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FTSE Rises, Sterling Behaving Like an Emerging Market Currency

10/05/2021 | 09:12am EST

Sterling Behaving Like an Emerging Market Currency

Sterling has traded like an emerging market currency over the past week due to its sensitivity to risk appetite, Argentex forex analyst Joe Tuckey says. "In a week where [bond] yields have risen aggressively, sterling slid with equities, ignoring the move in yields and therefore trading more like emerging markets FX," he says. "This is all while acting somewhat nervously to what should become transient short-term issues." While many paint a "dismal outlook" for sterling this winter, this is unlikely to be the case as government measures should alleviate some supply-side pressures and as the Bank of England moves closer to tightening monetary policy, he says. GBP/USD rises 0.1% to 1.3624 and EUR/GBP falls 0.3% to 0.8513.

 
Companies News: 

Altitude Group Appoints Graham Feltham as CFO

Altitude Group PLC said Tuesday that it has appointed Graham Feltham as chief financial officer.

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Coral Products FY 2021 Pretax Loss Narrowed on Higher Revenue

Coral Products PLC reported on Tuesday a narrowed pretax loss for fiscal 2021 as revenue increased.

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Inspiration Healthcare 1H 2022 Pretax Profit Rose

Inspiration Healthcare Group PLC said Tuesday that pretax profit rose for the first half of fiscal 2022 as revenue increased, and that it will increase its interim dividend by 2.5%.

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GSTechnologies to Acquire Angra Ltd. for GBP800,000, Shares Rise

Shares in GSTechnologies Ltd. rose on Tuesday after the company said that it has conditionally agreed to acquire Angra Ltd. from its director and sole shareholder Rodolfo Modesto Basilio for 800,000 pounds ($1.1 million) cash upon completion.

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Great Portland Estates, BP Pension Fund Sell Central London Building for GBP181.5 Mln

Great Portland Estates PLC said Tuesday that it has sold its 160 Old Street property in central London to a fund advised by J.P. Morgan for 181.5 million pounds ($247 million).

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Marks Electrical to Float on London's Junior AIM Late This Month

Marks Electrical Ltd. said Tuesday that it plans to float on London's junior AIM late this month.

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Amte Power FY 2021 Pretax Loss Widened on Higher Costs

Amte Power PLC on Tuesday reported a widened pretax loss for fiscal 2021 on higher costs despite an increase in turnover.

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Bens Creek Group to List on London's Junior AIM on Oct. 19

Bens Creek Group PLC said Tuesday that it plans to list on London's junior AIM on Oct. 19, and that it expects to raise 7.0 million pounds ($9.5 million) on admission.

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Prospex Energy Shareholders Vote Against Removal of Board at General Meeting

Prospex Energy PLC said Tuesday that the resolutions presented at a general meeting requisitioned by shareholder Jarvis Investment Management Ltd. to remove the board were rejected, and that shareholders voted in favor to keep Mark Routh and Alasdair Buchanan as directors.

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Secured Income Fund Reviews Loan, Expects Increased Provisioning

Secured Income Fund PLC said Tuesday that it is reviewing a 5.6 million-pound ($7.6 million) loan, which should result in a substantial increase in provisioning.

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Amedeo Air Four Plus Expects Thai Airways Rehabilitation to Conclude in November

Amedeo Air Four Plus Ltd. expects that the Thai Airways rehabilitation plan to conclude in November.

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LPA Group Shares Fall After Warning of FY 2021 Operating Loss

Shares of LPA Group PLC fell 14% on Tuesday after the company said it now expects to post an operating loss for fiscal 2021, blaming supply-chain issues, which have delayed rail projects.

 
Market Talk: 

Hotel Chocolat Is Sweeter on Investment Than Dividends

1250 GMT - Shares in Hotel Chocolat Group jump 10% after the U.K. chocolatier swung to a pretax profit in the year to June and said it is prioritizing investment over dividends. "It's interesting to see the company decide not to pay a dividend in favor of putting spare cash back into the business," AJ Bell investment director Russ Mould says. "Not many companies would make that bold move, even though it might be the best decision. Hotel Chocolat comes across as very confident about the future, which is a very different message [to that given by] a lot of other companies battling supply-chain issues and labor shortages."

