- FTSE 100 consolidates above 8,000
- Wall Street drops after more robust US data
- Centrica and StanChart stronger after updates
4:40pm FTSE 100 consolidates above 8,000
The FTSE 100 consolidated above 8,000 on Thursday, finishing 14 points higher at 8,012.
“It might be a purely psychological milestone but when London’s blue-chip index is on this kind of a roll investors sit up and take notice,” AJ Bell’s head of financial analysis Danni Hewson said.
“2022 was a torrid year and many people were left feeling pretty bereft as they watched their investments get scorched by inflation, rate rises and dwindling consumer confidence.
“Those with time in the market understood that the down cycle would end and whilst there are still huge issues facing the UK economy, the FTSE 100 is leading by example.
She added: “It might leave a slightly bad taste with the general public that Centrica’s bumper profits played a part in today’s record breaking, but this is a business that has to walk a lubricated tight rope and today was never going to be an easy one to navigate.”
3.55pm: Investment bankers to be culled
The FTSE 100 index might be at record levels, but investment bankers still need to be looking over their shoulders as more cuts are expected.
Bank of America (BofA) is planning to reduce jobs in its investment bank, Bloomberg News has reported, citing people familiar with the matter.
The move comes as firms across Wall Street wrestle with an investment-banking slump as evidenced in recent quarterly results, with BofA having already paused hiring in recent months.
However, the reductions could affect less than 200 jobs globally, Bloomberg added, according to its sources.
3.35pm: Will there be a close above 8,000?
Having reached a new intra-day peak well above the 8,000 level today, the FTSE 100 index could still close above that magic level for the first time ever, having failed to hold on to its gains above 8,000 on Wednesday.
Around 3.35pm, the FTSE 100 index was back above the psychologically important level - just - up 4 points, at 8,002, rallying from the session low but well off the day's new all-time peak at 8,047.06.
Looking at the day's new peak, Rob Morgan, chief investment analyst at Charles Stanley commented: “Over the past two decades, the UK’s FTSE 100 index has been a poor performer compared with most other markets. The index, representing the 100 largest stock market-listed UK companies, is a mere 25% higher than at the turn of the millennium.
“Admittedly, this represents an unflattering starting point. The index was puffed up by unsustainable valuations of ‘TMT’ stocks during the dotcom bubble in the late 1990s. Yet it has been a clear laggard against the US or emerging markets where investors have comfortably trebled their money – in capital growth terms alone.
“Where the FTSE has stood out, and consequently generated respectable returns, is dividends – the profits declared by companies and paid to shareholders. Reinvesting these for growth has boosted returns substantially, and the old-fashioned values of seeking out sustainable and growing payouts from shares are a large part of why the index has hit the landmark of 8000 points.”
3.15pm: More jobs at discounter
Aldi plans to hire more than 6,000 people across the UK this year, as the discount supermarket group continues to expand following strong Christmas trading, the Guardian has reported.
The supermarket chain said it plans to open 40 new stores in 2023, with Norwich, Newcastle, Huddersfield and Shrewsbury among the locations.
Aldi saw its sales during the crucial December holiday period come in 26% higher than in 2021, although during 2022 it also opened nearly 40 stores.
Aldi currently has more than 990 stores and employs about 40,000 people in the UK. The 6,000 new roles are across head office, new or upgraded stores, with 450 in its 11 regional distribution centres.
The hiring campaign at Aldi comes after the UK's biggest retailer, Tesco this month said it would cut 1,500 jobs to rein in costs. Tesco also said it would end night shifts in more than 80 stores and almost 40 petrol stations.
3.00pm: Mobile bills rising
Millions of O2 and Virgin Mobile customers will be hit with price hikes of up to 17.3% in April, the mobile providers' parent company has confirmed.
Customers on O2 'Refresh' or Virgin Mobile 'Freestyle' plan, will see the headline figure of 17.3% apply to the airtime part of their contract only, not to what they pay for calls, texts and data, nor what they pay for any device they have.
