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FTSE 100 Rises Despite Inflation Surprise; Fed Decision Eyed

16/06/2021 9:45am

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FTSE 100 Rises as Market Awaits Fed Decision

0813 GMT - The FTSE 100 rises 0.2% to 7189.66 ahead of a U.S. Federal Reserve decision due after European markets close, with investors cautiously anticipating that policymakers will view rising inflation as temporary and continue hefty stimulus. Investors shrug off earlier data showing annual U.K. inflation rose more than expected to 2.1% in May, from 1.5% in April, which may concern rate-setters at the Bank of England. "It was a surprisingly calm open on Wednesday, suggesting the markets have set aside certain anxieties for the moment," says Connor Campbell, analyst at Spreadex. Retailers, leisure and tourism stocks and property firms are broadly higher, although heavyweight mining stocks fall. (jessica.fleetham@wsj.com)

 
Companies News: 

Best of the Best Declares Special Dividend for Buoyant FY 2021

Best of the Best PLC reported Wednesday a sharp rise in pretax profit and revenue for fiscal 2021 and said it is declaring a special dividend for the year.

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Tullow Oil Says Production to May Was in Line

Tullow Oil PLC said Wednesday that its production to the end of May was in line with expectations.

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Hipgnosis Songs Fund to Raise GBP150 Mln

Hipgnosis Songs Fund Ltd. said Wednesday that it intends to raise 150 million pounds ($211.3 million) by way of a share placing to fund the acquisition of a pipeline of songs.

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Electra Private Equity to Launch Hostmore PLC as Demerged Parent of TGI Fridays

Electra Private Equity PLC said on Wednesday that Hostmore PLC is to be the new parent company for its hospitality brands: American-themed restaurant chain TGI Fridays, and 63rd+1st, a cocktail-led bar and restaurant brand start-up.

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Helios Towers to Raise $160 Mln Through Equity Issue, Convertible Bonds

Helios Towers PLC said Wednesday that it will raise around $160 million, more than initially indicated, through an equity issue and convertible bond offering to fund acquisitions.

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FireAngel Safety Technology Sees 1H Performance in Line With Views

FireAngel Safety Technology Group PLC said Wednesday that it anticipates its performance for the first half to be in line with the board's expectations but challenges stemming from the pandemic are expected to continue through the current year.

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N. Brown Lawsuit Claimant Allianz Insurance Applies to Increase Scope of Claim

N. Brown Group PLC said Wednesday that Allianz Insurance PLC has applied to increase the scope of a claim against its subsidiary, estimated at an additional 36 million pounds ($50.7 million.)

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Christie Group Trading in Line with Expectations with Demand Across All Services

Christie Group PLC said Wednesday that the business has performed well in the year to date and is trading in line with market expectations, with all of its services and sectors in demand.

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Dillistone Group Expects Narrowed Loss in 2021; Finance Director to Retire

Dillistone Group PLC said Wednesday that it expects a significantly reduced pretax loss in 2021 compared with 2020 although revenue will be lower, and that Finance Director Julie Pomeroy will retire later this year.

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Motorpoint Pledges to Double Revenue Above GBP2 Bln in Medium-Term

Motorpoint Group PLC on Wednesday set targets to double its revenue in the medium term, and reported that its profit nearly halved in fiscal 2021.

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Time Finance Sees Flat FY 2021 Adjusted Profit; Sets out Strategic Goals

Time Finance PLC said Wednesday that it expects adjusted pretax profit for fiscal 2021 to be flat on the previous year, and that it is targeting to more than double its lending book organically by 2025 as part of a set of strategic objectives.

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Elixirr International Sees 2021 Revenue at Top End of Range After Strong Start

Elixirr International PLC said Wednesday that trading for the first five months of the year has been strong and it now expects to report revenue at the upper end of the previously indicated range.

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ScS Group Sees FY 2021 Results, FY 2022 Outlook Above Market Views; Declares 3p Dividend

ScS Group PLC said Wednesday that it expects both its results for fiscal 2021 and outlook for fiscal 2022 to beat market forecasts on the back of strong business, and that it is resuming dividend payments.

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Mercantile Ports & Logistics Restructures Debt Facility

Mercantile Ports & Logistics Ltd. said Wednesday that it has restructured its debt facility in terms which are favorable to the company as it recognizes the acute disruption in India caused by Covid-19.

