FTSE 100 climbs with Provident Financial at the top as investors eye Jackson Hole



10.15am: German business confidence falls 

German business confidence fell slightly in August, reflecting less positive assessments of the current business situation.

The ifo Institute’s business climate index dropped to 116.0 points from 115.9 in July. But Clemens Fuest, resident of the ifo Institute, said sentiment among German businesses remains very strong.

“The decline was due to slightly less positive assessments of the current business situation,” Fuest said. “Companies’ short-term business outlook, by contrast, improved. Germany’s economy remains on track for growth.”


9.30am: German economic growth unrevised in latest second quarter estimate

Germany’s economy grew by 0.6% quarter-on-quarter in the second quarter, in line with initial estimates and market forecasts, Destatis revealed. 

This marked a slowdown from the 0.7% seen in the first quarter. 

On an annual basis, gross domestic product rose 2.1% in the second quarter, following 2% growth in the prior quarter. 

German exports rose 0.7% during the period, easing from 1.6% growth in the first quarter and missing expectations for a 1.2% increase. Imports edged up 1.7%, less than the 2.0% expected and compared to 0.4% in the previous quarter. 

Private consumption grew 0.8%, beating forecasts of 0.7% and following a 0.4% increase. 


8.50am: Markets quiet ahead of Jackson Hole 

The FTSE 100 added just six points to trade at 7,413.16 ahead of the main speeches at the Jackson Hole summit in the US for central bankers.

In the meantime, there is very much a listless feel to the market as traders wind down ahead of the extended weekend break.

Top of the Footsie risers (again) was the Tuesday’s big faller, the doorstep lender () following news Provvy had replaced the head of its struggling home credit unit.

The prospect of category-three storm Hurricane Harvey ripping through the Gulf of Mexico and into the central coast of Texas has put the oil industry there on red alert.

Platforms in the Gulf have already being evacuated and refineries in Texas are braced for a battering.

The net effect on the markets has been to push up the cost of a barrel of Brent crude to US$52.50.

The knock-on impact was a boost to oilers, with BP (LON:BP) at the vanguard.

The miners were also in demand early on, while the retail gloom generated by the Dixon Carphone’s (LON:DC.) profit warning Thursday spread to affect (), J Sainsbury () and Marks & Spencer ().

Proactive News headlines:

() expects to come on strong in the second of its current fiscal year, but admitted that a slower-than-expected start to a couple of big contracts picked up earlier this year will hamper near-term performance. Even with a “more pronounced second half weighting”, WYG said the expected first-half shortfall in performance meant it would be lowering its full-year guidance.

CentralNic Group PLC () headed higher on Friday morning after the internet domain names specialist announced the €26mln acquisition of Slovakian counterpart SK-NIC and confirmed it is on track to hit full-year expectations.

PLC (), the digital marketing services group, has changed the terms of the earn-out deal agreed as part of the acquisition of the user experience business MMT. The company said the new deal will benefit both sides of the transaction.

() is seeing significant commercial traction for its energy storage and clean fuel technology with a pipeline totalling £35.5mln, £17.8mln of which is under contract. The update was provided as ITM delivered results for the 12 months to April 30.

Digital media specialist PLC () said it bought for £8 and then cancelled the founder share in the business owned GSC SICAV. The share allowed its owner the right to appoint and remove directors from the business, providing a layer of protection that is now not required.

SDX Energy PLC (LON:SDX) revealed a first half boosted by the acquisition of the assets with net revenues transformed. The company, in results for the six months ended June 30, reported revenue of US$18mln compared with US$4.6mln in the same period of 2016.

(LON:ECO, CVE:EOG) chief executive Gil Holzman has told investors that the explorer has started to look for new opportunities. Holzman, in the explorer’s first quarter results, highlighted the company has been able to engage in seeking new potential assets and explore new transactions due to its strong balance sheet.

() investors waiting on the Australian shale decision will be assured that in the meantime the group remains financially stable. In a stock market statement, highlighting the filing of interim financial statements, Falcon told investors that it position was strong – with no debt and US$9.7mln cash at the end of June.

() shares zipped higher in early deals after the miner secured the final regulatory approvals needed for the construction of its Elikhulu tailings project in South Africa. The AIM-quoted firm has been granted the integrated water use licence for the project by the South African department of water and sanitation for a period of 20 years.

() said today it has received £250,000 – £237,500 net of fees – from the previously announced £1mln unsecured convertible note facility due 8 June 2019. The note facility was first announced on 13 June 2017 and in total £350,000 has now been received from it.  The cash will be used for general working capital purposes and to potentially support an acquisition or development of a project to complement the company’s US$3mln equity interest in the New York Wheel Project.

() has proposed the implementation of an options programme, consisting of three tranches, designed to incentivise its board and management to target, over the next five years, a market capitalisation of £100mln and progressing onto a share price of 10p. The diversified mineral production and development company said the options programme is being implemented after its board received a number of enquiries, from shareholders and the general market, as to the future direction of the company and how the board and management would be incentivised.