Virgin Media O2, the parent company of both firms, says this means the average price rise across all its mobile customers is 10% – which is just below headline CPI inflation.
Other major providers including BT, EE and Sky have already announced price rises of up to 14.4% for their mobile customers from this spring. These providers use the January retail prices index (RPI) rate of inflation as part of their price rise calculation which was revealed at 13.4% in data released on Wednesday.
The new hikes come just days after industry regulator Ofcom announced it would investigate the practice of mid-contract price hikes, amid concerns telecoms providers aren't being clear enough about what customers can expect to pay over the course of their contracts.
2.45pm: Another bad day for data across the Atlantic
The FTSE 100 extended its retreat from the 8,000 level as US stocks started Thursday significantly lower as the trend of stronger-than-expected economic data continued.
The US Producer Price Index (PPI) for January came in hotter than expected, rising 0.7% month-over-month, ahead of forecasts of 0.4% and up from -0.2% in December.
Meanwhile, initial unemployment claims for the week ending February 11, 2023, also underscored the continued strength of the labor market, falling unexpectedly to 194,000. That was modestly below the 195,000 claims reported for the previous week, and far below the Street’s expectation of 200,000.
FOREX.com market analyst Fiona Cincotta said the data built on the theme of stronger-than-forecast data points this week, after US CPI and retail sales came in ahead of estimates, suggesting, far from cooling into a recession, the US economy is still pretty hot.
“Inflation concerns are once overtaking recession fears as the prime concern for the markets, which means hawkish Fed fears are back in the driving seat,” she said.
She noted that there were now growing worries that the Fed won’t be pausing rate hikes any time soon, let alone performing a dovish pivot.
“As we would expect, as hawkish Fed bets rise, stocks are heading lower, led by the tech-heavy Nasdaq. Meanwhile, the USD is pushing higher,” Cincotta said. “Looking ahead, investors will focus on the Fed policymakers who are due to speak and could shed more light on the Fed’s future path for rate hikes.”
Around 15 minutes after the opening bell, the Dow Jones Industrial Average had dropped 329 points, or 1.0% at 33,798, the S&P 500 was down 1.2%, and the Nasdaq Composite had lost 1.4%.
In London, the FTSE 100 index fell back to its low point for the session, down 17 points, or 0.2% at 7,980.
On the other hand, Bitcoin rallied to hit a new six-month high. It had added 7.5% at US$24,406.21 shortly after the US market opened.
2.25pm: Crypto in demand
Bitcoin and cryptocurrency-aligned stocks have continued to soar as traders on both sides of the Atlantic plunged into riskier assets.
Bitcoin spurred the market with an impressive double-digit rally on Wednesday, causing a flurry of activity in companies whose underlying value is determined by the crypto assets.
A combination of risk-on appetite among traders due to easing recession fears and a surge in on-chain NFT activity thanks to Ordinals caused the benchmark cryptocurrency’s rally.
Bitcoin (BTC) scored a thumping 9.5% gain in the BTC/USDT pair on Wednesday to close at a six-month high of US$24,320.
Short liquidations shot upwards by US$155mln as the benchmark cryptocurrency smashed every resistance line on the order book and cruised safely past the 23k-24k channel.
BTC/USDT added more gains this morning, with the pair touching US$24,900 before getting knocked back.
2.10pm: US wholesale inflation jumps
US wholesale inflation as measured by the producer price index (PPI) was well above forecasts in January, with a headline rate of 0.7% month-on-month and ex Food, Energy & Trade at 0.6%, or up 6.0% and 5.2%, respectively, year-on-year.
Marc Ostwald, chief economist & global strategist at ADM Investor Services International commented: "A lumpy 1.2% m/m rise in Goods Prices underline second round passthrough effects in annual price increases, much less surprising was the Energy rebound 5.0% m/m, while Services unchanged at 0.4% m/m, and some offset from a drop in Food of -1.0% m/m.