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Filta Group Says Demand Has Picked Up in All Operating Territories

Filta Group Holdings PLC said Wednesday that demand for its services has increased in all of its operating territories amid Covid-19 vaccine rollouts.

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Alpha Growth Clarifies Purchase of Northstar Shares

Alpha Growth PLC said Wednesday that it has acquired shares in Northstar Group (Bermuda) Ltd, not Northstar Financial Services Bermuda Limited, in response to shareholder queries.

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EverArc to Buy Perimeter Solutions Parent in $2 Bln Reverse Takeover

EverArc Holdings Ltd. said Wednesday that it has agreed to buy SK Invictus Intermediate Sarl, parent company of firefighting products and lubricant additives maker Perimeter Solutions, in a reverse takeover valued at around $2 billion.

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Origin Enterprises Sees FY 2021 Adjusted EPS on the Rise Despite Lower 3Q Revenue

Origin Enterprises PLC said Wednesday that it expects adjusted diluted earnings per share for fiscal 2021, following a decent third quarter given the inclement weather.

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Severfield FY 2021 Pretax Profit Fell

Severfield PLC said Wednesday that pretax profit fell for fiscal 2021 after booking higher costs, and that its high-quality order book for the U.K. and Europe supports continued growth throughout fiscal 2022 and beyond.

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Castings FY 2021 Profit, Revenue Fell on Covid-19 Disruptions

Castings PLC said Wednesday that pretax profit and revenue fell in fiscal 2021 as the coronavirus pandemic caused disruptions, but that it is now back to full production.

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Renold Shares Fall on FY 2021 Accounts Delay; Trading in Line with Views

Shares of Renold PLC fell as much as 12% on Wednesday after the company said that its fiscal 2021 earnings will be delayed while its auditors complete the audit process.

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Oilex Appoints Roland Wessel as CEO

Oilex Ltd. said Wednesday that Roland Wessel has been appointed chief executive officer effective June 16, and that Managing Director and Interim Chairman Joe Salomon will assume the position of executive chairman for an interim period.

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HSBC Reshuffles Top Team as Alternatives Push Takes Off -- Financial News

Of Financial News

 
Market Talk: 

BOE to Keep Policy Loose Even as Inflation Rises Above Target

0708 GMT - U.K. annual inflation jumped to 2.1% in May, data showed, from 1.6% in April, taking it above the Bank of England's 2.0% target, but monetary policy is still likely to remain loose, says Jonathan Letham, head of IMX at Nucleus Financial. "Central bankers in the U.S., U.K. and Europe are indicating they will maintain loose monetary policy (i.e. keeping interest rates low) to support economic recovery," he says. The fear for investors is that central banks' stimulus combined with economies reopening could lead to prices spiralling higher and hurt real returns over the longer-term. However, U.K bond markets indicate only modest increases in inflation expectations of about 0.6% higher over 5 years and 0.5% higher over 10 years since the start of the year, he says. (lorena.ruibal@wsj.com)

All Eyes on Blue Prism's Outlook in 1H Results

0718 GMT - Blue Prism Group flagged the main indicators of its first-half performance in an update last month, so all eyes will be on any incremental surprises in the outlook statement when it releases its results on Thursday, Shore Capital says. The U.K. maker of robotic-process-automation software was somewhat downbeat in its update, as it indicated that fiscal 2021 revenue would likely be toward the low end of its previous guidance range of GBP170 million to GBP180 million, Shore says. "In our view, it would be surprising if the company made a more downbeat assessment of the outlook for FY21, precisely one month on from the trading update. But equally, it is unlikely to be more positive," Shore says. (adria.calatayud@dowjones.com)

UK July 2035 Gilt Has Appeal Ahead of Auction

0737 GMT - The U.K. Debt Management Office's planned sale Wednesday of GBP2.5 billion in 0.625% July 2035 gilt should go well as the bond looks attractive in value terms, says RBC Capital Markets. "We think this bond looks quite attractive on the curve and micro-relative value at these levels which should see it taken down smoothly," analysts at the bank say. This is likely being the last tap of the bond in its regular supply cycle which should further support the event, along with bond purchases by the central bank taking place in the afternoon, , they say. (lorena.ruibal@wsj.com)

