Pound Still Likely to Weaken if BOE Lifts Rates
The Bank of England could start raising interest rates in
November but the pound is still likely to depreciate in coming
months, MUFG Bank says. "GBP is more likely to weaken heading into
year-end given the more challenging backdrop of slowing global
growth, higher inflation and tightening liquidity conditions, which
should be less supportive for risk assets and high beta currencies
like the pound," MUFG currency analyst Lee Hardman says. BOE policy
tightening could also be viewed as a policy mistake if the U.K.
economy slows more notably, which would dent sterling, he says.
GBP/USD rises 0.4% to a one-month high of 1.3789, according to
FactSet.
Companies News:
YouGov Annual Profit Increased on Higher Revenue; Chairman to
Step Down
YouGov PLC on Tuesday reported a rise in pretax profit for the
fiscal 2021 on higher revenue, and said that its Nonexecutive
Chairman Roger Parry will stand down in 2022.
---
RHI Magnesita Warns Cost Inflation Is Hurting Profitability
RHI Magnesita NV on Tuesday warned that third-quarter
profitability was weaker than expected as costs continue to
increase.
---
Oxford Metrics Says FY 2021 Should Come in Stronger Than
Expected
Oxford Metrics PLC said Tuesday that it expects to report
stronger-than-expected outturns for fiscal 2021.
---
Greencoat Renewables Raises EUR165 Mln via Initial Placing
Greencoat Renewables PLC said Tuesday that it has now raised 165
million euros ($191.6 million) via the initial share placing
announced earlier this month.
---
Providence Resources CEO Steps Down
Providence Resources PLC said Tuesday that chief executive
officer and director Alan Linn stepped down from the board on
Monday.
---
Bank of Ireland Reduces Credit Risk Exposure to Irish
Mortgages
Bank of Ireland Group PLC said Tuesday that it has executed a
credit risk transfer transaction in relation to a portfolio of 1.4
billion euros ($1.63 billion) of Irish mortgages to reduce its
credit risk exposure though a risk sharing structure.
---
Gresham House Calls for Return of Liquidity from Gresham House
Strategic
Gresham House PLC said Tuesday that a five-month strategic
review into Gresham House Strategic PLC has failed to deliver a
solution for all shareholders, and requisitioned a meeting to call
for a return of liquidity.
---
Salt Lake Potash Says London Trading Has Been Voluntarily
Suspended Amid Fundraising Uncertainity
Salt Lake Potash Ltd. said Tuesday that the trading of its
shares on London's Alternative Investment Market has been suspended
on the company's request, given uncertainty over the successful
completion of a fundraising.
---
GetBusy Acquires New Assets for Its SmartVault Platform
GetBusy PLC said Tuesday that it has bought two software
products--Quoters and DocDown--that will be part of its SmartVault
platform, and said its performance in the second half of fiscal
2021 remains robust.
---
Life Science REIT to List on AIM Market Via Share Placing,
Subscription, Intermediaries Offer
Life Science REIT PLC said Tuesday that it intends to launch an
initial public offering on the London Stock Exchange's AIM market
via a share placing, offer for subscription and intermediaries
offer.
---
Alinda Capital Partners Chases London IPO With GBP350 Mln
Raise
Alinda Capital Partners LLC said Tuesday that it intends to
float on the London Stock Exchange, raising up to 350 million
pounds ($480.5 million) through an offer and subscription late next
month.
---
Legal & General Capital Appoints Ernst & Young's Gareth
Mee as CFO
Legal & General Group's Legal & General Capital said
Tuesday that it has appointed Gareth Mee as its new chief financial
officer.
---
Supermarket Income REIT Doubles Target Size of Initial Share
Placing to Up to GBP200 Mln
Supermarket Income REIT PLC said Tuesday that the board has
decided to double the target size of its initial share placing from
around 100 million pounds ($137.3 million) to up to GBP200
million.
---
Candela Medical Sets IPO at 14.7 Million Shares; Sees Pricing at
$16-$18 Each
Candela Medical Inc. on Tuesday said it plans to sell about 14.7
million shares at between $16 and $18 apiece in its initial public
offering.