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Gilt Selloff Continues on BOE Lift-Off Uncertainty

1239 GMT - Investors continue selling U.K. sovereign bonds due to uncertainty around whether the Bank of England will raise borrowing costs in the last quarter of this year, says JPMorgan. Gilts sold off and underperformed peers last week "reflecting ongoing uncertainty around a 4Q21 BoE lift-off with Governor [Andrew] Bailey not pushing back on Sterling Overnight Interbank Average Rate market pricing," it says. The bank expects the first interest-rate rise to take place in the first quarter of 2022, but given BOE signaling for an increase in the fourth quarter of this year, "there will be increased focus on Monetary Policy Committee commentary, wage pressure and the evolution of both market and survey-based measures of inflation expectations," they add.

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Aston Martin Tipped to Report Margin Pressure in 3Q

1214 GMT - Aston Martin Lagonda Global Holdings is likely to report margin pressure in the iconic sports-car maker's third-quarter update Nov. 4, Citigroup says. The quarter can be seasonally weak for Aston Martin, Citi says, forecasting around 130 basis points of Ebitda margin pressure versus 2Q due to an estimated 15% on-quarter decline in volumes due to summer plant shutdowns, increased marketing spend and plant ramp-up costs. It expects Aston Martin to make 55% of 2021 Ebitda in 4Q. "We believe the company is on track to meet its FY21 guidance, which should be a key catalyst for improved conviction in the mid-term turnaround plan, but recognize this may only become evident once Valkyrie deliveries begin in 4Q," Citi analysts say.

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Rising Energy Prices to Push Sovereign Bond Yields Higher

1146 GMT - Rising energy prices have been pushing sovereign bond yields higher and should continue to do so, says TD Securities. "The rise in energy prices is going to continue to be a driver, as markets speculate on how long the major central banks will be able to hold their nerve with soaring headline inflation rates," analysts at the bank say. The 10-year Treasury yield and the 10-year gilt rise both around 2 basis points relative to Monday's close, according to Tradeweb. Oil prices rise to multi-year highs Tuesday, with Brent crude oil last up 1.3% at $82.29 a barrel, while the WTI benchmark rises 1% to $78.45 a barrel.

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Petrofac Closure on Bribery Case Is 'Oxygen' for the Company

1040 GMT - Clarity on the U.K. Serious Fraud Office case is the oxygen that Petrofac has been searching for, as it allows for derisking in estimates and valuation, Jefferies says. On Monday, a U.K. court ordered the oil-and-gas services company to pay a total penalty of GBP77 million for failing to prevent senior executives from using agents to bribe public officials for oil contracts in the Middle East, which includes a confiscation order, fine and legal fees. Shares in the company closed up 4.6%. The financial penalty is materially lower than the $300 million Jefferies had forecast. The bank keeps its hold rating on the stock, but raises its target price to 200 pence from 140 pence, reflecting higher 2023 revenue expectations.

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Hotel Chocolat's Strategy Should Drive Growth in FY 2022

1013 GMT - Hotel Chocolat's margins should improve as retail recovers and continuity revenue grows, Liberum says. The chocolatier has a track-record of achieving double-digit sales growth despite challenges such as Brexit, political uncertainty and pademic-related lockdowns, the U.K. brokerage says. The company has used this period to transform the business model into a multi-category, multi-geography and multi-channel platform, and with the reopening of stores going well, the second quarter of fiscal 2022 could be very strong, it says. "With a well-articulated and focused strategy across three main geographies, fiscal 2022 should deliver the step change in growth we confidently forecast," the brokerage says. Liberum rates the stock buy.

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

(END) Dow Jones Newswires

10-05-21 0911ET

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