Market overview: Balfour Beatty craters, Tesco lines up credit
1630:Close UK stocks ended the session slightly lower, led by falls in shares of HSBC and StanChart after they moved to close some of their branches in Hong Kong in response to the protests in the special administrative region. Tesco was also to be seen near the bottom of the pile on the back of a very negative news-flow out on the company over the weekend. While understandable, prudent even, it should be noted that the troubled grocer has opted to lock-in access to a £2.5bn credit line, according to reports. It may be interesting to see on what terms (and at what cost). Over on the FTSE 250 it was all about Balfour Beatty, with analysts at Westhouse Securities warning that the firm’s problem London contracts threaten its financial stability. FTSE 100 down 3 to 6,646.
Apple Inc.
$169.30
13:09 26/04/24
Balfour Beatty
361.20p
16:40 26/04/24
FTSE 100
8,139.83
17:09 26/04/24
HSBC Holdings
663.60p
16:40 26/04/24
Lloyds Banking Group
52.30p
16:40 26/04/24
Sainsbury (J)
261.40p
16:40 26/04/24
Standard Chartered
681.40p
16:40 26/04/24
1601: The return of aggressive bidding by contractors as they seek more MENA work - given slowdowns elsewhere – may impact Petrofac's order intake, write analysts at Morgan Stanley.
1600: Commenting on the latest warning out from Balfour Beatty analysts at Westhouse are saying that: "The resulting KPMG review of the firm’s UK contract portfolio, the possibility that management failed to keep pace with the deteriorating outlook and the prospect of a new chief executive arriving, “could potentially result in a further significant write-down”.
14:00 Pending US home sales fell at 1% clip in August versus the previous month (consensus: -0.5%). However, the previous month’s percentage variation was revised to show a rise of 3.2% versus the initial estimate of -3.3%.
1330: Personal incomes and spending in the US increased by 0.3% and 0.5% over the month in August, versus consensus estimates for readings of 0.3% and 0.4%, respectively.
1320: Lloyds has reportedly fired eight members of staff over rate-fixing claims.
1231: Balfour Beatty's shares are now down 19% after issuing a profit warning. Westhouse Research recommended selling the shares and withdrew its target price due to "uncertainty" caused by the report, meaning it its "impossible to value at present". "We fear the problem contracts at the comparatively tiny engineering services unit within UK construction are a potential black hole threatening the financial health of the group," said Westhouse analyst Alastair Stewart. "As contagion starts to spread to other parts of UK Construction, estimated average net debt has escalated at an alarming pace and we think at least one more profit warning could follow."
1117: Standard Chartered and HSBC are now at the bottom of the pile on the Footsie, most likely due to the ongoing protests in Hong Kong.
0947: In a note issued on Monday morning analysts at Credit Suisse highlight the fact that Petrofac is now at a four-year low, near 1,000p, and trading on 8.2 times’ the estimated 2015 price-to-earnings multiple. That represents a 20% discount to the wider European sector. Other fundamental ratios tell much the same story, the Swiss broker writes. The company, for example, is on just 5.1 times’ next year’s EV/EBITDA multiple – for a 30% discount to its historic average.
0930: UK mortgage approvals for home purchase eased to 64,212 in August from 66,100 in July (consensus: 65,000), according to the latest data provided by the Bank of England. “The Bank of England data reinforce the impression that housing market activity is seeing an underlying loss of momentum,” writes Dr.Howard Archer, chief European+UK economist at IHS Global Insight.
0900: UK stocks have begun the session moving lower despite the gains seen last Friday on Wall Street. Sainsbury is the worst performer now on the Footsie ahead of the company’s latest figures, due out this week. Spanish stocks are under the weather on news that the autonomous region of Catalonia will go ahead with an independence referendum. Money supply and mortgage lending statistics are due for release at 09:30, courtesy of ONS. Stateside, focus will be on the latest data for personal income and spending as well as pending home sales. US stock futures are now pointing to losses of 0.5% come the opening bell on Wall Street, likely as a result of weakness in Apple. FTSE 100 down 29 to 6,620.