The FTSE 100 closed Friday up 0.35%, hitting a fresh 2021 high as investors back-tracked on defensive moves made when interest rates were expected to rise. This week's biggest gains were BT Group PLC and Smith & Nephew PLC, the latter despite management warnings that supply-chain issues could affect the company well into next year, AJ Bell financial analyst Danni Hewson says. Elsewhere, the week's earnings numbers were broadly pleasing despite rising prices and supply-chain disruption, Ms. Hewson says. "Next week there's plenty more data to dig into from the latest U.S. inflation numbers to a look at how the U.K. economy performed once the long summer holidays came to an end and normal service was just about resumed," she says.
Companies News:
River & Mercantile FY 2021 Pretax Profit Rose on Higher Revenue
River & Mercantile Group PLC on Friday reported an increased profit for fiscal 2021 on the back of higher revenue that was boosted by an increase in performance fees.
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Edenville Energy Says Tanzania Rukwa Coal Upgrades Boosted Production, Sales
Edenville Energy PLC said Friday that production, processing and sales at its Tanzania's Rukwa coal project increased in October after upgrades to the site were applied in the third quarter.
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Mitie Group Announces $162 Mln Notes Offering
Mitie Group PLC said Friday that it will issue U.S. private placement notes worth 120 million pounds ($162.0 million).
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Stelrad Prices IPO at 215p a Share; Conditional Trading Starts in London
Stelrad PLC on Friday priced its initial public offering at 215 pence a share, implying a market capitalization of 274 million pounds ($369.9 million) as conditional trading starts on the London Stock Exchange.
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M.P. Evans Appoints New CEO
M.P. Evans Group PLC said Friday that it has appointed Matthew Coulson as chief executive officer, effective Jan. 1.
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Nichols FY Adjusted Pretax Profit Seen to Beat Market Views
Nichols PLC said Friday that its performance for the first nine months of the year has been strong, with revenue ahead of market views, and that it now anticipates full-year adjusted pretax profit ahead of consensus.
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Harmony Energy Income Trust Raises GBP186.5 Mln at IPO
Harmony Energy Income Trust PLC said on Friday that it has raised 186.5 million pounds ($251.8 million) at its initial public offering via a placing and an offer for subscription.
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Gresham House Strategic Interim Chair Resigns; Bows Down to Shareholder Pressure
Gresham House Strategic PLC said Friday that Helen Sinclair has resigned as interim chair of the board and will be replaced temporarily by Charles Berry.
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Weir Group to Buy Motion Metrics for GBP89 Mln
Weir Group PLC said Friday that it is acquiring Canadian artificial intelligence and machine-vision technology group Motion Metrics International Corp. for an initial consideration of 89 million pounds ($120.2 million)
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Kavango Resources Appoints Brett Grist as COO
Kavango Resources PLC said Friday that it has appointed Brett Grist as its new chief operating officer-designate.
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Vertu Motors to Start New GBP3M Share Buyback Program When Current One Finishes
Vertu Motors PLC said Friday that it plans to start a new 3 million-pound ($4.1 million) share buyback program once the current one finishes.
Market Talk:
IAG's 3Q Results Underscore a Turbulent Period for the Company
1143 GMT - IAG latest set of results are disappointing considering the continued revival of the travel industry, and underscore a turbulent period for the company, Mark Crouch at eToro says. Although the U.S. travel corridor is now open--a key route for group airline British Airways--with capacity still only at 40% of prepandemic levels and anticipated to only reach 60% by the end of 4Q, the company faces a slow march to profitability, Crouch says. IAG has made strategic errors with the battle over refunds making it seem petty and reversing course on a new short-haul carrier after it faced a pilot's rebellion, he says. "Make no mistake, IAG is a business in turmoil," Crouch says.
