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FTSE 100 Closes Lower on Inflation, Rising Interes Rates

01/28/2022 | 12:15pm EDT

The FTSE 100 on Friday closed down as market turbulence looks set to continue. "This sign of broadening selling does not bode well for those that hope a bounce can develop once January is out of the way, and suggests that concerns about inflation and rising rates will hit the European financial markets once more," said Chris Beauchamp, chief market analyst at IG.

 
Companies News: 

Abrdn Raises GBP264 Mln From Sale of Part of Phoenix Group Stake

Abrdn PLC said Friday that it has sold 40 million shares in Phoenix Group Holdings PLC to institutional investors, raising proceeds of around 264 million pounds ($353.3 million).

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Amigo Holdings Appoints Danny Malone as Interim CFO

Amigo Holdings PLC said Friday that it has appointed Danny Malone as chief financial officer on an interim basis.

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Character Group to Return GBP13.5 Mln to Shareholders in Tender Offer

Character Group PLC said Friday that it intends to return around 13.5 million pounds ($18.1 million) to shareholders through a tender offer and repurchase of shares.

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Capita PLC to Sell Trustmarque for GBP115 Mln

Capita PLC said Friday that it has agreed to sell its Trustmarque IT services business to One Equity Partners for 111 million pounds ($148.6 million).

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Avon Protection Launches Buyback Program of up to GBP18.5 Mln

Avon Protection PLC said Friday that it was launching a share buyback program of up to 18.5 million pounds ($24.8 million), and that organic revenue for the first quarter of fiscal 2022 was ahead of the year-prior period.

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Paragon Banking Group 1Q Performance in Line With Expectations

Paragon Banking Group PLC said Friday that performance in the first quarter of fiscal 2022 has been strong and in line with the board's expectations.

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Chill Brands 1H 2022 Revenue Soared

Chill Brands Group PLC said Friday that revenue for the first half of fiscal 2022 rose significantly.

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YouGov Expects FY 2022 to Beat Views After Good First Half

YouGov PLC said Friday that it expects fiscal 2022 results to be slightly ahead of the board's expectations after experiencing growth across all divisions and geographies in the first half.

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Trackwise Sees 2021 Loss Widening, Revenue Rising; Names CFO Designate

Trackwise Designs PLC said Friday that it expects its 2021 adjusted operating loss to widen and revenue to rise, and named Paul Cook as its chief financial officer designate.

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BrandShield to Raise GBP1.5 Mln in Share Placing

BrandShield Systems PLC said Friday that it intends to raise 1.5 million pounds ($2 million) through a share placing to institutional investors.

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Surface Transforms Sees 2021 Revenue Increase

Surface Transforms PLC said Friday that it expects to report a 20% increase in revenue for 2021.

 
Market Talk: 

BOE Expected to Lift Bank Rate, Start Active Gilt Sales From August

1215 GMT - The Bank of England is set to lift the bank rate by 25 basis points next week, subsequently triggering quantitative tightening, says TD Securities. "We expect the Monetary Policy Committee to hike [the] Bank Rate to 0.50% and confirm that Gilts will start maturing off its balance sheet from March," analysts at the bank say. The 25 basis-point rate increase is "fully warranted" as a healthy pre-Omicron economy and rising inflation and inflation expectations leave the MPC on the defensive, they say. The BOE is hence expected to stop reinvesting the proceeds of maturing gilts in its portfolio in March, with subsequent rate-rises in May and August this year, triggering the consideration of active gilt sales from August, they add.

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Shell 4Q Earnings Expected to Double

1210 GMT - Shell's adjusted earnings on a current cost of supply basis are expected to have doubled in the fourth quarter of 2021. The market consensus for the period is $8.8 billion, AJ Bell says. This would be up from $4.1 billion in the third quarter, when earnings were hit by the Hurricane Ida and lower trading profits. "Shares in Shell, newly renamed as part of the switch in its tax domicile and headquarters to London from Amsterdam, are up by a third over the past year, buoyed by a 60% surge both oil and natural gas over the last 12 months. A messy set of third-quarter results in October did not hold back the share price for long either," AJ Bell says.

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Capita Needs a Period of No Surprises to Rebuild Confidence, RBC Says

1148 GMT - The upcoming fiscal year results provide a good opportunity for Capita PLC to provide further disclosure around its business divisions, growth opportunities and profit swing factors over the next couple of years, RBC Capital Markets says. The FTSE 250 professional-services provider needs a period of no surprises to start to rebuild confidence in the story and to generate a re-rating, the bank says. The December downgrade to 2022 was disappointing and unhelpful for its already low credibility, RBC notes. However, the bank reaffirms an outperform rating on the stock. "Whilst Capita remains in the 'uninvestable' camp for many, we continue to see enough upside on a risk-reward basis."

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Smart Metering Systems to See Material Earnings Growth Over Next Few Years

1125 GMT - Smart Metering Systems now sees its 2021 pretax profit marginally ahead of market consensus, prompting Peel Hunt to raise its forecast by 3% to GBP18.3 million. The U.K. energy infrastructure company's liquidity also remains strong and the pipeline is substantial, which will enable material earnings growth over the next few years, Peel Hunt says. Smart Metering Systems also remains confident in reaching consensus expectations for 2022, the brokerage says, retaining its pretax profit estimate of GBP20.9 million for the year. Peel Hunt reiterates a buy recommendation and target price of 1,159 pence on the stock. Shares are up 0.8% at 740.0 pence.

