MARKET UPDATE 31/03/2016

The FTSE 100 is called to open 8 points lower at 6195.

UK Gilt 10 Year Yield 1.4343%, Spot Gold $1228.35 +2.95 Brent Crude $39.64 -0.45

$ per £ 1.4342

$ per € 1.1315

€ per £ 1.2675

U.S. stocks rose, extending to the highest levels this year, as central bankers continued to spur optimism amid assurances that they will act to stave off a global downturn. The Standard & Poor’s 500 Index climbed for a third day after yesterday posting the strongest increase in two weeks as Federal Reserve Chair Janet Yellen signaled officials will be cautious in raising interest rates due to heightened economic risks overseas. The dollar headed for its steepest monthly drop since 2010. Apple Inc. rallied to a three-month high, boosting technology shares, while banks rose for the first time in six days. The S&P 500 added 0.4 percent to 2,063.95, pushing its 2016 gain to 1 percent. The Dow Jones Industrial Average climbed 83.55 points, or 0.5 percent, to 17,716.66. The Nasdaq Composite Index increased 0.5 percent to close above its average price during the past 200 days for the first time this year. About 6.6 billion shares traded hands on U.S. exchanges, 22 percent below the 2016 daily average.

PRESS COMMENTARY

More US initial public offerings collapsed than succeeded in the first quarter of 2016 as the ferocity of this year’s stock market tumble hit many companies’ hopes of coming to market, FT.

COMPANY NEWS  

Orange SA and Bouygues SA are heading into a make-or-break weekend as they try to salvage their wireless- phone merger plan, after acknowledging that talks had not advanced sufficiently to clinch a deal.

TUI said that both bookings and revenue for Summer 2016 are ahead of last year so far, and backed its full-year guidance for underlying Ebita growth of at least 10%.

Valeant Pharmaceuticals International Inc. said it was seeking more room from lenders to stave off a potential default. But stock investors were unnerved, as Valeant inched back from earlier assurances about its ability to hit financial targets required by its lenders.

Panmure Gordon & Co. PLC (PMR.LN) said 2015 was a disappointing year for its primary markets activities as it swung to a full year pretax loss.

Wincanton Says Trading Continues to Be in Line With Views

Booker Group PLC (BOK.LN) said like-for-like sales fell 2.5% for the 12 weeks ended March 25, compared with a 6.1% drop a year earlier, impacted by deflation in food prices and weak consumer demand, but said profit for the full year remains in line with expectations.

Boeing Co. said that it planned to cut more than 4,500 jobs by June, as the company accelerates cost-cutting efforts in an effort to keep pace with customers demanding less expensive jetliners.

Wendel Says Has Already Met 2013-2017 Targets

Speedy Hire PLC (SDY.LN) said it expects adjusted pretax profit for fiscal 2016 ending March 31 to be in line with market expectations and net debt broadly in line with the previous year-end.

 

Maersk’s APM Terminals unit will invest EU758m in a second terminal in Tangier, which will have annual capacity of 5 mln TEUs. Source Quilter Cheviot

More Financial Information here 

 

MARKET UPDATE 30/03/2016

The FTSE 100 is called to open 50 points higher at 6155.

UK Gilt 10 Year Yield 1.4112%, Spot Gold $1237.75 -4.45 Brent Crude $40.17 +0.31

$ per £ 1.4394

$ per € 1.1298

€ per £ 1.2741

U.S. stocks rose, with the S&P’s 500 Index posting a 2016 high, as Federal Reserve Chair Janet Yellen signaled the central bank will be cautious on further interest-rate increases in a nod to global risks.

Equities saw the strongest gains since the conclusion of the last Fed meeting, when policy makers reduced their outlook for rate increases this year, citing negative developments overseas. The dollar repeated a post-Fed selloff, helping commodity and industrial shares to reverse losses on speculation the weaker currency will buoy earnings. The S&P 500 rose 0.9 percent to 2,055.01, the highest since Dec. 30. The Dow Jones Industrial Average added 97.72 points, or 0.6 percent, to 17,633.11, wiping out a drop of more than 100 points. The Nasdaq Composite Index increased 1.7 percent as Apple Inc. and Microsoft Corp. rallied more than 2.1 percent. The Russell 2000 Index of small caps jumped 2.7 percent, the most in two months.

