FTSE Falls, Pound Seen Rising in 2nd Half on Favorable Investment Flows

Pound Seen Rising in 2H on Favorable Investment Flows

Sterling should strengthen in the second half, supported by favorable investment flows and the Bank of England's traditional approach to monetary policy, Bank of America forex strategist Kamal Sharma says. "Investment flows remain critical to the prospects for GBP and the signs remain favorable: another strong print for foreign gilt buying; the U.K. continues to attract the largest amount of cross-border merger and acquisition flows in Europe; U.K. equities are yet to reclaim their post-pandemic levels compared to other global indices; and survey evidence suggests investors believe U.K. assets remain undervalued," Sharma says. Meanwhile, the BOE is taking a conventional policy approach and has signaled it won't tolerate persistently high inflation, thus fostering certainty, Sharma says.

 
Companies News: 

Treatt CFO Richard Hope to Retire in One Year

Treatt PLC said Wednesday that Chief Financial Officer Richard Hope will retire from the business effective June 30, 2022, and that a process to find a successor will start shortly.

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Baltic Classifieds Shares Rise in London Market Debut

Shares of Baltic Classifieds Group PLC rose 3% as the company started conditional trading on the London Stock Exchange on Wednesday, implying a market capitalization of 850 million pounds ($1.18 billion).

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Zephyr Energy Says Initial Results From Utah Project to Drive Potential Upside

Zephyr Energy PLC said Wednesday that drilling will start at its flagship project in the Paradox Basin, Utah, after results from the recent evaluation work suggest scenarios for considerable upside.

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TP Group CEO to Step Down

TP Group PLC said Wednesday that Chief Executive Officer Phil Cartmell will step down, effective from the closure of this business day, and has appointed an interim CEO until a successor is found.

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Eden Research Shares Fall on Widened 2020 Pretax Loss; 2021 Revenue Warning

Shares of Eden Research PLC fell as much as 15% in early trade Wednesday after the company reported a widened pretax loss and lower revenue for 2020 and said that revenue this year is likely to be hit by supply-chain-related issues.

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Bermele Acquires Premium-Beverages Company for GBP24.4 Mln

Bermele PLC on Wednesday said that it has agreed to acquire premium-beverages company East Imperial Pte. Ltd. for 24.4 million pounds ($33.8 million).

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Primorus Investments Names Matthew Beardmore as CEO

Primorus Investments PLC said Wednesday that it has appointed Matthew Beardmore as chief executive officer, effective Thursday.

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Hurricane Energy Shares Rise as Chairman Resigns

Alan John Wright, a director nominated by shareholder Crystal Amber, will replace Mr. McTiernan on an interim basis

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UKOG 1H Loss Widened

UK Oil & Gas PLC on Wednesday reported a widened loss for the first half of the fiscal year.

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ADM Energy 2020 Revenue Plunged on Lower Oil Production

ADM Energy PLC said Wednesday that its revenue fell in 2020 on the back of lower oil production.

 
Market Talk: 

Indivior Shares Rise After 1H Tops Hopes

1242 GMT - Shares in Indivior rise 4.7% to 152 pence after the producer of opioid-use disorder treatments raised its 2021 revenue and profit expectations after a better-than-expected first half. The company said adjusted pretax profit is expected to be significantly higher than previously forecast, but didn't provide any figures. Numis Securities has a buy recommendation and 320p price target on the stock. "The continued resilience of Suboxone Film (daily) and strong performance from Sublocade (monthly) in the U.S. are the main drivers of the upgraded expectations," Numis analyst Paul Cuddon says.

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Workspace Shares Don't Reflect Its Recovery Potential, RBC Says

1225 GMT - Workspace Group's shares aren't pricing in its recovery prospects, says RBC Capital Markets, increasing its recommendation on the U.K. office provider to outperform from sector perform. Workspace's share-price performance since the pandemic started reflects the negative impact on its business from its flexible leases, but none of the potential for a strong recovery, RBC says. "Its business is well-placed for such a recovery in our view, something that doesn't appear to be reflected in consensus forecasts," RBC analyst Julian Livingston-Booth says. "We increase our price target by 40% to 1,050p," he adds.

