FTSE 100 Closes 0.3% Lower as Royal Mail, B&M Plummet

The FTSE 100 closed down 0.3% on Friday, but it continued to outperform most global markets. “The energy sector is helping to keep the FTSE 100 afloat, helped by another two-month high for Brent crude prices, which is keeping a floor under BP and Royal Dutch Shell,” Michael Hewson from CMC Markets said. However, this wasn’t enough to offset losses by companies such as Royal Mail, whose shares plummeted 5.6% after being placed on negative catalyst watch by JPMorgan Chase; or retailer B&M, which fell 5.3% as one of its shareholders sold a 4% stake in the company. Miners underperformed too, with Antofagasta down 3.9% and Polymetal falling 2.9%.

 
Companies News: 

Cornerstone FS Sees 2021 Revenue Increase Boosted by New Asia Team

Cornerstone FS PLC said Friday that it expects to report increased revenue for 2021, boosted by its new Asia team.

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Good Energy Urges Shareholders to Vote Down Resolutions Called by Ecotricity

Good Energy Group PLC said Friday that it urges shareholders to vote against resolutions removing Chairman William Whitehorn, and to direct the board not to dispose of the company’s generation approval in a meeting in February.

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Currys Lowers FY Guidance, Says Christmas Performance Was Challenging — Update

Currys PLC said Friday that its performance during its peak Christmas period was hurt by lower demand, and that it has downgraded its guidance on its adjusted pretax profit for the financial year.

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Cornerstone FS Concludes Convertible Loan Note Negotiation

Cornerstone FS PLC said Friday that it has concluded negotiations to amend the terms of its convertible loan note.

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Secure Trust Bank New-Business Lending Reached Record in 4Q

Secure Trust Bank PLC said Friday that total new-business lending rose significantly in the fourth quarter, reaching a record for the lender.

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Foxtons Sells Douglas & Gordon Sales Business, Integrates Lettings Unit

Foxtons Group PLC said Friday that it has sold its Douglas & Gordon Ltd. sales business for a nominal consideration to D&G’s Chief Executive James Evans, and integrated its lettings business into its network.

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Bellway Names Former Redrow Chief John Tutte as Incoming Chairman

Bellway PLC said Friday that former Redrow PLC Chief Executive and Executive Chairman John Tutte will join the company as its designated nonexecutive chairman on March 1.

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Stock Futures Edge Up Ahead of Bank Earnings — WSJ

U.S. stock futures edged up ahead of earnings reports from major banks that could offer insight into the impact of the Omicron variant on the economy.

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Global Petroleum Shares Rise on Favorable European Court Finding

Global Petroleum Ltd. shares rose on Friday after it said the European Court found that its four permit applications offshore Italy didn’t contravene European Union law.

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Sensyne Health Shares Fall on Financing Agreement to Continue Trading

Shares in Sensyne Health PLC fell on Friday after it said that it has signed a financing agreement for 6.4 million pounds ($8.8 million) with institutional shareholders as without financing it is unlikely to continue trading beyond early February.

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Castillo Copper Drops Plans to Buy Additional Lithium Assets

Castillo Copper Ltd. said Friday that its board has decided to focus on developing the BHA’s Project East Zone and drop plans to acquire the Litchfield and Picasso lithium assets in Australia.

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Minds + Machines to Return GBP19 Mln to Holders via Tender Offer; Shares Rise

Shares of Minds + Machines Group Ltd. rose as much as 19% on Friday after the company said it plans to return up to 19 million pounds ($26 million) to shareholders via a tender offer.

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Simigon Agrees on $8.5 Mln Merger With New U.S. Company; Shares Rise

Shares of Simigon Ltd. rose 35% on Friday after the company said that it has agreed to merge with Power Breezer Sub Ltd. and Maxify Solutions Inc. in a deal that values the company at $8.5 million.

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Echo Energy to Buy 70% Stake in Chilean Solar Energy Project

Echo Energy PLC said Friday that it has entered into an option agreement to purchase a 70% interest in a 3 megawatt solar project in Chile, and that it has raised 660,000 pounds ($904,464) which it will use toward the project and as working capital.

