LONDON BRIEFING: National Grid plans GBP7 billion capital raise

(Alliance News) - Stocks in London are called to open slightly higher on Thursday, with focus on interest rate policy in the UK and US.

Eyes have been on UK Prime Minister Rishi Sunak, who has called a general election for July 4. Sunak called the election "the moment for Britain to choose its future".

The prime minister has gambled that improved inflation figures and a recovering economy will help him overturn Labour's 20-point opinion poll lead.

Stocks in New York on Wednesday took a hit, after some hawkish US central bank minutes.

Federal Reserve officials grew more concerned about the lack of progress in tackling inflation, minutes from the latest Federal Open Market Committee meeting showed, with some members even suggesting rates should rise.

In early corporate news, National Grid announced a GBP7 billion capital raise.

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 slightly at 8,373.30

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Hang Seng: down 1.6% at 18,892.14

Nikkei 225: closed up 1.3% at 39,103.22

S&P/ASX 200: closed down 0.5% at 7,811.80

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DJIA: closed down 201.95 points, or 0.5%, at 39,671.04

S&P 500: closed down 14.40 points, or 0.3%, at 5,307.01

Nasdaq Composite: closed down 31.08 points, or 0.2%, at 16,801.54

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EUR: down at USD1.0826 (USD1.0840)

GBP: down at USD1.2724 (USD1.2732)

USD: up at JPY156.71 (JPY156.55)

Gold: down at USD2,365.70 per ounce (USD2,389.20)

(Brent): down at USD81.32 a barrel (USD82.21)

(changes since previous London equities close)

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ECONOMICS

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Thursday's key economic events still to come:

10:00 CEST eurozone flash composite PMI

16:00 CEST eurozone consumer confidence

09:15 CEST France flash composite PMI

09:30 CEST Germany flash composite PMI

09:30 BST UK flash composite PMI

08:30 EDT US Chicago Fed national activity index

08:30 EDT US initial jobless claims

08:30 EDT US building permits

09:45 EDT US flash composite PMI

10:00 EDT US new home sales

10:30 EDT US EIA natural gas stocks

11:00 EDT US Kansas City Fed manufacturing activity

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BROKER RATING CHANGES

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JPMorgan raises Unilever to 'overweight' (underweight) - price target 5,100 (3,600) pence

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COMPANIES - FTSE 100

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National Grid reported that pretax profit in the year ended March 31 fell to GBP3.05 billion from GBP3.59 billion a year earlier. Operating profit dropped to GBP4.48 billion from GBP4.88 billion. Revenue fell to GBP19.85 billion versus GBP21.66 billion a year ago. National Grid upped its dividend to 58.52p from 55.44p. It also announced a fully underwritten equity raise of GBP7 billion via rights issue to fund a GBP60 billion investment in energy network infrastructure in the five years to the end of March 2029, nearly double the investment of the past five years. Looking ahead, National Grid's focus is on its five year investment plan. Chief Executive John Pettigrew said the investment cemented the company's position "as a leader in the energy transition in the UK and US northeast." He added: "This is an unprecedented time for our industry that is creating significant opportunities for National Grid today, over the next five years and for decades to come. Our new five-year investment plan will deliver long-term value and returns for our shareholders, support over 60,000 more jobs, and accelerate the decarbonisation of the energy system for the digital, electrified economies of the future."

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Aviva reported that General Insurance premiums rose by 16% annually to GBP2.7 billion in the first quarter of 2024. Looking ahead, Aviva reiterated its full year outlook, eyeing an operating profit of GBP2 billion by 2026. "This is another set of excellent results, extending our track record of consistently strong trading. Our diversified business model is continuing to deliver, and we are growing right across the group," said CEO Amanda Blanc.

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COMPANIES - FTSE 250

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Hargreaves Lansdown on Wednesday rejected a takeover approach from a group of private equity firms including CVC Advisers. In a brief statement, the consortium which includes CVC Advisers Ltd, Nordic Capital XI Delta, and Platinum Ivy B 2018 RSC Ltd, a wholly-owned subsidiary of Abu Dhabi Investment Authority confirmed making a bid for the investment platform and financial services company. The consortium said it was considering a possible offer for Hargreaves Lansdown after having made a 985 pence per share proposal on April 26. Hargreaves Lansdown rejected the proposal, the consortium said.

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Wizz Air reported that revenue in year ended March 31 jumped 30% to GBP5.07 billion from GBP3.90 billion a year earlier. The airline swung to a pretax profit of GBP341.1 million from a loss of GBP546.6 million. Looking ahead, Wizz Air said trading in the new financial year has been "encouraging", with sustained demand and positive booking momentum for the summer. "Sustained healthy demand for air travel across our markets was a defining feature of F24, signalling that the surge witnessed post pandemic has evolved into a longer-term trend in consumer behaviour. Wizz Air has been strongly positioned for this trend as reflected in our performance for the year," said CEO Jozsef Varadi.

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Tate & Lyle reported that revenue in the year ended March 31 fell to GBP1.65 billion from GBP1.75 billion a year earlier. Pretax profit however jumped 48% to GBP226 million from GBP152 million. Tate & Lyle announced a final dividend of 12.9p per share, bringing the full-year dividend to 19.1p per share, up 3.2%. CEO Nick Hampton said: "In challenging market conditions, it's been another year of robust financial performance and strategic progress, with strong profit growth and productivity delivery, excellent cash generation, and further progress to transform the business."

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OTHER COMPANIES

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Riders and shareholder activists are preparing to challenge Deliveroo on poor pay, working conditions and job security at its annual general meeting. The board will face questions from Deliveroo riders, co-ordinated by ShareAction and the Independent Workers Union of Great Britain, during the meeting at the offices of law firm White & Case in central London on Thursday. They will allege that Deliveroo has failed to engage with riders who say they have been facing increasing financial difficulties in the last 12 months. Riders raised similar frustrations at last year's AGM where they also protested against the bumper pay package of Founder & CEO Will Shu.

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By Sophie Rose, Alliance News senior reporter

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