PRESS COMMENTARY

Tata Steel is set to pull out of all its UK operations, including Port Talbot, in a move that could put thousands of jobs at risk, Guardian.

Janet Yellen, has vowed to move with extreme care before tightening monetary policy in the face of lingering global deflation and trouble in China.

Sports Direct has upped its stake in Findel to nearly 30%, in the latest stage of its battle to wrest control of the online specialist.

COMPANY NEWS  

Deutsche Bank AG’s Paul Achleitner has won support to stay on as the firm’s supervisory board chairman from one of its biggest investors, former Qatar Prime Minister Sheikh Hamad bin Jassim bin Jabr Al Thani.

3M Co. affirmed its 2016 sales and earnings outlook, but set targets for the five-year period through 2020 slightly below its past five-year targets.

McCormick & Co.Inc. raised its offer for the U.K.'s Premier Foods PLC to around 537 million pounds ($773 million). The 65 pence a share offer comes after Premier Foods, whose brands include Mr. Kipling cakes and OXO stock cubes, rejected a previous 60 pence a share offer.

Colgate-Palmolive Inc. promoted two company veterans as part of a plan to line up an eventual successor to Chief Executive Ian Cook, who has run the company for nine years.

UniCredit in talks with Rome over €2bn mutual capital raising

EDF Engineers Urge Delay of U.K. Nuclear Project: FT

Fidelity Investments will charge annual fees of 0.35% to 0.39% for Fidelity Go, its automated robo-investing service -- a price that makes the service roughly competitive with offerings from Vanguard Group and other rivals.

Sports Direct Raises Stake in Findel to 29.8%

NewRiver Retail Ltd. (NRR.LN) said it is in advanced negotiations to buy the Broadway shopping centre and Broadway Square in Bexleyheath town centre, London Borough of Bexley for 120 million pounds ($172.76 million).

Sinclair Pharma 1H Rev. Decline, Renegotiated Ellanse Mile stone

IMImobile PLC (IMO.LN) Wednesday said it is trading in line with expectations, with revenue and gross profit expected to have increased by around 25% and 20% respectively in the year ending March 31. Source Quilter Cheviot

More financial information here

FINANCIAL MARKETS UPDATE 26/03/2016

The FTSE 100 is called to open 5 points lower at 6187.

UK Gilt 10 Year Yield 1.4565%, Spot Gold $1234.25 -14.30 Brent Crude $41.92 -0.42

$ per £ 1.4174

$ per € 1.1186

€ per £ 1.2670

The Nasdaq Composite Index edged higher in light trading, giving the index a fifth straight gain and its longest advance in 11 months, while travel-related shares helped drag the S&P’s 500 Index lower after a deadly terrorist attack in Brussels. Nasdaq rose 0.3 percent to 4,821.66, pushing its climb over five days to 2 percent. The rally has come amid the lightest trading volume of the year, and delivered just one day of gains for the technology-heavy index that topped 0.7 percent. Other major indexes were little changed after briefly erasing losses sparked by bombings at the Belgian capital’s airport and a subway station that killed at least 31 people. The S&P 500 slipped 0.1 percent to 2,049.80, declining for the first time in five days. The Dow Jones Industrial Average fell 41.30 points, or 0.2 percent, to 17,582.57. The gauge erased a 0.5 percent drop before losing momentum in the final hour to halt the longest winning streak since October.

PRESS COMMENTARY

Advent International, the global private equity group, has taken the unusual step of raising its latest $13 billion buyout fund without offering minimum returns to backers, FT.

Hong Kong has priced the first public float in the world to raise more than $1 billion in 2016, marking the slowest start to a year for initial public offerings since the financial crisis in 2009, FT.

COMPANY NEWS  

Kingfisher PLC (KGF.LN) reported 21% fall in fiscal 2016 pretax profit, partly due to lower sales, and said that it is tracking the progress of its restructuring program.

Credit Suisse Group AG plans to eliminate an additional 2,000 jobs this year and deepen cuts at the investment bank, five months after Chief Executive Officer Tidjane Thiam announced an overhaul of the Swiss lender.

