UK Gilt Yields Fall as BOE Raises Rates
1321 GMT - U.K. gilt yields decline, after a brief rise, after
the Bank of England raised the key rate by 50 basis points to 4.0%
but two members voted to leave rates unchanged. "Today's 50 bps
interest rate rise from the Bank of England gets us closer to the
end of the monetary tightening cycle in the U.K. - but we're not
yet done," says BlackRock chief investment strategist Vivek Paul in
a note. Paul is cautious on gilts and prefers short-term U.S.
government bonds and investment grade credit which offer high
yields at a lower risk level. The 10-year gilt yield is down 17
basis points at 3.156%, following a brief rise to 3.225%
immediately after the BOE announcement, Tradeweb data show. The
2-year gilt yield falls to 3.300% after rising to 3.409% straight
after the announcement. (miriam.mukuru@wsj.com)
Companies News:
Airtel Africa 3Q Pretax Profit Fell on Rising Costs
Airtel Africa PLC said Thursday that third-quarter pretax profit
fell despite a revenue increase, due to inflationary pressures
across its markets.
---
Superdry CEO Julian Dunkerton Has No Plans to Take Company
Private
Superdry PLC founder and Chief Executive Officer Julian
Dunkerton said Thursday that he has no plans to take the company
private.
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BT Group Nine-Month Pretax Profit Fell Depreciation Offset
Ebitda Growth
BT Group PLC said Thursday that nine-month pretax profit fell
due to increased depreciation that offset earnings before interest,
taxes, depreciation and amortization growth.
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Cranswick Says 3Q Revenue Grew; Sees In-Line FY 2023 Outlook
Cranswick PLC on Thursday said its full-year outlook remains in
line with the board's expectations as it saw revenue growth
accelerating in the third quarter of fiscal 2023.
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Shell Joins U.S. Oil Majors in Posting Record 2022 Profit --
WSJ
By Jenny Strasburg
---
JTC Sees Double-Digit 2022 Revenue Growth; Ebitda at Top End of
Market Views
JTC PLC said Thursday that for 2022 it booked double-digit net
organic revenue growth and that underlying earnings before
interest, taxes, depreciation and amortization will be at the top
end of the range of market expectations
---
James Halstead Sees 1H Pretax Profit Slipping But Remains
Positive for FY 2023
James Halstead PLC said Thursday that it expects profit for the
first half of fiscal 2023 to be slightly hit by continued though
improving headwinds, and expectations for the full-year performance
remain positive.
---
ScS Group 10-Weeks Order Intake Rose; To Meet FY 2023 Market
Views
ScS Group PLC said Thursday that like-for-like order intake rose
in the last 10 weeks and that it is on track to meet fiscal 2023
market expectations.
---
Hotel Chocolat Appoints Jon Akehurst as CFO
Hotel Chocolat Group PLC said Thursday that it has appointed Jon
Akehurst as chief financial officer with effect in May 2023.
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Safestyle Sees 2022 Swing to Underlying Pretax Loss, Revenue
Rising
Safestyle UK PLC said Thursday that it expects to swing to an
underlying pretax loss for the year ended Jan. 1, in-line with
market expectations, and revenue to rise.
---
Shell Adds $41 Billion in Profit to Record Annual Haul From Oil
Majors -- WSJ
By Jenny Strasburg
---
BT Group Nine-Month Pretax Profit Fell as Depreciation Offset
Ebitda Growth -- Update
BT Group PLC said Thursday that nine-month pretax profit fell
due to increased depreciation that offset earnings before interest,
taxes, depreciation and amortization growth.
---
Renishaw 1H Pretax Profit Fell on Higher Costs
Renishaw PLC said Thursday that pretax profit fell for the first
half of fiscal 2023 after it higher costs, and that weaker demand
in the semiconductor and electronics sectors was offset by revenue
growth from strategic priorities.
