Gilt Yields Rise as BOE Rate Expectations Increase

Gilt Yields Rise as BOE Rate Expectations Increase

1036 GMT - U.K. gilt yields rise as investors anticipate further interest rate increases from the Bank of England after a string of stronger than expected U.K. economic data, including inflation and wage figures. Monday's final manufacturing purchasing managers index data for June was 46.5, higher than the flash estimate of 46.2, albiet still below the 50 level that separates growth from contraction. Investors place an 83% probability of a 50 basis-point rate increase from the BOE at the August 3 meeting, Refinitiv data show. The U.K. 2-year gilt yield rises around 7 basis points to last trade at 5.345%, while the U.K. 10-year gilt yield is up around 1bp at 4.399%, Tradeweb data show. ([e-mail])

COMPANIES NEWS:

IG Group CEO June Felix to Take Medical Leave

IG Group Holdings on Monday said its Chief Executive Officer June Felix is taking medical leave from the business for a short period of time

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Yourgene Health Agrees to GBP16.7 Mln Takeover by Novacyt

Yourgene Health said Monday that it has agreed to a 16.7 million pound ($21.2 million) takeover by French peer Novacyt.

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Tate & Lyle Chairman Gerry Murphy to Step Down, Warren Tucker Named Interim

Tate & Lyle said Monday that Gerry Murphy will step down as chairman to take up the position at Tesco on Sept. 1, with Warren Tucker appointed interim chairman from that date.

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Centralnic Group Increases Buyback Program by GBP30 Mln

Centralnic Group on Monday said it has expanded the size of its current 4 million-pound ($5.1 million) share buyback to a maximum of GBP34 million in line with its renewed capital-allocation policy.

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Hamak Gold Raises GBP350,000 in Share Subscription

Hamak Gold said Monday that it has raised 350,000 pounds ($444,500) in a share subscription at a price of 8.75 pence each, which is a discount of 5.4% to Friday's closing price.

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Blancco Technology Sees FY 2023 Results Beating Views

Blancco Technology Group on Monday said it expects to report results for fiscal 2023 above market expectations, driven by growth across its geographies, a high level of repeat revenues and conversion of new business opportunities.

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Zanaga Iron Ore Enters Equity Subscription Agreement; Swung to 2022 Pretax Profit

Zanaga Iron Ore said Monday it has entered into an equity subscription agreement with Shard Merchant Capital, or SMC, and that it swung into pretax profit for 2022 after booking lower costs.

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Keras Resources Shares Suspended on Delay of 2022 Financial Report

Keras Resources said Monday that its shares will be suspended as it postpones its annual financial report following a delay of funds received and payed.

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LendInvest Gets GBP500 Mln in Funding From Chetwood Financial

LendInvest on Monday said it received a 500 million-pound ($635 million) investment to fund part of its future mortgage originations from Chetwood Financial.

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Alien Metals Gets $1 Mln Funding Facility

Alien Metals said Monday that it entered into a short-term funding facility of up to $1 million to meet immediate and medium-term need.

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Science in Sport Trading Halted Due to 2022 Accounts Delay

Science in Sport said Monday that trading in its shares has been temporarily suspended as it has been unable to publish its 2022 earnings by the regulatory deadline.

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Argo Blockchain Executive Pay Resolution Rejected by Shareholders

Argo Blockchain on Monday said its resolution on executive pay failed to pass at its annual general meeting.

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UK Commercial Property REIT Appoints Peter Pereira Gray as Chairman From July 31

UK Commercial Property REIT said Monday that Peter Pereira Gray has been appointed as chairman from July 31, replacing Ken McCullagh, who will retire on the same date.

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Eurasia Mining Shares Rise on Approval of Definitive Feasibility Study for Russian Project

Shares in Eurasia Mining rose Monday after the company said the definitive feasibility study has been approved for its Monchetundra project in northwest Russia, raising the likelihood of a sale of the project.

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Public Policy Holding Appoints Roel Smits as CFO

Public Policy Holding on Monday said it has named Roel Smits as its chief financial officer effective immediately, replacing Bill Chess who is becoming chief administrative officer.

