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BOE Is Seen Voting 7-2 For 50 Basis-Point Rate Rise

08/02/2022 | 08:46am EDT

BOE Expected to Vote 7-2 For 50bp Rate Rise

1015 GMT - The Bank of England is likely to vote 7-2 for a larger 50 basis points interest rate increase at Thursday's meeting as it responds to higher inflation, Bank of America Global Research analysts say in a note. "But we see risks skewed towards a unanimous vote for 50bp hikes," they say. A potential rate rise of 50 basis points should be a one-off rather than the start of a series of similarly aggressive increases, BofA says. The BOE is also likely to "all but announce" the start of active quantitative tightening from October which should be confirmed at the September meeting, the U.S. bank says. (renae.dyer@wsj.com)

Companies News: 

BP Appoints Former Aviva CEO Amanda Blanc as Director

BP PLC said Tuesday that it has appointed Amanda Blanc, the former chief executive officer of insurance group Aviva PLC, as nonexecutive director.

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Booking Holdings' EUR1.6 Bln Etraveli Acquisition to Be Probed by UK Watchdog

The U.K. Competition and Markets Authority said Tuesday that it is investigating Booking Holdings Inc.'s 1.6 billion euro ($1.64 billion) acquisition of Etraveli Group to see if it will lead to a substantial lessening of competition.

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Crimson Tide Chief Executive to Become Product Director; Appoints New CEO

Crimson Tide PLC said Tuesday that Chief Executive Officer Luke Jeffrey will shift roles to become product director, and that nonexecutive director Jacqueline Daniell will take over as CEO.

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X5 Retail 2Q Net Profit Rose on Robust Revenue Growth, To Open Further 400 Stores

X5 Retail Group NV said Tuesday that net profit rose for the second quarter backed on strong revenue increase and that it plans to accelerate growth and expansion through its Chizhik hard-discount chain.

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Comptoir Group CEO, Chairman Step Down

Comptoir Group PLC said Tuesday that its Chief Executive Chaker Hanna and Chairman Richard Kleiner have both stepped down with immediate effect.

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Synthomer Shares Fall as 1H Pretax Profit More Than Halved

Shares in Synthomer PLC on Tuesday fell after the company reported a significant decline in pretax profit for the first half of 2022.

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JLEN Environmental Assets Appoints Ed Warner as Chairman

JLEN Environmental Assets Group Ltd. said Tuesday that it has appointed Ed Warner as chairman with immediate effect.

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NWF Group FY 2022 Profit Rose on High Prices, FY 2023 to Date Meeting Views

NWF Group PLC said Tuesday that fiscal 2022 pretax profit rose on significantly higher revenue driven by increased prices, and performance in fiscal 2023 to date is meeting management views.

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Rotork 1H Profit, Revenue Fell on Supply Chain Issues; Raises Dividend

Rotork PLC said Tuesday that first half pretax profit together with revenue slipped due to supply chain challenges, and raised its dividend.

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Global Invacom 1H Revenue Fell, Loss Widened Amid Semiconductor Shortages

Global Invacom Group Ltd. said Tuesday that it expects to report a widened net loss after tax and lower revenue for the first half as semiconductor shortages hurt its ability to meet orders.

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Ricardo Sells Software Business to Up $20.5 million

Ricardo PLC said Tuesday that it has completed the sale of its software business to Constellation Software Inc.'s business division, FOG Software Group, for a maximum consideration of $20.5 million in cash.