---
Dillistone Expects to Report 2022 Revenue Growth on Improving
Performance
Dillistone Group PLC said Thursday that it expects to report
full-year revenue growth for 2022 after improving performance
trends continued through the second half.
---
Altona Rare Earths Now Raise GBP1.3 Mln Ahead of Delayed AIM
IPO
Altona Rare Earths PLC said Thursday that it now plans to raise
1.3 million pounds ($1.6 million) through a share placing ahead of
a planned initial public offering on London's junior AIM, after a
previous fundraise expired.
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Shell 4Q Net Profit Boosted by Higher LNG, Deferred Taxes --
Energy Comment
Shell PLC on Thursday reported a 54% rise in net profit for the
fourth quarter compared with the earlier quarter, which it
attributed to higher liquefied natural gas trading and optimization
results, favorable deferred tax movements and partly offset by
lower realized oil and gas prices, and higher operating expenses.
Here's what the energy giant had to say:
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PCI-PAL 1H Revenue Rose, Sees FY 2023 in Line With Views
PCI-PAL PLC said Thursday that first-half revenue rose and that
adjusted Ebitda loss was better than expected as the group pipeline
continues to grow.
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Xpediator Shares Rise as 2022 Pretax Profit Seen Ahead of
Views
Shares in Xpediator PLC rose 13% on Thursday after the company
said that it expects to report 2022 revenue at just below 400
million pounds ($494.9 million) with adjusted pretax profit
significantly ahead of previous management guidance of GBP9.0
million.
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Vast Resources Shares Rise on High Court Order for Diamonds
Release
Vast Resources PLC shares rose Thursday after it said that the
High Court of Zimbabwe has granted a default order against the
country's Minister of Mines & Mining Development, relating to
historic diamond claims.
---
88 Energy Shares Fall on Discounted Share Placing
88 Energy Ltd. shares fell on Thursday after the group said that
it expects to raise up to 12.0 million Australian dollars ($8.6
million) via a discounted share placing to strengthen its balance
sheet and provide sufficient capital to fund some of its
projects.
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Ingenta Sees Increased 2022 Revenue, Earnings on Commercial
Division Growth
Ingenta PLC said Thursday that it expects to report increased
revenue and adjusted earnings before interest, taxes, depreciation
and amortization for 2022, in line with market expectations, thanks
to growth at the commercial division.
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Esken Sees FY 2023 Ebitda at Renewables Division Below Guidance
on Unplanned Outages
Esken Ltd. said Thursday that fiscal 2023 Ebitda for its Esken
Renewables division will be below guidance as biomass plant
customers have experienced unplanned outages during the winter
months.
---
Essentra to Return Around GBP150 Mln to Shareholders via Special
Dividend, Buyback Program
Essentra PLC said Thursday that it will return around 150
million pounds ($185.6 million) to shareholders via a special
dividend and a buyback program.
---
Jadestone 2022 Production Slipped but Revenue Rose on High Oil
Prices
Jadestone Energy PLC said Thursday that 2022 production slipped,
in line with expectations, though it said it expects to report that
revenue rose and that it has made a strong start to 2023.
---
Iconic Labs Reduces Credit Claims; In Talks Over
Acquisitions
Iconic Labs PLC said Thursday that creditor claims were reduced
after the group exit from administration and that it is in talks
regarding potential acquisitions.
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Shell Posts $41 Billion Profit, Adding to Industry's Record Haul
-- Update
By Jenny Strasburg
---
NCC Group 1H Revenue, Pretax Profit Rose on Assurance
Performance Across Regions
NCC Group PLC said Thursday that pretax profit and revenue rose
for the first half of fiscal 2023 after it booked strong North
America and U.K. & APAC Assurance performance.
---
Immotion Shares Leap on Planned LBE Business Sale, Return to
Shareholders
Shares of Immotion Group PLC rose as much as 79% on Thursday
after the company said that it is selling its location-based
entertainment business for an enterprise value of $25.2 million and
that it will return up to 13.5 million pounds ($16.7 million) of
the money to shareholders.