"The Fed will be concerned above all by second-round effects on Goods PPI, and not happy with 0.8% m/m rise in Services ex Trade; overall it is clear that pipeline pressure are an issue. Put simply, energy prices are going to have fall sharply if businesses are not going to carry on hiking prices due to cumulative pressure on costs."
Futures for the Dow Jones Industrial Average (DJIA) extended falls to 0.8% in Thursday pre-market trading, while those for the broader S&P 500 index shed 1.1%, and contracts for the Nasdaq-100 tumbled 1.4%.
The FTSE 100 fell back in response, losing the 8,000 level, albeit only down 1.5 points at 7,996.
1.25pm: A quick look at London’s risers and fallers
Bank of Georgia - up 6% to 2,885p: Shares rallied following the announcement of an addition of £45mln to its share buyback programme. This is consistent with the Group's capital and distribution policy, announced in September 2021, to target a dividend/share buyback payout ratio in the range of 30-50% of annual profits.
CPP Group - up 14.5% 212p: The real-time assistance products company jumped after it provided an upbeat statement on progress at its insurance technology business, Blink Parametric. CPP revealed that Blink has signed a new partnership agreement for its flight disruption product with a large European insurer, with a launch in Ireland planned for early 2023.
Jaywing- down 23% to 5.2p: The integrated agency powered by data science tumbled after it warned full-year net profits would be below market expectations. In a trading update, the company reported a softening in demand over the past two months with certain clients seeking to defer their marketing spend, both in the UK and Australia until the economic situation settles or improves.
1.00pm: US seen lower at open
Wall Street is expected to open mostly lower as investors continue to digest news that reveals the US economy remains resilient, clearing the path for the Federal Reserve to continue hiking interest rates to rein in sticky inflation.
January's Producer Price Index (PPI), scheduled for release before the start of trade, will be just the latest data point for the Federal Reserve to consider.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.1% in Thursday pre-market trading and those for the broader S&P 500 index also declined 0.1%, while contracts for the Nasdaq-100 were flat.
The main indices all closed higher on Wednesday after retail sales numbers for January came in hotter than expected, following on from inflation data on Tuesday that was also higher than anticipated.
The DJIA closed 0.1% up at 34,128, the Nasdaq Composite jumped 0.9% to 12,071 and the S&P 500 added 0.3% to 4,148. The small-cap-focused Russell 2000 improved by 1.1% to 1,960.
“Investors continue to digest a busy data docket this week, with today’s producer price inflation, housing data, weekly jobless claims and the Philly Fed manufacturing survey the latest data dump,” commented TickMill Group market analyst Patrick Munnelly.
“PPI inflation is pencilled to retreat to 5.4% in the annualised comparison, while initial jobless claims are expected to remain anchored at record low levels, suggesting continued tightness in the US labour market landscape.
“Housing starts are set to buck the positive data trend, they are expected to post another decline with the sector weighed by interest rate increases, while the Philly Fed is expected to post a marginal improvement in conditions, but ultimately remaining in contractionary territory.
Investors will also eye comments from Fed officials Bullard & Mester set to speak on the US economic outlook later today,” Munnelly added.
12.30pm: One more hike
UBS expects one more Bank of England hike following mixed inflation data.
UK CPI inflation fell for the third consecutive month in January to 10.1%, although the analysts at the bank expect one more interest rate hike.
“We continue to expect the BoE to deliver one more 25bp rate hike on 23 March, bringing Bank Rate to 4.25%, and then stop there.
“Between now and the next meeting we will be closely watching survey indications around price and wage setting and expectations and the next set of labour market and inflation data," they said.
12.10pm: Sterling remains volatile
Sterling hovered at US$1.20, just below the US$1.24 touched early in the month, following Wednesday's CPI figures that offered some relief that price pressures may be finally easing.
According to Caxton Market View, while this is not necessarily bad news, it shows the volatility of sterling, especially since October and Truss’ mini-budget clanger.
“It lends proof to the assertion that the market has become more data dependent and short-sighted, as data that misses forecasts by even a small amount causes serious volatility," it said.
