BOE May Hold Rates But Pound Likely to Shrug Off Decision

The Bank of England may leave interest rates unchanged on Thursday but this isn't likely to have much impact on sterling, Argentex says. "The Bank of England's 'wait and see' approach---previously deeply unpopular--is likely to be the preferred option ahead of Thursday's meeting, given the resurgence in Covid-19 cases since the previous meeting in November," Argentex forex analyst Joe Tuckey says. Expectations for a rate rise on Thursday have "largely dissipated" due to coronavirus with more aggressive policy tightening anticipated in 2022 to compensate for these pauses, he says. That means sterling could "hold" following a decision to keep rates steady, he says. 


 
Companies News:

Altice UK Buys 585 Mln Further Shares in BT Group

Altice UK said Tuesday that it has acquired 585 million shares in BT Group PLC, increasing its stake to around 18% of the British telecommunications provider's issued share capital.

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Ocado 4Q Retail Revenue Fell on Changing Post-Lockdown Environment

Ocado Group PLC said Tuesday that it benefited from strong underlying demand in the fourth quarter of fiscal 2021, but that its retail revenue declined for the fourth quarter on a changing post-lockdown environment in the U.K.

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Ocado Wins Patent Trial Against Autostore

Ocado Group PLC said Tuesday that a U.S. International Trade Commission trial has found in favor of the company, with a chief administrative law judge ruling that it hasn't infringed any valid patent of Autostore Holdings Ltd.

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Rentokil Initial to Buy Terminix Global Holdings in $6.7 Bln Stock and Cash Deal

Rentokil Initial PLC said on Tuesday that it will buy Terminix Global Holdings Inc. for $1.3 billion in cash and 643.3 million new Rentokil initial shares in a deal that values the U.S. company at $6.7 billion.

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Joules Group Expects 1H Pretax Profit Below Market Expectations

Joules Group PLC shares were down 25% in early trade Tuesday after the company said it expects pretax profit for the first half of its fiscal 2022 to be below market expectations due to global supply-chain issues and inflationary pressures.

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Altus Strategies Raises GBP19.8 Mln; Shares Fall

Shares in Altus Strategies PLC fell Tuesday after the company said it has raised 19.8 million pounds ($26.2 million) via a discounted placing to new and existing institutional investors, as well as a subscription.

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Cohort Shares Fall on Widened 1H Loss, Lower Full-Year Expectations

Cohort PLC shares fell Tuesday after it said that its first-half pretax loss widened and that its full-year performance is expected to be below market expectations.

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Network Rail 1H Pretax Profit Slipped, Revenue Rose

Network Rail said Tuesday that its pretax profit slipped despite a rise in revenue in the first half of fiscal 2022.

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Stagecoach Sells Three Assets to ComfortDelGro for GBP8.8 Mln

Stagecoach Group PLC said Tuesday that it has agreed to sell its 35% Scottish Citylink stake and the retail and customer service activities of Megabus UK and Falcon for total proceeds of 8.8 million pounds ($11.6 million).

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National Express, Stagecoach Agree to Merger

Stagecoach Group PLC and National Express Group PLC said Tuesday that they have agreed to an all-share merger, creating a company worth around 1.9 billion pounds ($2.51 billion) based on their current market capitalizations. 


 
Market Talk:

Rentokil Initial Shares Slip After US Deal

1040 GMT - Rentokil Initial shares fall 3% after the pest-control and washroom-service group said it plans to buy Terminix Global Holdings Inc. in a deal valuing the U.S. company at $6.7 billion. Rentokil is paying a fairly big premium, though a significant part of that is accounted for by its own shares and the deal could boost the U.K. company's earnings, AJ Bell says. "The use of the word 'transformational' to describe the deal by Rentokil boss Andy Ransom may also be giving some investors pause for thought," AJ Bell's Investment Director Russ Mould says. "It's not hard to see the strategic rationale behind the move, but so-called transformational deals often transform the purchaser's prospects for worse rather than better."