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Heathrow CEO John Holland-Kaye to Step Down
London's Heathrow Airport said Thursday that Chief Executive
Officer John Holland-Kaye intends to step down from the board in
2023.
---
NCC Group Shares Slide After Company Flags Longer Sales
Cycle
Shares of NCC Group PLC fell as much as 20% on Thursday after
the company said it has experienced a longer sales cycle since the
beginning of the second half of the fiscal year, and now expects to
report full-year revenue growth in the single-digits on a constant
currency basis.
---
Heathrow Airport CEO to Step Down After Turbulent Summer --
Update
By Benjamin Katz
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Shell Posts $41 Billion Profit, Adding to Industry's Record Haul
-- 2nd Update
By Jenny Strasburg
Market Talk:
StanChart Looks Less Attractive Than UK Domestic Rivals
1136 GMT - Standard Chartered shares don't look as attractive as
those of U.K. domestic rivals, Goldman Sachs says, downgrading the
emerging market-focused bank to neutral from buy. The shares have
outperformed the European bank sector by 33% since August 2021 on
the back of divergent rate hiking paths, which now appear to have
played out, Goldman says. Consensus forecasts increasingly appear
to reflect the benefit of higher rates, with 2023 net interest
income forecasts up 18% over the last year, the bank says. "We see
more limited benefit from higher policy rates in Hong Kong,"
analyst Martin Leitgeb adds in a note, saying Goldman prefers U.K.
domestic peers Natwest and Lloyds Banking Group, both of which it
rates as buy. (philip.waller@wsj.com)
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Inflation Reduction Act Makes Some U.S. Investments 'Suddenly
Interesting,' Shell CEO Says
1136 GMT - The U.S. Inflation Reduction Act is a boon to
renewable-energy investment that poses "a broad set of
opportunities" in the U.S. for oil giant Shell, the London-based
company's Chief Executive Officer Wael Sawan tells reporters on a
media call Thursday. "We see now opportunities that we were on the
fence on, that are suddenly interesting because of the tax
credits," Sawan says, citing areas including blue-hydrogen
production and carbon-capture technologies. His comments come in
his first quarter as CEO, and as Shell reports record full-year
earnings for 2022, a blowout year for big oil-and-gas companies.
(jenny.strasburg@wsj.com; @jennystrasburg)
---
Strong Company Fundamentals Support Sterling IG Credit
1156 GMT - Sterling-denominated investment grade bonds are an
attractive investment due to strong company fundamentals and high
levels of yields, says IBOSS senior investment analyst David
Winckler in a note. "We like the investment grade U.K. credit
market because company fundamentals remain robust, and yields are
attractive," he says. The sterling bank credit are also suitable
investments as banks in the U.K. are far better capitalized than
during the Great Financial Crisis, Winckler says.
(miriam.mukuru@wsj.com)
---
JTC Seen With Strong Momentum, M&A Potential
1203 GMT - JTC's update points to 2022 Ebitda at the top end of
the consensus range, with continued strong organic growth momentum
in the business, RBC Capital Markets analyst Andrew Brooke says in
a research note. Brooke says the fund administration industry has
structural growth potential and consolidation will be a major theme
that JTC will play its part in. "In our view, JTC is well
positioned given its unique ownership model and jurisdictional
reach," he says. RBC has a sector perform rating on the stock with
a 820 pence price target. Shares trade up 4.6% at 755.00 pence.
