UK/Euro Financial Market Daily Morning Briefing – UK/Euro Financial Market Daily Morning Briefing
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A daily snapshot of the UK, French, German and Dutch markets just after the market open. Including a diary of key financial events across the UK and a summary of U.S after market close. Click here to receive or daily bulletins. News provided by AFX/Associated Press.
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UK/Euro Financial Market Daily Morning Briefing 07-11-2006
11/07/2006
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ADVFN III |
Morning Euro Markets Bulletin |
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Daily world financial news from AFX/Associated Press |
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London |
London shares open up; Marks & Spencer climbs on H1, US midterms eyed
Leading UK shares advanced in early deals, amid volatile trade ahead of today's US midterm elections, and with strong interims from Marks & Spencer offsetting weaker first-half revenues from Yell Group. At 9.00 am, the FTSE 100 climbed 12.4 points to 6,236.8, while the broader markets were mixed. Volume was moderate, with 304.2 mln shares exchanging hands in 31,891 deals. Still, the mood in the UK is likely to remain one of caution ahead of the Bank of Englands decision on interest rates on Thursday, which is expected to lift the key repo rate by a quarter point to 5.00 pct, the highest level since before the September 11, 2001 terrorist attacks on the US. Overnight, Wall Street clocked up gains ahead of todays midterm elections and as private-equity buyout deals worth around 20 bln usd brought investors back to the market. The DJIA gained 119.51 points to 12,105.55, regaining the benchmark 12,000 level, while the Nasdaq composite index added 35.16 points to 2,365.95. The upbeat mood spilled over into Asian markets, with the Nikkei index closing up 28.65 points at 16,393.41, while the Hang Seng finished the session adding 2.76 points at a record 18,939.31. In London, shares in Marks & Spencer topped the leaders board, taking on 7-1/2 pence at 664, after the retailer issued a strong set of interim numbers, confirming the recovery under chief executive Stuart Rose has shifted up a gear. This morning, M&S reported a 32.2 pct jump in first half underlying pretax profit and has hiked its interim dividend 31.3 pct. For the 26 weeks to Sept 30, M&S made an adjusted profit before tax of 405.1 mln stg. This compares to analysts' consensus forecast of 400 mln stg. In response, Citigroup said pretax was in line at 405 mln and gross like-for-like sales grew 10 pct -- far above the industry average. As a result, the broker said second-half estimate risks remain firmly on the upside, while second-quarter UK like-for-like sales were up 6.4 pct, topping its and consensus estimates of 5.2 pt. Peer Sainsbury was up in sympathy, adding 3 pence to 402-1/4. Positive broker comment spurred gains in Northern Rock, climbing 12 pence to 1,204 after Merrill Lynch hiked its target on the stock, up to 1,395 pence from 1,250. The broker said the group was its preferred stock, together with Barclays, noting that while the former trades on a premium to the sector, this is "deserved" given the growth outlook. Meanwhile, Slough Estates and British Land also gained, up 7 pence to 109-1/2 and 6 pence to 1,513 after HSBC initiated both stocks with 'overweight' in a UK real estate sector note.