 
Market Talk: 

Greggs Had Strong 1H, Investment Case Stays Intact

1208 GMT - Greggs gains 2% to 2,126 pence after the U.K. bakery chain reported slightly higher 1H pretax profit and said management's full-year expectations remained unchanged. The results were strong, with like-for-like sales up 12.3% versus the equivalent period of 2019 and full-year guidance maintained despite market-wide inflationary pressures and broader economic uncertainty, Panmure Gordon says. Latest trading has also been robust with LFL sales rising 13.1% in the four weeks to July 30 versus 2021, when trading had returned to more normal levels than during the Covid-19 pandemic, the brokerage says. "We continue to believe the long-term investment case remains intact," Panmure analyst Alex Chatterton says in a note. "We therefore maintain our buy recommendation and 3,270 pence target price," he says. (philip.waller@wsj.com)

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Revolution Bars Shares Look Highly Attractive

1201 GMT - Revolution Bars Group has laid the foundations for faster expansion in a favorable leasehold market, Peel Hunt analysts say in a research note. The U.K. bar operator finds itself in this position thanks to its GBP3.6 million net debt reduction, its site refurbishments and the workstream program, they say. What's more, shares are at a highly attractive valuation on an enterprise value to Ebitda basis, the analysts add. Peel Hunt has a buy rating on the stock with a target price of 35 pence. Shares trade up 2.6% at 15.00 pence. (kyle.morris@dowjones.com)

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Taylor Wimpey Likely to Report 1H Healthy Profits

1159 GMT - Taylor Wimpey's first-half revenue is expected to slip to GBP2.07 billion from GBP2.20 billion a year prior, but profits should still look healthy when it posts results on Wednesday, J.P.Morgan Cazenove analysts say in a research note. The house builder's pretax profit should rise to around GBP309 million from GBP287.5 million, JPM Cazenove says, citing expectations for improved margins to offset lower sales completions. "We expect management to reiterate guidance for 2022, with focus on build cost inflation and commentary on the land market," the U.S. investment bank says, retaining its overweight rating and 180 pence price target on the stock. Shares are down 4.0% at 122.85 pence. (joseph.hoppe@wsj.com)

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National Express Could Attract M&A Interest From Infrastructure Funds

1137 GMT - Transport operator National Express looks set for a robust recovery in earnings, alongside strong top-line growth as 2022 revenue looks set to reach 2019 levels, Bank of America Global Research analysts say in a note. The company also looks to benefit from a trade-down to the lowest-cost public transport as fuel prices increase, they say. Furthermore, the U.K.'s postpandemic bus and rail market has seen a step-up in M&A activity potentially due to depressed valuations and a weaker pound, they say. "Most transactions have involved specialized private infrastructure funds and we think National Express could potentially attract interest at its current valuation," BofA says. BofA resumes cover with a buy rating on the stock and a 184.40 pence price objective. (anthony.orunagoriainoff@dowjones.com)

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tinyBuild Could Conduct More M&A

1133 GMT - tinyBuild might execute on more of its M&A pipeline and its game slate looks interesting, Peel Hunt's James Lockyer and Damindu Jayaweera say in a research note. The videogame publisher and developer's "Potion Craft" and "Not for Broadcast" titles are performing strongly and "Hello Neighbor 2" has a curious potential for a beat, they say. "TinyBuild's future is creating franchises and using purpose-built hyper-targeted marketing to get the best results from loyal fans who only care about what is next in the canon of their favorite multiverse, in the face of busy release schedules elsewhere," the analysts conclude. Peel Hunt initiates coverage with a buy rating with a target price of 200 pence on the stock. (kyle.morris@dowjones.com)

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Global Economic Growth Loses Momentum as Recession Looms

1119 GMT - Global growth is slowing and a recession has already begun, chief investment officer for core investments at AXA Investment Managers Chris Iggo says in a note. Germany, Italy, and the U.K. are expected to grow by less than 1% next year, an annual average suggesting the possibility of one or more quarters of recession, he says. Most major emerging market economies will experience a slowdown in 2023, but China is forecast to have stronger growth, Iggo says. "This is a global movement largely due to the massive change in the terms of trade between energy consumers and producers", he says. The forecasts mask the fact that the recession has already started in many geographies, which will keep investor confidence weak, Iggo says. (maria.martinez@wsj.com)

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Additional Fiscal Stimulus in the UK Would Lead to More Interest Rate Rises

