B.C. | ShareCast | 10 Feb, 2012 08:35 - Updated: 10:48 | | |
- Barclays rises after cutting bonuses, but profits fall.
- Eurogroup fails to approve Greek package.
- BCC welcomes BoE's QE boost.
UK stocks opened cautiously with Eurozone finance ministers last night failing to approve the latest round of Greek aid.
Yesterday afternoon, Greek Prime Minister Lucas Papdemos announced that the country's political party leaders manager to reach an agreement over austerity measures and that the deal would be presented to the Eurogroup's evening meeting. That meeting finished without a clear statement of support for the second bailout, with 10 out of 17 Eurozone finance ministers reportedly reluctant to approve the next tranche of aid, according to market chatter.
"Uncertainty remain high for markets as the emergency meeting of euro area finance minsters overnight failed to yield an approval for a second aid package for Greece," said analyst Khrishnamoorthy Sooben from Barclays Capital.
According to the Greek news website, Ekathimerini, the country's finance minister Evangelos Venizelos said: "until the next Eurogroup, which will most likely convene on Wednesday, our country, our people should think and make a final strategic choice [...] If we see the future of our country within the euro zone, within Europe, we should do what we have to do for the programme to be approved and for the PSI to be concluded on time before major bonds expire in March. If our country favours a different policy that will lead us outside the eurozone, then we must say it directly."
Meanwhile, markets are still digesting the Bank of England's move yesterday to boost its quantitative easing programme by a further £50bn. David Kern, the chief economist at the British Chambers of Commerce, said that British businesses welcome the Monetary Policy Committee's decision. "Although the benefits are not immediately obvious to the business community, quantitative easing plays a key role in strengthening the financial system and stabilising the wider economy. In the face of difficult domestic circumstances and the ongoing crisis in the eurozone, the decision was a sensible one," he said.
BARCLAYS RISES AFTER FULL-YEAR RESULTS
Barclays led the risers on the Footsie early on as investors seemed to focus more on the bank's reduction in bonuses, rather than the fall in profits. The lender said it has cut the bonus pool for its investment banking unit, Barclays Capital, by 32% in 2011 to £1.5bn. Meanwhile, group profit before tax fell from £6,065m to £5,879m in the 12 months ended December 31st, mainly attributable to a £1,000m provision for the redress of Payment Protection Insurance (PPI) that wasn't recorded the year before.
Meanwhile, miners were among the worst performers, tracking metals prices lower. Anglo American, Evraz, BHP Billiton, Antofagasta and Kazakhmys were all under pressure.
Engineering group Weir was in the red after proposing to buy Australia-listed mining equipment manufacturer Ludowici for A$294m (£200m), stepping on the shoes of Danish peer FLSmidth which made an indicative proposal for the firm last month. The FTSE 100 engineering solutions provider says it would pay A$7.92 per Ludowici share, representing a 10% premium to FLSmidth's indicative proposal of A$7.20 a share, announced on January 23rd.
C&W COMMS DROPS ON PROFIT WARNING
Cable & Wireless Communications was the big mover on the FTSE 250 falling over 7%. The revival of the telecoms firm, which provides services to islands and smaller countries, came to an abrupt halt as the company warned on profits due to difficulties in trading in Panama and the Caribbean.
The protracted courtship of closed life fund consolidator Phoenix Group by private equity firm CVC Capital Partners has ended with both parties agreeing it is best to go their separate ways. Phoenix fell nearly 6% early on.
HICL, the infrastructure investment firm, nudged higher after seeing net asset value improve from 111.5p to 114p per share over the third quarter.
FTSE 100 - Risers
Barclays (BARC) 240.00p +2.96%
Next (NXT) 2,755.00p +1.32%
InterContinental Hotels Group (IHG) 1,393.00p +1.02%
Aggreko (AGK) 2,173.00p +0.84%
Diageo (DGE) 1,480.00p +0.82%
SSE (SSE) 1,265.00p +0.80%
G4S (GFS) 280.90p +0.75%
Carnival (CCL) 1,990.00p +0.66%
Standard Chartered (STAN) 1,619.00p +0.62%
Reckitt Benckiser Group (RB.) 3,533.00p +0.57%
FTSE 100 - Fallers
ICAP (IAP) 368.60p -3.36%
Anglo American (AAL) 2,798.00p -2.17%
National Grid (NG.) 627.00p -2.03%
BHP Billiton (BLT) 2,075.50p -1.87%
Man Group (EMG) 135.10p -1.75%
BP (BP.) 485.45p -1.61%
Aviva (AV.) 364.60p -1.46%
Kazakhmys (KAZ) 1,160.00p -1.44%
International Consolidated Airlines Group SA (IAG) 177.70p -1.39%
Evraz (EVR) 423.00p -1.35%
FTSE 250 - Risers
Imagination Technologies Group (IMG) 628.50p +2.03%
Ophir Energy (OPHR) 345.10p +1.53%
Grainger (GRI) 109.40p +1.48%
Rank Group (RNK) 141.00p +1.44%
Dixons Retail (DXNS) 15.05p +1.42%
TUI Travel (TT.) 207.00p +1.12%
Aveva Group (AVV) 1,736.00p +1.11%
Homeserve (HSV) 248.00p +1.10%
Big Yellow Group (BYG) 299.90p +1.04%
Telecom Plus (TEP) 635.00p +1.03%
FTSE 250 - Fallers
Cable & Wireless Communications (CWC) 40.33p -7.44%
Phoenix Group Holdings (DI) (PHNX) 536.00p -5.88%
Perform Group (PER) 258.00p -4.52%
Redrow (RDW) 123.00p -4.50%
New World Resources A Shares (NWR) 522.50p -3.24%
Ferrexpo (FXPO) 343.30p -2.94%
Carpetright (CPR) 551.00p -2.82%
Renishaw (RSW) 1,454.00p -2.55%
Petropavlovsk (POG) 727.00p -2.22%
Exillon Energy (EXI) 260.00p -1.89%
Liberum has highlighted UK-listed IAG, Ryanair and Easyjet as its top picks across the European airline sector, saying it sees "opportunities for the brave" despite sentiment remaining fragile across the industry.
Previewing Premier Foods' third quarter results on Thursday, broker Shore Capital reiterated its 'buy' recommendation in light of the "truly awful" performance of the shares since March's refinancing despite the "much good work" done by management this year.
East African gold explorer Shanta Gold unveiled record production and confirmed its 2014 production guidance.
1038: Shares in Rolls-Royce are up 0.3% today as the stock attempts to bounce after Friday's 11% fall, after the company lowered its 2014 guidance for revenues. However, today's rebound has been limited by three broker downgrades; analysts at Liberum, Investec and JPMorgan Cazenove have all taken a more cautious view, removing their positive ratings.
09:55 Monday broker round-up
African Barrick Gold: Westhouse Securities cuts target price from 285p to 230p maintaining an add rating.
Technical analysts at Digital Look on Monday highlighted how the trend in the euro/dollar over the last few months continued to be bearish, noting that the pair had been setting successively lower lows and highs since the beginning of October.
The commodities complex was to be seen mostly lower on Friday, likely pressured by a rebound in the dollar, albeit with some significant exceptions.
Identity intelligence specialist GB Group achieved a strong set of first half results, the company revealed in a trading update ahead of the release of its interim figures.
A well off the coast of Morocco has struck oil, partners Genel Energy, San Leon Energy and Serica Energy said.
Commercial aircraft lessor Avation has agreed a deal to supply two aircraft to tour operator Thomas Cook.