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Markets: FTSE 100 bounces back on Wednesday
Interactive Investor's Market Report brings you bite-sized news covering all the day's FTSE and AIM announcements, the latest on commodities, global and domestic economics, gold, oil and currencies as well as US markets. Updated throughout the day, it's the digest you can't afford to miss.
Last updated: 17:00
UK markets: Wednesday's close
The FTSE 100 was buoyed by financial stocks and better-than-expected jobs data from the US as it glided towards a strong finish on Wednesday.
London’s leading index closed 77.54 points in the black at 5712.82 with Next (NXT) having led the blue chips all day, ending on a high of 6.4%. Randgold Resources (RRS) took the wooden spoon, down 2%.
Chris Beauchamp, market analyst at IG Index, noted the positive impact of results from Next and Standard Chartered (STAN).
Looking ahead, he anticipates increasing focus on the three central banks whose decisions appear in the coming hours.
"First up will be the Fed, although, as so often, no great change is expected from this quarter. The poorer UK figures this morning might provoke the Bank of England into action, but the main interest will be the ECB. Comments from Berlin this morning seemed to set the stage for a possible showdown between the Bundesbank and the ECB, so it will be interesting to see who wins out tomorrow," Beacuchamp said.
At a glance...
|GBP/USD: 1.5595||Gold: $1,602.74 |
|GBP/EUR: 1.2678||WTI crude oil: $88.73|
|EUR/USD: 1.2302||All changes from 09:00 BST.|
US markets slip back
US stocks lost some of the ground made earlier in the session as the Federal Reserve's announcement on monetary policy approached. Financial stocks were among the big winners on Wednesday on the back of better-than-expected economic data.
The Dow Jones was 32 points up at 13041. The Nasdaq lost four points to 2935, while the S&P 500 crept up almost two points to 1381.
Placing for CareCapital
CareCapital (CARE) has conditionally placed 52,000,000 new ordinary shares at a price of 1p to raise gross proceeds of £0.52 million, from institutional and other investors, including the company's chief executive Mike Sinclair.
The proceeds will be used to provide additional resources to develop the group's businesses in the cancer diagnosis and treatment market and for general working capital purposes.
Fusion's MedaPhor raises £1.06 million
Fusion IP () portfolio company MedaPhor has raised £1.06 million in an equity funding round to accelerate US sales and new product development of ScanTrainer, its novel ultrasound training simulator.
ScanTrainer is a virtual 'real feel' ultrasound-training simulator that provides students with a 24/7, educationally driven, training programme that replicates a real ultrasound scanning experience.
Dewhurst takes control of ERM
Dewhurst (DWHT), an independent supplier of components to the lift, keypad and rail industries, is to take full control of the newly combined Elevator Research & Manufacturing (ERM) after buying the remaining 20% held by Clive Mann for $906,950 (£581,594).
Dewhurst took over ERM and Winter & Bain Manufacturing, both Californian corporations which specialise in the elevator market, in 2010. In May 2011 W&B was merged into ERM and the shareholding of Clive Mann became 20% of the newly-combined ERM corporation.
Aegis snaps up marketing companies
Aegis Group (AGS) has acquired Spy Marketing and its affiliate 4Search for an undisclosed sum. Spy's gross assets were £2.9 million as at 31 December.
Specialising in the luxury retail, fashion and travel sectors, Spy is a digital marketing agency that integrates search, social advertising and analysis of consumer behaviour and data.
Aegis has also bought Data2Decisions, a UK-based, independent marketing effectiveness analytics consultancy. D2D's gross assets were £2.2 million as at 31 January.
Right direction for Rightmove
Online estate agents Rightmove (RMV) said underlying operating profit rose 23% to 57.9 million in the six months to 30 June.
The company's shares, which have already climbed steeply this year, added 8% to their value on Wednesday morning.
Revenue grew by 23% to £57.9 million. Operating margin increased by 2.4 percentage points to 73.5%.
Average revenue per advertiser rose 20% to £518 per month, but the number of advertisers remained largely steady at 18,299 compared with 18,276 the year before.
On the back of the strong results, the company raised its interim dividend by 28 percent to 9p per share.
Lok'nStore extends lease on better terms
Lok'nStore (LOK) has extended a lease on one of its existing stores on improved terms.