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Sterling's Fall Vs Euro Expected to Prove Short-Lived
1131 GMT - Sterling's current depreciation against the euro should be temporary as the Bank of England is likely to raise interest rates before the European Central Bank, Danske Bank says. "We still expect rate hikes from the Bank of England, while we expect the ECB to stay patient despite recent increases in rate hike expectations," Danske Bank analyst Lars Sparreso Lykke Merklin says. "Also we still believe the environment is more supportive for GBP than EUR, as GBP usually strengthens in an environment where USD does." However the potential for a stronger pound is lower than for the dollar, he says. Danske Bank expects EUR/GBP to fall to 0.83 within 12 months. EUR/GBP rises 0.2% to 0.8580.
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Sterling Extends Losses After BOE Holds Rates, Seen Vulnerable
0927 GMT - Sterling continues to weaken after the Bank of England held its benchmark interest rate at 0.1% on Thursday, defying expectations for a 15 basis points rate rise. GBP/USD falls 0.3% to a five-week low of 1.3440 and EUR/GBP rises 0.3% to a five-week high of 0.8591, according to FactSet. "Downside risks for the pound would continue to build if market participants become more fearful that the BOE is falling behind the curve in responding to higher inflation in the U.K.," MUFG Bank currency analyst Lee Hardman says.
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UK Gilt Curve Steepens After BOE Unexpectedly Left Rates Unchanged
0925 GMT - The Bank of England's surprise decision to leave monetary policy unchanged Thursday, after warnings in previous weeks that the central bank will have to act to curb inflation, led to a sharp repricing of the country's borrowing costs, Tradeweb data show. "A more dovish-than-expected BOE meeting triggered a repricing of market expectations for rate hikes across the board and, more in general, a further correction in rates market," UniCredit says. As a result, the gilt yield curve "bull-steepened aggressively," the bank says, referring to a change caused by short-term yields falling faster than long-term rates.
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IAG's Capacity in Line with Rivals, Transatlantic Travel Will Be a Boost
0902 GMT - IAG said it expects to fly around 60% of pre-pandemic capacity in 4Q, and this is broadly in line with legacy peers, Citi says. The reopening of the transatlantic routes is expected to aid in capacity and demand recovery as the operator of British Airways and Iberia plans to operate 100% of 2019's capacity by summer 2022, and return to profit next year, Citi says. "We think that the shares will react in-line to these results given no new surprises," the U.S. bank says. Citi rates the stock buy and has a 250 pence target price. Shares are down 1.5% at 167.12 pence.
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FTSE 100 Rises to Highest Intraday Level Since Feb 2020; Focus on US Jobs Data
0901 GMT - The FTSE 100 rises 0.4%, reaching its highest intraday level since February 2020 at 7311.25, according to FactSet, as U.K. stocks continue to rise in the aftermath of Thursday's unexpected Bank of England decision to leave interest rates unchanged. Retailers and housebuilders are mostly higher, while banking stocks recover. British Airways owner International Consolidated Airlines falls 2.1% after third-quarter earnings which showed a narrower loss. Focus for the day will center on U.S. nonfarm payrolls data due at 1230 GMT. Noting that traders will begin to question when U.S. interest rates will start to rise, IG says: "A sharp September decline in Covid-related financial assistance does signal a likely return to work that should soon provide a resurgent payrolls figure."
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IAG's Improving Situation Attracts Investor Attention
0853 GMT - Although IAG's situation is slowly improving after it posted a narrowed 3Q loss of EUR452 versus EUR1.9 billion the year before, investors still need to be prepared for the long term, Richard Hunter at interactive investor says. Cash operating costs for 3Q were EUR260 million per week, underlining its need to return to some kind of normality as soon as possible, and although IAG's actions have been decisive these inevitably come at a cost which will overshadow the operator of Iberia and British Airways for some time, Hunter says. "The company remains firmly in the camp of a recovery play, which in turn has attracted the attention of investors still keen on IAG's prospects," Hunter says.
Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com
(END) Dow Jones Newswires
11-05-21 1309ET
