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FTSE Edges Lower, Rates Traders to Focus on Data Amid Muted Gilt Supply

11/15/2021 | 06:36am EST

UK Rates Traders to Focus on UK Data Amid Muted Gilt Supply

U.K. rates traders are likely to focus on U.K. data releases this week amid muted government bond supply, says Mizuho. "This week's attention will be focused on the UK's labour market data release on Tuesday and the CPI on Wednesday," analysts at the bank say, adding that an upside surprise seems possible due to the rising energy costs in October. Gilt net supply will be nearly flat, with a tap of the January 2046 gilt scheduled for Tuesday. "The supply lull in rates markets will make it difficult to short cash rates outright" in anticipation of the strong U.K. data, they say. They prefer to express an outright short position in the 20-year rate of interest starting in 10 years time.

 
Companies News: 

Kainos Says 1H Pretax Profit Increased; Is Confident About Full Year

Kainos Group PLC on Monday reported an improved pretax profit for the first half of fiscal 2022 and said it remains confident about the current and future years.

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Power Metal Resources' Shares Climb on Raising of GBP1 Mln via Share Placing

Shares in Power Metal Resources PLC on Monday rose after the company said it raised 1.1 million pounds ($1.5 million) via a share placing.

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MTI Wireless Edge Nine-Month Pretax Profit Rose on Higher Revenue

MTI Wireless Edge Ltd. on Monday reported a higher pretax profit for the first nine months of 2021, and said it is well-placed going forward as it has won several contracts that will increase future orders.

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Ascential Buys WhyteSpyder

Ascential PLC said Monday that it has acquired WhyteSpyder LLC, an ecommerce software and digital merchandising business.

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Shell Proposes Single-Share Structure, UK Tax Residence

Royal Dutch Shell PLC on Monday laid out plans to simplify its share structure, ending its current dual-share class, and to move its tax residency to the U.K.

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Shell Plans to Scrap Dual Share Structure to Help Navigate Energy Transition

Royal Dutch Shell PLC said it planned to consolidate its dual British and Dutch structure into a single U.K.-based entity, a move the oil giant said would help it navigate the transition to low-carbon energy.

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Induction Healthcare Appoints Guy Mitchell as CFO

Induction Healthcare Group PLC said Monday that it has appointed Guy Mitchell as chief financial officer with immediate effect.

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Gfinity FY 2021 Pretax Loss Narrowed on Lower Costs

Gfinity PLC on Monday reported a narrowed pretax loss for fiscal 2021 as it booked less costs after its restructuring.

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Cairn Energy to Start GBP20 Mln Share-Buyback Program

Cairn Energy PLC said Monday that it plans to buy back up to 20 million pounds ($26.8 million) worth of its shares.

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SkinBioTherapeutics Launches Discounted Share Placing

SkinBioTherapeutics PLC said Monday that it has placed 3.6 million shares with new and existing institutional investors at a discounted price of 55 pence per share.

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Ruffer to Raise Up to GBP166.6 Mln for Acquiring Investments

Ruffer Investment Co. said Monday that it will raise up to 166.6 million pounds ($223.4 million) in an open offer, offer for subscription and intermediaries offer, for acquiring investments.

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Eurowag Sees FY 2021 Revenue in Line With Views; To Buy WebEye for Up to EUR55.9 Mln

WAG Payment Solutions PLC said Monday that it expects to deliver fiscal 2021 revenue in line with medium-term guidance and that it will buy WebEye Telematics ZRT for up to 55.9 million euros ($64 million).

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Kin & Carta Divests Last Two Venture Businesses for GBP18.6 Mln

Kin & Carta PLC said Monday that it has divested its two remaining venture businesses Edit Agency Ltd. and Relish Agency Ltd. for 18.6 million pounds ($24.9 million) in cash before expenses.

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Diurnal Group Appoints Anders Harfstrand as Nonexecutive Chairman

Diurnal Group PLC said Monday that it has appointed Anders Harfstrand as nonexecutive chairman with immediate effect, replacing Sam Williams, who has been interim chairman since March 2020.