Sports Direct International PLC (SPD.LN) said it expects its adjusted earnings for the year ending April to be at the bottom of its forecast range.

Lamprell PLC (LAM.LN) said it is well prepared for another challenging year as it reported a fall in 2015 pretax profit after low oil prices hurt the industry.

AccorHotels Sees Latin America Vol. Growth 6%-7%: Echos

DFS Furniture PLC (DFS.LN) swung to a pretax profit for the first half of fiscal 2017, raised its dividend payment, and said that it remains well placed to sustain its sales growth, market share capture and cash generation over the full year.

William Hill PLC (WMH.LN) said it has had a weaker than expected online performance from the beginning of 2016 to March 20, adding that now it sees group operating profit for the full-year to be in the range of 260 million pounds ($376.3 million) to GBP280 million.

Paddy Power Betfair PLC (PPB.DB) said that its chief operating officer Andy McCue is stepping down following the completion of the merger of bookmaker Paddy Power and online betting group Betfair earlier this year.

AstraZeneca PLC (AZN.LN) said that results from the trials comparing brilinta/brilique with aspirin for stroke patients from first occurrence to death failed to meet its target.

Heineken Said to Have Bought 2.1m Shrs in United Breweries

Genel Energy PLC (GENL.LN), the U.K.-listed oil company chaired by former BP PLC (BP) chief executive Tony Hayward, said Wednesday it has decided to repurchase $55.4 million of $730 million in bonds as part of a buyback program launched last Friday.

Wizz Air Sees FY Adj Net at Top End of EU200m-EU210m Guida nce

SDL Appoints Adolfo Hernandez As Chief Executive Officer

Cenkos Securities PLC (CNKS.LN)  cut its dividend payment after reporting 26% drop in full year pretax profit due to lower revenue generation.

John Wood Group PLC (WG.LN)  announced without giving financial details a new three year contract to deliver industrial services for Royal Dutch Shell PLC (RDSA.LN)gas processing plants in Aberdeenshire and Fife, Scotland.

Laura Ashley Holdings PLC (ALY.LN) reported a drop in profit but said it remains optimistic for the future. Source Quilter Cheviot

More financial information here

FINANCIAL MARKETS UPDATE 21 March 2016

The FTSE 100 is called to open 22 points lower at 6167.

UK Gilt 10 Year Yield 1.4485%, Spot Gold $1243.15 -12.20 Brent Crude $41.35 -0.30

$ per £ 1.4422

$ per € 1.1258

€ per £ 1.2811

U.S. stocks rose, with the S&P’s 500 Index turning positive for 2016 in the wake of a dovish Federal Reserve that helped the gauge post its longest weekly winning streak since November. The equity benchmark joined the Dow Jones to advance for the year, staging one of the biggest turnarounds in history. The Dow surged 12 percent in 24 days through Thursday, boosted by seven separate daily advances exceeding 1 percent. It’s a stunning comeback from what was the worst-ever start to a year, with stocks pushed over the top as the Fed this week signaled a slower pace of interest-rate increases. The S&P 500 added 0.4 percent to 2,049.58 and is now up 0.3 percent this year after falling as much as 11 percent. The Dow climbed 120.81 points, or 0.7 percent, to 17,602.30, extending its 2016 increase to 1 percent. The Nasdaq Composite Index advanced 0.4 percent, trimming its decline since the end of 2015 to 4.2 percent from almost 15 percent. Trading volume in U.S. equities was boosted Friday by a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire. About 11 billion shares traded hands on U.S. exchanges, 25 percent above the 2016 average.

PRESS COMMENTARY

The UK’s biggest institutional investors are to demandFTSE 100 companies stop quarterly reporting as part of a radical shake-up of how shareholders interact with their investments.

Crispin Odey, the outspoken London hedge fund manager, made a 22% loss in his €1 billion Odey European fund in the first two weeks of March as a number of big bets went against him, FT.

Ten great share tips for your ISA - James Halstead, Ricardo, Cranswick, James Fisher & Sons, Carr’s Group, Portmeirion, Avon Rubber, WS Atkins, Yound & Co’s Brewery, British American Tobacco, Telegraph (Questor share tips).