The UK inflation rate slowed by more than anticipated to 10.1% in January, from 10.5% in December, while annual core inflation eased to the lowest in seven months.
The fall raises bets the Bank of England will not need to pursue a more aggressive policy stance and may stop raising rates in March.
Money markets are now pricing a 4.55% interest rate peak by September compared to 4.69% before the CPI report,
A volatile pound has had no negative impact on the FTSE 100 index, which is up 14 points to 8,012.
11.40am: Rolls Royce higher as Air India confirms option for more Airbus jets
Air India’s chief commercial and transformation officer said the carrier has the option to purchase an extra 370 aircraft from Airbus and Boeing over the next decade.
Earlier this week, the carrier announced it had agreed to purchase 250 jets from Airbus and 220 planes from Boeing as part of the airline's transformation plan under India’s largest conglomerate, Tata Group.
"The order comprises of 470 firm aircraft, 370 options and purchase rights to be procured from Airbus and Boeing over the next decade," said Nipun Aggarwal, chief commercial and transformation officer at Air India, wrote in a LinkedIn post.
The UK government hailed the deal, boasting it will be worth billions of pounds to the economy and support the creation of hundreds of jobs.
Wing assembly of the aircraft will be designed in Filton, near Bristol, and assembled in Broughton, North Wales, and is expected to generate an additional 450 manufacturing jobs and bring more than £100mln of investment to Wales.
The A350 Airbus aircraft’s engines are exclusively powered by Rolls-Royce XWB engines which are assembled and tested in Derby.
Shares in Rolls-Royce Holdings PLC (LSE:RR.) were up 1.8% to 114p, making it the seventh biggest riser on the Footsie.
11.20am: Recession still on the horizon
Capital Economics said the latest economic data from the UK and US suggests that the recession has been postponed, not cancelled.
Economic data in the US poured “cold water” on the idea that its economy slipped into a recession in 2023, following GDP data that the euro-zone and UK economies just avoided contraction in the fourth quarter.
According to the markets and economy insight group, “it looks like the recessions we have long been forecasting in advanced economies will commence a little later than we had initially envisaged.”
The FTSE 100 remains unaffected by recession talks, with the index still holding strong above 8,000 points.
Goldman: 75% chance of no recession. pic.twitter.com/5Cm0xK7Ntz
— Brian Sozzi (@BrianSozzi) February 16, 2023
10.50am: Home REIT receives takeover approach
Home REIT PLC, which invests in sheltered housing for the homeless, said it has received an unsolicited approach from Bluestar Group regarding a possible offer.
Any takeover, according to a statement, would likely be in cash.
For the quarter ending November 2022, only 23% of rent was collected, with uncertainty over the willingness or ability of the tenants to pay in the near future.
The group also said that roughly 67% of its portfolio needs refurbishment, which is estimated to cost around £15mln to £20mln.
In light of this, the board said it is considering all strategic options, including the possible sale of the company.
The FTSE AIM All-Share is little changed, up 0.09% to 870.3 points, while shares in Home REIT were down 2% to 38p.
10.25am: Vodafone considers options for Vodacom
Vodafone’s shares bounced following a report that the telecoms giant is exploring options for its African business.
According to Bloomberg, which cites people familiar with the matter, Vodafone is working with advisers to extract more value from its 65% holding in Vodacom Group.
Possible avenues being explored include merging the business with other operators, divesting some assets in certain markets, or selling a stake in the company.
A representative for Vodafone told Bloomberg that “Vodacom is a strong business that is an important part of Vodafone.”
On Monday, Liberty Global (NASDAQ:LBTYA) disclosed a 4.9% stake in Vodafone but ruled out a full takeover.
Vodafone shares were up 3.7% to 102.9p in mid-morning trading, second highest on London's blue-chip leaderboard.
10.00am: Boohoo targeting £5bn market cap
Boohoo’s remuneration committee is targeting a market cap of £5bn which would see shareholders receive a £175mln payout as part of its new growth plan.
The plan is designed to create shareholder value through distinct, stretching share price hurdles, the eCommerce retailer said in a statement.
