UK Gilt Yields Expected to Rise Further

The war in Ukraine hasn't prevented gilt yields from rising further and they are likely keep climbing, says Capital Economics. Government bond yields are well above pre-war levels, which is "partly due to higher commodity prices having pushed breakeven inflation rates higher," the London-based consultancy says, adding that it also reflects the rise in interest rate expectations. It forecasts 10-year yields will rise to 1.75% this year and to 2.25% next year, though it sees a risk they could rise further and sooner. The 10-year gilt yield trades last at 1.665%, according to Tradeweb. 


 
Companies News:

Pearson Shares Fall as Apollo Withdraws Takeover Plans

Shares in Pearson PLC fell on Wednesday after Apollo Global Management Inc. confirmed that it doesn't intend to make an offer for the textbook publisher after a third takeover proposal was rejected this week.

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Symphony Environmental Technologies 2021 Pretax Loss Widened on Higher Costs

Symphony Environmental Technologies PLC said Wednesday that its 2021 pretax loss widened after booking higher costs, and that the war in Ukraine may hurt future raw material costs as most of its products are derivatives of oil and gas.

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Intercede Shares Rise on US Government Order

Shares in Intercede Group PLC rose Wednesday after the company said it has received an order from the U.S. Federal Government worth $3.4 million.

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Pearson Shares Fall as Apollo Withdraws Takeover Plans

Shares in Pearson PLC fell on Wednesday after Apollo Global Management Inc. confirmed that it doesn't intend to make an offer for the textbook publisher after a takeover proposal that valued it at around 6.5 billion pounds ($8.51 billion) was rejected earlier this month.

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Michelmersh Brick Holdings 2021 Pretax Profit Rose; Raises Dividend

Michelmersh Brick Holdings PLC said on Wednesday that pretax profit for 2021 rose, on the back of a robust gross margin performance, and that it raised its dividend payout.

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Team17 2021 Pretax Profit Rose; Warns on 2022 Revenue Hit From Ukraine War

Team17 Group PLC said Wednesday that 2021 revenue and pretax profit rose, but warned that the war in Ukraine is forecast to hit 2022 revenue by around 4 million pounds ($5.2 million).

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Electrocomponents Sees FY 2022 Revenue, Adjusted Operating Profit Margin, at Top End of Consensus

Electrocomponents PLC said on Wednesday that it expects revenue and adjusted operating profit margin for fiscal 2022 to be at the top end of consensus, and that it has continued to perform at the same rate as that reported on March 9.

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Bloomsbury Sees FY 2022 Trading Materially Ahead of Upgraded Expectations

Bloomsbury Publishing PLC said Wednesday that trading for fiscal 2022 is materially ahead of upgraded expectations after strong sales and the mitigation of print supply chain issues.

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Keywords Studios 2021 Pretax Profit Rose; Declares Dividend

Keywords Studios PLC said on Wednesday that 2021 pretax profit rose driven by higher demand, as it expects 2022 to be a strong year for new game launches.

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Polymetal Suspends, Delays Projects in Russia

Polymetal International PLC said Wednesday that it is delaying or suspending some of its projects in Russia and reducing its exploration budget. 


 
Market Talk:

Keywords Studios' Demand Could Benefit From Videogame Industry Growth Trend

1152 GMT - Keywords Studios' 2021 earnings showed that the company has a wide exposure to an attractive industry, but at the same time it doesn't carry the same risk of a developer or publisher, Shore Capital says. The U.K. investment group sees an increasing trend in game development and believes that outsourcing will remain a key part of the industry, which should make demand for Keywords' services stay at high levels. "Given the group's track record, extensive client list and global exposure, we see a good read-across for demand," Shore says. Shares are up 6.2% at 2,484.0 pence.

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UK Energy Firms May Come Under More Stress, Hitting Bonds

1135 GMT - U.K. energy firms may come under more stress, hitting their bonds, though further spread widening may be small, Capital Economics says. "High wholesale utility prices and a reversal in the recent rises in oil prices over the next couple of years will probably prompt more firms in the energy sector to come under stress," the London-based consultancy says. Spreads in the energy sector have continued to rise in recent weeks but any further rises will be "fairly small," it says. It has already seen a small narrowing in corporate bond spreads over the past week and stresses that survey data suggest the economy has been resilient to the war in Ukraine so far.