BOE Is Likely to Look Past UK's Inflation Rise

0740 GMT - U.K. headline inflation climbed to 2.1% on year in May and is likely to be around 2.5% by the end of the year, but the figures probably aren't a concern for the Bank of England, ING's developed markets economist James Smith says. The current inflation rise is driven by base effects and temporary factors stemming from the reopening of the economy, he says. "It's worth saying that core inflation is unlikely to go as far as headline this year, while the latter will also likely be back to [BOE's 2%] target by around this time next year," Smith says. ING expects the BOE to hike rates in early 2023, although a more rapid recovery could bring the move forward to 2022. (xavier.fontdegloria@wsj.com)

Pound Rises After UK Inflation Data, Gains Limited Before Fed

0741 GMT - The pound rises after data showed annual U.K. inflation reached 2.1% in May, above a Wall Street Journal poll forecast of 1.9% and exceeding the Bank of England's 2.0% target for the first time in almost two years. Gains are limited, however, ahead of a U.S. Federal Reserve decision later Wednesday, which has the potential to boost the dollar and weigh on risk appetite, sending the pound lower. The U.K. data "remains supportive for the pound" but the dollar's reaction to the Fed "will of course be key as will any deterioration in the EU-U.K. relationship in regard to the Northern Ireland protocol," says Derek Halpenny, head of research for global markets for EMEA at MUFG. GBP/USD rises 0.2% to 1.4115. EUR/GBP falls 0.2% to 0.8593. (jessica.fleetham@wsj.com)

Motorpoint's Growth Targets Seen as Ambitious

0806 GMT - Vehicle retailer Motorpoint delivered "a bold statement of intent" as it set a target to double sales to GBP2 billion by fiscal 2024, Liberum's Sanjay Vidyarthi says. This is to be achieved with GBP1 billion of online sales, improved margins and strong free cash flow generation. "Targets are ambitious, but the track record is strong and we have confidence in the management team to deal with the threat from online disruptors," Vidyarthi says. The analyst now forecasts Motorpoint's EPS will grow at a 58% compound annual rate in 2021-2024 and raises the target price on the stock to 435 pence from 290 pence. (jaime.llinares@wsj.com)

ScS Group Rises on Outlook, Still Looks Undervalued, Shore Says

0806 GMT - ScS Group's shares don't seem to reflect the strength of the flooring-and-furniture retailer's business, according to Shore Capital. ScS can leverage a strong balance sheet with no non-lease debt and considerable balance, the investment group says. Management has outlined a positive outlook for this year and next year and the declaration of a dividend feeds hopes for more payouts, Shore says. Shares are up 11% at 322 pence. (matteo.castia@dowjones.com)

N. Brown's Lawsuit Scope Is Disappointing But Likely to Be Smaller Than Expected

0806 GMT - It is disappointing that N. Brown is still dealing with legacy issues, particularly of the magnitude it faces as Allianz tries to increase the scope of its litigation claim, but the final amount will likely be smaller than claimed, Jefferies says. The U.K. clothing and footwear-retailer says Allianz has applied to increased the scope of the claim as part of a further customer redress exercise. "However, we think the eventual outcome of the Allianz case will be considerably smaller than the headline claims and see N. Brown as far better capitalized to deal with any potential outflows," the U.S. bank says. Jefferies retains its buy rating and 95.0 pence price target. Shares are down 5.2% at 60.0 pence. (joseph.hoppe@wsj.com)

Pets at Home Seen Set for Further Growth

0814 GMT - Pets at Home's impressive growth seems bound to continue as the company can leverage both self-help and external tailwinds, according to Berenberg. The pet-care company ended fiscal 2021 with two-year like-for-like sales growth of circa 20% and if that momentum continues it should generate 9% to 10% like-for-like sales growth in fiscal 2022, Berenberg says. Meanwhile, the company continues to benefit from the increasing pet population in the U.K. and has plans to expand its store chain this year, the German brokerage says. Berenberg has a buy rating on the stock and a target price of 540.0 pence. Shares are up 0.4% at 458.4 pence. (matteo.castia@dowjones.com)

 

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

June 16, 2021 04:35 ET (08:35 GMT)

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