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FTSE Down, Pound Unfazed by Empty Petrol Stations Due to Rate-Rise Prospects

09/28/2021 | 06:50am EDT

Pound Unfazed by Empty Petrol Stations Due to Rate-Rise Prospects

The shortage of truck drivers and lack of fuel at petrol stations in the U.K. are becoming increasingly serious but are so far having little impact on the pound, Commerzbank says. "This is mainly due to the Bank of England, which is increasingly emphasizing its willingness to fight higher inflation risks (which supply bottlenecks also entail) with interest rate hikes if necessary," Commerzbank currency analyst Esther Reichelt says. BOE Governor Andrew Bailey on Monday said that interest rates could be raised before Christmas if needed to stem inflation. GBP/USD falls 0.2% to 1.3663 and EUR/GBP rises 0.1% to 0.8547.

 
Companies News: 

NAHL Expects Lower Revenue, Underlying Operating Profit for 2021; Shares Fall

Shares in NAHL Group PLC fell after the company said it expects 2021 revenue and underlying operating profit to be lower than the board's previous expectations and below 2020, despite reporting a swing to pretax profit for the first half.

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Frenkel Topping to Raise Up to GBP2.3 Mln via Sale of Treasury Shares

Frenkel Topping Group PLC said Tuesday that it plans to raise up to 2.3 million pounds ($3.2 million) via the sale of treasury shares and will use the money to increase its cash resources.

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DWF Group Says Year-To-Date Performance Is in Line With Management Views

DWF Group PLC said Tuesday that its performance for the financial year to date is in line with management expectations.

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Carnival Appoints Sture Myrmell President of Carnival U.K., Marguerite Fitzgerald President of Carnival Australia, P&O Cruises Australia

Carnival PLC said Tuesday that Sture Myrmell has been appointed president of Carnival U.K. effective Oct. 18, replacing Simon Palethorpe, and that Marguerite Fitzgerald will assume his position and serve as president of Carnival Australia and P&O Cruises Australia effective Jan. 10.

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Osirium Technologies 1H Pretax Loss Narrowed

Osirium Technologies PLC on Tuesday reported a narrowed pretax loss for the first half of the year, and said that its positive momentum has continued into the second half.

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First Property Says Performance Remains In Line

First Property Group PLC said Tuesday that performance remains in line with management expectations.

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Ferro-Alloy Resources 1H Pretax Loss Narrowed; Positive on 2H

Ferro-Alloy Resources Ltd. reported on Tuesday a narrowed pretax loss for the first half of the year due to higher prices, which were partly offset by lower production linked to Covid-19 related effects that have now been largely resolved.

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UK Commercial Property REIT Swung to 1H Pretax Profit

UK Commercial Property REIT Ltd. said on Tuesday that it swung to a pretax profit for the first half and that it was seeing the positive impact of the economic recovery as lockdown measures were eased.

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Petershill Partners Debuts in London With GBP4.0 Bln Market Capitalization

Petershill Partners said Tuesday that its initial public offering on the London Stock Exchange will value the company at around 4.0 billion pounds ($5.48 billion).

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HeiQ 1H Pretax Profit Fell on Lower Revenue, Increasing Costs; Shares Fall

Shares in HeiQ PLC fell 21% in early trade Tuesday after the company reported lower profits for the first half of the year on reduced sales and higher costs.

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IHS Markit 3Q Profit Falls, Revenue Up

IHS Markit Ltd. said profit for its recent quarter fell as revenues for financial services, transportation and consolidated markets and solutions rose.

 
Market Talk: 

Wickes Shares Look Cheap Given its High Quality

1022 GMT - Wickes looks high-quality, cash-generative and a leader in its market, and shares currently remain far too cheap for the high-quality growth, upgrade momentum and strong cash generation on offer, Liberum says. The building-materials retailer continues to strengthen its market-leading position through multiple self-help levers--embedding digital channels, improving its curated product ranges and delivering best-in-class customer service, the brokerage says. There is further space to grow in Wickes' "do-it-for-me" business, while indicators for trade and DIY remain positive, Liberum says. The brokerage retains its buy rating on the stock with a target price of 221.0 pence, and says Wickes is one of the best ways to invest in the U.K.'s repair, maintenance and improvement market. Shares are up 2.2% at 226.0 pence.

