FTSE Flat, Brexit, Trade Issues Pose Risks For Sterling

10/13/2021 | 07:31am
James Stewart

Brexit, UK Trade Issues Pose Risks For Sterling

Brexit and its impact on U.K. trade should be a "bigger issue" for sterling than is currently the case, BDSwiss Group analyst Marshall Gittler says. This is because the U.K. has a persistent current account deficit that has to be covered by its financial account surplus, or inflows into financial markets, he says. U.K. interest rates could rise to lift the pound but it's questionable whether an economy undergoing supply chain issues can support higher rates, he says. "I think it spells trouble for Britain and the pound in the future." The U.K.'s trade deficit widened to GBP3.7 billion in August from GBP2.9 billion in July as Brexit and coronavirus-related shortages held back exports, data showed Wednesday.

 
Companies News: 

Vertu Motors Raises FY 2020 Profit Guidance

Vertu Motors PLC on Wednesday raised its profit guidance for the current fiscal year despite warning of vehicle-supply constraints and cost pressures.

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Mobile Streams Says Upgrade to LiveScores Revenue Forecast Is Likely; Shares Rise

Shares in Mobile Streams PLC rose Wednesday after the company said its LiveScores service has passed a subscribers milestone six months ahead of its expectations, which will likely lead to an upgrade to its revenue views.

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Deutsche Bank Disputes Allegations in EUR500 Mln Lawsuit -- Update

Deutsche Bank AG plans to defend itself vigorously against claims made by Spanish hotel group Palladium, a company spokesman said Wednesday.

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Novolipetsk Steel 3Q Sales Fell Despite Higher Output

Novolipetsk Steel on Wednesday posted lower sales volumes but higher output for the third quarter.

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Deutsche Bank Says Claims by Spanish Hotel Group Are Unfounded

Deutsche Bank AG will defend itself vigorously against claims made by Spanish hotel group Palladium, a company spokesman said Wednesday.

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WPP's Glover Hering and Rival Sard Verbinnen & Co Agree Merger

WPP PLC said Wednesday that its majority-owned subsidiary Finsbury Glover Hering Corp. has reached an agreement merge with Sard Verbinnen & Co to merge and create a major strategic communications and advice firm.

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Adriatic Metals Secures $102 Mln Equity Raise to Build Silver Project in Bosnia and Herzegovina

Adriatic Metals PLC said Wednesday that it has completed a $102 million equity financing, the largest for a London-listed mining company in 2021, to construct its Vares silver project in Bosnia and Herzegovina.

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Gulf Marine Services Swung to 1H Pretax Profit

Gulf Marine Services PLC said Wednesday that it swung to pretax profit in the first half of the year on the back of higher revenue and lower costs, and that it expects a significant improvement to Ebitda in the second half.

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Versarien Chairman James Stewart to Resign

Versarien PLC said Wednesday that Nonexecutive Chairman James Stewart will step down at the end of the year, and that Diane Savory will be appointed as his replacement on Jan. 1.

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Pendragon Appoints Ian Filby as Non-Executive Chairman

Pendragon PLC said Wednesday that it has appointed Ian Filby as its new non-executive chairman.

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Quartix Technologies Expects 2021 Revenue, Profit in Line With Views

Quartix Technologies PLC said on Wednesday that it expects 2021 revenue, profit, and free cashflow to be in line with market consensus.

 
Market Talk: 

UK Faces Christmas Supply Chaos as Shippers Shun Ports

1233 GMT - The U.K. faces Christmas chaos as lorry-driver shortages sparked by the country's EU exit and coronavirus force shipping lines to divert vessels away from major U.K. ports, parcel-delivery website ParcelHero says. Maersk is re-routing larger ships from Felixstowe in eastern England, which handles much of the country's container freight, to EU ports for onward transit to the U.K. by smaller ship or land-based transport, newspapers reported. It means goods such as toys and gifts may not reach the U.K. for the festive holiday, ParcelHero says. "Britain's acute truck-driver shortage means containers are taking way too long to load onto lorries and leave ports. This will add new delays, especially with Brexit checks in place," ParcelHero's David Jinks says.

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Market Losing Faith in Central Banks' Attitude to Inflation

1227 GMT - Bond yield movements in the past few days have clearly shown that market participants are increasingly wary of central banks' lack of urgency about the inflation trend, says Metzler. "Even if we concede to the Fed and the European Central Bank that there will probably be significant relief on the price side in the coming year, we cannot and must not lose sight of the fact that the market is currently very nervous and would like to see a (at least verbal) reaction from the monetary guardians to the concerns of the players," Metzler says. The ECB's adherence to the argument that current price pressures are triggered in particular by severely disrupted supply chains and are therefore unsustainable is somewhat disturbing, Metzler says.

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Man Group 3Q Net Inflows Exceeded Market Views, Benefiting From Diversified Asset Mix

1143 GMT - Man Group's third-quarter net inflows, totaling $5.3 billion, came in far ahead of market expectations, Citi says, noting Visible Alpha's $1.6 billion consensus forecast. This will be the market's main focus in the investment manager's 3Q update, as the bulk of the net inflows were in the higher-margin alternative assets, the bank says. "Overall we see the results as strongly positive, reinforcing our view of Man benefiting from a diversified asset mix with underlying business resilience," it says. Citi sees low- to mid-single-digit upgrades to 2H estimates on higher assets under managements and a positive fee margin mix. Shares are up 7.5% at 217.90 pence.

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Harbour Energy Now Has Two of the UK's Four Offshore Carbon-Storage Licenses

1110 GMT - Harbour Energy now has two of the U.K.'s four offshore carbon-storage licenses after being awarded a second one on Monday, Jefferies says. The U.K.'s Oil & Gas Authority has awarded Harbour a CO2 appraisal and storage license in the Southern North Sea, offshore Lincolnshire, covering the Viking and Victor depleted gas fields, the bank says. Harbour's other license is located offshore the east cost of Scotland, as part of the Acorn CCS cluster, Jefferies adds.

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Pound to Fall Vs Euro if Market Adjusts Aggressive UK Rate Rise Bets

1104 GMT - The market's expectations for Bank of England interest rate rises look too aggressive and may need to be scaled back, putting pressure on the pound versus the euro in the near-term, Danske Bank says. Danske Bank raises its three-month forecast for EUR/GBP to 0.85 from 0.84, compared to the current level of 0.8482. A 15 basis points U.K. rate rise is already priced in before year-end with a total of 87bps of tightening expected between now until the end of 2022, Danske Bank analyst Mikael Milhoj says. "I think the BOE will hike something like 65bp over the same period, so a re-pricing is likely to send EUR/GBP higher."

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Man Group 3Q Tops Hopes, Boosts Investment Case

1039 GMT - Shares in Man Group rise 7% after the FTSE 250-listed investment manager reported higher third-quarter funds under management and said it expects positive momentum to persist into the fourth quarter. Net investment flows in 3Q were well above Panmure Gordon's expectations, the brokerage says. Not only is the magnitude of flows ahead of expectations, the impact on revenue margin from mix should also be helpful for estimates, Panmure says. "The strength of flows, the potential for material performance fees, a low valuation and a continuing share-repurchase program offer considerable support to the investment case. Buy," Panmure analysts say.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

10-13-21 0931ET

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