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Experian Faces Possible Economic Pressure in US

1134 GMT - Experian faces potential U.S. economic hurdles, Citigroup says, downgrading the credit-checking firm to neutral from buy and its price target to 3146 pence from 4150 pence. Experian's North-American data business is susceptible to possible pressure on U.S. real disposable incomes and likely fewer housing transactions in 2022, Citi says. "We believe cyclical headwinds are likely to make it difficult for the North-American data business to achieve consensus FY23E organic growth of 8.2%," Citi analysts say. "In an environment in which U.S. housing transactions reduce year-over-year, we think 4% is more reasonable. We don't believe consensus earnings estimates can continue to rise." Still, Citi says Experian's cash-generative nature and strong organic-growth track record remain attractive. Shares fall 3.6% to 2958 pence.

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Bloomsbury Publishing's Strength Continues, Peel Hunt Says

1100 GMT - Bloomsbury Publishing goes from strength to strength as a first-rate publisher and has delivered on the ambitious target for Bloomsbury Digital Resources of GBP15 million in revenue and GBP5 million in profit by 2022, Peel Hunt says. The U.K. brokerage increases its revenue forecast by 5% to GBP220 million and pretax profit will increase by around 15% to GBP25.3 million. Demand strength at year-end should also continue into 2023, it adds. Peel Hunt has a buy rating on the stock and increases its target price from 400 pence to 425 pence. Shares trade up 9.6% at 400 pence.

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UK Corporate Bond Spreads Expected to Fall in Coming Years

1057 GMT - U.K. corporate bond spreads are likely to fall in the coming years after the recent selloff triggered by Russia's invasion of Ukraine sent spreads wider, says Capital Economics. "The lasting effects on U.K. corporate bonds from the war in Ukraine has so far been wider credit spreads," says the London-based consultancy, adding that it still expects spreads to narrow slightly over the next couple of years. The risk, however, is that higher energy costs, higher interest rates and weaker demand eat into profits and prompt credit spreads to widen further, it says.

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Antofagasta Has Rallied, But Inflation and Country Risks Remain

1044 GMT - Antofagasta, like other mining stocks, has rallied recently on the back of higher commodity prices. However, RBC Capital Markets warns that cost inflation will hurt margins, and copper-supply growth and potential weaker demand could drive copper prices lower in the near term. In addition, although new Chilean president Gabriel Boric is governing from the center, tax and royalty increases in Chile remain highly probable in some form, and the constitutional reform process remains a bigger risk, the Canadian bank says. "Antofagasta is a well run company but following the recent rally we move our recommendation to underperform from sector perform," RBC says, trimming the target price to 1,350 pence from 1,450 pence.

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Electrocomponents Seen in a Strong Position to Invest, Drive Profit Growth

1041 GMT - Electrocomponents has set out a refreshed and rebranded strategy in order to achieve its targets, UBS says. The company intends to drive stronger revenue growth enhanced by strategic acquisitions, achieve a mid-teens adjusted Ebita margin and maintain at least 20% return on capital employed, versus UBS estimates of around 25%. "With current trading remaining robust, implying small further upgrades to consensus, we see the company in a strong position to invest & drive further profit growth," the bank says. UBS rates the stock buy and has a 1,375 pence target price.

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Burford Looks High Value Amid Strong 2021 Earnings

1033 GMT - Burford Capital's value is too good to ignore, Peel Hunt says. The finance and asset-management company's value has been supported by its earnings for 2021, as deployments are growing fast and new solutions are continuously evolving, Peel Hunt says. "Covid-19 delays are reducing and [the] Petersen [case] should make visible progress this year," the U.K. brokerage adds, noting that the only downside to the company's value that it sees would be linked to Petersen failing. Peel Hunt maintains its buy recommendation on the stock and has a target price of 741 pence a share.


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

(END) Dow Jones Newswires

03-30-22 0853ET