Pound to Fall Vs Dollar if BOE Delays Rate Rise, Fed Accelerates Tapering

Sterling is likely to weaken versus the dollar if the Bank of England delays raising interest rates and the Federal Reserve accelerates the tapering of asset purchases, MUFG Bank says. The BOE will likely keep rates unchanged until at least February after the U.K. government tightened coronavirus restrictions and following recently cautious comments from BOE officials, MUFG's Lee Hardman says. Meanwhile, the Fed should speed up tapering at its December 14-15 meeting, he says. "The time gap between the first BOE and Fed rate hikes is likely to be much shorter now than initially expected which should keep downward pressure on cable heading into year end and moving it closer to the 1.3000-level." GBP/USD trades flat at 1.3206. 


 
Companies News:

Rolls-Royce Returned to Positive Free Cash Flow in 3Q

Rolls-Royce Holdings PLC said Thursday that it restored positive free cash flow in the third quarter.

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Farfetch Snaps Up Resale Platform as Secondhand Luxury Keeps On Growing

Farfetch Ltd. has acquired luxury resale platform Luxclusif as the sector's interest in the second-hand market grows apace, marking the latest expansion at the British-Portuguese e-commerce firm.

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Frasers 1H Pretax Profit Rose Significantly; Sees FY Growth

Frasers Group PLC on Thursday reported a significant rise in pretax profit for the first half of fiscal 2022 and said that it expects to post a materially stronger adjusted pretax profit for the full year if there are no additional Covid-19 lockdowns in the U.K., particularly during Christmas.

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DS Smith 1H Pretax Profit, Revenue Rose; Increases Dividend

DS Smith PLC said Thursday that pretax profit and revenue rose for the first half of fiscal 2022 and that it has increased the interim dividend.

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ITV Studios Revenue Seen Recovering to 2019 Levels in 2022

ITV PLC said Thursday that total revenue for its ITV Studios unit should recover to 2019 levels in 2022.

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Harbour Energy Introduces $200 Mln Annual Dividend

Harbour Energy PLC said Thursday that it will introduce a $200 million annual dividend, as it expects to remain free cash flow positive every year in the medium term at current forward commodity prices.

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Hikma Signs Deal to Commercialize Gedeon Richter's Osteoporosis Treatment

Hikma Pharmaceuticals PLC said Thursday that it has signed a deal to commercialize Gedeon Richter PLC's denosumab in the U.S.

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Stanley Gibbons 1H Pretax Loss Widened; Aims to Become Cash Sustainable in 2H

Stanley Gibbons Group PLC said Thursday that its pretax loss widened in the first half of fiscal 2022 and that it aims to become a sustainably cash positive business within the next six months.

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Galileo Resources Shares Rise as Investee Glenover Agrees to $16 Mln Disposal

Shares in Galileo Resources PLC rose Thursday after it said its investee Glenover Phosphate Proprietary Ltd. agreed to sell certain phosphate rock deposits and mining rights for 250 million rand ($15.9 million) to Afrimat Ltd.

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S&U Growth Accelerates on Strong Performance

S&U PLC said Thursday that it is performing strongly, with growth accelerating in both its Advantage Finance and Aspen Bridging Finance businesses.

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Clipper Logistics 1H Pretax Profit Rose

Clipper Logistics PLC on Thursday reported a higher pretax profit for the first half of fiscal 2022, and said it is on track to meet full-year expectations.

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Real Good Food Shares Rise as 1H Pretax Loss Narrowed Significantly

Shares in Real Good Food PLC rose Thursday after the company reported a significantly narrowed pretax loss for the first half of fiscal 2022 and said the board is confident it will restore greater profitability over the coming trading periods. 


