Sterling Weakens as China Concerns Grow -2-

Oneiro Energy has appointed Andrew Yeo as nonexecutive chairman, replacing Robert Jones who will remain on the board as a nonexecutive director.

---

Galileo Resources Enters JV for Zambian Exploration License

Galileo Resources shares rose on Tuesday after the company entered into a joint venture agreement with Cooperlemon Consultancy for copper exploration in Zambia.

MARKET TALK:

Beazley Looks Good Value Despite Glitches

1338 GMT - Beazley looks attractive despite issues, RBC Capital Markets says ahead of the Lloyd's of London insurer's first-half results Thursday Sept. 7. Beazley's shares remain as one of the weakest performers among insurers covered by RBC so far this year despite having recovered some ground of late, the bank says. "Beazley's story this year is marked by a series of reporting mishaps, overshadowing continued strong operating performance where we expect further confirmation of this from the print," RBC analysts write. "The capital update offers a chance to remove an overhang and a potential transition to a Solvency II basis should also be well-received, given better alignment to peers. Beazley continues to screen as good value." ([e-mail])

---

UK Retailers Drop After Mixed Sales, Services Data

1245 GMT - U.K. retailers such as B&M European Value Retail, Tesco and Kingfisher are among the biggest FTSE 100 fallers after mixed economic data. U.K. total retail sales increased 4.1% in August, against a 1% rise in August 2022, according to the British Retail Consortium and accountancy firm KPMG. Still, consumer credit and debit-card spending gains slowed to 2.8% in August year-on-year from 4% in July, according to Barclays data cited by Interactive Investor. Meanwhile, the S&P Global/CIPS U.K. services PMI shrank to 49.5 in August from 51.5 in July, the lowest since January. "Service providers saw customer spending reverse course during August as higher borrowing costs, subdued business confidence and stretched household finances acted to curtail sales opportunities," S&P Global's Tim Moore writes. ([e-mail])

---

B&M's Wilko Stores Acquisition Brings Additional Scale at Low Price

1232 GMT - B&M's acquisition of Wilko stores was struck on attractive terms and gives further confidence on forecasts and on how well B&M is positioned, Liberum analysts say in a note. The convenience retailer's deal is likely to bring additional scale benefits and the opportunity to leverage central costs, supporting the group's double-digit Ebitda margin, they say. Liberum estimates that the acquired stores could provide at around of 5% annualized uplift to Ebitda on prudent assumptions, they say. The acquisition will add 50 stores, compared with initial guidance of 30 openings a year, at an immaterial consideration for B&M, they add. ([e-mail])

---

DS Smith's 1Q Unlikely to Prompt Consensus Changes

1203 GMT - FTSE 100 packaging company DS Smith's 1Q showed little color beyond management saying that its overall performance was in line with its expectations, Goodbody analyst David O'Brien says in a note. Still, it was encouraging to see that pricing remains resilient as the demand backdrop appears to be showing signs of improvement, O'Brien says. "We believe consensus is unlikely to shift given this morning's commentary and as such the improving volume backdrop should be enough to support the share price given how undemanding valuations are across the sector," he says. Goodbody has a buy recommendation on the stock. Shares are down 0.2% at 309.10 pence. ([e-mail])

---

European Insurers Show Strong Fundamentals Despite Caution on UK Life

1056 GMT - Operational trends in the European insurance sector are steady, Morgan Stanley writes in a note. "Supportive themes for the sector are pricing momentum and IFRS 17 clarity, while asset risk remains an overhang," analysts write. The brokerage prefers reinsurers and multiliners but is cautious on U.K. life. MS cuts its rating on London-listed Hiscox to equal-weight from overweight as it sees less visibility on improving growth and underwriting after half-year results. It raises peer Lancashire Holdings to equal-weight from underweight, citing its underperformance against the sector despite delivering higher topline growth and most likely better pricing conditions than peers, given its exposure to property catastrophe business. Scandinavian insurer Tryg is raised to overweight from equal-weight. ([e-mail])

---

B&M Could Incorporate Wilko Stores With Limited Cannibalization Risk

1052 GMT - B&M's acquisition of Wilko stores provides a potential boost to its ambition to reach 950 stores in the U.K., Third Bridge analyst Orwa Mohamad says in a note. The convenience retailer's move has limited risk of cannibalization given its focus on out-of-town locations, meaning B&M can incorporate many of Wilko's high street stores, he adds. "Quite often, Wilko & B&M sell the same product, meaning consumers have a strong incentive to continue frequenting those stores regardless of the banner," he adds. ([e-mail])

---

CMC Markets Still Seen With Upside When Conditions Improve

1036 GMT - CMC Markets' share price is likely to struggle to make progress until the headwinds from subdued market conditions it faces abate, Peel Hunt says in a note. "We still see upside in the shares... but await more positive trading conditions as the key catalyst," analysts write. There is much to be optimistic about in terms of its strategic direction, they add, and estimate the company will start to make meaningful revenue over the next 12 months. CMC has been in this position before, the analysts note, pointing revised 2024 expectations which stand at a similar level to 2019 pretax profit. However, CMC has evolved and now has incremental revenue sources from its Australia stockbroking activity, they add. Peel Hunt has an add recommendation on the stock. ([e-mail])

---

Superdry Shows Encouraging Signs of Progress

1026 GMT - Superdry's FY 2023 pretax loss was in line with expectations while 1Q performance continues to reflect a challenging backdrop, Liberum analysts say in a note.However, the clothing brand's strategic progress is encouraging given the GBP105 million refinancing, around GBP45 million brand-rights sale and equity raise and GBP35 million annualized cost savings, they say. Added to that, the group has also showed continuing inventory reduction, while it has reset the wholesale model to address performance concerns, they say. "We retain our buy recommendation on Superdry noting the strength the brand and the global growth opportunities this brings, which is not reflected in the current all-time low share price," they add.([e-mail])

---

CMC Markets Revenue Shock Makes Stock Look 'Uninvestable'

1016 GMT - CMC Markets shares look unappealing after its recent profit warning on revenue weakness in its trading and investing divisions, Shore Capital says in a note. The negative impact on earnings of heavy investment with increased costs, and now lower revenue expectations, has been dramatic, especially for an operationally-geared business model, analyst Vivek Raja writes. "While CMC works through various strategic initiatives, until we observe a sustained improvement in revenue trajectory, we think the stock is uninvestable," he adds. The brokerage cuts its rating on the London-listed online trading platform to sell from hold and slashes its target price to 75 pence from 155 pence. Shares have lost 53% of their value since the start of the year and trade at 104.4 pence. ([e-mail])

---

DS Smith Flags Trading in Line, But Markets Stay Tough

1010 GMT - DS Smith shares are among the biggest FTSE 100 fallers, down more than 1% after the packaging company reported trading in line with expectations, but said markets remained tough. Still, Smith noted continued resilient pricing, strong cost-control measures and improved like-for-like performance in corrugated-box volumes since the start of its financial year in May, Citigroup says. There were clear signs that customers' existing stockpiles are running out, meaning demand could rise, Citi says. "This is in line with what peers have been saying at their half-year results last month, that they see de-stocking in corrugated packaging coming to an end," Citi analysts say a note. "We see no material changes to consensus estimates on the back of this trading update." ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

09-05-23 1030ET