BOE Rates May Not Rise Enough to Keep Pound Supported

The market's expectations suggest the Bank of England won't raise interest rates enough to keep sterling supported, Commerzbank says. The BOE's key rate isn't expected to exceed 1% in the foreseeable future, compared to 0.1% currently, Commerzbank currency analyst Ulrich Leuchtmann says. That isn't "active" monetary policy that delivers sterling-positive real interest rates adjusted for inflation, he says. "It seems more like a very marginal move away from extremely expansionary monetary policy," he says. "That is not sufficient to act as a sustainable GBP-positive argument." The BOE holds its next decision on Thursday with only a "tiny minority" of analysts expecting it to lift rates, with many expecting the central bank to hold off until February, he says. 


 
Companies News:

Byotrol Appoints Chris Sedwell as CFO

Byotrol PLC said Monday that it has appointed Chris Sedwell as its new chief financial officer.

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Rockhopper Exploration CFO Stewart MacDonald to Step Down

Rockhopper Exploration PLC said Monday that Chief Financial Officer Stewart MacDonald intends to step down and join another company.

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Triple Point Income Sells Achnacarry Hydro Ltd. for GBP10.7 Mln

Triple Point Income VCT PLC said Monday that it has completed the disposal of hydroelectric asset Achnacarry Hydro Ltd. for 10.7 million pounds ($14.2 million).

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Hawkwing Withdraws From Internet Fusion Group Takeover

Hawkwing PLC said Monday that it has withdrawn from reverse-takeover negotiations with Internet Fusion Group Ltd.

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Aptamer Group Prices London IPO at 117 Pence a Share; Trading Expected Dec. 22

Aptamer Group PLC on Monday priced its initial public offering on London's junior AIM at 117 pence a share, implying a market capitalization of 80.7 million pounds ($107.1 million) when trading starts on Dec. 22.

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Shell to Acquire Toll Products Company MSTS Tolls

Royal Dutch Shell PLC said Monday that it has agreed to buy tolls payment products company MSTS Tolls from TreviPay.

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Gear4Music Chief to Sell Significant Stake at Discounted Price

Gear4Music (Holdings) PLC said Monday that Chief Executive Andrew Wass intends to sell around 7.9% of the company's issued share capital at a discounted price.

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Royal Mail to Sell Remaining Nine Elms Plots for GBP111.2 Mln

Royal Mail PLC said Monday that it has exchanged contracts to sell the last three remaining plots on its Nine Elms Park Site to London Square for 111.2 million pounds ($147.6 million).

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Petra Diamonds, Tanzanian Government Reach Deal on Williamson Mine

Petra Diamonds Ltd. said on Monday that it has reached an agreement with the government of Tanzania to restructure the capital of the Williamson diamond mine.

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VK Co. Appoints Vladimir Kirienko as CEO for Russia

VK Co. Ltd. said Monday that Vladimir Kirienko has been appointed chief executive officer for Russia with immediate effect, replacing Boris Dobrodeev.

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J.D. Wetherspoon Expects to Be Loss-Making or Marginally Profitable in 1H

J.D. Wetherspoon PLC said Monday that it might be loss-making or marginally profitable in the first half of the financial year ending July 31.

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Bidstack Group Partners with Three Additional Games

Bidstack Group PLC said Monday that it has added three new titles to its portfolio.

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Capita Shares Fall on Lower Revenue in Experience Division -- Update

Shares in Capita PLC fell Monday after the company said revenue at its Capita Experience division fell 8% in the 11 months to Nov. 30, adding that the impact of the pandemic on its portfolio division slowed top-line growth in 2021.

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UK Watchdog to Probe Ritchie Bros. Acquisition of Euro Auctions

The U.K.'s competition regulator said Monday that it is inviting comments on the expected acquisition of Euro Auctions Group by Ritchie Bros. Auctioneers Inc. over concerns that it could substantially reduce competition. 