Market Talk:
Government Bond Yields Are Still Low Historically, Likely to
Rise, Says Kempen
1041 GMT - Despite the sharp upturn in 10-year U.S., German and
U.K. government bonds, yields are still historically low and likely
to rise further, says Joost van Leenders, senior investment
strategist at Kempen Capital Management. "We therefore believe that
yields will rise further and see the greatest risk of this
happening in the U.S.," the strategist says. Kempen assumes that
any excessive increases in government bond yields will be countered
by policy adjustments. With this view in mind, Kempen continues to
hold a negative outlook for government bonds.
---
Ryanair's Share of Europe's Short-Haul Market to Rise in
2023
1033 GMT - Ryanair's capacity share of Europe's short-haul
market will increase 7 percentage points to 24% in 2023 as its
competitive overlaps ease and it benefits most from capacity cuts
at Norwegian and Alitalia, Berenberg says. The budget airline's top
10 competitors' share of its network fell from 150% in 2019 to 100%
in 3Q, and flag carriers will struggle to recover ground after 2022
as Ryanair's cost leadership will be extended after the delivery of
new aircraft, Berenberg says. "The fleet's transition to the MAX-8
aircraft will provide an annual 0.8 percentage point unit cost
tailwind for fiscal 2022 to fiscal 2024 estimates," the German bank
says. Berenberg rates the stock buy and raises the target price to
EUR21 from EUR20.
---
UK Growth Expected to Slow in Short-Term; Inflation to Edge
Up
1007 GMT - The U.K. economy is likely to experience a taste of
stagflation for the next six months as the worsening product and
labor shortages will put the brakes on economic growth and at the
same time higher energy prices will drive up inflation, Capital
Economics' chief U.K. economist Paul Dales says. The coincidence of
low economic growth and high inflation won't be anywhere near as
severe or as persistent as in the 1970s, he says. Inflation is
expected to accelerate to around 5% in April 2022 before falling
back to the 2% target in late 2022, but the Bank of England's
growing fear that some of this rise in inflation becomes embedded
will prompt a rise in interest rates for the first time since the
pandemic, Dales says.
---
EasyJet Is Well Placed for the Next Phase of Recovery
0944 GMT - With a balance sheet fit to weather a weak winter
period easyJet is well placed for the next phase of recovery as the
prospect of a potential dilutive equity raise no longer hangs over
its shares, Berenberg says. The budget airline is well-placed to
capitalize on improving industry pricing, when looking beyond the
next six months, with ancillary initiatives such as bag fees
bolstering its unit revenue outlook, the German bank says.
Furthermore the uncertainty surrounding British Airways's plans at
Gatwick Airport represent an opportunity for the airline as it
could purchase BA's slots for around EUR1 billion, the bank says.
"Not only could this help pricing, but economies of scale would
drive cost efficiencies at the airport," Berenberg says.
---
EasyJet Has the Characteristics of an Attractive Takeout
Target
0935 GMT - EasyJet's attractive market access, relatively
inflated cost base compared with other budget airlines and recently
expanded cash balance make it an appealing takeout target,
Berenberg says. If Wizz Air was to acquire the airline, it could
achieve annual cost synergies of around EUR440 million, the bank
says. This would easily warrant a premium of around 35% to
easyJet's current share price, which has an implied equity value of
around GBP6.6 billion, it says. "The pro-forma entity would be the
second largest contributor to European shorthaul capacity, driving
consolidation and healthier capacity discipline." Berenberg raises
its rating on the stock to buy from hold, and the target price to
800 pence from 720 pence.
---
Centamin Production Expected to Continue Improving in Coming
Quarters
0906 GMT - Centamin's production for the third quarter was
slightly below forecasts, but output rates should continue to
improve in the coming quarters especially as the company's
knowledge of the Sukari orebody increases, RBC Capital Markets
says. According to RBC, third quarter performance was solid, with
the open pit delivering a quicker-than-anticipated return to higher
gold grades. "We continue to see an improving underlying backdrop
for gold equities as macro uncertainty continues to grow. Centamin,
following the market's rebasing of expectations, we believe is in a
strong position to benefit from this trend," the bank says.
Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka
Halas at sarka.halas@wsj.com
(END) Dow Jones Newswires
October 19, 2021 07:10 ET (11:10 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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