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The broker said the REIT industry is at the top of the cycle and it is therefore starting coverage with 'underweight' ratings on Liberty International and Hammerson ahead of a forecast correction in shopping centres. The broker also recommended switching into Slough Estates and British Land, both of which it initiated with 'overweight' ratings, for defensive growth and on valuation grounds. Shares in Land Securities Group were 13 pence firmer at 2,102 after HSBC initiated coverage with a 'neutral' rating. Telecoms giant BT Group was also in fine fettle, up 2-1/2 to 287-1/2 after Investec Securities upped its stance on the stock to 'buy' from 'hold' ahead of the group's third quarter results on Thursday. Elsewhere, shares in BAE Systems hardened, up 3-1/2 pence to 413-3/4, after Citigroup initiated coverage with a 'buy' stance, noting its positive view on the defence subsector is partly built on a belief that US defence spending will continue to grow and partly that the strength in exports will continue. Oil heavyweights advanced as oil prices remained steady at 59.96 usd per barrel, spurring gains in BP and BG Group, up 5-1/2 to 602-1/2 and 4 pence to 701 respectively. On the downside, Yell Group shares sank by 26-1/2 pence to 589-1/2 after the UK directories publisher released weaker-than-expected fiscal first-half results, knocked by the recent 3.3 bln eur takeover of Spanish peer TPI. The news prompted house broker Merrill Lynch to cut its stance on the stock to 'neutral' from 'buy', saying that the shares have now exceeded its price objective after a strong run and that the absence of upgrades and slower momentum in the US may limit upside, at least in the short term. The owner of the Yellow Pages directory said first half turnover jumped 19.4 pct to 848.8 mln stg following the TPI and the TransWestern takeovers, although far short of the 923.2 mln stg consensus forecast, mainly due to a smaller-than-expected contribution from the Spanish business. AB Foods shares also took a knock, sliding 24 pence to 827, as investors took this morning's 'in-line' full-year results as an opportunity to take profits following yesterday's strong performance. Before the open this morning, the sugar foodstuffs group, which also owns the Primark high street retail chain, said its adjusted full-year pretax profits fell 4 pct from a year earlier to 559 mln stg, a performance that the company described as "resilient" in the face of a steep hike in energy costs and the ongoing impact of the EU's sugar regime reform. The company hiked its total dividend by 4 pct to 18.75 pence per share, as it expressed confidence in the future growth of the business. In response, Credit Suisse said that AB Foods' underlying profits are very much in line with the broker's and consensus estimates, while highlighting that the British Sugar division put a large dent of 34 mln stg in the group's full-year numbers, although this is a touch less than the broker had expected.
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Scottish & Newcastle shares also deflated, shedding 11-1/2 pence to 557, as investors locked in profits following a robust trading update, driven by "strong growth" from Baltic Beverages Holding and its Asian business. Citigroup retained its 'hold' stance, saying that, while the update was 'in-line', the performance in Western Europe remained 'weak' and the outlook was 'cautious'. Over on the second line, Cookson group was the top performer, up 35 pence at 633, after the material sciences company said it is expecting its full-year performance to be slightly ahead of forecasts following an "encouraging" performance in the third quarter, dealers said. Responding to the update, Bridgewell Securities repeated its 'buy' advice on the general industrials firm and added that the trading statement makes for encouraging reading. On the downside among the midcaps, Henderson Group was the main casualty, down 3-1/2 pence to 111-1/2 amid reports that UBS was placing 48 mln shares in the mid-cap fund manager at a price of 111 pence each. Meanwhile, a couple of downgrades weighed on Meggitt shares, down 8-3/4 pence to 320-1/4, with UBS cutting its stance to 'neutral' from 'buy', while Dresdner Kleinwort downgraded its stance to 'hold' from 'buy' by Dresdner Kleinwort. UBS lowered its 2007 and 2008 EPS estimates for Meggitt by 2.0 pct and 3.4 pct respectively on the back of the A380 delays.
On the economic front in the UK, todays figures from the British Retail Consortium are expected to show that high street sales growth dipped in October, particularly after last month's weak distributive trades survey from the Confederation of British Industry.
