Unilever sales fall short, Rolet stepping down from LSE
London open
The FTSE 100 is expected to open 10 points lower on Thursday, having closed up 0.36% at 7,542.87 on Wednesday.
Stocks to watch
Sales growth from Unilever fell short of expectations for the third quarter, with turnover negative, though the consumer goods colossus returned to volume growth after five quarters of price-driven expansion. Chief executive Paul Polman said conditions in developed markets remained challenging and that growth in the quarter was adversely affected by poorer weather in Europe and natural disasters in the Americas, with silver linings being signs of improvement appearing in major emerging markets such as India and China.
Property investment and development company SEGRO updated the market on its trading for the period from 1 July to 18 October, reporting that it contracted £8.8m of new headline rent during the third quarter, including £3.8m in rent from existing space. The FTSE 100 company said total contracted headline rent for the nine months to 30 September was £36.4m, which was 3% ahead of what the board called a “very strong” prior year comparator.
London Stock Exchange announced on Thursday that Xavier Rolet will leave the group by December next year, after nine years at the helm. The FTSE 100 company’s board said it was now initiating a process to find a successor, and would work closely with Xavier to ensure a smooth transition process as the group continued to execute on its growth strategy, based on its principles of open access and partnership with customers.
Newspaper round-up
Britain’s low pay culture traps people in poorly paid jobs and prevents them from escaping into full-time work with better pay, according to a major study by the government-backed body that tracks social mobility. Only one in six workers on low pay managed in the last 10 years to push themselves up the pay ladder and stay there, while most remained stuck in a cycle of part-time and insecure jobs. – Guardian
The chancellor has asked UK enforcement agencies to look into whether British banking groups HSBC and Standard Chartered are linked to South Africa’s corruption inquiry into alleged ties between the wealthy Gupta family and President Jacob Zuma. According to letters seen by the Guardian, Philip Hammond has passed concerns raised by former Labour cabinet minister Peter Hain to the Serious Fraud Office(SFO), National Crime Agency (NCA) and the Financial Conduct Authority (FCA). – Guardian
Lloyds Banking Group “mugged” shareholders by withholding vital information about the “catastrophic” financial state of HBOS prior to its takeover in the teeth of the financial crisis, the High Court has heard. Richard Hill QC, acting for 6,000 shareholders suing Lloyds for £600m in losses they claim were incurred due to the HBOS deal, said in court: “We are saying shareholders were mugged in this acquisition and should never have been kept in the dark.” – Telegraph
Norway’s $1 trillion sovereign wealth fund has joined a growing number of critics to the proposals made by the UK financial watchdog that will ease rules for companies listing in London - a move widely seen as an attempt to lure oil giant Saudi Aramco to float in Britain. In July, the Financial Conduct Authority proposed launching a new category in its “premium” listings, exempting state-controlled companies from certain requirements. The changes to listing rules would cover relations between the company and its controlling shareholder, and whether smaller shareholders get to vote on independent directors. – The Telegraph
Ministers are to be urged to show solidarity with workers at the Bombardier aerospace factory in Northern Ireland and select the C-Series aircraft, part-built in Belfast, as the new jet for the Queen’s Flight. It is also understood that the slow-selling C-Series, which has been rescued by a deal with Airbus this week after being caught up in a transatlantic trade row with Boeing and the US government, could be close to nearly tripling orders thanks to a big contract with Qatar Airways. – The Times
US close
Gains for Big Blue on the back of its latest quarterly numbers pushed the Dow clear of the 23,000 point mark on Wednesday, with investors very much focused on the steady stream of corporate results coming out.
The Dow Jones Industrial Average finished up 0.7% at 23,157.60, the S&P 500 added 0.07% to 2,561.26 and the Nasdaq 100 closed 0.13% softer at 6,114.35.
Shares of IBM rocketed 8.86% for their biggest one-day price move since January 2001.
“Looking back at previous instances of stretched valuations one of the common denominators on a historical basis has been a feeling of euphoria, a sentiment which is largely absent at this point in time,” said Michael Hewson at CMC Markets UK.
"That's not to say investors are complacent, some undoubtedly are but when we've had substantial corrections on previous occasions the rotation of capital has always had an alternative destination to go to in terms of government bonds.
“These are nowhere near as attractive now, interest rates, and bond yields were much higher in 2007, 1997 and 1987, while today they are anchored to the floor, which limits investor options in terms of returns.”