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Likewise Group PLC Completion of Acquisition and Trading Update

TIDMLIKE

 
Market Talk: 

Copper Shares Remain Undervalued, Jefferies Says

1221 GMT – The market continues to underappreciate the likely upside to the copper price and its potential impact on copper mining shares, as many investors are mostly focused on near-term market dynamics rather than longer-term fundamentals, Jefferies says. The U.S. bank estimates that the copper mining equities in its coverage are pricing in an average copper price of $4.41 per pound, below the current spot price of $4.52. And Jefferies expects the market to tighten, with prices averaging at least $5.50 in 2022-2025. “We reiterate our Buy ratings on Freeport[-McMoRan], Glencore, First Quantum, and Antofagasta.”

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SSE to Pivot Towards International Expansion in 2022

1204 GMT – 2022 will mark a year when SSE shifts from a premier domestic offshore wind developer in the U.K. to an internationally focused company with broadening global footprint, RBC Capital Markets says. The energy group has announced plans to enter tender bids for offshore wind projects in the Netherlands. “These plans are embedded within SSE’s growth targets, and if successful the Dutch auction would form part of SSE’s growth plans for net installed capacity to double through 2026, reaching 8GW,” RBC says. Still, the bank warns that competition will remain high from all major industry participants in upcoming renewable infrastructure auctions.

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UBS Cuts Forecasts For Euro Versus Pound

1129 GMT – UBS Global Wealth Management cuts its forecasts for the euro-sterling exchange rate as it expects the Bank of England to raise interest rates further this year while the European Central Bank maintains its negative rates policy. “We are lowering our EUR/GBP forecasts to 0.82 for end-March; 0.81 for end-June and end-September; and 0.81 for end-December (from 0.84, 0.83, and 0.82, respectively),” UBS analysts say. EUR/GBP last trades at 0.8346. The market expects 100 basis points of BOE rate rises this year compared to 10bp for the ECB, the analysts say. The ECB is more likely to miss those expectations than the BOE, they say.

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Experian’s Growing Trend Is Expected to Continue

1053 GMT – Experian’s strong 3Q performance is set to continue into 2023 as the group enjoys a strategic position in the data-economy-driven sector, Shore Capital says. The U.K. investment group expects a strong and continued organic trend across the core North America business, while U.K. metrics will become Experian’s focus of improvement. Shore Capital keeps a buy recommendation on the stock. Shares are down 1.4% at 3,109 pence.

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UK’s Strong GDP Expansion Unlikely to Last

1042 GMT – The 0.9% on-month growth for U.K.’s economy in November signals that private demand remained strong before Omicron, but the data aren’t likely to be indicative of a trend improvement in the outlook, Citi economist Benjamin Nabarro says. Seasonality likely played a notable role in November data, with earlier Christmas shopping boosting transport and warehouse services in particular, he says. “We continue to see significant challenges as we move into 1H 2022,” Nabarro says. Economic activity is likely to face further pressures associated with the cost of living crunch, and while accumulated savings and further post-pandemic normalization may prevent an outright contraction, momentum is expected to be subdued, he says.

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Ferguson’s Capital Markets Day Reassured on Many Fronts, Jefferies Says

1040 GMT – Ferguson’s capital markets day served as a useful reminder of the company’s strong market positions and business model, Jefferies says. The U.K.-based distributor of plumbing-and-heating products’ newly released midterm expectations were particularly reassuring as they suggest scope for a step up in market outperformance and continued margin expansion from 2021’s high base, the U.S. bank says. “While top line growth is seen to be the clearest driver of margin expansion, management also flagged the gradual benefits of selling more own brand products–currently c.9% of sales, but generating double the gross margin of other products–and productivity initiatives,” Jefferies says, retaining its buy rating on the stock with a 15,212 pence price target. Shares are up 0.2% at 12,830 pence.

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UK GDP Data Seen Supporting Rate-Rise Bets But Pound Little Moved

0957 GMT – Sterling reacted modestly to stronger-than-expected U.K economic growth data as traders are focused on other matters such as bond market dynamics, Monex Europe says. However, the figures will act as the “first confirmation point” before next week’s data deluge to allow the Bank of England to raise interest rates again in February, Monex currency analyst Simon Harvey says. “The probability of a Feb rate hike from the BOE has held around the 80% level for months now, while we expect data next week to push this higher along with front-end Gilt yield.” The economy grew 0.9% month-on-month in November, versus the 0.5% expected by analysts in a WSJ survey. GBP/USD rises 0.2% to 1.3740 and EUR/GBP falls 0.1% to 0.8347.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

January 14, 2022 12:07 ET (17:07 GMT)

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