Weak UK Economic Outlook Seen as Headwind for Pound

Weak UK Economic Outlook Seen as Headwind for Pound

0935 GMT - The U.K. economy may have narrowly avoided falling into a recession with zero growth in the final quarter of 2022 but the outlook remains challenging, creating strong headwinds for sterling, ActivTrades says. "The currency has benefited from a recent increase in global risk appetite, however, with the country's economy expected to contract in 2023, the recent pound rally may soon run out of steam," ActivTrades analyst Ricardo Evangelista says in a note. Data on Friday showed U.K. gross domestic product was unchanged between the third and fourth quarters, narrowly avoiding a recession despite a worse-than-expected GDP fall of 0.5% month-on-month in December. GBP/USD falls 0.1% to 1.2112 but EUR/GBP is flat at 0.8854. ([e-mail])

Companies News: 

Saga in Discussions With Open Insurance Over Possible Acromas Sale

Saga PLC said Friday that it was in exclusive discussions with Open Insurance Technologies Pty Ltd. regarding a possible sale of its in-house insurer Acromas Insurance Company Ltd., or AICL.

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Victrex 1Q Revenue Rose on Better-Than-Expected Prices

Victrex PLC said Friday that revenue rose 6% in the first quarter of fiscal 2023 as average selling prices were ahead of expectations, with good momentum from price increases and surcharge pricing.

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ASOS Names Sean Glithero as Next Interim CFO

ASOS PLC said Friday that Sean Glithero will be appointed interim chief financial officer from May, until a permanent CFO is found.

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Lancashire Holdings 2022 Pretax Loss Narrowed on Higher Underwriting Profit

Lancashire Holdings Ltd. on Friday said its pretax loss for 2022 narrowed as its premiums increased and said it has seen a strong start to 2023.

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3i Infrastructure Raises GBP100 Mln via Share Placing

3i Infrastructure PLC said Friday that it has raised 100 million pounds ($121.2 million) via the previously announced share placing, part of which will be used to repay a debt facility with the rest for future investments.

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Polymetal International Working to Restore Regular Trading of Shares After Disruption

Polymetal International PLC said Friday that it is working to restore the regular trading of its shares after a disruption.

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ITIM Group Sees 2022 Revenue in Line; Earnings Below Views

ITIM Group PLC said Friday that it expects to report 2022 revenue in line with market expectations and earnings before interest, taxes, depreciation and amortization below market views.

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Belluscura Raises $5.8 Mln; Will Issue Additional Option of Up to $4.2 Mln

Belluscura PLC said Friday that it has raised a total of around $5.8 million before expenses in a combined placing and broker option, and will issue an additional broker option worth up to $4.2 million.

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Scotgold Resources Raises GBP2.5 Mln via Placing, Subscription

Scotgold Resources Ltd. said Friday that it has raised 2.5 million pounds ($3 million) via the share placing and subscription first announced late Thursday.

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FRC chief executive set for exit to lead HS2 -- Financial News

Jon Thompson will continue as chief executive of the FRC on a part-time basis until the end of his six months' notice period

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Fulcrum Metals to Raise GBP3 Mln in London IPO

Fulcrum Metals PLC said Friday that it intends to list on the AIM market of the London Stock Exchange and aims to raise 3 million pounds ($3.6 million) via a conditional share placing.

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Pan African Resources 1H Earnings Per Share Expected to Fall

Pan African Resources PLC said Friday that it expects to report a fall in its first-half earnings per share on lower gold revenue.

