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FTSE Drops, Sterling Expected to Gain on Prospect of Rate Rise

10/06/2021 | 06:11am EST

Sterling Expected to Gain on Prospect of Rate Rise

Sterling will likely strengthen in coming months as the Bank of England moves closer to raising interest rates, UBS Global Wealth Management says. The BOE's last meeting suggests the central bank could raise rates earlier than the UBS forecast for a 15-basis points increase in May 2022, UBS analysts say. That puts sterling "clearly in the camp" of currencies that will benefit from central banks normalizing monetary policy before others in the G-10, they say. Sterling's recent pullback on soaring U.K. inflation, led by supply constraints, should also prove transitory, they say. Moreover, economic data should improve, they say. By December UBS expects GBP/USD to rise to 1.39 from 1.3565 currently and EUR/GBP to fall to 0.83 from 0.8507.

 
Companies News: 

Allied Minds Books Lower 1H Loss

Allied Minds PLC said Wednesday that its net loss narrowed in the first half of the year on higher revenue, and that it is positive about the prospects of its portfolio companies and the group as a whole.

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Pure Gold Mining to Raise C$3.5 Mln Via Share Issue to AngloGold Ashanti

Pure Gold Mining Inc. said Wednesday it is raising 3.5 million Canadian dollars (US$2.8 million) via a share issue to AngloGold Ashanti Ltd. and will use the money to fund operations at the Red Lake project in Ontario, as well as for general corporate purposes.

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Ascential Seeks to Double Digital Commerce Revenue Run Rate by 2024

Ascential PLC on Wednesday set a target to more than double the current revenue run rate of its digital commerce business by 2024 on an organic basis.

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Watchdog Launches Probe into Mazars' Audit of French Connection -- Financial News

Of Financial News

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Xaar Conditionally Accelerates Sale of Its Interest in Xaar 3D

Xaar PLC said Wednesday that it has conditionally agreed the terms to accelerate the sale of its interest in Xaar 3D to its partner Stratasys Ltd. for an initial consideration of $12.8 million.

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Prairie Mining Shares Climb on A$9 Mln Deal to Acquire Copper Project in Greenland

Shares in Prairie Mining Ltd. jumped Wednesday after it signed a deal to acquire up to an 80% stake in the Arctic Rift copper project in Greenland.

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Arix Bioscience's Interim CEO Robert Lyne Becomes Permanent CEO

Arix Bioscience PLC said Wednesday that its interim Chief Executive Robert Lyne has been named the company's permanent CEO with immediate effect.

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IP Group CEO Alan Aubrey, Investment Officer Mike Townend Retire From Board

IP Group PLC said Wednesday that Chief Executive Alan Aubrey and Chief Investment Officer Mike Townend are retiring from the board with immediate effect, following the recent initial public offering of Oxford Nanopore Technologies PLC.

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Schroder Real Estate Investment Trust's Lorraine Baldry to Step Down as Chairwoman in 2022

Schroder Real Estate Investment Trust Ltd. said Wednesday that Lorraine Baldry will retire as chairwoman of the company at the end of July 2022, when Alastair Hughes will be appointed chairman.

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Sirius Real Estate's Comparative Annualized Rent Roll Rose in 1H FY 2022

Sirius Real Estate Ltd. said Wednesday that its like-for-like annualized rent roll rose 2.5% in the first half of fiscal 2022, and that its performance was in line consensus and management expectations for the full year.

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European Energy Acquires Wind and Solar Assets From Vattenfall

STOCKHOLM--Swedish state-owned utility group Vattenfall Group AB said Wednesday that Danish solar and wind farm developer European Energy has acquired eight wind and solar assets in Denmark, Germany, the Netherlands and the U.K.

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Cineworld Chief on Meme Stocks, Competing With AMC and the Cinema Industry's Pandemic Recovery

Cineworld Group Chief Executive Mooky Greidinger can be described as the mirror image of Adam Aron, his meme-loving counterpart at rival AMC Entertainment Holdings Inc.

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Pod Point Is Set to Announce London IPO Next Week -Sky News

--Electric vehicle charging infrastructure network Pod Point intends next week to confirm plans to float on the London stock exchange, with the company's shares making their trading debut in early November, according to Sky News.

