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FTSE 100 Closes Down as Investors Shift Attention to Growth Stocks

01/20/2022 | 12:28pm EDT

The FTSE 100 closed down 0.06% Thursday, and for a second consecutive day the legion of banks, miners and oil stocks that make up the index's heavyweights slipped. "Investors are switching up their trades today, moving back into growth stocks after the recent selloff while trimming their profits in the FTSE 100 after a good run for that index," IG Group chief market analyst Chris Beauchamp says. The recent trend of moving investments to household names from growth stocks has taken a bit of a knock Thursday, but as with the concurrent bounce in the U.S. it isn't yet clear whether the day's reversal of fortunes is likely to turn into anything more sustained, Mr. Beauchamp says.

 
Companies News: 

Tesco Permanently Appoints New Execs for Underwriting Arm

Tesco PLC said Thursday that it has appointed Debbie Walker as chief risk officer and Gary Duggan as chief insurance officer and chief executive of Tesco Underwriting, a subsidiary of Tesco Bank, effective immediately.

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Norway Oil Fund Pays $299.5 Mln for 50% Share in UK Property Portfolio

Norway's $1.4 trillion sovereign-wealth fund, the world's largest, has bought a portfolio of 14 logistics properties in the U.K. with property joint-venture partner, Prologis Inc.

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Novolipetsk Steel 4Q Production Rose 16%

Novolipetsk Steel on Thursday reported that its steel production increased 16% in the fourth quarter, bringing 2021 growth to 10%.

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As Inflation Bites, Power Lies Higher Up the Food Chain -- Update

The food companies with the best shot at beating inflation are those that investors are least likely to know.

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Hercules Site Services Hopes to Raise GBP5.5 Mln by Floating on AIM

Hercules Site Services PLC said Thursday that it plans raise around 5.5 million pounds ($7.5 million) by floating on London's AIM.

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Arecor Therapeutics's 2021 Performance in Line With Views

Arecor Therapeutics PLC said Thursday that its performance for 2021 was in line with expectations and it closed the year with a strong cash balance.

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ContourGlobal Sells Brazil Hydro-Electricitry Business for $318 Mln

ContourGlobal PLC said Thursday that it has sold its majority-owned hydro-electric generation subsidiary in Brazil for 1.73 billion Brazilian reais ($318.1 million), netting proceeds of around $110 million.

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Rockwood Realisation Names Noel Lamb as Chairman

Rockwood Realisation PLC said Thursday that it has appointed Noel Lamb as independent nonexecutive chairman with immediate effect, while Interim Chairman Simon Pyper will return to his nonexecutive director role.

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GetBusy Sees 2021 Revenue Slightly Ahead of Market Views

GetBusy PLC said Thursday that its revenue for 2021 is expected to be slightly ahead of market expectations, and that it expects its adjusted pretax loss for the year to be in line with views.

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Netcall Sees 10% Rise in 1H Revenue

Netcall PLC said Thursday that it expects a 10% rise in revenue for the first half of fiscal 2022, and that adjusted Ebitda is expected to increase by 17%.

 
Market Talk: 

Countryside Properties Seen as Well-Placed, But Facing Issues

1319 GMT - Countryside Properties faces hurdles despite positive prospects in its partnerships business, says Peel Hunt, cutting its recommendation on the U.K. house-builder to hold from buy. "Following last week's profit warning, we're reducing our EPS estimates by 49%, moving our target price from 560p to 330p and downgrading our recommendation to hold," Peel Hunt analysts say. "While we believe Countryside remains well-placed as the largest player in the structurally-growing partnerships sector, the company is clearly facing some operational issues. Assessing the trajectory of the group's recovery post the ongoing internal review is a tough call at this stage, but we're optimistic it will be more rapid than [that of] others in the sector." Shares fall 2.9% to 319p.

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Rentokil Initial's Terminix Deal Might Boost US Prospects

1316 GMT - Rentokil Initial's proposed acquisition of U.S. group Terminix Global Holdings Inc. bodes well for the pest control and hygiene company's U.S. prospects, Citigroup says, raising its rating on the group to buy from neutral. The deal could propel Rentokil into the number-one slot in U.S. pest control with an estimated market share of 25%, Citi says. "Based on state-by-state branch footprint analysis, we feel confident that Rentokil can significantly outperform management's synergy target, possibly 2x. We upgrade our rating to buy," Citi analysts say.

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PayPoint's 3Q Seen in Line But Some Businesses Saw Net Revenue Decline

1203 GMT - PayPoint's 3Q performance was in line with expectations, but the payments company saw different results across its businesses, Liberum says. Parcels and Handepay businesses were the star performers but a number of its businesses showed a decline in net revenue, such as ATM's which saw a 5.3% fall in net revenue to GBP2.4 million, the U.K. brokerage says. Liberum maintains its fiscal 2022 Ebitda estimates of GBP59.3 million for PayPoint, saying the continuing progress at Handepay and the strong performance at Parcels is offsetting mild weather elsewhere. "PayPoint is expanding its addressable universe and growth business lines could be 70% of group in three years," the brokerage says. Liberum rates the stock buy and has a 1,000 pence target price.