 
Market Talk:

BOE Unlikely to Raise Bank Rate This Week Due to Omicron Risks

1339 GMT - The Bank of England is unlikely to raise its base interest rate on Thursday at its last policy meeting of the year due to risks stemming from the spread of the Omicron variant of Covid-19, says Bank of America. Analysts say they expect "no change" in monetary policy but note "it will be a close call." Market participants were largely expecting a 15-basis point rise to be announced this Thursday before the identification of a new Covid-19 strain, known as Omicron, in late November. "Omicron tips balance in favour of hold," they say. The base rate is 0.1%.

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Costain's GBP53.5 Mln Payment to National Grid Seen as Disappointing

1300 GMT - The news that Costain will make a GBP53.5 million payment to National Grid next month over its P&H contract is disappointing, Peel Hunt says. While a proportion of this figure will be recoverable following a further contract process in the first quarter of 2022, the U.K. brokerage says uncertainty will persist for a number of months and that shares will be weaker while investors evaluate the news. Peel Hunt has placed its recommendation and target price for Costain under review. Shares trade down 4.3% at 49.5 pence.

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Purplebricks Drops After Flagging Communication Issue

1233 GMT - Purplebricks Group shares slump 19% after the U.K. online estate agent said it would delay its first-half results and book provisions for potential future claims, after identifying an issue in how it communicates with tenants on behalf of landlords. The company said it was correcting the matter, related to deposit registrations, and early provisional estimates suggested a potential financial risk of between GBP2 million-GBP9 million. "The longer-running impact could be worse if it leads to an exodus of landlords away from the platform," AJ Bell Investment Director, Russ Mould says.

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UK Shorter-Dated Gilts Likely to Rally if BOE Holds Policy, Says Saxo

1224 GMT - U.K. shorter-dated government bonds could rally if the Bank of England keeps its base interest rate unchanged at 0.1% this Thursday, says Saxo Bank. "The BOE might not deliver on a 10bps interest-rate hike this week as members are divided concerning Covid restrictions," head of FX strategy John Hardy says. It's possible that if the BOE doesn't raise rates, the gilt yield curve will be steepening, with short-term gilts "gaining the most as the market pushes back on next year's rate expectations," he says. The two-year gilt yield trades last at 0.405%, down from 0.553% in Dec. 1, according to Tradeweb.

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SThree's 2022 Performance Could Face Headwinds

1218 GMT - SThree earnings-per-share consensus forecasts for 2022 could decline due to investment in infrastructure and talent, Jefferies says. For 2021, SThree is expecting to deliver a pretax profit in line with the market forecasts, Jefferies says, but adds that other recruitment companies have been beating expectations. Adding to headwinds is the surprise departure of Chief Executive Mark Dorman, who will leave for personal reasons, the brokerage says. Shares trade down 57.50 pence, or 10.5%, at 488.50 pence.

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FTSE 100 Set for Bullish Run, Gilts Look Mispriced, Jefferies Says

1143 GMT - Jefferies has a buy recommendation on the FTSE 100, but advises clients to cut exposure to U.K. government bonds. "The Bank of England is set to be one of the more hawkish developed market central banks in 2022 and the divergence of five year breakeven inflation expectations from Gilt yields suggests that the bond market is mis-priced," the brokerage says. This should be good news for the FTSE 100 as U.K. corporate pricing power remains firm, it notes. "We remain bullish on the FTSE 100 within our global asset allocation," Jefferies says. (lorena.ruibal@wsj.com)

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Purplebricks Shares Plunge as Letting Errors Add to Uncertainty

1135 GMT - Shares in Purplebricks fall 19% after it delayed its first-half results following the discovery of a potential liability of GBP2 million-GBP9 million. The online estate agent said the issue was with letting-deposit registrations. This leaves the group vulnerable to claims from tennants or landlords, a potential liability that will need to be incorporated into the next financial results, Citi says. "The problem comes on the back of a number of issues which have depressed the share price. The further uncertainty that this creates is likely to have a disproportionate impact on valuation in the short term given that it adds to current levels of uncertainty at a time when market conditions are themselves challenging," the bank says.

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

(END) Dow Jones Newswires

12-13-21 0911ET