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Delta Coronavirus Concerns Weigh on Airline Bonds

1215 GMT - Concerns around the rapid global spread of the highly transmissible Delta virus variant threatens to hinder the European summer holiday season, weighing on bonds of tourism and air transport companies, Commerzbank says. "Spreads were little changed to slightly tighter overall [on Tuesday], but fears of Delta fallout continue to weigh on tourism and transport-related names," head of corporate credit research Marco Stoeckle says. Lufthansa's and IAG's high-yield benchmark bonds were 5-10 basis points wider on Tuesday, around double the move among their investment-grade peers, he says. "Travel- and hospitality-related names should be first in line in terms of fundamental fallout of a fourth wave and could feel forced to revisit their fundamental rebuild or deleveraging plans," he says.

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Cairn Energy Faces Uncertainty Over Indian Tax Case

1143 GMT - Cairn Energy's attempts to recover cash linked to a tax dispute with India still face uncertainty, says Berenberg, cutting its recommendation on the oil company to hold from buy and reducing its price target to 170 pence from 200 pence. Last December, Cairn was awarded $1.2 billion in damages, plus interest and costs, related to its arbitration with India's tax authorities, Berenberg says. However, the company is still trying to get the cash and it isn't clear how long that might take or how much it may eventually receive, Berenberg says. "Our updated price target assumes an implied chance of recovery of 30%--ie. $510 million, or 73p per share," Berenberg analyst James Carmichael says. Shares fall 3% to 147 pence.

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Dixons Carphone Shares Might Be Fully Valued

1059 GMT - Shares in Dixons Carphone jump 5% after the consumer-electronics retailer reported a swing to an annual pretax profit and said it was confident about its outlook. The company has weathered the coronavirus pandemic well, helped particularly by higher online sales, and an improved balance sheet has allowed it to restart its dividend, eToro says. Still, an easing in the group's share price from its mid-April high indicates that investors may consider it fully valued, the trading firm says. "We believe the re-opening boost is probably already baked into its share price, meaning investors should probably temper their short-to-medium term share-price expectations," says eToro analyst Mark Crouch.

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Brexit Drag on UK's Sovereign Outlook Eases But Credit Risks Remain, Says Scope

1052 GMT - Brexit's drag on the U.K.'s sovereign credit rating has eased but credit risks remain, says Scope Ratings. The most significant cliff-edge contingencies affecting the U.K. sovereign outlook from the country's split with the EU have dissipated, prompting Scope to revised the U.K.'s Outlook to Stable from Negative, affirming the AA ratings onJune 25. This is partly because of "exhibited resilience since the [2016] referendum in sterling's status as a reserve currency," it says. However, Brexit risks remain, as a comprehensive deal on services is still pending, U.K.-based business may continue to relocate activities to the continent, Scotland may hold a second referendum on independence and the fallout from the Northern Ireland Protocol may intensify.

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City of London May Endure Long-Lasting Damage From Brexit

1045 GMT - The City of London is potentially facing long-lasting damage in awaiting definitive agreements with the European Union on financial services, says Scope Ratings. "The U.K. ultimately secured an EU deal for trade in goods where it has a trading deficit with the EU, but not one as comprehensive in services, where it stands to see a diminished trading surplus," says Eiko Sievert, a director at Scope, adding that this holds longer-term adverse consequences for the U.K.'s current account balance. U.K.-based businesses may continue to relocate some activities to the continent, he says. The service sector accounts for roughly 80% of the U.K.'s economy.

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Jadestone Energy Shows High Production-Growth Potential

1032 GMT - Jadestone Energy's strategy of mergers and acquisitions-led, South East Asia-focused growth has delivered five deals across four countries since its inception in 2016, growing production to more than 20,000 barrels of oil equivalent a day, Jefferies says. In addition, assuming that the development of its gas-development project offshore Vietnam proceeds, the company offers an 11% production compound annual growth rate between 2021 and 2025, the highest amongst Jefferies's coverage, the bank says. Moreover, Jefferies argues that Jadestone has shown excellent operational asset delivery on completed deals to date, and retains high working interests in most of its assets. The U.S. bank initiates coverage of the stock with a buy rating and a 100 pence target price.

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(END) Dow Jones Newswires

06-30-21 0903ET