UK Diary of Events
For a diary of key UK financial and corporate events today, click here
US Summary
For a summary of US stocks at yesterday's close of trade, click here
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Paris |
Paris shares AFX at a glance outlook Forthcoming Events
Today BPLG-AFP September small business sentiment indicator, 9.00 am Eiffage Q3 sales Pernod Ricard AGM EADS board meeting, decision on A350 project possible Linedata Services Q3 sales, after markets close Tomorrow EADS Q3 results Total Q3 results Scor Q3 results CNP Assurances Q3 sales Eutelsat Q1 sales Maurel et Prom Q3 sales Fininfo Q3 results GFI Informatique Q3 sales Teleperformance Q3 sales
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Company News Vivendi Q3 sales nearly flat vs yr earlier at 4.889 bln eur Sopra Q3 sales 205.2 mln eur, up 14.4 pct Neuf Cegetel Q3 sales 713 mln eur, up 6 pct pro forma GL Trade 9 mths sales 135.3 mln eur, up 2 pct like for like Boursorama 9 mths net 21.0 mln eur, up 62 pct Air France-KLM Oct passenger load factor 81.4 pct vs 81.7 Three funds to sell most of combined 15.2 pct stake in Legrand Club Med sells 3 French villages for more than 100 mln eur in leaseback deal JCDecaux wins 15-year public transport shelter contract in Nice, France Technip wins contract from Saint Louis Sucre to build bioethanol plant in France Gemalto launches payment terminal running on Linux technology Poweo buys wind farm, takes stake in another for total 15.3 mln eur EADS brings forward delivery schedule for two Brazilian Air Force jets Airbus slashes subcontractors by 80 pct; sees 900 mln eur admin savings by 2010
Amsterdam
Amsterdam shares AFX at a glance outlook
Forthcoming Events Today Eurocommercial Properties AGM Tomorrow Wolters Kluwer Q3 results (7.00 am), conference call (12.00 pm) Wereldhave Q3 results Dutch Sept industrial sales, output (8.30 am)
Company News Air France-KLM Oct passenger load factor 81.4 pct vs 81.7 Hunter Douglas "remains optimistic" about FY after disappointing Q3 opg SBM Offshore wins new orders including BC-10 FPSO lease from Shell, worth total 850 mln usd Heineken to change div policy, to up dividend pay-out to 30-35 pct of net profit beia, from existing 20-25 pct
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Frankfurt |
FRANKFURT - Market data at 10.08 am
Major indices:
DAX up 0.24 pct, or 15.43 at 6,346.08 MDAX up 0.09 pct, or 7.96 at 8809.21 TecDAX up 0.57 pct, or 3.97 at 696.71 Euro/dollar - 1.2751 usd up 0.0053
Top DAX risers Deutsche Post up 2.99 pct, or 1.77 eur at 60.96 ahead of third quarter results tomorrow
RWE up 1.59 pct, or 1.22 at 77.99, after group rejects possibility of Gazprom takeover
SAP up 1.24 pct, or 1.93 at 157.79, Citigroup reaffirms 'buy' rating and target of 200 eur
Linde AG up 1.00 pct or 0.78 at 78.87
Infineon up 0.84 pct at 9.55, buying opportunity following previous day's sharp falls
Top DAX fallers
Deutsche Boerse down 0.38 pct or 0.49 eur at 129.57, following mixed Q3 results; lower than expected EBIT and turnover
Siemens down 0.67 pct or 0.48 at 71.00, following new accusations on BenQ Mobile insolvency
Deutsche Telekom down 0.44 pct or 0.06 at 13.62
Munich Re down 0.74 pct or 0.97 at 130.03
Altana down 0.38 pct or 0.17 at 44.62
Forex
Singapore 0737 |
Sydney 0300 GMT |
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US dollar |
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yen 117.79 |
down from |
118.11 |
sfr 1.2521 |
down from |
1.2535 |
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Euro |
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usd 1.2757 |
up from |
1.2744 |
stg 0.6699 |
down from |
0.6703 |
yen 150.26 |
down from |
150.49 |
sfr 1.5974 |
up from |
1.5973 |
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Sterling |
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usd 1.9042 |
up from |
1.9012 |
yen 224.21 |
down from |
224.49 |
sfr 2.3835 |
up from |
2.3824 |
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Australian dollar |
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usd 0.7733 |
up from |
0.7721 |
stg 0.4060 |
down from |
0.4062 |
yen 91.090 |
down from |
91.190 |
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Advfn Plc, 26 Throgmorton Street, London, EC2N 2AN +44 (0) 870 794 0236
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