COMPANY NEWS  

CVS Group PLC (CVSG.LN) Monday reported a 17% fall in pretax profit for the first half of fiscal 2016 after booking extra costs and despite a higher revenue, and said comparable sales growth for January and February has improved slightly, in line with expectations.

After losing the battle for Syngenta AG, Monsanto Co. has explored possible deals with BASF SE and Bayer AG of Germany as the U.S. seed company seeks to bolster its position amid industry consolidation.

Pets At Home Group PLC (PETS.LN) has appointed Ian Kellett as Chief Executive Officer from April 4, following the resignation of Nick Wood.

BT in Discussions With TalkTalk Over YouView Control.

Deutsche Boerse Plans German ‘AIM’ Market, Kengeter Tells FT.

Smiths in Talks to Buy Safran’s Morpho Detection Unit.

Cape PLC (CIU.LN) said it has secured a three year extension to its contract with SABIC U.K. Petrochemicals Ltd.

Inland Homes PLC (INL.LN) reported a massive rise in pretax profit for the first half of fiscal 2016, and said it is confident it will continue to deliver further value to shareholders over the coming year despite the volatility in the financial markets. Source Quilter Cheviot

More Financial Information here

 

 

FINANCIAL MARKETS UPDATE 18/3/16

The FTSE 100 is called to open 3 points higher at 6204.

UK Gilt 10 Year Yield 1.4551%, Spot Gold $1264.15 +5.75 Brent Crude $41.92 -0.24

$ per £ 1.4453

$ per € 1.1295

€ per £ 1.2797

 

The Dow Jones Industrial Average erased its 2016 losses, as a weaker dollar spurred a rally in commodity producers and industrial shares that spread to the broader U.S. stock market.Equities pushed to the highest levels since the end of last year as a gamut of companies that benefit from a lower U.S.currency, from General Electric Co. to Coca-Cola Co., surged. A scaled-back pace of interest-rate increases from the Federal Reserve sent the dollar spiraling lower, helping the Dow extend a rebound of more than 11 percent from a two-year low reached last month. The S&P’s 500 Index rose 0.7 percent to 2,040.59, near its break-even level for the year. The Dow added 155.73 points, or 0.9 percent, to 17,481.49, wiping out a 2016 loss that reached as much as 10 percent. The Nasdaq Composite Index rose 0.2 percent, with an increase capped by the slide in biotechnology companies. About 8.2 billion shares traded hands on U.S. exchanges, 6 percent below the 2016 average.

PRESS COMMENTARY

The new administrator of Libor, Intercontinental Exchange, is overhauling the way it is calculated, reducing its reliance on banker estimates in an attempt to restore faith in the scandal-hit rate, FT.

Oil prices rose to their highest this year, breaking through the $40 barrier, as investors bet that markets were starting to rebalance after a production freeze led by Russia and Saudi Arabia, Times.

Twenty-one of the 23 analysts who cover Valeant were telling investors to buy or hold the drug group’s shares before Tuesday’s massive sell-off, fuelling new doubts over whether investment banks’ research is too bullish about the companies they cover.

COMPANY NEWS  

South Africa's Illovo Sugar Ltd. (ILV.JO) said it has received no formal offer from Associated British Foods PLC for the shares the British firm doesn't already own in Illovo, with talks still at a preliminary stage.

Generali 4Q Net Misses Estimates; Dividend Beats BDVD Est.

Berkeley Group Holdings PLC (BKG.LN) said results for its fiscal year ending April 30 will be at the top end of expectations, adding that housing market has remained stable between November to February and that it is seeing good underlying demand for its properties.

Santander to Improve 2016 Div/Shr by 5%: Expansion Link

BT Group PLC (BT.A.LN) has named Simon Lowth as its new finance chief to replace Tony Chanmugam who is stepping down from the role later this year.

M&C Saatchi PLC (SAA.LN) Friday raised its dividend payment by 15%, as full year pretax profit more than doubled.

Glencore Said to Receive Two Bids for Lomas Bayas in Chile

UBS Group AG raised its bonus pool by 14 percent in 2015, with Chief Executive Officer Sergio Ermotti receiving a 28 percent increase, as other lenders slashed compensation.