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Surgical Innovations Appoints New CFO; Reduces Board Members

Surgical Innovations Group PLC said Monday that it has appointed Charmaine Day as chief financial officer with immediate effect.

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Nightcap FY 2021 Pretax Loss Widened on Higher Costs

Nightcap PLC on Monday reported a widened pretax loss for financial 2021 as it booked higher costs.

 
Market Talk: 

EasyJet May Have to Cut Fares to Maintain Demand, Slots

1111 GMT - EasyJet shares fly 0.6% lower to 594 pence after Kepler Cheuvreux cuts its recommendation on the European budget carrier to reduce from hold and its price target to 460 pence from 605 pence. The brokerage says it considers deteriorating traffic trends, coupled with slot requirements at European capacity-constrained airports, to be increasingly likely during the winter flight schedule. "In such a scenario, we consider easyJet to be the most vulnerable company in our coverage," Kepler analysts say. "We expect easyJet to operate at least 50% of its pre-crisis capacities during the winter flight schedule in order to keep its portfolio of slots at capacity-constrained airports. We see risk that it will have to incentivize demand with fare discounts."

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New Shell Structure Won't Change Much for Investors

1104 GMT - Shell's proposed changes to its share structure and tax residence won't change much for investors, aside from the fact that the shares they hold will no longer come with a 'Royal' designation, Hargreaves Lansdown analyst Laura Hoy says. Ultimately, the new structure would be a net positive for shareholders as it will streamline the company and make it easier to manoeuvre moving forward, she says. "The long-term growth story for Shell still rests heavily on the oil price. For now, buoyant oil prices are keeping the group's cash coffers topped up, which has had a positive impact on debt and given the group the means to boost shareholder returns."

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Shell May Suffer From the Netherlands' Withholding Tax

1058 GMT - Shell is proposing to move its tax residency and board to the U.K., alongside a simplification of its share structure. To what extent the oil-and-gas company will suffer from plans to put a fine on companies leaving the Netherlands due to the withholding tax isn't known yet, as there are still discussions going on about whether it is possible under EU legislation, ING says. Shell's plans weren't fully unexpected, but they are certainly important, the bank says. The changes are to be voted at a general meeting and require 75% of favorable votes, which could still result in an interesting discussion about the decision, ING notes.

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Pound Seen Rising on UK Data as Traders Brush Aside Brexit

0941 GMT - Sterling could strengthen as U.K. economic data later this week should support the case for an imminent interest rate rise while investors shrug off Brexit risks, ING says. U.K. jobs data on Tuesday and inflation data on Wednesday should make markets and the Bank of England "more comfortable with a December rate hike call," ING analysts say. Meanwhile, the market is reluctant to price in any Brexit-related risk premium on sterling despite the EU's threats to retaliate if the U.K. suspends parts of the Northern Ireland protocol, they say. "We see the balance of risks tilted to the downside in EUR/GBP in the near term, with room for a move below 0.8500." EUR/GBP is flat at 0.8531. (

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Serco Gains From More Coronavirus-Linked Work

0937 GMT - Shares in Serco rise 2.8% after the support-service provider raised its 2021 guidance on the back of higher volumes of work for governments related to the coronavirus pandemic. "Most of us will be mightily sick of the pandemic by now, but for Serco there has been a silver lining, as it upgraded forecasts thanks to Covid 19-related work running for longer than expected," AJ Bell investment director Russ Mould says. "More telling for the company's transformation away from the ugly duckling of a business of a few years ago is how much of this work is translating as free cash flow."

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Shell Rises After Share Structure Simplification, UK Tax Residency Proposals

0919 GMT - Shares in Royal Dutch Shell rise 2.2% after the energy company proposed to simplify its share structure, ending its current dual-share class, and to move its tax residency to the U.K. Analysts at Jefferies say they see merits in the proposed restructuring. Among other benefits, the changes would increase Shell's ability to buy back shares, which was until now constrained by Class B shares liquidity, the bank says. And this is an important point ahead of the start of the $7 billion buyback program related to the sale of the Permian assets, and in the context of a potential increase in size of the ordinary buyback, Jefferies says.

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

(END) Dow Jones Newswires

11-15-21 0636ET

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