 
Market Talk: 

Barclays Shares Slip After UK Watchdog Probe Report

0846 GMT - Barclays shares fell up to 1.9% after the FT reported that the British bank is being probed by the Financial Conduct Authority over its anti-money laundering systems. "Yet again, it appears that Barclays may have stepped on a banana skin and, while such complex regulated organizations are always likely to find it difficult to completely avoid such regulatory matters, this will simply add to the perception that Barclays is somewhat accident prone," Shore Capital analyst Gary Greenwood says in a note. Shares trade 0.8% lower at 188.2 pence. ([e-mail])

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Lancashire Shares Fall After Higher War Provisions Lead to 2H Miss

0905 GMT - Lancashire Holdings' second-half earnings came short of expectations due to higher-than-expected additional provisions for the Ukraine war, RBC Capital Markets says in a note. "This is ultimately a one-off and is well absorbed by the group with the solvency ratio looking very strong at 300%," analyst Derald Goh says. RBC has an outperform rating on the stock and notes the insurer's earnings quality should improve from its a diversified business and its natural catastrophe bias should generate higher relative return potential to peers. Shares fall 5.0% to 597.0 pence. ([e-mail])

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Lancashire's Extra War Provisions Is A Prudent Step

0918 GMT - Lancashire Holdings' additional margin for potential claims linked to the Russia-Ukraine war is a prudent step, says Jefferies in a note, after the insurer raised them to $65.8 million from $22 million. "Lancashire has not explicitly stated what this relates to, however, we expect that it will largely arise from potential aviation losses from any stranded aircraft in Russia," say analysts at the brokerage, which rates the stock buy. They also flag Lancashire's better-than-expected underlying combined ratio and its strong capital position which puts it on a good stead to grow into the hardening market conditions. Shares shed 3.3% at 607.0 pence. ([e-mail])

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UK Likely to Face Mild Recession This Year

0934 GMT - The U.K. will enter into a shallow recession this year as rapidly rising interest rates hit households and business spending, Handelsbanken U.K. economist Daniel Mahoney says in a note. The growth outlook has recently improved due to a moderation in energy prices, but the economy continues to face headwinds in early 2023, he says. "There are serious questions around the sustainability of improved business investment given the higher interest rate environment is hitting corporations especially hard: around four-fifths of corporate debt is floating rate, meaning tighter monetary policy is passing through to U.K. businesses very quickly," Mahoney says. In this context, Handelsbanken expects the Bank of England's base rate to end the year at the current level of 4%. ([e-mail])

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Victrex FY Volume Likely to Fall

0938 GMT - Victrex's first-quarter volume decline will likely follow through to a full-year volume fall as the company moves further toward normalization, Citi analysts say in a research note. The polymers company's earnings though will likely be subdued as it continues to face raw-materials headwinds and continues to spend on innovation, they say. "The uncertainty around the global macro conditions and inflation, coupled with the valuation closing in on recent averages means that we remain neutral," the analysts say. Citi has a neutral rating on the stock with a target price of 1,790 pence. Shares trade down 1.3% at 1,853.00 pence. ([e-mail])

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Victrex 1Q Reflects Sector Trends

0951 GMT - Victrex's first quarter reflects the trends seen across the sector as volumes were down 8%, but pricing was encouraging and better than expected, Peel Hunt's Henry Carver and Harry Philips say in a research note. "In what is seasonally a quieter quarter for Victrex, the business performed broadly as we would have expected in 1Q, with demand from value-added resellers (VARs) normalizing against tough comps," they say. Peel Hunt has a buy rating on the stock with a 2,300 pence price target. Shares are down 1.3% at 1,853.00 pence.([e-mail])

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Aegon's Update Boosts Confidence on Capital Return Story

1012 GMT - Aegon's fourth-quarter update ticked the right boxes, says UBS in a note. The Dutch insurance and asset-management company's new EUR200 million share buyback gives confidence in the capital return story, UBS says. Technical support to the share price should be provided by the execution of the EUR1.5 billion buyback from the sale of its Dutch business to ASR Nederland in a time frame of less than a year, which represents up to 20% of Aegon's average daily trading volume, says UBS. "US growth to be funded from within the division, indicating holding company cash could be used for future shareholder distributions," the Swiss bank says, raising the target price on the buy-rated stock to EUR6.10 from EUR5.75. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

02-10-23 0559ET