EDF plans to make the final decision to go ahead with an 18 billion-pound ($26 billion) nuclear power plant in the U.K. before its annual general meeting in May,

Telecom Italia Posts 2015 Loss

Bang & Olufsen A/S (BO.KO) announced a technology partnership deal with South Korea's LG Electronics that will focus on developing the next generation of Organic Light Emitting Diodes (OLED) televisions.

HICL Infrastructure Co. Ltd. (HICL.LN) said it intends to raise 25 million pounds ($35.33 million) through an issue of ordinary shares in the capital of the company by way of tap issuance. Source Quilter Cheviot

MoreFinancial information here

 

 

MARKET COMMENTARY 16/3/16

The FTSE 100 is called to open 15 points higher at 6155.

UK Gilt 10 Year Yield 1.5368%, Spot Gold $1234.95+2.70 Brent Crude $39.30 +0.34

$ per £ 1.4108

$ per € 1.1091

€ per £ 1.2716

U.S. stocks slipped in light trading, with the Standard & Poor’s 500 Index posting back-to-back declines for the first time this month, as investors considered the capacity of central banks to boost global growth. The complexion of Tuesday’s retreat mirrored yesterday’s results, with commodity companies among the biggest losers, joined again by health-care and financial shares. Valeant Pharmaceuticals International Inc. plunged 51 percent after cutting its profit forecast. Apple Inc. added 2 percent amid positive analyst comments on iPhone sales, while baby formula maker Mead Johnson Nutrition Co. surged 11 percent on deal speculation.  The S&P 500 declined 0.2 percent to 2,015.93 at 4 p.m. in New York, trimming an earlier 0.7 percent slide. The Dow Jones Industrial Average added 22.40 points to 17,251.53, after erasing a 108-point decline. The Nasdaq Composite Index slid 0.5 percent, while the Russell 2000 Index sank 1.6 percent. About 6.5 billion shares traded hands on U.S. exchanges, 26 percent below the 2016 average. Yesterday’s session saw the fewest shares traded this year.

PRESS COMMENTARY  

Financial Times: Shares in Valeant lost half their value on Tuesday after the besieged Canadian drugmaker raised the prospect of defaulting on its $30 billion of debt and slashed full-year profit targets for the second time in five months.

The Daily Telegraph: The trigger for the next global recession is at last coming into view after a series of loud distractions and false alarms; the Atlanta Federal Reserve's gauge of "sticky-price" inflation in the US soared to a post-Lehman peak of 3% in February.

COMPANY NEWS

Deutsche Boerse AG and London Stock Exchange Group Plc agreed to merge, a deal that would create a titan of European trading as long as rival suitors don’t upend the agreement and regulators give it their blessing. LSE’s equity holders will own 45.6 percent of the enlarged group, while Deutsche Boerse stockholders will get the remaining 54.4 percent, according to a statement on Wednesday.

Smiths Group PLC (SMIN.LN) Wednesday reiterated its expectations for 2016 as it recorded a 28% rise in pretax profit and increased its dividend during the half year. The technology company said its pretax profit during the six months ended Jan. 31, rose to 168 million pounds ($241.5 million) from GBP131 million on revenue of GBP1.37 billion and GBP1.42 billion respectively.

Swiss Re requests authorization for share buyback program of as much as CHF1b, according to e-mailed statement. Proposes 8.2% increase in regular div. to CHF4.60/share.

U.K.-listed independent oil producer Tullow Oil PLC (TLW.LN) said Wednesday that the Cheptuket-1 well in Block 12A in Northern Kenya has encountered "good oil shows."

Volkswagen AG lost market share in Europe for the sixth month in a row as the German carmaker’s diesel- emissions scandal pushed buyers to the likes of Fiat Chrysler Automobiles NV, Mercedes-Benz and Ford Motor Co. Volkswagen’s brands accounted for 24 percent of new auto registrations in February versus 25.4 percent a year earlier, the ACEA, said Wednesday.

Sodexo Wins 10-Year A$2.5 Billion Contract From Rio Tinto. The French on-site services company said in an e-mailed statement that it was awarded a 10-year contract estimated at A$2.5, or $1.87 billion, to provide facilities management services at mining company Rio Tinto’s operations in Australia’s Pilbara region.

