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GVC can't avoid regulation worries, Fed minutes eyed

The question is whether chair Jerome Powell will succumb to pressure from President Trump for another rate cut, which would be the third this year

Flutter Entertainment PLC -

Traders around the globe will be scrutinising the minutes from the Federal Open Market Committee’s latest meeting for hints on any tweaks to US interest rate policy.

With investors reluctant to be too optimistic about this week’s Chinese trade talks, the central bank is considered to have done “just about enough so far to sustain markets”, according to foreign exchange analysts at Oanda.

The question is whether chair Jerome Powell will succumb to pressure from President Trump for another rate cut, which would be the third this year.

GVC’s regulatory issues going away?

In the UK, Ladbrokes and Partypoker owner GVC Holdings PLC (LON:GVC) will publish a third-quarter update, with its shares climbing by more than a third since its half-year numbers in mid-August.

These share price gains have recouped only some of the losses since last summer, which have been due to wider UK regulatory concerns about bookmakers’ betting machines and share sales by the company’s CEO and chairman in March.

With strong momentum across “all divisions” into the second quarter, cost-cutting and a “clear roadmap” for the US as a number of states legalise sports betting, management guided to full-year underlying profits £10mln ahead of expectations at that time.

“Since then the US joint venture has launched sports-betting under the BetMGM brand and the State of New Jersey will shortly publish September revenue figures which will see what kind of initial success this has had,” said broker Peel Hunt, which sees the shares as still “materially undervalued”.

Regulatory concerns still linger, however, in the UK and Germany, so this will be an area investors may look for more guidance, while the sector has been in the headlines in the past week for rival Flutter Entertainment PLC’s (LON:FLTR) merger with Canada’s Stars Group.

Peel Hunt said it is “not out of the question” that GVC could counteroffer for Stars once the various competition authorities have ruled on the deal, but the combined debt load “might be too great for investors to stomach”.

Wednesday 9 October:

Finals: Volution Group PLC (LON:FAN)

Interims: Vertu Motors PLC (LON:VTU)

Trading statement: GVC Holdings PLC (LON:GVC)

AGMs: FastForward Innovations Ltd (LON:FFWD), Fulcrum Utility Services Ltd (LON:FCRM)

Economic data: US Fed policy minutes, US MBA mortgage applications

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