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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| WPP | 866.2 | 40.4 | 4.89 | 2.32 |
| London Stock Exchange | 4695 | 188 | 4.17 | 15.58 |
| ITV | 136.15 | 5.1 | 3.85 | 9.05 |
| British American Tobacco | 2863 | 104.5 | 3.79 | 14.52 |
| Schroders | 2165 | 65 | 3.1 | 4.84 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| RELX | 1610.5 | -118.5 | -6.85 | -0.37 |
| Rolls-Royce | 905 | -50 | -5.24 | 9.04 |
| Fresnillo | 824 | -36 | -4.19 | -4.19 |
| Rightmove | 471.9 | -10.2 | -2.12 | 9.17 |
| Lloyds Banking | 62.85 | -0.7 | -1.09 | 21.22 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,106.7 | 32.0 | 0.45 | 5.6 |
| UK | 19,399.7 | 218.4 | 1.14 | 10.8 |
| FR CAC 40 | 5,265.2 | 24.7 | 0.47 | 11.3 |
| DE DAX 30 | 11,601.7 | 86.1 | 0.75 | 9.9 |
| US DJ Industrial Average 30 | 26,026.3 | 110.3 | 0.43 | 11.6 |
| US Nasdaq Composite | 7,595.4 | 62.8 | 0.83 | 14.5 |
| US S&P 500 | 2,803.7 | 19.2 | 0.69 | 11.8 |
| JP Nikkei 225 | 21,822.0 | 219.4 | 1.02 | 9.0 |
| HK Hang Seng Index 50 | 29,001.5 | 189.3 | 0.66 | 12.2 |
| AU S&P/ASX 200 | 6,217.4 | 24.7 | 0.40 | 10.1 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 56.01 | -0.25 | 0.00 | 23.3 |
| Crude Oil, Brent ($/barrel) | 65.34 | 0.28 | 0.00 | 20.6 |
| Gold ($/oz) | 1294.16 | -9.55 | -0.01 | 0.9 |
| Silver ($/oz) | 15.55 | -0.11 | -0.01 | 0.5 |
| GBP/USD – US$ per £ | 1.3233 | – | 0.20 | 3.8 |
| EUR/USD – US$ per € | 1.1365 | – | 0.00 | -0.9 |
| GBP/EUR – € per £ | 1.1645 | – | 0.22 | 4.7 |
Click graph to enlarge
UK 100 called to open +25pts at 7130 after breaking above 1-week falling highs resistance. The recent correction/retrace may not have pulled back as far as 2-month rising support at 7000, but there is potential for this to be a revival of the 2-month uptrend channel. Bulls need a break above 7160 overnight highs. Bears require a breach of 7120. Watch levels: Bullish 7160, Bearish 7120
Calls for a positive open come Asian extended Friday’s rally. Driving upwards momentum was trade war optimism after a Bloomberg report that the US and China were once again close to inking a deal to lift US tariffs, as long as Beijing maintained intellectual property protections and purchased additional US goods.
In corporate news this morning, Aviva appoints Maurice Tulloch (current International Insurance head, ex-Aviva UK/Ireland General Insurance head) as CEO, with immediate effect. British American Tobacco reviewing decision by Quebec Class Action Court of Appeal to uphold May 2015 decision against subsidiary Imperial Tobacco Canada. To decide next steps in near future.
Daily Mail & Gen Trust to return c. £900m to shareholders; £200m cash + direct ownership of 49% stake in Euromoney at 14.5% discount. To simplify group. All other FY guidance unchanged.
Rotork 2018 revenues +8.3% on orders +2.3%, with adjusted operating profits +12.2% and adj. pre-tax profit +15.3%; organic constant FX growth stronger at all levels; div +9.3%; mindful of macro uncertainty, expects slower 2019 growth; modest organic sales growth, but margin expansion.
Senior 2018 revenues +6% (+8% at constant FX); adj op. profit +11% to £91.6m beats £90m consensus; adj. pre-tax +14%; div +7%; free cash flow -22%, next debt -1.5%; sees more growth in 2019 despite geopolitical conditions; started year in-line.
Synthomer 2018 revs +9.4% (+7.8% at constant FX) on volumes +5.1%; op profit +2.2% (Europe & N. America -5%, Asia/RoW +30%; unallocated +12%); pre-tax +3.9%, div +7.4%; well placed to navigate political/economic uncertainty. Expects 2019 growth; expectations unchanged.
888 acquires BetBright's sports betting platform for £115m, strengthening product and tech capabilities. The FT reports Rolls Royce all but giving up on winning engine contract for Turkey’s next generation fighter jet in a dispute over intellectual property. It signed a £100m contract in 2017.
Wizz Air Feb passengers +12.9% YoY and load factor +3% on seat capacity +9.3%. Avg seat KM +12.8%; Rev passenger KM +16.5%; added 5 new routes and 2 aircraft. Ryanair Feb passengers +13% YoY, rolling annual +9%, 96% load factor flat.
Superdry co-founders Julian Dunkerton and Peter Williams (combined 29% stake) have called for shareholders to vote on their potential return to the board to help revive the struggling retail brand. Ted Baker CEO Ray Kelvin resigns with immediate effect after allegations of misconduct. Acting CEO Lindsay Page continues in role. Internal investigation to conclude end-Q1/early Q2.
Brazilian mining giant Vale CEO resigns, albeit temporarily, amid pressure from prosecutors after a second dam collapse in just over 3 years. The Basel Committee financial regulator wants external checks on banks’ loan riskiness after Metro Bank’s recent debacle, making external auditors responsible for checking for errors/cheating.
Abcam H1 revenues +10.8% YoY (+10% at constant FX), adj. pre-tax profit +4.5%. Gross margin +40bps to 70.2%. Interim dividend +3.8%. Expects FY growth broadly in-line with H1. Keller FY revenues +7% (+11% ex-FX), underlying pre-tax profit -18% (-16% ex-FX). Final dividend -2.4% (full year +5%). Trading in-line with revised expectations. £1bn order book; Confident in 2019 outlook.
Macro data today is scarce today, limited to UK Construction PMI (9:30pm), expected a shade weaker in Feb, US ISM New York business conditions index (2:45pm), seen extending a 6-month downtrend, and US Construction Spending (3pm), growth forecast slowing in Dec.
The rest of the week should prove more interesting, with Feb Services PMIs from across major economies (Tues, from 8:15am till mid-afternoon), the ECB monetary policy update (Thurs, decision: 12:45pm; presser: 1:30pm) and US Non-Farm Payrolls (Fri, 1:30pm).
In Asia, the National People’s Congress (China’s legislature) begins its annual session, with Premier Li Keqiang (Tues, 1am) presenting an economic report, important for China-sensitive stocks. Economists expect the Premier to announce a 6% 2019 growth target, down from 6.5% last year.
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Prepared by Michael van Dulken, Head of Research