The agreement will extend the lease by up to ten years and will produce an annual saving of around £60,000 in rent and service charge over the coming five years, increasing the operating income of the store by approximately 25%.
"Following on from the acquisition of the freehold of our Swindon store last week, this is a further demonstration of the Lok'nStore's commitment to actively manage its portfolio," said chief executive Andrew Jacobs. "We have been able to take advantage of our strong covenant, underpinned by our robust cash flow, to once again reduce the company's operating costs."
UK markets: 15:00 update
The FTSE 100 continued its ascent on Wednesday afternoon on the back of positive news from Standard Chartered (STAN) and NEXT (NXT). Investors stopped short of outright optimism as they awaited decisions from central banks policy meetings.
Adding 63 points, Britain’s main share index reached 5699.
Next kept its upward momentum, climbing 7.4%, to lead the gainers. Randgold Resources (RRS) lost 2.6% to make them bottom of the pile.
On AIM, OXUS () managed to haul itself up 27%, while Metrodome Group () fell by 33%
BP (BP.) was the most traded stock on Interactive Investor.
At a glance...
|GBP/USD: 1.5605||Gold: $1,597.72 |
|GBP/EUR: 1.2677||WTI crude oil: $88.27|
|EUR/USD: 1.2318||All changes from 09:00 BST.|
US markets: Wednesday's open
Markets across the Pond started August on a positive note with investors hoping that the Federal Reserve would leave the door open to further stimulus when it releases its policy decision in the afternoon.
Additionally, the ADP Employer Services said that US companies added a better-than-expected 163,000 jobs in July, but revised its June count slightly lower to 172,000.
The Dow Jones surged 47 points to 13056. The Nssdaq jumped seven points to 2947, while the S&P added three points to 1382.
PureCircle raises £20 million
Producer and marketer of high purity stevia PureCircle (PURE) has raised £20 million after placing ten million new ordinary shares to Wang Tak Company.
The net proceeds of the placing will be used for working capital to support growth, further strengthening of the group's supply chain and to reduce net debt, the company said.
Following the subscription, Wang Tak will own 19,276,150 shares in PureCircle, representing 11.7% of the increased share capital of the company. Wang Tak has agreed to a three year "lock-up" agreement for the ten million placing shares. In return a representative of Wang Tak will be appointed a non-executive director of the company at completion.
Spark Ventures sells Aspex Semiconductor business
Spark Ventures (SPK) has sold the Aspex Semiconductor business to Ericsson.
The company confirmed that proceeds from the sale will be distributed to shareholders of Aspex over the coming months but, warned that the exact timing of these payments to Aspex shareholders was not yet known.
Since 31 March 2012, £1.75 million of loan repayments will have been received by the company from Aspex. It is anticipated that these repayments, when combined with the expected net proceeds receivable by Spark pursuant to the sale, will be in excess of the £7 million of carrying value announced in Spark's results for the year ending 31 March.
Profit bump at Filtrona
Plastic supplier Filtrona (FLTR) saw its operating profit jump 26% in the first half, with the company saying it is well positioned to deliver further balanced growth for the year.
Revenue climbed 24% in the same period on a constant basis and 9% when looked at through a like-for-like lens.
The protection and finishing products division showed the strongest growth, with revenue up 61%.
Chief executive Colin Day said: "The increase was supported by continued successful new product development and further expansion in existing and new markets."
Shares were trading 4.6% up on Wednesday.
Rexam confident of 15% ROCE by end-2013
Consumer packaging company LSE:REX:Rexam reiterated its confidence in achieving its 15% return on capital employed target by the end of 2013 as it announced its results for the first half of 2012.
Sales and pre-tax profits grew 3% and 15% to £2.16 billion and £207 million respectively. However, it was the biggest faller among the blue-chips as its personal care division put a £171 million dent in the bottom line. The company confirmed the proposed sale of the personal care business for £452 million and its intention to return around £370 million to shareholders once the transactions were completed.
Looking ahead, the company said that in "an increasingly uncertain macroeconomic environment", it would continue to focus on generating cash, managing costs and return on capital employed for the rest of 2012.
Old Mutual's South African subsidiary updates investors
Nedbank Group, the majority-owned South African banking subsidiary of Old Mutual (OML) on Wednesday released its interim results for the six months ended 30 June.