Cape 2015 statutory revenue GBP711.4m vs GBP690.5m year earlier. Co. releases preliminary results. Cape FY pretax GBP29.1m vs GBP30m. Cape sees mkt conditions to continue to weaken through 2016. Cape FY dividend maintained at 14p/share.

Allied-Bristol Life Sciences, a biopharmaceutical enterprise jointly owned between Allied Minds and Bristol-Myers Squibb Company, announced that it has launched a new subsidiary, iβeCa Therapeutics, to license proprietary compounds from NYU School of Medicine that target the Wnt signalling pathway.

Mead Johnson Shares Rise After Blog Speculation on Deal Interest. Shares of infant formula maker Mead Johnson Nutrition Co. rose as much as 11 percent Tuesday after a blog post on the Betaville website suggested that rivals Nestle SA and Danone might be interested in taking it over. Mead Johnson has started working with bankers from Lazard Ltd. after receiving expressions of interest from Nestle and Danone, according to the short blog post on Monday, which cited unidentified sources.

Price comparison website Moneysupermarket.com Group PLC's (MONY.LN) founder Simon Nixon is selling a 6.9% stake in the company. Source Quilter Cheviot

More Finance Here

MARKET UPDATES 14/03/2016

The FTSE 100 is called to open 5 points higher at 6144.

UK Gilt 10 Year Yield 1.5755%, Spot Gold $1254.00 +3.15 Brent Crude $40.51 -0.15

$ per £ 1.4373

$ per € 1.1149

€ per £ 1.2890

U.S. stocks joined a global rally, sending the Standard & Poor’s 500 Index to its highest close this year, as investors reassessed stimulus measures in Europe and warmed to the steps taken to boost growth. Banks and commodity shares were the best performers, continuing to pace a monthlong advance. Citigroup Inc. and Wells Fargo & Co. added more than 2.6 percent. Dow Chemical Co. gained 3.1 percent while Anadarko Petroleum Corp. jumped to a two-month high as crude posted its longest run of weekly gains since May. The S&P 500 rose 1.6 percent to 2,022.19 at 4 p.m. in New York, capping a fourth straight week of gains, the most since November. The gauge finished above its average price during the past 200 days for the first time this year, ending its longest streak below that threshold since 2011. The Dow Jones Industrial Average added 218.18 points, or 1.3 percent, to 17,213.31. It also closed at a 2016 high and above its 200-day moving average. The Nasdaq Composite Index gained 1.9 percent.

PRESS COMMENTARY

Sainsbury Set to Raise Bid for Argos Parent to GBP1.5b: Mail.

Osborne Mulls Sale of Bradford & Bingley Assets: Sky

The Times: George Osborne is poised to announce further cuts of about £4 billion to government spending by the end of the decade in a budget that reflects growing uncertainty over the economic recovery.

COMPANY NEWS

AIA Group Ltd. and Prudential Plc shares declined in Hong Kong after China tightened restrictions on the use of third-party payment providers to buy insurance products in the city. Hong Kong-based AIA fell as much as 2.4 percent Monday, the biggest intraday decline since Feb. 29, after Bloomberg reported Saturday the People’s Bank of China will prohibit the use of electronic payment services by mainland individuals for any purchases of life insurance and investment-related products, starting March 12.

BNP Paribas SA, France’s largest bank, had its long-term credit rating cut to A from A+ by Standard & Poor’s, which cited a “less favourable” view of the lender’s capital cushion.

Airbus Chief Executive Officer Fabrice Bregier said in an interview published in Le Figaro newspaper that even a global slowdown will have a smaller impact on air traffic as a growing middle class travels more. Source Quilter Cheviot.

More Financial Information here

 

 

 

The ECB exceeds expectations, aiming for stimulus to the real economy

 

What was expected by market participants?

We were convinced that further easing by the ECB at its March meeting highly likely, as a result of lower inflation, sticky bank lending, and fragile financial conditions. Ahead of the meeting, market participants considered the following tools as possible action paths:

 

•           Rate cuts: focus was on the deposit rate, with near-universal expectation of a 10bp cut and small number of forecasters considering even bigger cuts as possible.