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Wincanton Cost Headwinds Seems to Be Moderating

1151 GMT - Wincanton's concern over possible labour shortages and driver costs has proved to be excessive as these headwinds appear to be weakening, Liberum says. The U.K. road-haulage and warehousing company currently expects a full-year profit above market expectations boosted by a strong peak season, while headwinds didn't appear to be as severe as expected by Wincanton due to its exposure to open-book contracts, the U.K. investment bank says. Liberum raises 2022 EPS forecast by 7% and has a buy rating on the stock with a target price of 520.0 pence. Wincanton shares are up 13% to 394.0 pence.

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Spirent Communications Starting to See Benefits of Its Investments

1150 GMT - Spirent Communications' investments in technologies, solutions, customer segments and geographies over the last five to six years look to now be paying off, and that should lift growth levels higher going forward, Jefferies says. "With the 5G investment cycle still at an early stage and new customer segments like hyperscalers opening up, we believe the stock is attractive," equity analyst Will Kirkness says. Orders for 2021 are anticipated to have increased at a double-digit rate, supporting a healthy outlook into 2022, the U.S. bank says. Jefferies has a buy rating with a target price of 340 pence. Shares in the FTSE 250 provider of test, assurance, and analytics services trade up 6.6% at 245.6 pence.

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AJ Bell AuA Increase Could Give Room to Upgrades

1115 GMT - AJ Bell's total assets-under-administration increase over the first quarter above forecasts gives room for further upgrades, Shore Capital says. The U.K. investment firm says AuA was 2% higher than expected, but market performance and flows were slightly weaker than forecast. "We expect upgrades to flow through as a result of the higher AuA and the market taking this moment to reappraise how the company benefits from higher interest rates," Shore says. The brokerage has a buy rating on the stock. AJ Bell shares are up 0.23% to 347.4 pence.

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N. Brown Needs Further Visibility on Details For Clearer Forecasts

1111 GMT - Retailer N. Brown's 3Q update confirms that its very strong sales growth in clothing & footwear was broadly offset by a weaker performance in home & gift, Shore Capital says. The company's active customer numbers returned to growth for the first time in almost four years, ending the period at 2.9 million, and it is carrying out major work that will have an important effect in its medium-term earnings, Shore says. Still, it has several notable moving parts and forecasting the company to the extent that Shore Capital's analysts would like remains challenging as visibility still needs to come through. "With much heavy lifting now undertaken [albeit not yet completed], we see significant value in the N. Brown stock," Shore says

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Entain Dividend Payment Could Restart Soon, Says Interactive Investor

1107 GMT - Entain continues to benefit from growth momentum despite pandemic-fueled prior-year comparatives and there are also hopes that the dividend payment will start again soon, Interactive Investor says. While online net gaming revenue has fallen, ending more than 20 consecutive quarters of double-digit growth, retail net gaming revenue has jumped by around 60% as open high-street outlets replace the largely shuttered stores during restrictions, it says. The fall in online NGR is also better than analysts expected. "In all, and with growth ongoing and sector M&A still a feature, analyst consensus opinion continues to point to a strong buy," investment analyst Keith Bowman says. Entain shares trade up 1% at 1,727.5 pence.


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


(END) Dow Jones Newswires

01-20-22 1228ET

Stocks mentioned in the article
ChangeLast1st jan.
AJ BELL PLC 2.40% 264 Delayed Quote.-32.05%
AJ NETWORKS CO., LTD. 0.29% 6840 End-of-day quote.26.43%
BELIEVE 1.22% 9.935 Real-time Quote.-41.92%
CITIGROUP INC. -0.10% 49.78 Delayed Quote.-17.57%
CONTOURGLOBAL PLC 0.02% 255.55 Delayed Quote.33.49%
COUNTRYSIDE PARTNERSHIPS PLC 7.12% 244 Delayed Quote.-49.47%
EURO / BRAZILIAN REAL (EUR/BRL) -0.71% 5.138 Delayed Quote.-17.66%
FTSE 100 1.23% 7393.12 Delayed Quote.-1.11%
FTSE MID 250 INDEX 0.87% 19862.57 Delayed Quote.-16.15%
GETBUSY PLC 0.00% 61.5 Delayed Quote.-8.21%
IG GROUP HOLDINGS PLC 1.14% 710 Delayed Quote.-13.65%
LONDON BRENT OIL 0.69% 112.25 Delayed Quote.42.93%
NETCALL PLC 3.37% 68.74 Delayed Quote.-3.62%
NOVOLIPETSK STEEL 0.00% 0.3162 Delayed Quote.-98.93%
PAYPOINT PLC 2.12% 578 Delayed Quote.-14.89%
PROLOGIS, INC. -0.44% 119.18 Delayed Quote.-28.89%
SPIRENT COMMUNICATIONS PLC -0.52% 228.8 Delayed Quote.-16.65%
TERMINIX GLOBAL HOLDINGS, INC. 0.67% 42.2 Delayed Quote.-7.34%
TESCO PLC 2.43% 261.3 Delayed Quote.-12.00%
WINCANTON PLC 2.98% 414.5 Delayed Quote.9.38%
WTI 0.76% 110.016 Delayed Quote.43.34%
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