Return on equity, excluding goodwill, increased to 15.7%, while the core tier 1 capital ratio strengthened to 10.6%
Notwithstanding the increasingly challenging market conditions, Nedbank Group confirmed it remained on track to achieve its earnings growth target of GDP plus consumer price index plus 5% in 2012.
Operating profit doubles for Taylor Wimpey
Housebuilder Taylor Wimpey () doubled its operating profit in the last six months as the housing market made tentative steps towards recovery.
The company's 5% higher average selling price and an 8% increase in house completions helped to drive a 12% increase in revenues to £903 million in the half year to 1 July. Operating profit hit £101 million.
Operating margins increased to 11.4%, from 8.4% in the same period last year. Looking forward, 6,890 new plots have been approved for purchase compared to 5,289 at the same time last year.
Chief executive Pete Redfern said: "Although wider economic conditions remain uncertain, we have been reassured by the continued stability in trading conditions and the strength of our order book."
There was a rich seam of mining news from across the market on Wednesday with mixed fortunes for FTSE 100 giants such as Antofagasta (ANTO) and Eurasian Natural Resources () as well as AIM-listed minnows such as Coal of Africa (COAL) and Sable Mining (SBLM).
Find out more in: Wednesday's mining news.
Oil and gas round-up
UK markets: Midday update
The FTSE 100 (UKX) continued to climb on Wednesday as poor manufacturing data from around the world sparked speculation about new stimulus packages.
Banks made up ground lost in the previous session, with the sector up 1.7%.
The City's premier index rose 40 points to 5675.
Next (NXT) continued to shoot up the table, with a 6.3% rise, while Rexam (REX) stayed firmly at the bottom, losing 2.7%.
On AIM, Oxus Gold () gained 19.6%, while 3D Diagnostic Imaging (3DD) took a 23% tumble.
"Global PMI day dawns, as countries around the world provide updates on the state of their manufacturing sectors. China's figure managed to remain in expansion territory, but only just, as the slowdown in that economy continues," commented Rupert Osborne, futures dealer at IG Index.
"In Europe, the picture was gloomier, as Spanish, Italian and French figures all remained weak."
Looking ahead to the afternoon, Osborne noted that Wednesday's main event will be the US Federal Reserve meeting, even if no great change is expected from policymakers in Washington. "US ADP numbers and its ISM manufacturing index are out later, providing markets with a distraction ahead of the key European Central Bank meeting tomorrow,” he noted.
Osborne's forecast is for the S&P 500 to begin higher.
At a glance...
|GBP/USD: 1.5630||Gold: $1,614.62 |
|GBP/EUR: 1.2695||WTI crude oil: $88.16|
|EUR/USD: 1.2312||All changes from 09:00 BST.|
Next raises profit guidance
Shares in Next (NXT) led the climbers on the FTSE 100 after it revealed revenues were given a leg up by strong online sales, prompting the clothing retailer to raise its full-year profit guidance.
The company announced a 4.5% increase in total group sales in the quarter to 28 July, ahead of the company's interim results next month.
For the full story, read: Next boosted by online sales.
Production rises at Range Resources
Range Resources' (RRL) oil and gas production increased in the first quarter as the company grew its revenues.
The energy company had a mixed three months, with the increase in its Texan reserves boosting shares before disappointment from the Shabeel North Well in Somalia knocked them back.
For the full story, read: Range Resources reports mixed quarter.
Standard Chartered "only major international bank to be upgraded"
Standard Chartered (STAN) performed "strongly" during the first six months of 2012, reporting a 9% increase in pre-tax profits and a normalised return on ordinary shareholders' equity of 13.8%.
The bank pointed out the overall strength of the franchise and balance sheet by virtue of being the only major international bank to be upgraded by all three ratings agencies since the onset of the financial crisis.
"Set against a macroeconomic environment that is increasingly challenged, we have continued to deliver consistent good returns. We have a firm grip on the business, with the ability to turn adversity to our advantage, and we will keep investing as we see long-term opportunities for growth. We continue to support our customers and clients, deepening our long-term relationships with them," said chairman Sir John Peace.
"We remain confident in our ability to grow our business and deliver sustained value for our shareholders."
