(Alliance News) - Stocks in London are set to open up on Thursday, ahead of the latest interest rate decision from the Bank of England.
The BoE is expected to leave the benchmark bank rate unchanged again on Thursday, but focus will be on whether the central bank lays the groundwork for a June cut.
The central bank announces its latest rate decision at 1200 BST, alongside the monetary policy report of economic projections. A press conference with Governor Andrew Bailey follows at 1230 BST.
The BoE's 25 basis points hike in August meant it has lifted rates by 5.15% during the current hiking cycle. Threadneedle Street has left rates unmoved in each of the five meetings since, however.
In early corporate news, 3i's net asset value grew but profit fell, while BAE Systems said trading in 2024 so far has been in line with expectations and left its full-year guidance unchanged.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.3% at 8,381.35
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Hang Seng: up 1.1% at 18,515.92
Nikkei 225: closed down 0.3% at 38,073.98
S&P/ASX 200: closed down 1.1% at 7,721.60
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DJIA: closed up 172.13 points, 0.4%, at 39,056.39
S&P 500: closed little changed at 5,187.67
Nasdaq Composite: closed down 29.80 points, 0.2%, at 16,302.76
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EUR: down at USD1.0739 (USD1.0749)
GBP: down at USD1.2479 (USD1.2495)
USD: up at JPY155.73 (JPY155.55)
Gold: up at USD2,314.14 per ounce (USD2,317.69)
(Brent): up at USD83.83 a barrel (USD83.48)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
12:00 BST South Africa manufacturing production
12:00 BST UK interest rate decision
17:15 BST UK Bank of England Chief Economist Huw Pill speaks
13:15 BST eurozone ECB Vice-President Luis de Guindos speaks
13:30 BST US initial jobless claims
15:30 BST US EIA natural gas storage
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UK Foreign Secretary David Cameron will on Thursday urge Nato partners to soon start spending 2.5% of GDP on defence, during a major speech in which he will call for a more muscular approach to Western foreign policy. Cameron – a former UK prime minister – will say that countries need to take more assertive action to protect their interests from emerging threats, including from Russia and Iran. "We are in a battle of wills. We all must prove our adversaries wrong –- Britain, and our allies and partners around the world," Cameron will say, according to excerpts released by the foreign ministry.
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New UK home buyer inquiries fell back in April following three months of increases in a row, according to surveyors. The Royal Institution of Chartered Surveyors said its latest survey of property professionals suggests that a recent recovery in buyer demand has mellowed slightly, with the market seeming to have been impacted by mortgage rates edging up over the past few weeks. A net balance of 1% of property professionals reported new buyer inquiries falling rather than rising in April, following a balance of 6% reporting inquiries rising in March. The regional feedback on buyer demand is mixed, with a notable loss of momentum mainly seen in London and southern parts of England, Rics said.
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Chinese exports returned to growth last month while imports smashed expectations, data showed Thursday, providing a much-needed boost to the country's leadership as it tries to steer the economy out of a long-running slump. Overseas shipments expanded 1.5% on-year in April, slightly beating FXStreet-cited market consensus of 1.0% and a strong turnaround after a shock 7.5% plunge in March. Meanwhile, imports surged 8.4%, beating the 5.4% market forecast, providing hopes that demand in the world's number two economy could be improving. Imports had fallen 1.9% annually in March. The figures from Beijing's General Administration of Customs come as authorities struggle to spur an economic recovery that has sputtered since the country emerged from stringent Covid control measures in late 2022.
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BROKER RATING CHANGES
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Barclays raises NatWest price target to 400 (330) pence - 'overweight'
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COMPANIES - FTSE 100
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3i said net asset value per share on March 31 was 2,085 pence, up from 1,745p a year earlier. Across financial 2024, the infrastructure investment trust recorded a total return of 23%, down from 36% a year earlier. Operating pretax profit fell to GBP3.83 billion from GBP4.58 billion, which it blamed on foreign exchange loss on investments versus gain. It declared a dividend of 34.5p per share, up from 29.75p a year earlier, taking its total financial 2024 dividend to 61p from 53p a year earlier. Chief Executive Officer Simon Borrows comments: "We expect that the current macro-economic conditions and geopolitical uncertainty will persist in the near term and that this will continue to impact confidence and pricing expectations in the wider mid-cap M&A market. Our rigorous and disciplined approach to capital allocation remains unchanged. We have been building resilient portfolio companies that are capable of navigating through these challenging trading conditions."
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BAE Systems said trading in 2024 so far has been in line with line with expectations, with operational performance continuing to be "strong and our backlog and programme incumbencies underscore our confidence in our long-term value-creating model," according to CEO Charles Woodburn. The defence, aerospace and security company said its full-year 2024 guidance remains unchanged. Woodburn comments: "We're continuing to deliver on mission critical requirements for our customers, and progress our long-term strategic programmes within the elevated threat environment. We have commenced the integration of our new Space & Mission Systems business in the US following the closing of the Ball Aerospace acquisition in February. Our global presence and diverse portfolio of products and services provide high visibility for top-line growth, margin expansion and cash generation in the coming years."
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COMPANIES - FTSE 250
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Watches of Switzerland said it completed the acquisition of Roberto Coin Inc, an associate company of Roberto Coin Spa, for a total of USD130 million from Roberto Coin Spa, Pilar Coin and Peter Webster, co-founder of Roberto Coin Inc. The watch retailer said Roberto Coin designs and manufactures delicately handcrafted jewellery with a unique ruby signature and is the sixth largest jewellery brand in the US by sales at retail value. Roberto Coin Inc has exclusive perpetual rights to import and distribute Roberto Coin jewellery throughout the US, Canada, Caribbean and Central America. The acquisition was financed via a new USD115 million term loan facility. Watches of Switzerland CEO Brian Duffy comments: "We believe there is significant opportunity to leverage our proven retail expertise in luxury branded jewellery. The luxury branded jewellery category has consistently outperformed the wider jewellery sector, and we see further strategic and operational opportunities for the business within the broader group."
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OTHER COMPANIES
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Synthomer said trading in the first quarter of 2024 was in line with its expectations at the start of the year. The chemicals manufacturer said continuing group volumes were at their highest levels since the second quarter of 2022, while continuing group earnings before interest, tax, depreciation and amortisation was higher than a year earlier, benefitting from "continued robust pricing particularly in our speciality businesses, ongoing cost reduction activities and lower energy costs". Continuing group revenue was lower on-year due to lower raw materials prices. CEO Michael Willome comments: "We are cautiously encouraged by trading since the start of the year: while there are signs of improvement in some of our end markets, visibility of a sustained recovery remains elusive at this stage. We therefore continue to strengthen Synthomer's position for the future, by delivering our specialisation strategy, optimising our portfolio and cost position, and demonstrating the cash generative nature of our business."
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By Greg Rosenvinge, Alliance News senior reporter
Comments and questions to newsroom@alliancenews.com
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