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FTSE 100 Slips Back on Disappointing US Jobs Report

The FTSE 100 slipped back in the red this afternoon, ending the week down 0.35% on weaker-than-expected U.S. nonfarm payrolls data. This, coupled with a disappointing national employment report released by ADP earlier this week, have raised concerns that the U.S. economy is hitting a rough patch, IG's chief market analyst Chris Beauchamp says. Initially stock markets took it well, with limited losses for U.S. futures and European stocks, but the flight to exit worsened after U.S. markets opened. "However, the recent pattern of opening losses followed by a rebound later in the U.S. session provides hope that Friday won't be the beginning of something more dramatic, even if September has yet to get underway in earnest," Mr. Beauchamp said.

 
Companies News: 

Triple Point Social Housing Says 1H Net Asset Value Remained Flat

Triple Point Social Housing REIT PLC said Friday that its net asset value stayed flat over the first half of the year, suggesting it declined in the second quarter.

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Serica Energy Appoints Andrew Bell CFO

Serica Energy PLC said Friday that Andrew Stuart Bell has been appointed as chief financial officer and a director of the company with immediate effect.

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Mercantile Investment Trust Raises GBP150 Mln in Long-Term Debt

Mercantile Investment Trust PLC said Friday that it has raised 150 million pounds ($207.5 million) in long-term debt via the issue of unsecured notes.

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Alba Mineral's Greenland Spinout to Raise GBP5.1 Mln in London IPO

Shares in Alba Mineral Resources PLC rose Friday as its Greenlandic spinout GreenRoc Mining PLC said it intends to raise 5.1 million pounds ($7.1 million) at its initial public offering in London.

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International Public Partnerships Increases Holding in Angel Trains

International Public Partnerships Ltd. said on Friday that it will increase its shareholding in U.K. rolling stock company, Angel Trains, by a further approximately 5%, and that it will acquire the shareholding from AMP Capital and associated investors.

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Watchstone Says Polygon's Final Offer Undervalues Company

Watchstone Group PLC said Friday that the final takeover offer from Polygon Global Partners LLP undervalues the company.

 
Market Talk: 

Ashmore's Full-Year Results Were Mixed; Better Value Elsewhere

0954 GMT - Ashmore Group's final results were mixed, says Panmure Gordon, as the asset manager's shares drop 5%. Management fees were a little disappointing due to market volatility in the second half of the year, with performance fees and other items a bit better, Panmure Gordon says. Direct costs were well controlled, while staff costs were higher than expected, reflecting bonuses. "This year, the company believes the value in emerging markets to be even more compelling, but there is always a lag before others agree," analysts at the brokerage say. "Ironically while short-term investment performance is exceptional, the outlook for performance fees is modest. There are stronger investment cases elsewhere in the sector."

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Mitchells & Butlers, Wetherspoons Pub Chains Most Exposed to Rising Wages

0932 GMT - Mitchells & Butlers and JD Wetherspoon are the U.K. pub chains with most to fear from wage inflation, Jefferies says. Mitchells & Butlers suffers from having around 40% of its sites within London's M25 ring road, where competition for staff is fiercest, meaning rising wages could materially hit its 19% Ebitda margin, the brokerage says. Wetherspoons is exposed due to its relatively low Ebitda margin of 12%, although it could fare better if competitors are forced to raise prices, Jefferies says. The brokerage expects that a roughly 10% decline in pub numbers in the wake of the Covid-19 pandemic will relieve competition in the sector.

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Ashmore Group's Results Point to Emerging Markets' Poor Performance

0912 GMT - Ashmore's fiscal 2021 results paint a mixed picture for the asset management company, Mark Crouch at eToro says. Although pretax profits were up on 2019, Ebitda and net revenues were down, he says. Despite the company saying this was mostly due to lower fee income offset by higher fee performance, the continuing poor performance of emerging markets can't be discounted, Crouch says. The pandemic has hit, and continues to affect, emerging markets hard and markets such as China have recently been affected by regulatory crackdowns, he says. "With vaccines now beginning to roll out across major EM economies such as Brazil, South Africa and India, the performance of markets in these regions should begin to turn around," Crouch says.