Awards to shareholders will be divided into five tranches whereby a distinct 90-day average price must be achieved within an overall five-year period.
The first tranche requires the share price to reach 95p, with an implied market cap of £1.2bn, which would result in shareholder value creation of £600mln and an award size of £17.5mln.
The final tranche requires the share price to reach 395p, with an implied market cap of £5bn, which means shareholders would have created £4.4bn of value and receive a £55mln award.
9.35am: Moneysupermarket plays down hopes that energy switching will return this year
Moneysupermarket.com Group PLC (LSE:MONY) has reported a 22% rise in full-year revenue to £387.6mln and a jump in profits driven by a strong performance in money and travel channels.
Pre-tax profits jumped to £85.2mln from £70.2mln and the dividend was left unchanged at 111.71p.
Gross margins fell around 3 percentage points driven by the expected impact of Quidco consolidation.
In Insurance, car revenue returned to growth for the first time in 2022 with improving trends in market switching volumes while travel insurance grew strongly, with revenue almost 50% higher than 2019.
In Money, there was continued strong growth in banking due to the availability of attractive products while borrowing was broadly flat year on year although conversion in loans softened amid higher credit pricing.
In Home Services, attractive provider offers drove good growth in home comms while travel saw robust demand and continued to recover with revenue around half of pre-pandemic levels.
Looking ahead the online finance comparison provider said “The first few weeks of 2023 have seen similar trends as in Q4 in Insurance and Money.
“As previously guided, the ongoing conditions in the energy market mean it is unlikely that switching will return in 2023. On this basis the Board is confident of delivering market expectations for the year.”
Shares fell 2.6%. Peel Hunt said the numbers were broadly in line and does not expect to change forecasts for financial year 2023.
Russ Mould, investment director at AJ Bell said there "have been some suggestions in recent days that energy switching activity could restart from July."
"Moneysupermarket has poured cold water over that thought by saying it is unlikely that energy switching will return this year, and that’s likely to have spooked investors hoping for a big part of its business to start earning again," he said.
“The other negative is the lack of dividend growth which suggests Moneysupermarket is being cautious until all parts of its business are firing on all cylinders again.”
Meanwhile, the FTSE 100 is at 8,025.09, up 27.26 points, or 0.34%.
9.00am: Footsie in fine fettle
The FTSE 100 remained in a buoyant mood although it has settled below new record highs established shortly after the open.
At 9.00am, the lead index was at 8,021.74, up 23.91 points, or 0.30%, below the new intra-day high of 8,047.06.
Sentiment was lifted by a number of positive updates from leading blue-chips which followed yesterday’s weaker-than-expected inflation numbers.
AJ Bell investment director Russ Mould said: “The dominant theme now seems to be that ‘better times are coming,’ especially after the share price crushings handed out to a lot of cyclicals and consumer discretionary names in the first half of 2022 may have left them looking cheap, while the index’s exposure to miners and oils may also give the FTSE 100 appeal as a potential inflation hedge for good measure.”
Centrica PLC (LSE:CNA) remained the star of the show powering to the top of the FTSE 100 risers. Broker Jefferies noted profits of £3.31bn were well ahead of the company-compiled consensus of £2.7bn with the beat coming from Energy Marketing & Trading. It kept a ‘buy’ rating and 130p price target on Centrica shares which were up 4% at 102.45p.
But over in the FTSE 250, Indivior PLC (LSE:INDV) failed to join in the equity party. Shares plunged 13% after it updated investors on antitrust litigation for which it made a US$290mln provision in the financial year 2022. It said provisions could increase and there was no certainty a settlement would be reached.
“Because these matters are in various stages, Indivior cannot predict with any certainty how these matters will ultimately be resolved, or the costs, or timing of such resolution.
“In particular, any final aggregate costs of these matters, whether resolved by settlement or trial, may be materially different from this provision.
“The Group cannot predict with any certainty whether it will reach settlement with the antitrust claimants,” the company said.
