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FTSE Rises, Pound Edges Lower After Manufacturing PMI Revised Lower

07/01/2021 | 04:22am EST

Pound Edges Lower After UK Manufacturing PMI Revised Lower

Sterling extends its losses slightly after data showed U.K. manufacturing activity grew less than previously estimated in June and the sector suffered continued cost pressures. The IHS Markit/CIPS U.K. manufacturing purchasing managers' index for June was downwardly revised to 63.9 from an initial estimate of 64.2, compared to May's record high of 65.6. A level above 50 signals an expansion in sector activity. "The sector is still beset by rising cost inflationary pressures, however, as Brexit-related trade issues exacerbated global supply chain delays," Markit director Rob Dobson says. GBP/USD falls to 1.3791, from 1.3800 before the data and EUR/GBP rises to 0.8587, from 0.8583 beforehand.

Companies News: 

Polar Capital's Pretax Profit Rose in FY 2021

Polar Capital Holdings PLC reported Thursday a rise in pretax profit for fiscal 2021, and said its outlook is positive.


Argentex FY 2021 Pretax Profit Fell

Argentex Group PLC said Thursday that pretax profit fell for fiscal 2021 after it booked higher costs, and that trading volumes were encouraging as key markets were on the path to recovery.


Indivior Extends Maturity of Borrowing Facilities

Indivior PLC said Thursday that it has entered into an amendment to reprice and extend the maturity of term-loan facilities of $250 million.


Cambridge Cognition Completes Spinout of Monument Therapeutics

Cambridge Cognition Holdings PLC said Thursday that it has completed the spinout of Monument Therapeutics Ltd., a drug-development company applying digital phenotyping to central-nervous-system disorders.


Grafton to Divest Traditional Merchanting Business in Great Britain for GBP520 Mln

Grafton Group PLC said Thursday that it has agreed to divest its traditional merchanting business in Great Britain to Huws Gray, for an enterprise value of 520 million pounds ($719.2 million).


Trident Royalties Enters $10 Mln Facility to Boost Balance Sheet

Trident Royalties PLC said Thursday that it has entered into a $10 million secured loan facility agreement with a syndicate managed by Tribeca Investment Partners, including the CNL Sprott Strategic Asset Fund and the company's chairman, Paul Smith.


Petropavlovsk Says Several Resolutions Failed to Pass at AGM

Petropavlovsk PLC said Thursday that the resolutions to approve the directors' remuneration policy, changes to the company's incentive plan and the terms of an option plan aimed at the chief executive didn't pass as its annual general meeting.


Logistics Development Disposes of Interest in Greenwhitestar Acquisitions

Logistics Development Group PLC said Thursday that it has disposed of its interest in Greenwhitestar Acquisitions Ltd.


Petropavlovsk CEO to Stay on Despite Re-Election Failing to Pass at AGM

Petropavlovsk PLC said Thursday that Denis Alexandrov will continue as chief executive officer of the company despite the resolution to re-elect him failing at the company's annual general meeting.


UK Regulator Seeks Comments on Sony Music, AWAL and Kobalt Deal

The U.K. Competition and Markets Authority on Thursday invited interested parties to offer comments on Sony Group Corp.'s completed acquisition of AWAL and Kobalt Neighbouring Rights businesses from Kobalt Music Group Ltd. ahead of a formal decision into the deal.


Gresham Proposes GBP100 Mln Placing to Fund Project Acquisitions

Gresham House Energy Storage Fund PLC said Thursday that it has signed contracts to acquire a set of energy-storage projects, and proposed a 100 million-pound ($138.3 million) share placing to fund them.


Block Energy Chairman Re-Election Passed With Low Support at AGM

Block Energy PLC said Thursday that resolutions to reappoint Nonexecutive Chairman Philip Dimmock to the board and authorization to allot shares received low counts at the annual general meeting but were still approved.


Elliott Calls for Board Changes at GlaxoSmithKline Ahead of Consumer-Healthcare Spinoff

Elliott also urged the drugmaker to consider selling its consumer-healthcare business


Diverging Covid-19 Aftermath Leads Gap to Leave UK While Primark Capitalizes on Its Exit

AB Foods' Primark in 3Q more than offset lost sales on account of Covid-19, generating revenue of GBP1.61 billion

Market Talk: 

UK Economy Is Expected to Recover to Pre-Pandemic Output Levels by Year-End

0941 GMT - The U.K.'s economic recovery is proceeding faster than expected and GDP should reach its pre-pandemic peak by the end of 2021, Credit Suisse says. The quick pace of the vaccine rollout, policy support and high consumer savings being spent drove economic output in April to a better-than-expected 3.7% below its pre-pandemic levels, the bank says. Inflation is likely to continue to stay above the 2% target for the next few months, and although the rise in prices this year is likely due to temporary factors, risks are tilted to the upside, Credit Suisse says.


UK Manufacturing Sector Likely to Lose Momentum

0941 GMT - The U.K. manufacturing purchasing managers' index survey suggests the sector remains relatively strong in June but it could lose momentum in the second half, Pantheon Macroeconomics says. "Manufacturing output likely is being supported at present by firms panic-buying goods in order to rebuild their inventories, as well as by high demand for consumer goods, because Covid-19 still is dissuading people from purchasing services," Pantheon economist Gabriella Dickens says. However, these temporary supports to demand will have probably faded by year-end, she says. The IHS Markit/CIPS U.K. manufacturing PMI for June was downwardly revised to 63.9 from an initial estimate of 64.2, compared to May's record high of 65.6. A level above 50 indicates expansion in activity.