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Pittards, GoldStone Resources and Eco Buildings Shares Temporarily Suspended

Pittards, GoldStone Resources and Eco Buildings Group on Monday said trading in their respective shares has been temporarily suspended pending the publication of their audited accounts for 2022.

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Panthera Resources Shares Fall on LCM Financing Due Diligence Extension

Shares of Panthera Resources fell as much as 24% on Monday after the company said that it has extended the due diligence date for the $10.5 million in litigation financing with LCM Funding SG by two weeks.

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Star Phoenix's Chair Reelection Fails to Pass at AGM

Star Phoenix Group Ltd. said Monday that the resolution to reappoint its Chair Lubing Liu has failed to pass at the annual general meeting.

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Zenith Energy Awarded EUR30,000 in Compensatory Damages by French Court

Zenith Energy said Monday that its subsidiary Anglo African Oil & Gas Congo has been awarded a 30,000 euros ($32,740) payment for compensatory damages by the Paris Commercial Court.

MARKET TALK:

UK Banks' Balance-Sheet Size Poses Near-Term Constraints to Income

1022 GMT - The near-term issue for U.K. banks is the size of their balance sheets, Jefferies says in note. The lenders stand to materially benefit from income growth from structural hedges--seen lasting through to at least 2024 and 2025--but the binding constraint to income is the balance-sheet size with deposit contraction and mortgage repayments, analysts say. Having analyzed U.K. household data, Jefferies concludes that for the top 40% of income earners, who account for 70% of mortgage debt, "the burden of rising rates is manageable (assuming all mortgages reprice to 6%) with no knock-on impact on discretionary spending." The ultimate driver of consumer loss is unemployment--the most significant factor of credit risk--but they don't expect this to be of material earnings consequence until the unemployment rate surpasses 5%, they say. ([e-mail])

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European Chemical Companies' 2Q Could Fall Short of Low Expectations

1018 GMT - Expectations of European chemical companies are low going into the second-quarter earnings season, but disappointments can't be ruled out and guidance cuts seem likely for BASF, Evonik Industries and Wacker Chemie, Stifel analysts say in a research note. Looking farther ahead, consensus estimates for 2024 seem too optimistic, particularly for companies that face intense price competition, Stifel says. "We prefer companies with predictable earnings growth, as a cyclical recovery is postponed. Diversified and upstream chemical companies are at the end of our pecking order," Stifel says. Stifel cuts each of Brenntag, Croda International, DSM-Firmenich, Evonik and Solvay from hold to buy, and raises Givaudan and KWS Saat to buy from hold. ([e-mail])

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Pricing of BOE Rate Rises 'Quite Volatile'; Pound Could Stay Propped Up Vs Euro

1000 GMT - The market's pricing of expected interest-rate rises by the Bank of England is high and "remains quite volatile," says ING currency analyst Francesco Pesole. "Markets are pricing in 130 basis points of BOE hikes to the peak at the moment, which clearly sets the bar quite hike for hawkish surprises for the MPC's communication, but also shows how hawkish-prone markets are given the U.K. inflation situation," he says. Sterling could stay supported against the euro, with EUR/GBP likely to "struggle to find very sustainable support beyond current levels." GBP/USD should be driven by dollar movements given there is little U.K. data or Bank of England speakers due this week. EUR/GBP falls 0.2% to 0.8592 but GBP/USD rises 0.2% to 1.2669. ([e-mail])

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Thames Water Crisis Makes Waves Across Utilities Sector

0943 GMT - The U.K. water sector's troubles are exacerbated by the financing crisis of England's largest private water utility Thames Water, as utility companies face an increasingly difficult challenge of balancing the growing need for environmental expenditure with customer affordability while staying financially resilient, Jefferies analysts write in a research note. Thames Water's financial stress is likely to intensify the political, regulatory and media scrutiny of the sector, they say. "With this, we think listed companies should trade close to historically low valuations of nil-premium to regulatory capital values," they say. Jefferies has an underperform rating on stock in Severn Trent and Pennon, and a hold on United Utilities. ([e-mail])

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(END) Dow Jones Newswires

07-03-23 0703ET