Standard Chartered PLC (LSE:STAN) held in positive territory. Shore Capital’s Greg Johnson said the bank's full-year results “missed consensus earnings expectations in a large part due to a $300m impairment of the Group’s investment in China Bohai Bank.”
“However, the capital position is stronger than expected and the group has proposed higher than expected shareholder distributions.
“The outlook is also encouraging, notably for the RoTE to be >11% in FY24F (previously >10%) with further growth thereafter, which suggests upside risk to consensus,” Johnson noted.
Telecoms remained in favour with Vodafone Group PLC (LSE:VOD) up 2.8%, taking it back above 100p, and BT Group PLC (LSE:BT.A) rose as investors continue to believe M&A activity in the sector could drive returns.
8.20am: FTSE soars above 8,000
The FTSE 100 roared to new record highs, firmly above the 8,000 level, as favourable economic data across the world encouraged hopes that inflation is cooling and economic growth not crumbling.
At 8.20am, London's blue-chip index was at 8,041.65, up 43.82 points, or 0.55%, while the FTSE 250 reached 20,256.31, up 83.72 points, or 0.42%.
Better-than-expected UK CPI figures yesterday sent gilt yields lower in the UK yesterday as investors took the view that easing pricing pressures would mean a lower-than-expected peak in interest rates.
While strong retail sales figures in the US yesterday showed the world’s largest economy was proving resilient and that talk of a recession may be misplaced.
In London, the lead index was supported by strong gains in Centrica PLC (LSE:CNA) which soared after reporting more than tripled annual profits of £3.3bn driven by soaring wholesale gas prices, and plans a further £300mln buy-back.
The company, which restored dividends in the first half, declared a full-year dividend of 3p per share. Centrica shares rose 4.7%.
Standard Chartered was also in favour as it raised expectations for return on equity and launched a US41bn share buy-back.
“We are upgrading our expectations, and are now targeting a return on tangible equity approaching 10% in 2023, to exceed 11% in 2024, and to continue to grow thereafter,” said the bank's chief executive Bill Winters.
Shareholders will also receive a final dividend of 14 cents per share resulting in a 50% increase to the full-year dividend of 18 cents. The buy-back will start “imminently” and knock around 40 basis points (bps) off the CETI ratio, the bank said.
The Asia-focused bank reported a full-year statutory operating income of US$16.32bn, up 11% from US$14.70bn a year ago while pre-tax profits rose by 28% to US$4.29bn from US$3.35bn. StanChart shares rose 2.3%.
Relx PLC was another on the rise after posting double-digit rises in full-year profit and revenue and announced plans for £800mln of share buybacks in 2023.
In 2022, pre-tax profit rose 18% to £2.11bn from £1.80bn in 2021, while revenue climbed 18% to £8.55bn from £7.24bn. Relx's total payout for the year rose to 54.6p per share from 49.8p in 2021. Relx shares rose 2.2%
8.00am: Profits triple at Centrica, plans new buy-back
British Gas owner Centrica PLC (LSE:CNA) reported record annual profits of £3.3bn, driven by soaring wholesale gas prices, and it plans a further £300mln buy-back.
The FTSE-100 listed firm saw adjusted operating profits more than triple to £3.31bn from £948mln a year ago while adjusted earnings per share (EPS) jumped to 34.9p (2021: 4.1p).
Centrica reported strong gas production and electricity generation against a backdrop of higher commodity prices but lower retail profits including a small loss in British Gas Services & Solutions, reflecting weak commercial performance and investment in customer service, support and pricing.
Group free cash flow from continuing operations of £2.5bn (2021: £1.2bn), included some big swings in working capital with £1.1bn inflow in British Gas Energy reflecting the short-term acceleration of cash flows from government support schemes and a £1.6bn build in EM&T and Centrica Storage.
Looking ahead the company said strong capabilities and positions in Retail and EM&T leave it well-placed for growth as core markets transition to net zero and it plans to invest around £400mln into in-flight solar, battery and gas-peaking generation projects.