1030 GMT - The Bank of England is unlikely to start cutting interest rates from mid-2023 if Liz Truss becomes prime minister as she could deliver increased fiscal stimulus, Bank of America Global Research says. Betfair prices an 86% probability that Truss, who has committed to major tax cuts and may need to announce extra support for high utility bills, will win the Conservative Party's leadership race, BofA analysts say in a note. "Fiscal stimulus will mean more rate hikes," they say. "We assume 50 basis points [of interest rate rises] in response to that stimulus." BofA expects two interest rate increases of 25 basis points in 1H 2023 and no rate cuts until late-2024. (renae.dyer@wsj.com)

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SSP's New Contracts Will Take Time to Bear Fruit

1022 GMT - SSP Group confirmed at its 3Q update that revenue was at 89% of 2019 levels, benefiting from a recovery in passenger numbers, Liberum analyst Anna Barnfather says in a note. The food-and-beverage outlets operator confirmed that its pipeline of new contracts was expected to add GBP500 million to revenue by 2025, compared with 2019, and when combined with recovery assumptions showed a clear pathway to revenue of GBP3.25 billion, Barnfather says. However, these contracts will be initially lower-margin as their mobilization will involve preopening costs and will take time to optimize, prompting a downward revision of forecasts for the fiscal years beyond FY 2022, Barnfather says. Liberum rates the stock buy and lowers the target price to 330 pence from 350 pence. (anthony.orunagoriainoff@dowjones.com)

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Fresnillo Could Partially Reverse Earnings Miss in 2H

(MORE TO FOLLOW) Dow Jones Newswires

08-02-22 0846ET

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) -0.12% 0.5751 Delayed Quote.6.92%
AVIVA PLC 2.37% 397.4 Delayed Quote.-0.85%
AXA -1.09% 22.23 Real-time Quote.-14.17%
BANK OF AMERICA CORPORATION 2.95% 31.09 Delayed Quote.-32.12%
BOOKING HOLDINGS INC. 2.17% 1678.93 Delayed Quote.-31.51%
BP PLC 2.22% 442.7 Delayed Quote.31.04%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) -0.47% 0.648239 Delayed Quote.10.78%
COMPTOIR GROUP PLC 0.00% 5.35 Delayed Quote.-4.46%
CONSTELLATION SOFTWARE INC. 2.58% 1971.7 Delayed Quote.-18.10%
CRIMSON TIDE PLC 0.00% 2.05 Delayed Quote.-26.79%
EURO / BRITISH POUND (EUR/GBP) -1.34% 0.86773 Delayed Quote.4.53%
FRESNILLO PLC 3.80% 798.4 Delayed Quote.-13.84%
GLOBAL INVACOM GROUP LIMITED 0.00% 0.054 Delayed Quote.-29.87%
GREGGS PLC 0.64% 1723 Delayed Quote.-48.70%
INDIAN RUPEE / BRITISH POUND (INR/GBP) -1.36% 0.010846 Delayed Quote.10.84%
JLEN ENVIRONMENTAL ASSETS GROUP LIMITED -1.51% 117.2 Delayed Quote.13.33%
NATIONAL EXPRESS GROUP PLC 0.41% 169.4 Delayed Quote.-34.41%
NWF GROUP PLC 0.81% 248 Delayed Quote.16.04%
REVOLUTION BARS GROUP PLC -2.46% 9.9 Delayed Quote.-55.38%
RICARDO PLC -1.09% 455 Delayed Quote.2.45%
ROTORK PLC 1.45% 237.6 Delayed Quote.-34.43%
SSP GROUP PLC -0.76% 188.4 Delayed Quote.-20.93%
SYNTHOMER PLC 2.35% 109 Delayed Quote.-73.35%
TAYLOR WIMPEY PLC 2.40% 90.42 Delayed Quote.-49.69%
TINYBUILD, INC. 0.00% 121 Delayed Quote.-36.27%
US DOLLAR / BRITISH POUND (USD/GBP) -1.63% 0.88333 Delayed Quote.21.23%
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