6.45am … FTSE to edge higher

The  FTSE 100 is expected to edge higher in early trading today, following mixed showings overnight on Wall Street and in Asia, with the session likely to be quiet ahead of the long bank holiday weekend in the UK. 

Spread betting firm CMC Markets expects the FTSE 100 index to open around 4 points higher at 7,411, having gained about 24 points yesterday.

Overnight on Wall Street, the Dow Jones closed 28 points lower at 21,783, with other US indices also weaker on worries over the continuing battles between President Trump’s administration and Congress.

But Asian stocks advanced today, shrugging off the sluggish performance on Wall Street as attention shifted to the central bankers’ symposium that began on Thursday in Jackson Hole, Wyoming.

David Madden, market analyst at CMC Markets UK said: “After a long wait the Jackson Hole symposium finally kicked off yesterday, and traders will be paying close attention to the speeches from Janet Yellen and Mario Draghi, which are due to take place today.”

ECB and Fed bosses to speak

He added: “The ECB chief (Draghi) will probably use the speech to congratulate himself on the recovery of the eurozone thanks to the loose monetary policy, but he might use the relatively low inflation rate as an excuse not to talk about reigning in the stimulus package.”

Madden continued: “Janet Yellen, the chair of the Federal Reserve, is likely give us more of the usual, that the US economy is improving, and in particular unemployment is falling. Earnings could be firmer but they are edging higher. The US inflation level is below the Fed’s target, and if Ms Yellen brings that up, it will tip off traders that we are unlikely to see a rate hike in December.”

On the data front, overnight a survey showed UK consumer morale improved slightly in August but remained subdued overall as households became gloomier about their finances.

The monthly consumer confidence index from pollster YouGov and consultancy Cebr rose to 107.6 from 107.2 in July, aided by an increase in its measures of job security and house prices..

But consumers’ perception of household finances worsened for a fifth month in a row, the longest run since YouGov records started eight years ago.

Corporate diary very thin

On the final Friday trading session of August,  the corporate news diary is unsurprisingly pretty empty, with just a handful of releases to provide any interest. 

Small cap hydrogen fuel and storage specialist  () recently revealed good growth in its order pipeline, which should bode well for progress when the firm posts full-year results on Friday.

READ: ITM Power’s pipeline fills up some more

At the start of this month, ITM revealed that another £4.87mln of orders had rolled in, meaning the company currently has £23.54mln worth of projects under contract and £16.67mln of contracts in the final stages of negotiation.

Back with half-year results in January, ITM Power said its orders totalled £15.68mln, which was a 100% increase year-on-year and the group said it remained confident of delivering full year results to end April in line with market expectations.

For its half year to October 31, the firm reported revenue of £0.4mln, down 39% compared to the same period of 2015 reflecting the early stages of build projects during which there is relatively little revenue recognition.

UK concerns for , but Europe could excite

Elsewhere, FTSE250-listed IT services group PLC () will deliver its first half results, having said back in April that it expected to beat expectations in 2017 after solid first quarter growth.

READ: Computacenter expects to beat 2017 expectations after solid first-quarter growth

However, Swiss bank recently downgraded its rating for to ‘neutral’ as its analysts think the firm could be set for a rough ride over the coming years as the UK economy continues to show signs of stalling.

Around 40% of the mid cap firm’s sales and more than half of all profits come from its UK business, making it an “important market” for the company.

But was a little more optimistic about the outlook for other parts of the business, with an “improving picture” across the Channel in continental Europe, while the Windows 10 cycle could also serve to boost sales.

Significant events expected on Friday August 25:

Finals:  ()

Interims: PLC (), Henry Boot PLC (LON:BOOT)

Economic data: US durable goods orders

Around the markets (around 8.45am):

  • Sterling: US$1.2813, up 0.1%

  • Gold: US$1,287 an ounce, up 0.1%

  • Brent crude: US$52.45 a barrel, up 0.8%

City Headlines:

  • drug reduces risk of repeat heart attack by almost a third – Daily Telegraph

  • Chief Mike Ashley increases stake in Centres to 15% – Scottish Herald

  • closer to IPO after Warner Music deal – Financial Times

  • Amazon accelerates assault on UK supermarkets – Daily Telegraph

  • Phoenix hunts for deals as it sits on ‘more money than ever before’ – Daily Telegraph

  • Miner South32 looks to jump on electric vehicle bandwagon – Daily Telegraph

  • BHS creditors to be paid tens of millions by Arcadia – The Times

  • John Laing suffers profits fall after hit on waste projects – Financial Times

  • Jet2 announces pilot recruitment drive as it looks to fill 1700 jobs – The Independent

  • SoftBank takes £3.4bn bet on shared workplace start-up – Daily Telegraph

  • Two SocGen Managers accused of Libor manipulation – Financial Times

  • Bell Pottinger faces sanction over claims it stirred racial tension in South Africa – Daily Telegraph

  • Vegan millionaire eco-warrior Dale Vince surrenders in battle with rival Good Energy – Daily Mail

  • Pay revolt companies to be named and shamed – The Times

  • Housebuilding in the UK at the highest since financial crash – The Times

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