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LONDON BRIEFING: Woodford Equity Income Fund To Be Wound Up

(Alliance News) - The corporate director of the LF Woodford Equity Income Fund has decided to ...

Alliance News 15 October, 2019 | 8:07AM
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(Alliance News) - The corporate director of the LF Woodford Equity Income Fund has decided to wind the fund up, Woodford Patient Capital Trust said on Tuesday.

Link Fund Solutions has decided not to re-open the fund, and will be winding it up "as soon as practicable".

Woodford Investment Management will cease, with immediate effect, to be the investment manager of LF Woodford Equity Income Fund.

Woodford Investment Management also manages closed-end investment trust Woodford Patient Capital, which repeated Tuesday that it is reviewing its own management arrangements and will make an announcement "in due course".

At the beginning of June, stockpicker Neil Woodford took the decision to suspend withdrawals from the equity income fund due to "an increased level of redemptions", with the fund needing time to "reposition" its portfolio invested in unquoted and less liquid stocks into more liquid investments.

Since then, the investor has made numerous disposals of stakes in London-listed firms.

Woodford Patient Capital Trust was down 9.5% in early dealings Tuesday.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: up 0.4% at 7,241.30

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Hang Seng: down 0.1% at 26,497.77

Nikkei 225: closed up 1.9% at 22,207.21

DJIA: closed down 29.23 points, 0.1%, at 26,787.36

S&P 500: closed down 0.1% at 2,966.15

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GBP: up at USD1.2675 (USD1.2584)

EUR: firm at USD1.1034 (USD1.1022)

Gold: down at USD1,488.72 per ounce (USD1,491.04)

Oil (Brent): flat at USD58.95 a barrel (USD58.98)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Tuesday's Key Economic Events still to come

0930 BST UK monthly unemployment figures

0930 BST UK mortgage lending trends statistics

0930 BST UK BoE Carney appears before Treasury Committee to discuss Financial Stability Report

1100 BST Ireland goods exports and imports

1100 CEST Germany ZEW indicator of economic sentiment

0830 EDT US Empire State manufacturing survey

0855 EDT US Johnson Redbook retail sales index

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The UK government has rejected claims that a Brexit deal cannot be negotiated in time for a crucial EU summit after the Finnish prime minister said "more time" is needed. Boris Johnson is in a race against the clock to secure a fresh agreement for the meeting of European leaders starting in Brussels on Thursday. After meeting the European Council's president-elect Charles Michel, Finland's Antti Rinne said there was "no time" for the UK prime minister to achieve an agreement. But Housing Secretary Robert Jenrick rejected the remarks, stressing a "great deal" of progress had been made and negotiators are working "very intensively".

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US President Donald Trump imposed a raft of sanctions and doubled tariffs on Turkey on Monday over Ankara's assault on north-east Syria. The US announcement followed a rare and vocal bipartisan barrage of criticism for the Republican president's withdrawal of US troops from Syria, which critics say paved the way for the Turkish incursion and could lead to a resurgence of the Islamic State. Trump's moves cap a flurry of action on Monday as the conflict escalates between Turkey and the Syrian Kurds, who were once a key US ally. Trump ordered Vice President Mike Pence to lead a delegation to Turkey in search of an ceasefire, hours after saying he would be happy if Russia, China "or Napoleon Bonaparte" took responsibility for the Kurds.

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China's consumer inflation accelerated at its fastest pace in almost six years in September as African swine fever sent pork prices soaring nearly 70%, official data showed. Authorities have gone as far as tapping the nation's pork reserve to control prices of the staple meat, as the swine fever crisis could become a political and economic liability for the state. The consumer price index, a key gauge of retail inflation, hit 3.0% last month, the National Bureau of Statistics said, up from 2.8% in August and the highest since November 2013. The producer price index, an important barometer of the industrial sector that measures the cost of goods at the factory gate, contracted 1.2% in September from the previous year, the NBS said.

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BROKER RATING CHANGES

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RBC RAISES DUNELM GROUP TO 'SECTOR PERFORM' ('UNDERPERFORM') - TARGET 850 PENCE

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PEEL HUNT RAISES HILTON FOOD TO 'BUY' ('HOLD')

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JEFFERIES CUTS SOPHOS TO 'HOLD' ('BUY') - TARGET 583 (540) PENCE

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COMPANIES - FTSE 100

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Fund manager Schroders reported assets under management at September 30 of GBP450.8 billion, up 11% from GBP407.2 billion at January 1.