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VTB Bank 9-Month Net Profit Nearly Quadrupled

VTB Bank on Wednesday reported that its net profit rose above 200 billion rubles ($2.77 billion) for the first time in the first nine months of the year.

 
Market Talk: 

Topps Tiles Shares Look Cheap After Strong 4Q Update

1108 GMT - Shares in Topps Tiles edge 0.3% higher after the U.K. home-improvement retailer forecast better-than-expected full-year profit as it benefited from a buoyant U.K. market. While percentage gross margins are lower than last year due to higher shipping costs, product-related changes and continued investment, Topps said it expected adjusted pretax profit in the year to Oct. 2 to slightly exceed consensus forecasts. Peel Hunt, which has Topps as a corporate client, says revenue could still top expectations. "The shares remain undervalued. Buy," Peel Hunt analysts say.

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Not All Western Central Banks Plan to Tighten Policy Soon

1027 GMT - Major central banks in western economies are generally tilting towards removing some of their hefty monetary stimulus, but not all are so keen, says Amundi. Norges Bank was the first major western central bank to raise interest rates after the pandemic emergency. The U.S. Federal Reserve signaled a faster taper and that interest rates would likely rise earlier than previously expected, while the Bank of England signalled a wind-down of quantitative easing and possible rate rises. The European Central Bank is more cautious, however, and the tilt towards tightening "is not unanimous," says Amundi, adding: "we expect more inconsistency in the pipeline." It expects continued stimulus from the Bank of Japan as it's too early for Japan to discuss normalization.

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Tesco's 'Decisive' 1H Report Supports Positive Views

1005 GMT - Shares in Tesco climb 4.4% after reporting higher profits for the first half, announcing a new capital framework and upgrading guidance. This is the first financial year led by the new CEO and CFO, and this decisive report emphasizes ING's positive view on Tesco, ING analyst Alyssa Gammoudy says. "We continue to like Tesco fundamentally and we believe there is still some tightening potential in its credit curve," she says. Tesco has reduced net debt by GBP1.7 billion since the previous financial year ended in February, reflecting strong cash flow. The grocer is now targeting a net debt-to-Ebitda ratio of between 2.3 and 2.8 times.

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Tesco Performing Remarkably Well Ahead of Testing Christmas Period

0954 GMT - Considering that Tesco is now lapping an incredibly busy period in 2020, the grocer is doing remarkably well, AJ Bell analyst Russ Mould says after the company reported results for the six months ended in August. A year on, sales are higher still as Tesco has grown market share, and operating profit growth shows that it is dealing with cost pressures very well, Mould says. Christmas will be a testing time for the business, given fears of shortages during the festive period, but Tesco should be feeling a lot more comfortable about dealing with such pressures given its strong performance during the pandemic, the analyst adds.

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Supply Issues, Inflation Remain a Threat to UK Supermarkets

0931 GMT - Tesco's improved profits for the six months to Aug. 28 show how supermarkets are seeing Covid-19 costs ebb away, eToro analyst Mark Crouch says. The industry seems to be in far better shape than it was 12 month ago, although there is plenty of uncertainty as we enter the all-important Christmas season, Crouch says. "While Tesco is bullish about its prospects, and has upgraded its full-year forecasts, there is no getting away from the fact that supply bottlenecks and price inflation threaten to chip away at profit in the short-term," he warns.

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UK Construction Activity Growth Slows in September Amid Supply Chain Crisis

0918 GMT - U.K. construction activity expanded at a slower pace in September as the sector suffered disruptions from unavailable transport, a severe lack of materials and labor shortages, according to a IHS Markit/CIPS survey. The construction purchasing managers' index fell to 52.6 in September from 55.2 in August, marking the weakest pace of recovery in eight months even as a level above 50 indicates growth. "September data highlighted a severe loss of momentum for the construction sector as labour shortages and the supply chain crisis combined to disrupt activity," Markit director Tim Moore says. "The volatile price and supply environment has started to hinder new business intakes as construction companies revised cost projections and some clients delayed decisions on contract awards."

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

(END) Dow Jones Newswires

10-06-21 0811ET

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