(kyle.morris@dowjones.com)
---
BOE's Monetary Report Is 'Far Cry' from Earlier Dire
Predictions
1217 GMT - The Bank of England's monetary policy report is a
"far cry from the rather dire predictions of only a few weeks ago,"
revealing that the BOE now expects a shorter and shallower
recession, Jeremy Batstone-Carr, European strategist at Raymond
James Investment Services says in a note. The BOE raised the bank
rate by 50 basis points to 4%, as most in the market had expected,
but the Monetary Policy Committee was again split with two members
voting for unchanged rates and one for a 75bp increase. The markets
are eager for the BOE to signal it is close to, or at, its peak
rate, the strategist says. (emese.bartha@wsj.com)
---
Sterling Trims Losses Only Briefly After BOE Lifts Rates
50Bp
1229 GMT - Sterling trims its losses but only briefly after the
Bank of England raised interest rates by 50 basis points to 4.0%
although two out of nine members preferred to keep rates unchanged.
Some analysts expected a smaller 25bp rate rise. The BOE said
inflation is likely to fall sharply over the rest of the year but
the outlook is uncertain and it will lift rates further if
inflationary pressures persist. GBP/USD initially rises to 1.2386
after the decision from 1.2332 beforehand but has since fallen back
down to 1.2284. EUR/GBP briefly falls to 0.8888 from 0.8919 before
rising to a fresh four-month high of 0.8950, according to FactSet.
(renae.dyer@wsj.com)
---
BOE Could Be Nearing End of Rate-Rise Cycle
1238 GMT - The Bank of England is likely to be nearing the end
of its interest-rate rising cycle after lifting rates by 50 basis
points to 4.0% on Thursday, Killik & Co partner Rachel Winter
says. While the market had priced in Thursday's rate decision, many
had hoped the BOE would hold off on a further rise given the latest
inflation reading registered a slight fall in prices, she says in a
note. "The good news is that we do appear to be getting close to
peak interest rates, with the market now predicting that our base
rate will reach 4.5% this summer before declining."
(renae.dyer@wsj.com)
---
BOE Could Start Cutting Rates by Year-End
1249 GMT - The Bank of England looks set to raise interest rates
only once more, with the possibly of rate cuts before year-end, UBS
Global Wealth Management says. It seems the appetite for further
outsized rate rises is fading after the BOE lifted rates by 50
basis points to 4.0% on Thursday, although another increase is
still likely given the BOE's outlook for growth and inflation, UBS
economist Dean Turner says in a note. "We look for one further
increase of 25 basis points in March which should mark the top of
the cycle," he says. "Furthermore, we believe the door remains open
for rate cuts before the year is out." (renae.dyer@wsj.com)
---
BOE's Lower Inflation Forecasts Point to End of Interest-Rate
Increases
1254 GMT - The new inflation forecasts from the Bank of England
suggest policy makers won't need to raise interest rate further
over the coming months in order to bring inflation back to the 2%
target, Pantheon Macroeconomics chief U.K. economist Samuel Tombs
says in a note. The minutes of the meeting didn't include any clear
guidance of further interest rate increases, he adds. Still, one
last 25 basis-point rate increase in March still can't be ruled
out, Tombs says. "But if, as we expect, signs of slowing price
rises and accumulating labour market slack continue to emerge in
line with its expectations, then the Monetary Policy Committee
looks set to keep bank rate at 4% in March, and throughout the rest
of this year." (xavier.fontdegloria@wsj.com)
---
BOE Statement Indicates Caution, Points to Data Dependence
1258 GMT - The Bank of England's statement accompanying a 50
basis-point rate rise indicates a central bank that is cautious and
looking for more data to direct them on future policy action,
Fredrik Repton, portfolio manager with the global fixed income and
currency management teams at Neuberger Berman, says in a note. The
labor market is stronger than they had expected and they have
revised up forecasts for the economy as a whole, but the BOE now
expects inflation to drop markedly due the base effects in energy
prices, he says. "Thus, it has removed the reference to forceful
with regards to increasing interest rates and this is perhaps the
biggest takeaway before the press conference as market participants
reads this as dovish." (emese.bartha@wsj.com)
---
BOE Expected to Keep Raising Interest Rates Amid Tight Labor
Market
1259 GMT - The Bank of England is expected to continue to
increase interest rates to at least 4.50% from the current 4.00%,
J.P. Morgan Asset Management chief market strategist for EMEA Karen
Ward says in a note. "Even though headline inflation is likely to
fall in the coming months, on the back of stable energy prices, we
do not expect core inflation to weaken materially as wages continue
to put upward pressure on costs and final prices," she says. The
U.K. has a problem of labor supply as half a million people left
the workforce during the Covid-19 pandemic and may not return in
the short-term, she says. "At times like these, the bank has to
make the 'unpopular' choice," Ward says.