It is also aiming to progress plans to repurpose Rough and Morecambe as net zero assets.
More detail on longer-term investment plans and expected returns alongside interim results in July 2023, Centrica added.
7.40am: Standard Chartered plans new US$1bn buy-back, hikes dividend
Standard Chartered PLC (LSE:STAN) upgraded expectations for return on equity, launched a new US$1bn buy-back as it delivered full-year results and expects the reopening of China to support further growth.
“We are upgrading our expectations, and are now targeting a return on tangible equity approaching 10% in 2023, to exceed 11% in 2024, and to continue to grow thereafter,” said chief executive Bill Winters.
Shareholders will also receive a final dividend of 14 cents per share resulting in a 50% increase to the full-year dividend of 18 cents. The buy-back will start “imminently” and knock around 40 bps of the CETI ratio, the bank said.
The Asia-focused bank reported full-year statutory operating income of US$16.32bn, up 11% from US$14.70bn a year ago while pre-tax profits rose by 28% to US$4.29bn from US$3.35bn.
On an underlying basis pre-tax profits rose 13% to US$4.76bn from US$4.20bn.
Net interest income rose 18% at constant currency, representing around half of total income growth, boosted by a 21% advance in financial markets although wealth management saw a 17% decline reflecting risk-averse customer sentiment and the impact of COVID-19 restrictions.
Return on tangible equity of 8.0%, was up 120 bps year-on-year, and net interest margin rose 20 bps year-on-year to 1.41%, with rising interest rates partially offset by hedges and product mix changes.
But credit impairment charge of US$838mln were up US$575mln year-on-year reflecting a US$582mln charge for Chinese commercial real estate exposure and US$283mln charge for sovereign downgrades relating to Pakistan, Ghana and Sri Lanka.
Other charges included a US$308mln impairment charge relating to the investment in China Bohai Bank.
Standard Chartered said it remains strongly capitalised with its CET 1 ratio at 14.0%, at the top of the 13-14% target range and little changed from a year ago (14.1%).
Winters said the dividend payments and share buy-back take “total shareholder distributions announced since the start of 2022 to US$2.8bn, more than half the three-year US$5bn target we set ourselves by 2024.”
Looking ahead and the bank said income is forecast to grow in the 8-10% range and full-year average net interest margins of around 175 bps in 2023 and above 180 bps in 2024 are expected.
7.00am: FTSE set to break more records
The FTSE 100 index is expected to establish new record highs at the open pushing back above the 8,000 mark following a rally in New York which saw all three major indices close in the green.
Spread betting companies are calling the lead index up by around 20 points.
Michael Hewson chief market analyst at CMC Markets UK said: “As we look ahead to today’s European session, we look set for a positive European open, and another record high for the FTSE100, with the focus shifting to today’s US PPI numbers for January and a confirmation that supply chain and factory gate costs are also easing sharply.”
In the US, the Dow Jones Industrial Average closed Wednesday up 39 points, 0.1%, at 34,128, the Nasdaq Composite jumped 110 points, 0.9%, to 12,071 and the S&P 500 added 12 points, 0.3%, to 4,148. The small-cap-focused Russell 2000 improved by 20 points, 1.1%, to 1,960.
The US benchmarks all found their way to positive territory after opening in the red. The Nasdaq closed higher for the third day in a row.
Stronger-than-expected US retail sales figures showed the resilience of the US economy dampen fears of a recession.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank said: “Do you remember we were predicting a recession, that was supposed to hit the US and the global economy at the start of the year?
“Well, forget about all that, it’s not happening. And if you look at the data, what’s happening is the exact opposite.
“The US jobs data remains strong, inflation continues coming lower but the downtrend gives signs of slowing. And yesterday’s US retail sales data came as a cherry on top, with an eye-popping 3% rise in retail sales last month; it was the biggest jump in the past two years.“
Standard Chartered PLC (LSE:STAN) will be an early focus as it reports results in the wake of disappointing numbers from Barclays PLC (LSE:BARC) yesterday.