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Joules Brand Remains Strong Despite Industry Challenges, Liberum Says

1032 GMT - Joules's disappointing cuts in its performance update for fiscal 2022 should be looked at as industry-wide challenges, Liberum says. The British lifestyle brand's margins are currently under pressure due to industry-wide supply-chain issues, which Joules expects to persist until at least the second half of the 2022 financial year. Liberum continues to be optimistic about Joules's medium-term outlook, as the company has reached 1.9 million active clients and keeps evolving into a premium brand. However, the U.K. investment bank downgrades its pretax-profit forecast for 2022 to GBP10.0 million from GBP15.0 million, and lowers its target price to 300 pence from 350 pence. Shares are down 46.5 pence, or 24% at 148.5 pence.

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Aberdeen Standard European Logistics Significantly Enhances Portfolio With Purchase

1015 GMT - Aberdeen Standard European Logistics Income's acquisition of a portfolio of newly built logistics properties in Madrid significantly enhances the scale of the company's portfolio to EUR730 million, Liberum says. The real-estate investment company's new Madrid portfolio offers scope for long-term rental growth from a high-quality tenant base, the brokerage says. Aberdeen has now deployed all of the proceeds from its GBP125 million equity raise in September, and the manager also has two additional assets under offer in the Netherlands and France, Liberum says. "Further equity issuance is likely in the near term, providing scope to achieve an investment grade rating and the opportunity to lower the cost of financing," the brokerage says. Shares are down 0.4% at 115.0 pence.

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BOE Likely to Hold Off Raising Rates Despite Strong Labor Data

1003 GMT - The Bank of England is set to hold off on raising interest rates this Thursday despite strong U.K. labor data, says Hugh Gimber, global market strategist at J.P. Morgan Asset Management. "With Omicron posing near-term risks to the growth outlook, and still much to learn about the real-world efficacy of vaccines, we expect policymakers to instead opt to keep rates on hold this week in the hope that the outlook has become clearer by February," he says. Barring the emergence of this new strain, today's U.K. labour market report would likely have been enough to convince the BOE to raise interest rates this week, as the unemployment rate continues to fall, he says.

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Altice Could Push for BT Infrastructure Separation After Stake Increase

0958 GMT - Altice UK could push for some form of infrastructure separation at BT to profit from its investment, ING says after Altice increased its stake in the British telecommunications provider to 18.0% from 12.1%. Altice will also likely be interested in acquiring further shares, the Dutch bank's Jan Frederik Slijkerman says, but such a move is now restricted for six months under U.K. takeover regulations after Altice said that it doesn't intend to make an offer. An infrastructure separation, partial or otherwise, "would create transparency around the valuation for BT, because the sum of its parts is probably worth more than the current value of BT (despite all of the issues around its pension plan)," Slijkerman says. Shares trade down 6.5% at 163.50 pence.

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Altice UK Displays Serious BT Intent With Stake Increase, Jefferies Says

0954 GMT - Altice UK increasing its interest in BT Group to 18.0% from 12.1% underlines the serious intent of the Patrick Drahi-owned company, contrasting with the lack of clarity in the government position on the British telecommunications provider, Jefferies says. Altice UK said it is fully supportive of BT's strategy and that it doesn't intend to make an offer for the company, and under the U.K. Takeover Code is now committed to that for six months. Altice has engaged constructively with BT, but there is always scope to make an offer if the BT board recommends it, or a third party presents one, Jefferies adds. The U.S. bank has a buy rating on BT shares and a target price of 260 pence. Shares trade 5% down at 166.15 pence.

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Ocado Gains After Flagging Strong 4Q, Court Ruling

0948 GMT - Ocado Group shares top the FTSE 100 risers, up 8% after the online grocer and retail-technology supplier reported strong underlying fourth-quarter demand. Ocado also said the U.S. International Trade Commission had ruled in its favor in a patent case. "The announcement has provided some relief to Ocado's share price, which is down more than 30% year-to-date. That's partly down to concerns that the firm is continually loss-making, despite posting large gains in revenue and customer numbers in recent years," eToro analyst Adam Vettese says. "That's to be expected of a company in the growth phase, but seeing as it's 20 years-old, you would expect that to have changed by now."

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

(END) Dow Jones Newswires

12-14-21 0559ET