UK investors will likely spend most of Thursday morning mulling the possibilities of three central bank announcements later today. The Bank of England’s news at midday has damp squib written all over it while the ECB’s likely downgrade to growth estimates has already been leaked.
We’ll find out the facts at 12.45pm, but it is Turkey that could grab the economic headlines, also at midday, with its’ central bank expected to cut the key repo interest rate, putting emerging markets back under the spotlight.
In the meantime there is only vague corporate news to draw the attention of investors, explaining why UK stocks market start trading on Thursday in fairly limp fashion. The FTSE 100 dips by single digits to 7,308.92 at 8.30am, with the FTSE 250 and small cap indices also modestly on the back foot.
PROFITS FALL DRAGS ON MORRISONS
Rising half year like-for-like sales reported by supermarket group Morrisons (MRW) fail to offset investors disappointment over a slump in profits. The company has reported a 4.9% rise in like-for-like sales for the six months to 5 August, including an increase of 6.3% in the second quarter, apparently a nine-year high.
Total sales rose to £8.8bn compared to £8.4bn this time last year but pre-tax profits fell to £142m from £200m, sending the share price down nearly 3% in early trade on Thursday to 258p, making the group the biggest FTSE 100 faller.
The supermarket chain blames a couple of factors for the profits decline, including a change in the way it estimates stock provisions.
Gaming group GVC (GVC), the bookmaker that owns Ladbrokes, Coral and Bwin, bounced back into the black in the six months to 30 June on sales up 8%.
The £6b-plus company announced a £113.8m pre-tax profit compared to a £6.4m loss last year on revenue of £1.6bn, up from £1.5bn. UK gaming income was weak in the UK, where net revenue fell 3% because of the impact of poor weather in the first half, although that was partly offset by what GVC calls ‘a good World Cup’. European net revenue was much better, up 29%.
DEBENHAMS BUYOUT PLAN DENIED
Pile ‘em high, sell ‘em cheap leisure and sports retailer Sports Direct (SPD) has ruled out the idea that may launch a full takeover of struggling department stores group Debenhams (DEB), in which it has a 29% stake.
That clarification comes after confusion following talks between senior Sport Direct executives and journalists. Sports Direct shares are largely unaffected, dipping 1.6% to 346.9p, but the news goes down more poorly among Debenhams investors, which mark it stock nearly 6% lower to 12.61p, valuing the department stores chain at £155m.
Insurer Legal & General (LGEN) has completed a £4.4bn buy-in for the British Airways pension scheme, covering nearly 22,000 former BA employees.
The FTSE 100 company said it was the largest ever bulk annuity policy arranged with a UK pension scheme, and also included the conversion of existing longevity insurance into a bulk annuity.
Legal & General shares nudge 2.1p higher to 253p, valuing the group at a little more than £15bn.
JUNIORS ON THE MOVE
Among AIM listed companies, Faron Pharmaceuticals (FARN:AIM) is Thursday’s biggest loser after reporting soaring pre-tax losses for the first half to 30 June. The rough €14m loss is close on double the €7.1m pre-tax deficit of 12 months ago, sending shares in the company spinning nearly 13% lower to 105.5p.
Going the other way, Bushveld Minerals (BMN:AIM) rallies 15% to 21.75p after sealing a deal for a 21.2% stake in a new vanadium deposit.
Gold prices on Thursday held steady near a more than one week high hit in the previous session, with hopes for a new round of US/China trade talks weighing on the dollar.
Oil prices fell on Thursday, reversing some of the strong gains from the previous session, as economic concerns raised doubts about ongoing fuel demand growth.
Going ex-dividend today is turnaround engineer Melrose Industries (MRO) which will trade without entitlement to its latest dividend pay-out, trimming 0.26 points off the FTSE 100, according to Reuters’ calculations.