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Abrdn's Partial Disposal of Phoenix Stake Seen as a Welcome Surprise

1058 GMT - Abrdn's placing of a 4% stake in Phoenix Group Holdings is a pleasant surprise, with proceeds to be returned to shareholders as soon as practicable after its results in March, Jefferies says. The FTSE 100 investment company could now see its prospective dividend yield lifted to around 10% for the year, assuming the proceeds are returned by special dividend, the U.S. bank says. "From the statement, it seems clear that this disposal is entirely consistent with the simplified and extended relationship Abrdn agreed with Phoenix in February," Jefferies says. Jefferies retains its buy rating and 273.0 pence price target on Abrdn's stock. Shares are up 1.2% at 241.1 pence. (joseph.hoppe@wsj.com)

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Farfetch's Beauty Takeover Should Give Shares a Lift

1041 GMT - Farfetch's entry into the beauty sphere through the acquisition of online platform Violet Grey should mitigate recent share-price decline, Bernstein says. The British-Portuguese luxury e-commerce company said Friday that it is acquiring Los Angeles-based Violet Grey for an undisclosed sum, a move that, while unexpected, is consistent with a strategy of creating traffic synergies with a focus on younger consumers, Bernstein says, pointing to recent streetwear acquisitions as part of the same goal. Farfetch's share has suffered recently from shifting sentiment away from tech stocks and the return to physical stores, but the Violet Grey takeover should to some extent alleviate these pressures, the brokerage says. Shares last closed in New York at $19.12.

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BOE Seen Trying to Encourage Stronger Pound

1028 GMT - The Bank of England isn't pushing back against the market's interest rate rise expectations as it probably wants to encourage a stronger pound, ING says. The market sees the benchmark rate rising to 1.35% by December from 0.25% currently, ING analysts say. Previously the BOE may have issued a "verbal rate protest" against such pricing to weaken sterling in a deflationary environment with poor global demand but now it's likely welcoming sterling strength to fight against higher energy prices, they say. EUR/GBP could fall towards 0.8275 if the BOE lifts rates by 25 basis points and doesn't protest against rate bets at next Thursday's meeting, they say. EUR/GBP falls 0.1% to 0.8322 after hitting a one-week low of 0.8311 earlier.


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


(END) Dow Jones Newswires

01-28-22 1215ET

Stocks mentioned in the article
ChangeLast1st jan.
ABRDN PLC -0.50% 188.35 Delayed Quote.-21.81%
AJ BELL PLC 0.23% 266.6 Delayed Quote.-29.73%
AJ NETWORKS CO., LTD. -2.51% 6590 End-of-day quote.21.81%
AMIGO HOLDINGS PLC 4.92% 6.505 Delayed Quote.8.60%
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) -0.24% 0.56522 Delayed Quote.5.48%
AVON PROTECTION PLC 0.77% 1175 Delayed Quote.4.82%
BRANDSHIELD SYSTEMS PLC 0.00% 8.25 Delayed Quote.-49.23%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) 0.07% 0.631931 Delayed Quote.8.00%
CAPITA PLC -3.45% 23.54 Delayed Quote.-35.51%
CHILL BRANDS GROUP PLC 0.00% 2.95 Delayed Quote.-81.27%
EURO / BRITISH POUND (EUR/GBP) 0.08% 0.84656 Delayed Quote.1.07%
FTSE 100 0.63% 7464.8 Delayed Quote.0.46%
FTSE MID 250 INDEX 0.01% 19924.11 Delayed Quote.-15.16%
INDIAN RUPEE / BRITISH POUND (INR/GBP) -0.56% 0.010432 Delayed Quote.6.17%
LONDON BRENT OIL 0.44% 112.839 Delayed Quote.41.60%
OIL AND NATURAL GAS CORPORATION LIMITED -0.03% 153.5 Delayed Quote.7.79%
PARAGON BANKING GROUP PLC 0.51% 477 Delayed Quote.-15.80%
PHOENIX GROUP HOLDINGS PLC 2.89% 634.6 Delayed Quote.-2.85%
S&P GSCI NATURAL GAS INDEX 1.91% 377.0484 Real-time Quote.108.18%
SMART METERING SYSTEMS PLC 1.52% 799 Delayed Quote.-4.99%
SURFACE TRANSFORMS PLC -2.13% 46 Delayed Quote.-13.21%
THE CHARACTER GROUP PLC 0.00% 570 Delayed Quote.-8.80%
TRACKWISE DESIGNS PLC -0.72% 68.5 Delayed Quote.-27.89%
US DOLLAR / BRITISH POUND (USD/GBP) -0.10% 0.811926 Delayed Quote.10.34%
WTI 1.11% 111.72 Delayed Quote.44.13%
YOUGOV PLC -1.79% 1100 Delayed Quote.-31.25%
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