 
Market Talk:

Platform Companies Could Leave Some Countries After EU Gig-Worker Bill

1117 GMT - Ride-hailing and delivery companies could decide to leave certain countries given the higher costs implied by employing riders, Bryan Garnier warns. The EU on Thursday published a legal proposal that could entail the reclassification of more than 4 million gig workers in the bloc, with an associated increase in costs of up to EUR4.5 billion a year for platform companies. In Spain, a law came into force this summer ordering delivery platforms to employ their workers, leading U.K.-based Deliveroo to withdraw from the country entirely. Given the higher scale need to break even if and when the new proposals are implemented, some players could decide similarly to exit certain markets, Bryan Garnier says in a note published ahead of the bill, adding that consumer costs could also rise.

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Platform Companies Should See EU Gig-Worker Proposals in Perspective

1111 GMT - Re-classification of platform workers as employees should be seen in perspective, Bryan Garnier says. The EU on Thursday published a legal proposal that could entail the re-classification of more than 4 million gig workers in the bloc, with an associated increase in costs of up to EUR4.5 billion a year for platform companies. While the law does mean material changes to the way such companies operate, it has been expected for a long time, and could take years to implement by each member country, Bryan Garnier says in a note ahead of the bill's publication. Recent selloff in delivery stocks including Delivery Hero, Deliveroo and Just Eat is, as such, excessive, the investment bank says.

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Balfour Beatty's Stable London Outlook Is Reassuring

1058 GMT - Balfour Beatty expects its fiscal 2021 earnings to be in line, with a return to pre-coronavirus pandemic profits and, most positively, no change to London Residential assumptions, Peel Hunt says. The infrastructure group's shares have weakened since August, when it said losses on London property construction contracts meant its U.K. construction business hadn't made any progress on the year, the brokerage says. Now Balfour's investors should be reassured there is no further changes to assumptions, with one project now completed and two remaining, Peel Hunt says. "The continuation of the multi-year capital returns program should also refocus minds on Balfour Beatty's potential," Peel Hunt says, reiterating its buy rating and 350 pence target price. Shares are up 2.7% at 253.8 pence.

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Financial Materiality Helps the 'S' in ESG in Shine

1039 GMT - Having a more consistent language in the sustainability space will go a long way to making social issues more tangible in ESG investing, where the 'S' is widely seen as the hardest area to measure. "The market needs a common language, so that people don't think, 'Well social means we're just talking about being nice,'" says Nneka Chike-Obi, director at Sustainable Fitch. Though there are frameworks like SASB for financial materiality-oriented reporting, there still isn't standardization around social metrics. Corporate sustainability reports can read like essays or journal entries: "'We love the world. We love our workers,' but where are the numbers?," she says. What people need to know are metrics like percentage of female staff or number of safety incidents. Failing to address financial risks stemming from social issues could affect how an organization like Fitch rates a company, she says.

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Rolls-Royce Shares Fall on Slower Recovery Concerns

0848 GMT - Rolls-Royce shares fall 3.2% after releasing a trading update. While things are moving in the right direction, the engine-maker is still set to fall short of its 2021 target for large engine flying hours, Michael Hewson at CMC Markets says. This isn't surprising given what has been happening with the Delta coronavirus variant in Europe and latterly Omicron, and international travel is likely to remain a headwind heading into next year, he says. Rolls-Royce returned to positive free cash flow in 3Q, but the company still has some way to go to reach its 2022 free cash flow target of GBP750 million, and much of this will depend on when and if international travel returns to normal, Hewson says.

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Frasers 1H Came in Ahead of Views, But It Still Faces Headwinds

0833 GMT - Frasers's set of results for the first half of fiscal 2022 were better than expected, RBC Capital Markets says. The U.K. sports-fashion retailer's performance shows it is in a good position given the momentum in the core sports retail businesses and stronger-than-expected full-price sales, the Canadian bank adds. However, execution risk is higher than average for Frasers and it may be challenging to scale its luxury offer outside of regional U.K. cities, it says. At the same time, department stores continue to face structural pressures and a gradual loss of their range advantage to online players, RBC adds. "Finally Frasers continues to lag the sector on ESG practices, which is likely to constrain its appeal to investors," it notes.

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

(END) Dow Jones Newswires

12-09-21 0638ET