"Funding for lending" scheme kicks off
Banks can start tapping into a new government programme to provide them with cheap funding designed to get more credit to flow through the recession-hit economy, the finance ministry said on Wednesday.
The scheme - which offers funding at below-market rates against a broad range of collateral if banks continue or extend lending to businesses and consumers - is likely to ultimately replace earlier credit-easing schemes, the ministry said.
For more, read: UK scheme to get credit to recession-hit economy begins.
Aviva completes sale of Czech, Hungarian and Romanian businesses
Insurance company Aviva (AV.) has completed the sale of its Czech, Hungarian and Romanian life businesses to MetLife's local operating subsidiaries in those countries.
Completion of the sale of Aviva's Romanian pensions business is expected to occur later this year, subject to regulatory approval.
"This transaction is consistent with Aviva's strategy to focus on fewer business segments, where it can produce attractive returns," the company said.
Chinese manufacturing slows
China's purchasing managers' index (PMI) fell to 50.1 in July, its slowest pace in eight months, renewing fears of a slowdown in the economy.
A reading above 50 indicates an expansion in manufacturing activity, while below 50 means a contraction.
While factory output was still expanding, new orders, including export orders, had contracted in July more than in June, with China leaders citing slow demand from Europe and the US as one of the main factors responsible for the slowdown.
"Economic downward pressure is still relatively large," said Premier Wen Jiabao on Tuesday, according to the official Xinhua News Agency, who also quoted him warning that the global slowdown that was hitting Chinese exporters "could last a very long time".
House prices experience fourth drop in five months
House prices fell 0.7% month-on-month in July, the fourth drop in five months, according to the Nationwide.
House prices were also down 2.6% year-on-year in July, which was the largest annual drop since August 2009. This follows hot on the heels of the Bank of England reporting that mortgage approvals fell back sharply to an 18-month low in June.
"The Nationwide data reinforces our belief that house prices are headed lower over the rest of 2012 and very possibly beyond in the face of limited activity, low and fragile consumer confidence, muted earnings growth and relatively high unemployment," said Howard Archer, chief UK and European economist at IHS Global Insight. He expects expect house prices to end up losing at least 3% from current levels.
UK markets: 09:00 update
The FTSE 100 (UKX) started Wednesday on the front foot, with fresh gossip doing the rounds on the likelihood of new stimulus packages from central banks
"We should expect markets to settle into a state of limbo ahead of key US employment data and the [US Federal Reserve] statement this evening. The gamblers out there will be hoping the Fed goes against the grain and announces another round of quantitative easing earlier than anticipated," Mike McCudden, head of derivatives at Interactive Investor, commented.
"Overall, the underlying story controlling these markets remains in the eurozone as we wait and see if bold talk becomes co-ordinated action,"
US markets: Tuesday's close
US stocks fell on Tuesday with investors fretting that central banks would take stimulus measures short of what is needed to bolster the global economy. The markets ended the month slightly higher for a second month running.
The Dow Jones fell by 64 points to 13008. The Nasdaq lost six points to 2939, while the S&P 500 dropped five points to 1379.
At a glance...
|Nikkei 225: 8641 ( 53)||GBP/USD: 1.5667||Gold: $1,616.58|
|Hang Seng: 19806 ( nine)||GBP/EUR: 1.2729||WTI crude oil: $88.04|
|Shanghai Composite: 2123 ( 19)||EUR/USD: 1.2316|
08:00 - The FTSE 100 (UKX) opens at 5635.28.
|RANGE RESOURCES LTD||0.18p||-22.22%|
|COLUMBUS ENERGY RESOURCES||0.00||0.00%|
|LOK'N STORE GROUP||390.00p||0.00%|
|RANDGOLD RESOURCES LTD||5,932.00p||0.00%|
|3D RESOURCES ORD 0.1P||0.00||0.00%|
|AEGIS GRP. ORD 5.5P||0.00||0.00%|
|ETFS DAXGBL COAL MINING GO ...||0.00||0.00%|
|GULF KEYSTONE PETROLEUM LTD||131.00p||4.63%|
|SABLE MINING AFRICA LTD||0.00||0.00%|
|SPARK VENTURES PLC ORD 50P||0.00||0.00%|
|All data 15min delayed as of: 04:14:48 25/03/18|