UK Manufacturing Sector Growth Eased From Record-High in June

0927 GMT - Manufacturing activity in the U.K. continued to grow at a robust pace in June, albeit at a slower rate than in May, according to data from IHS Markit. The manufacturing PMI dropped to 63.9 from May's record high of 65.6. Companies reported improved demand amid the reopening of the economy from the lockdown, with rates of expansion of output, new orders and employment coming in among the highest in the survey's history. "Solid business confidence and rising backlogs of work also suggest that the current upturn has further to run," Rob Dobson, director at IHS Markit, says. However, the sector is still hit by rising cost inflationary pressures as Brexit-related trade issues exacerbated global supply chain delays, he says.


Aveva's Five-Year Revenue Target Looks in Line With Views

0757 GMT - Engineering and industrial-software company Aveva's financial target to fiscal 2026 of a compound annual revenue growth rate of around 10% is broadly in line with market expectations, Jefferies says. Although the U.S. bank expected Aveva to reach 35% adjusted EBIT margin in two to three years, the five-year target is likely closer to investor expectations, it says. Furthermore, the company's 10% revenue growth in the first two months of fiscal 2022 puts it back on track to meet estimates of around 10% revenue growth for the year, the bank says. Jefferies has a buy rating on the stock and a 4,500-pence target price. Shares are up 3.3% at 3,829 pence.


JD Sports Fashion Gains After Trading Update Tops Hopes

0755 GMT - Shares in JD Sports Fashion rise 3% after the U.K. clothing retailer said it expects to report higher full-year pretax profit. The trading statement was better than expected, with recent trading staying strong and full-year guidance upgraded, RBC Capital Markets says. "JD now expects pretax profit for the year to January 2022 to be at least GBP550 million compared to previous guidance of GBP475-500m," RBC analyst Richard Chamberlain says. "This is ahead of our estimate of GBP539m and we estimate at least 5% above consensus. We think JD Sports should continue to strengthen its position as a preferred partner of major sportswear brands like Nike and adidas, given its strong retailing skills and premium positioning."


JD Sports Outlook Is Positive Despite Cautious Tone

0741 GMT - JD Sports Fashion's tone in its latest trading update is cautious, but its higher-than-market-expectations pretax profit forecast for the full year shows the company has ridden the effects of store closures well, Shore Capital says. The sport-goods retailer continues to make progress across both online and offline channels, Shore says. JD Sports is an overall well-managed company with good cash generation and tight stock and cost control, the U.K. brokerage adds. "[Thursday's] short statement should reassure investors that the group remains on track to deliver a year of good growth in revenues and earnings," Shore says. Shares are up 2.8% at 945.00 pence.


AB Foods Shares Seem Undervalued

0726 GMT - Associated British Foods is having a difficult time in its grocery division due to tough comparatives but the rest of the business is making significant progress, Shore Capital says. Third-quarter sales for the British conglomerate rose 47% on year, while the group remains well positioned in its markets and continues to leverage its strong brands and a robust balance sheet, Shore says. The current valuation undervalues this well-managed, high-quality business, according to the investment group. Shore has a buy rating on the stock. Shares are up 3.3% at 2,288 pence.

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

07-01-21 0622ET

Stocks mentioned in the article
ChangeLast1st jan.
ADIDAS AG -1.98% 250.6 Delayed Quote.0.97%
ARGENTEX GROUP PLC 0.58% 86.9 Delayed Quote.-6.59%
ASSOCIATED BRITISH FOODS PLC 0.00% 2042 Delayed Quote.1.69%
AVEVA GROUP PLC -2.35% 2986 Delayed Quote.-10.16%
BLOCK ENERGY PLC -1.75% 1.4 Delayed Quote.58.33%
CAMBRIDGE COGNITION HOLDINGS PLC -7.11% 117.5 Delayed Quote.0.00%
DJ INDUSTRIAL -1.30% 34265.37 Delayed Quote.-4.47%
EURO / BRITISH POUND (EUR/GBP) 0.58% 0.83674 Delayed Quote.-0.80%
GLAXOSMITHKLINE PLC 0.49% 1644.6 Delayed Quote.1.87%
GRAFTON GROUP PLC -1.26% 1180 Delayed Quote.-3.08%
GRESHAM HOUSE PLC 0.00% 893 Delayed Quote.-0.78%
INDIVIOR PLC -2.00% 235.2 Delayed Quote.-6.61%
JD SPORTS FASHION PLC -0.57% 193.55 Delayed Quote.-10.63%
LOGISTICS DEVELOPMENT GROUP PLC 0.00% 13.6 Delayed Quote.5.02%
NIKE, INC. 0.15% 142.95 Delayed Quote.-14.36%
PETROPAVLOVSK PLC -3.92% 15.43 Delayed Quote.-16.14%
POLAR CAPITAL HOLDINGS PLC 0.00% 681 Delayed Quote.-14.12%
SONY GROUP CORPORATION -1.37% 12955 Delayed Quote.-9.26%
SPROTT INC. -3.44% 46.93 Delayed Quote.-13.96%
TRIDENT ROYALTIES PLC -2.44% 40 Delayed Quote.12.33%
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