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Pennon 1H Revenue Rose, But Costs Are Set to Increase

0958 GMT - Pennon Group shares drop 4% after the U.K. water utility reported a first-half revenue increase, but forecast higher costs. Ebitda remains in line with management expectations as higher revenue offset increased costs, RBC Capital Markets says. "Pennon continues to be a strong performer within the U.K. water sector, given sector-leading [return on regulatory equity] performance; however, we see the current 34% premium to our FY22 [expected regulatory capital value] as challenging on a fundamental basis. We maintain a sector-perform recommendation," RBC analyst Alexander Wheeler

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Artificial Intelligence Could Give Rise to More Monopolistic Companies

0953 GMT - Artificial intelligence may exacerbate the wealth inequality among companies and nations, while also giving rise to more powerful monopolistic businesses, says Kai-Fu Lee, CEO of venture-capital firm Sinovation Ventures. Those with access to proprietary data could reap the benefits of AI, creating a virtuous cycle where "the data allows the company to build better AI, better AI can generate better economics and deliver a better product and [gain] way more customers and make more money and get even more data," he says.

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Electrocomponents Has Potential for Further Market Share Gains

0950 GMT - The pandemic has further strengthened Electrocomponents's competitive advantage, given its digital and web capability, stock availability and omni-channel superior proposition, RBC Capital Markets says. The bank's analysts see strong potential for Electrocomponents to gain further market share, and believe mid-teen margins are achievable from a number of levers. In addition, further acquisitions could be an incremental value driver, RBC says as it upgrades its recommendation on the distributor of industrial and electronics products. "Our medium-term forecast increases drive an increase in our target to 1,350p and we upgrade to Outperform, believing ECM will be a long-term winner."

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HSBC Well-Placed to Weather Turbulence; May Return Cash

0946 GMT - HSBC is best-placed among Hong Kong banks to weather short-term economic pressure and could return cash to shareholders, Citigroup says. Select HK banks are trading close to Covid-19 and 2015 trough levels over concerns on mainland China property exposure, but asset-quality risks facing banks in the region look manageable for most of them and a divergence between their share prices and the rising U.S. 10-year bond yield offers an attractive buying opportunity, Citi says. "Our top pick is HSBC, which we believe could announce a buyback in 3Q21 earnings given surplus capital, improved profitability and attractive valuation," Citi analysts say.

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PRS REIT's Capital Raise Likely to Be Popular But Will Hamper EPS

0940 GMT - PRS REIT's GBP75 million capital raise is likely to be well-supported following company performance improvements as the pace of development completions accelerates, but it will delay EPRA earnings per share growth, Liberum says. The real-estate trust is only just beginning to achieve a meaningful level of earnings per share as the proportion of completed units has risen and the majority of the net asset value return to date has come from development profits, the brokerage says. "We expect the company will maintain an uncovered dividend of 4.0 pence a year in the intervening period as another dividend cut would be unpalatable for some investors," Liberum says. Shares are up 0.5% at 103.5 pence.

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Non-Standard Finance Seen With Long Way to Go to Return to Viable Position

0938 GMT - The fact that Non-Standard Finance has reiterated indications of support from its largest shareholders regarding its plans to raise capital is positive, Goodbody says. However, it is clear that the U.K. provider of consumer finance still has much to do to return to a viable position, Goodbody says. A step Non-Standard Finance will likely take to return to a viable position could include a potential restructuring of its debt facilities, the Irish brokerage says.

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AG Barr Had Strong 1H, But Costs, Supply Issues Weigh

0930 GMT - Shares in AG Barr edge 0.4% lower after the Scottish soft-drink maker warned of a potential second-half margin hit from rising costs and supply-chain issues. The company had a strong 1H underpinned by a post-lockdown recovery in so-called 'out-of-home' demand, cost-cutting and several one-off benefits, Goodbody says. "The group anticipates margins to normalize in 2H, reflecting a re-phasing of marketing and increased cost inflation--raw materials, logistics and CO2--and therefore reiterates its guidance for FY21/22 PBT to be slightly ahead of pre-Covid levels," Goodbody analyst Patrick Higgins says. "Consequently, we anticipate leaving our current forecast for FY21/22 PBT of GBP38.4 million--versus FY19/20 of GBP37.4m--unchanged."

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

(END) Dow Jones Newswires

09-28-21 0649ET

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