•           QE expansion:

o          by size - €20bn increase in monthly purchases was the base case.

o          by type - possibility of IG corporate bonds being included in the asset purchase universe was also discussed.

•           Credit easing  through the banking system: more LTROs were considered as likely. The ability of banks to borrow at negative rates in order to lend to the real economy was considered a remote possibility.

What has been announced

•           Cut of the deposit rate to even more negative territory from -0.30% to -0.40%. Cut of the refi rate from 0.05% to 0%. Matches expectations.

•           Expanding the size of the QE program from €60bn/month to €80bn/month. Matches high end of expectations.

•           Expanding the composition of the QE program to include Investment Grade bonds issued by non-bank corporations. Exceeds expectations.

•           Proving LTROs with long maturities (4-year) at ultra-low rates (starting at refi rate and falling as low as depo rate, if lending gets expanded beyond a certain benchmark). Exceeds expectations.

Conclusions

•           The ECB seeks to provide stimulus to the real economy by firing all its guns:  interest rates, bank lending, direct asset purchases.

•           We find the bank lending channel particularly important. Banks are a critical part of the European economy and lending constraints could pose a large threat to its recovery. The ECB has taken action to address such concerns, by bringing down bank funding costs and potentially even paying banks to lend to the real economy.

•           The ECB appears confident on the effectiveness of its toolkit. President Draghi showed no concerns about the overall profitability of the banking system despite negative rates, expressed expectations for a large TLTRO2 take-up, and saw forward guidance as a powerful tool still exerting its influence across the entire yield curve.

•           By stating that the scope for further rate cuts is limited and choosing to focus on other channels, such as bank lending and corporate bonds, Draghi has eased the pressure on other central banks to match the ECB’s moves. This is likely to keep the SNB in wait and see mode for the time being.

source Lombard Odier

MARKET COMMENTARY 11/03/2016

The FTSE 100 is called to open 88 points higher at 6124.

UK Gilt 10 Year Yield 1.5385%, Spot Gold $1269.00 -3.35 Brent Crude $41.01 +0.75

 

 

$ per £ 1.4273

$ per € 1.1163

€ per £ 1.2786

U.S. stocks closed little changed after swinging between gains and losses, as investors assessed fresh stimulus measures unleashed by the European Central Bank and whether selling Thursday went too far in the face of the new initiatives. Equities stormed back in a final-hour rebound, with major indexes wiping out declines that had reached more than 1 percent. An earlier retreat was led by industries that were among the biggest contributors to a three-week rally, including banks and technology companies. JPMorgan Chase & Co. slipped 0.9 percent and Microsoft Corp. dropped 1.5 percent. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,989.57 at 4 p.m. in New York, after climbing as much as 0.8 percent and dropping 1 percent. The Dow Jones Industrial Average lost 5.23 points, or less than 0.1 percent, to 16,995.13. The gauge lost 178 points at the session low. The Nasdaq Composite Index fell 0.3 percent. About 8.4 billion shares traded hands on U.S. exchanges, 5.6 percent below the average in 2016.

PRESS COMMENTARY

Financial Times: The European Central Bank has unleashed a bigger than expected package of measures to stimulate the eurozone economy, with expanded quantitative easing, incentives to banks to increase lending and further interest rate cuts.

The Daily Telegraph: Another steep slide in oil reversed early gains made on the FTSE 100 following the European Central Bank’s move to slash interest rates and boost its quantitative easing programme.

COMPANY NEWS

Old Mutual PLC has announced plans to separate its four main businesses--Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management--as it reported a 5% rise in 2015 net profit. The banking and investment company expects to complete the separation by the end of 2018. It also plans to reduce its 40% stake in Nedbank, a South African lender, by distributing its shares to Old Mutual holders. It doesn't plan to sell any of Nedbank to a new strategic investor. The board plans to declare an unchanged second interim dividend of 6.25 pence a share, making a total payout for the year of 8.9 pence, up from 8.7 pence in 2014.