(xavier.fontdegloria@wsj.com)
---
European Stocks Stay Higher After BOE Rate Rise
1302 GMT - European stocks broadly maintain gains after the Bank
of England raised U.K. interest rates, though sterling compounded
losses. The Stoxx Europe 600 gains 0.4%, the FTSE 100 rises 0.5%,
the CAC 40 edges 0.1% higher and the DAX jumps 1.1%. Brent crude
drops 0.7% to $82.23 a barrel. IG futures data show the Dow opening
at 33933, versus Wednesday's close of 34092. The pound drops
against the euro and the dollar as the BOE increased rates by 0.5%
percentage points to 4%, but implied that they might have peaked.
"We retain a cautious view on U.K. and European stocks in the face
of downside risks to GDP and corporate earnings growth relative to
consensus expectations," HSBC Global Asset Management strategist
Hussain Mehdi writes. (philip.waller@wsj.com)
---
Sterling Could Fall, Gilt Yields Rise After Rate Decision
1309 GMT - Sterling may fall in the near-term and yields of U.K.
government bonds, or gilts, may rise slightly after the Bank of
England's policy decision Thursday, Aviva Investors says. With the
BOE anticipating a shorter and shallower recession and saying
inflation risks are "skewed significantly to the upside," gilt
yields should rise but not materially given expectations for
inflation to ease, Aviva head of rates Ed Hutchings says in a note.
"Sterling may well begin to struggle in the near-term, and with the
sizeable amount of gilt issuance to come, plus on-going
quantitative tightening, 2023 could also be somewhat more
challenging for the gilt market." The BOE voted 7-2 to lift rates
by 50 basis points on Thursday. (renae.dyer@wsj.com)
---
BOE's Tightening Cycle Looks Close to Its End
1309 GMT - The Bank of England's messaging suggests the bank is
laying the groundwork for the end of the current cycle of
interest-rate increases, ING developed markets economist James
Smith and senior rates strategist Antoine Bouvet say in a note.
Lower inflation forecasts, muted language about future
interest-rate hikes and warnings about economic growth suggest the
peak level of the deposit rate is close, they say. Still,
Thursday's interest rate increase isn't likely to be the last amid
still-high wage growth, ING says. "We think the BOE will be less
rapid to turn to rate cuts than the Federal Reserve, given core
inflation is likely to prove stickier," they say. "That suggests
policy easing is unlikely for at least a year."
(xavier.fontdegloria@wsj.com)
---
BOE Outlook Uncertain, Premature to Expect Rate Rises to End
1311 GMT - The outlook for U.K. inflation and interest rates
remains uncertain and it's too early to conclude that the Bank of
England will soon stop raising rates, Marcus Brookes, chief
investment officer at Quilter Investors says in a note. "Calling
this the beginning of the end of rate hikes still feels a little
premature," he says after the BOE raised interest rates by 50 basis
points to 4.0%. Inflation is "stubbornly high" and the BOE is "keen
to reinforce that the job is far from done," he says. "It may be
the Bank of England is happy to allow a shallow, but prolonged,
recession take place in order to tame inflation." Investors should
stay "patient and diversified," he says.
(jessica.fleetham@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires;
(END) Dow Jones Newswires
February 02, 2023 08:57 ET (13:57 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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