FTSE 100 Closes Up; CRH Lead the Gains -2-

UK Growth Concerns Seen Holding Back Pound

0947 GMT - Sterling's failure to benefit from the recent improvement in risk sentiment and expectations for the Bank of England to deliver a higher peak interest rate could reflect concerns about weak U.K. economic growth, MUFG Bank says. "Even more restrictive BOE policy rates would act to deepen the economic downturn in the UK," MUFG currency analyst Lee Hardman says in a note. Even if the BOE delivers higher rates, they are still expected to remain well below inflation and deeply negative in real terms, he says. Sterling's performance has disappointed leveraged funds, which have been building long positions that bet on the currency rising over the past month, he says. ([e-mail])

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Sibanye-Stillwater's Share Price Already Factors In Earnings Fall

0931 GMT - Sibanye-Stillwater's first-half headline earnings per share fell 50% on-year, in line with its recent trading update, while the interim dividend was below expectations, Citi says. However, the South African precious-metals mining company's earnings dip and operational issues have already been factored into its share price by the market, Citi analysts say in a research note. Sibanye Stillwater's shares trade at a discount to its peers, but its annual guidance suggest there will be significant improvements in the company's second-half performance, especially at the South African platinum group metals operations--a positive catalyst for its shares, the U.S. bank says. Citi maintains its buy rating and a target price of ZAR50. Shares are up 2.1% at ZAR40.47. ([e-mail])

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Harbour Energy Could Look to Invest Outside the UK Due to Windfall Tax

0928 GMT - Harbour Energy could look to further invest outside the U.K. as directors think expenditure in the country now comes with elevated fiscal risks following the introduction of the energy windfall tax, CMC Markets UK's Chief Market Analyst Michael Hewson says in a note. Hewson says the oil-and-gas company's interests in Indonesia, Vietnam, Mexico and Norway are tiny in comparison to its U.K. exposure, and against the tax backdrop, "it wouldn't surprise to see the company target future investment efforts towards its smaller interests in order to diversify its revenue streams." Shares trade up 11% at 476.60 pence. ([e-mail])

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Harbour Energy Seen in a Sweet Spot Amid Historically High Gas, Oil Prices

0912 GMT - Harbour Energy looks like it is in a sweet spot in cash generation terms as it benefits from historically high gas and oil prices, Peel Hunt analysts Werner Riding and Matt Cooper say in a research note. The oil-and-gas company's balance sheet has continued to strengthen rapidly amid a strongly rising commodity price backdrop, with interim results showing a strong operating and financial performance, they say. One headwind it may face though is a higher tax bill from the windfall tax that will reduce profitability over the coming years to some degree, they add. Peel Hunt has an add rating on the stock with a target price of 525 pence. Shares trade up 10% at 473.70 pence. ([e-mail])

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Hays Shares Might Have Further to Go After Upbeat FY

0911 GMT - Hays gains 3% to 119 pence after the U.K. recruitment group reported higher annual profit and declared a special dividend. The results matched expectations, RBC Capital Markets says, adding that the company's shares could exceed the brokerage's 165p price target, given the all-time-high discount at which staffing stocks are trading versus defensive alternatives. "History has shown these stocks tend to move early and typically outperform into the teeth of the worst economic news/uncertainty," RBC analysts say in a note. "Whilst macro sentiment is febrile as Europe stares down the barrel of potential primary energy shortages this winter, we nevertheless see favorable risk-reward at Hays in the context of the broader sector." ([e-mail])

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Sterling Could Benefit From 'Short Squeeze' Versus Dollar

0905 GMT - Sterling could recover further against the dollar as speculators who have been betting on the dollar rising take profit on those trades, ING says in a note. Rising prices of sterling may prompt traders to buy back the currency, pushing it even higher. "With the market long dollars, Cable [GBP/USD] is at risk of a short squeeze," ING analyst Chris Turner says in a note. "We see 1.1880 as key intra-day resistance here above which we could be looking at a retest of 1.20," he says. GBP/USD rises 0.3% to 1.1851. ([e-mail])

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UK Inflation Expected to Peak at 14.5% in January as Gas Prices Jump

0827 GMT - Inflation in the U.K. is expected to accelerate to a peak of 14.5% in January from July's 10.1% due to the recent leap in wholesale gas prices, Capital Economics chief U.K. economist Paul Dales says in a note. The British energy regulator Ofgem is expected to raise the utility price cap by around 80% for October rather than the 60% rise previously expected, pushing consumers' electricity and gas bills further up, he says. While inflation will most probably still fall in 2023, the average rate next year is likely to be 8.6% rather than 7.2% previously forecast, Dales says. "CPI inflation is unlikely to fall back to the 2% target until the start of 2024 at the earliest," he says. ([e-mail])

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Harbour Energy Seen With More Buybacks Ahead

0729 GMT - Harbour Energy looks set for more share buybacks ahead after increasing its current program to $300 million from $200 million in its first-half results, Jefferies' analysts Mark Wilson and Ruben Dewa say in a research note. The oil-and-gas company posted excellent interim results, with net profit of $984 million materially beating company-compiled consensus of $495 million, they say. This in turn helped secure a material beat for net debt, which was $1.1 billion compared with expectations of around $1.5 billion, they add. Jefferies has a buy rating on the stock with a target price of 490 pence. Shares trade up 9.8% at 472.70 pence. ([e-mail])

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Delivery Hero Stock Has Potential as Company Moves Toward Profitability

0721 GMT - Delivery Hero posted a wider net loss for the first half, but shares of the German food-delivery company have the potential to re-rate as the firm moves into profitability next year, RBC Capital Markets analysts write in a note to clients. "Our confidence in Delivery Hero's path to profitability ultimately stems from its operational execution, which we believe is leading in the industry. Delivery Hero's scale, highly predictable cohort behavior and material future cash flows make valuation look compelling at these levels," the analysts write. Delivery Hero shares trade 1.3% lower at EUR47.25. ([e-mail]; @MauroOrru94)

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Farfetch Played a Strong Hand in YNAP Deal With Richemont

0623 GMT - Farfetch looks to have called a lot of the shots in the deal with Richemont to take a stake in e-commerce business YNAP, analysts at Jefferies write in a note. The British-Portuguese luxury online-marketplace company will acquire nearly half of YNAP--with the possibility of taking a 100% stake in the future--in exchange for Farfetch shares transferred to Swiss group Richemont. From the deal, Richemont achieves the long-awaited deconsolidation of YNAP, though Farfetch arguably gets more: not only the YNAP business, but e-concessions from Richemont brands and the group as a major shareholder and, essentially, recapitalization of YNAP for free by Richemont, Jefferies says. With few other players apparently interested in taking a stake, it looks as if Farfetch was able to largely call the shots, the bank says. ([e-mail]; @joshualeokirby)

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(END) Dow Jones Newswires

08-25-22 1204ET