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Royal Mail will discover on Tuesday if it is facing the threat of a national strike by postal workers in a dispute over job security and terms and conditions of employment. Around 110,000 members of the Communication Workers Union have been voting on whether to launch a campaign of industrial action, with expectations of a yes vote when the result is announced. The CWU says that Royal Mail is not sticking to an agreement reached last year covering a wide range of issues, including plans to reduce the working week, as well as job security. Industrial relations at the company have worsened this year, with widespread unofficial strikes breaking out virtually every week.

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COMPANIES - FTSE 250

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Housebuilder Bellway said it put in a solid performance in financial 2019 and is well placed to deliver long-term volume growth and value for shareholders. For the financial year ended July 31, revenue rose 8.6% to GBP3.21 billion from GBP2.96 billion in financial 2018. Pretax profit rose 3.4% to GBP662.6 million from GBP641.1 million the year before. Bellway said financial 2019 was a "successful year" with a record number of housing completions at 10,892 homes, up 5.7% from 10,307 homes last year. Bellway raised its total dividend 5.2% to 150.4 pence from 143.0p last year. The midcap housebuilder said trading in the first nine weeks of the new financial year, has remained robust, with 183 reservations per week - an increase of 4.0% from the same period last year. CEO Jason Honeyman said: "The board is mindful that the uncertainty surrounding 'Brexit' could pose a threat to consumer confidence. Assuming market conditions remain favourable, the strong order book, together with additional, considered investment in land and work in progress, should enable Bellway to deliver further, yet more moderate volume growth in the year ahead."

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COMPANIES - OTHER MAIN MARKET AND AIM

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Helios Towers set its initial public offering price at 115 pence as it completes its listing on the Main Market of the London Stock Exchange. At that IPO price, Helios - which rents out mobile phone masts to operators across Africa - has an equity value of GBP1.15 billion, ranking it among the biggest IPOs of 2019 in London, behind Airtel Africa, Network International, Trainline, and Finablr. Helios will use the initial public offering proceeds to foster growth through the construction and acquisition of new sites. Helios Towers shares start conditional dealings on Tuesday, with unconditional dealings to commence on Friday.

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COMPANIES - INTERNATIONAL

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The Libra Association, created by Facebook to launch its new cryptocurrency, has announced its 21 founding members after defections by previous supporters including Visa and Mastercard. The announcement on Monday came as the planned Libra global currency faces swelling criticism from regulators, and reported warnings from the Group of Seven that it poses a threat to the global financial system. The group kicked off its first council meeting in Geneva and founding members including Uber Technologies, Spotify and Vodafone Group formally signed onto the Libra Charter, Director General Bertrand Perez said.

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Australia & New Zealand Banking Group said it expects, once action is taken, new regulations over the accounting handling of investments to have a minimal impact. The Australian Prudential Regulation Authority is planning changes to the way Australian authorised deposit-taking institutions, or ADIs, treat their investments in banking and insurance subsidiaries. Measures include the tangible part of an investment up to 10% of ANZ's net level 1 common equity tier 1, or CET1, capital treated at 250% risk-weighted, with the remainder of the investment treated as a full CET1 capital deduction. Currently, ADIs can treat the tangible parts of investments in an unlisted subsidiary as a 400% risk weighting. ANZ is looking into implications, it said, with smaller subsidiaries in places such as China and Indonesia likely to benefit but larger ones, like in New Zealand, booking a negative impact.

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Wind turbine firm Nordex reported "strong demand" for turbines in the third quarter, particularly in Europe. During the three months to September 30, Nordex received orders for 436 wind turbines with a combined capacity of 1,700 megawatts. A year prior, orders came in for 974 megawatts of turbines. In the third quarter, orders came from 14 countries. Some 60% of orders came in Europe, 28% in the US, and 12% in Latin America.

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Tuesday's Shareholder Meetings

Prudential (re demerger of M&G)

Shore Capital (re delisting from AIM)

Totally

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By Tom Waite; thomaslwaite@alliancenews.com

London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Dunelm Group PLC 828.00 GBX 0.36 -
Sophos Group PLC 570.60 GBX 0.00 -
Hilton Food Group PLC 1,014.00 GBX 0.00 -

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