trading gets underway despite the new record highs seen overnight in the US for the Nasdaq index.

London is seen around five points lower from yesterday’s close of 20,342, with the tone now firmly being set by electioneering ahead of the June 8 vote.

The Nasdaq Composite closed at 6,121, up 18 points. In contrast, the Dow relinquished early gains to finish 37 points lower at 20,976 while the S&P 500 did likewise to close at 2,397, down two points.

Oil stocks were a weak feature as the price of crude slipped lower again.

Asian stocks did better in the main with healthy gains in Hong Kong and Tokyo, though Shanghai was off teh pace a little.

Company news today in the UK sees housebuilder Barratt Developments PLC report.

Rivals Taylor Wimpey plc (LON:TW. and Persimmon plc (LON:PSN) updates last week and reported a good start to the year as strong demand for homes continued to outstrip supply.

Numis expects Barratt also to report robust trading, healthy demand for new homes and enough house price inflation to cover rising imports costs due to a weaker pound. However, the broker noted that Barratt is exposed to decline in prices in London’s prime real estate.

Business news headlines...

Disposable incomes in the UK are set to shrink this year as inflation is expected to peak at 3.4%, the Guardian reports citing a report from an economic thinkthank. The National Institute of Economic & Social Research warned that wage growth would be capped at 2.7% on average, which would see workers face the biggest real-terms cut in their take-home pay since early 2014.

Standard Life and Aberdeen are set to lose about 800 jobs if their £11bn merger goes ahead, The Telegraph writes. The investment companies unveiled further details of their deal, which is expected to close in mid-August, confirming a restructuring.

Outgoing HSBC chairman Douglas Flint and the UK's former European Commissioner Lord Hill will join the board of Centre for Policy Studies, according to City AM. They will join the likes of chairman Lord Saatchi and Times Newspapers chairman Andrew Knight on the board of the thinktank, whihc was first created by Margaret Thatcher in 1974.

Former Bank of England official Sushil Wadhwan has warned that raising interest rates could have a destabilising impact on the UK’s housing market, The Times reports.  Wadhwan, who was a member of the Bank’s rate-setting committee from 1999 to 2002, said that the UKwas caught in a debt trap that threatened to paralyse central banks.

Barclays' chief executive is fighting to save his reputation after UK and US regulators opened investigations into his attempts to uncover the identity of a whistleblower, the Financial Times said. Jes Staley is likely to face angry questions on the issue at today’s annual meeting in London. 

Commodities/Currencies...

Gold: US$1,222 up US$6

Oil (WTI): US$46.11 up 23c

£/$: 1.296 - pound higher

 


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