JD Wetherspoon PLC (JDW.LN) Friday posted a 2.2% drop in pretax profit during the fiscal 2016 half year-end as margins fell due mainly to increased labour costs. The pubs operator recorded pretax profit of 36.6 million pounds ($52 million) during the 26 weeks ended Jan. 24, compared with GBP37.5 million a year earlier on revenue of GBP790.3 million and GBP744.4 million respectively.

ArcelorMittal Announces 7 for 10 Rights Issue of 1.26b new shares, subscription price EU2.20/new share. Subscription price represents 35.3% discount to theoretical ex-rights price, based on March 10 close on Euronext Amsterdam. Mittal family trust entities committed to exercise their Rights for new shares pro rata to their current shareholding of 37.38%.

Computacenter 2015 Sales In Line; Sees Year of Further Progress. 2015 adj. rev. GBP3.05b vs GBP3.06b, est. GBP3.07b. 2015 adj. pretax profit GBP86.9m vs GBP81.1m, est. GBP85.6m. 2015 adj. EPS 53.4p vs 44.1p, est. 51p. Proposes div. of 21.4p/shr vs 19p/shr.

VW Unit MAN SE Reports 2015 EU92m Op. Profit After Sales Drop. Truckmaker sees 2016 commercial-vehicle sales level with last year, forecasts “slight” drops in group, commercial-vehicle revenue following “challenging” 2015, according to e-mailed statement.

 

Source Quilter Cheviot

More Financial Information Here

Market Update 4th March 2016

The FTSE 100 is called to open 28 points higher at 6158

UK Gilt 10 Year Yield 1.4306%, Spot Gold $1261.25 -3.25 Brent Crude $37.31 +0.14

$ per £ 1.4170

$ per € 1.0949

€ per £ 1.2941

U.S. stocks rose, led by gains in energy shares to extend a three-week rally before Friday’s payrolls report that may provide a clearer picture on the economy’s health and path for interest rates. Energy producers in the S&P’s 500 Index erased 2016 declines as a rally in the group helped equities shake off earlier weakness for a second day. Banks also gained momentum in the afternoon, rising for the fifth time in six days. Health- care and technology shares struggled, with Microsoft Corp. losing 1.1 percent. Kroger Co. sank 7 percent after the grocer forecast slower growth this year. The S&P 500 rose 0.4 percent to 1,993.40, erasing a 0.5 percent drop to remain at an eight-week high. The gauge gained for a third straight day for just the second time this year. The Dow Jones Industrial Average advanced 44.58 points, or 0.3 percent, to 16,943.90, and the Nasdaq Composite Index increased 0.1 percent. The Russell 2000 Index of small caps added 1 percent to rise for a third day. About 8.8 billion shares traded hands on U.S. exchanges, in line with the 2016 average.

PRESS COMMENTARY

The UK is set for another year of record low interest rates, economists have predicted, following news that the dominant services sector suffered a sharp slowdown last month, Guardian.

 COMPANY NEWS  

WPP PLC, reported net profit rose in 2015 despite strong currency headwinds in the second half of the year.

BHP Billiton Ltd.’s credit rating was cut two levels by Moody’s Investors Service as lower commodity prices are set to weigh on the world’s biggest mining company’s earnings even after it cut its dividend and spending.

Adidas AG to Open 3,000 New Stores in China by 2020.

Alliance Trust PLC (ATST.LN) reported a rise in full-year net asset value per share, and said that it remains on track to achieve its cost-cutting targets.

Andritz 4Q Sales, Ebitda Beat Estimates; Plans EU1.35 Dividend

EasyJet Carried 4.93M Passengers in Feb 2016 Vs 4.49M

London Stock Exchange Group PLC (LSE.LN) reported a 85% rise in full-year net profit on growth in revenue from capital markets and other areas. May Have 11% Upside If a Bidding War Breaks Out: Survey.

Dart Group PLC (DTG.LN), a leisure travel and logistics company, said that operating profit for the year ending March 31 will be slightly ahead of current market estimates due to lower than anticipated winter losses.

Capital & Regional PLC (CAL.LN) reported a 45% rise in pretax profit for 2015 and a trebled dividend, and said it has bought Edmonds Parade in Hemel Hempstead for 10.5 million pounds ($14.6 million)

Source Quilter Cheviot

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