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Royal Mail Exposed to Pay Pressure Amid Driver Shortages

0910 GMT - Royal Mail is among the stocks most exposed to wage pressures in the transport-and-logistics sector, Jefferies says. The U.K. postal operator's agreed nominal 1% pay rise for 2021-22 and a one-hour working week reduction over a two-year period implies 2.6% inflation overall, the brokerage says. Jefferies notes negotiations for a new pay deal will likely start this autumn amid an acute driver shortage in the U.K. Royal Mail's GLS logistics operation could also be hit by increasing labor shortages in the U.S., Jefferies says. "Higher wage inflation has proven to be difficult to pass on to clients, as stamp prices are regulated, and the parcel market used to be highly competitive," Jefferies says.

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UK Services Exports Subdued in August Due to Brexit, Pandemic

0906 GMT - The U.K.'s service sector experienced subdued export orders that weighed on overall new business intakes in August, according to the IHS Markit/CIPS purchasing managers survey. Many survey respondents blamed a lack of inbound tourists due to the pandemic, while some others cited Brexit trade frictions. "Brexit continued to make its mark and supply shortages and logistics difficulties will pile on the pressure in the coming months but service companies remained buoyant about future opportunities," CIPS director Duncan Brock says. The U.K. services purchasing managers index for August was downwardly revised to 55.0 from an initial estimate of 55.5, compared with 59.6 in July. However, a level above 50 signals an expansion in sector activity.

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UK Services-Sector Growth Slows to Six-Month Low on Supply Shortages

0905 GMT - U.K.'s services sector continued to expand in August, albeit at a slower pace since February amid a normalization of customer demand and shortages of staff and materials, data from IHS Markit shows. The services PMI fell to 55.0 in August from 59.6 in July. Respondents of the survey linked softer new order growth partly to the end of the full stamp duty holiday and a subsequent cooling in consumer demand arising from residential property transactions, as well as to the lack of inbound tourists and Brexit trade friction, the report said. "The service sector lost momentum for the third consecutive month as the impact of looser pandemic restrictions faded in August," IHS Markit's economics director Tim Moore says.

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Berkeley Group Flags Higher Costs, Brexit Supply-Chain Issues

0852 GMT - Shares in Berkeley Group Holdings edge 0.4% lower after the U.K. house builder flagged rising raw-material costs and supply-chain and labor-market shortages resulting from the U.K.'s EU exit and the pandemic. Despite cost pressures, market conditions remain good and selling prices are rising, leaving profit strong, Hargreaves Lansdown says. "Reservations are back to pre-pandemic levels, suggesting an increase of around 25% over 2020 levels as the London market comes roaring back to life," Hargreaves fund manager Steve Clayton says. "The group's confidence is shown in its comment that the next shareholder return of GBP141 million could be made via share buybacks," he says. (philip.waller@wsj.com)

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Eurocell May See Forecast Upgrades for 2021

0834 GMT - Eurocell's management saying that second-half trading will remain robust and that the conditions will continue in the foreseeable future underpin an increase in expectations for 2022, Goodbody says. The company increased its capital expenditure guidance to GBP18 million from GBP12 million and it has made further commitments to the sustainability agenda, the Irish brokerage says. The manufacturer of window, door and roofline PVC products may see an upgrade of around 4% to pretax profit forecasts to around GBP26.5 million, which cumulatively brings the total upgrades for the year to date to more than 50%, the broker says. "Eurocell is clearly demonstrating its ability to take market share and through improved efficiency drive strong operating leverage through the business," Goodbody says.

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Hurricane Ida May Weigh on Shell's Shares Near Term

0832 GMT - Uncertainty surrounding the potential impact of the Hurricane Ida's damage on Shell's West Delta-143 platform could weigh on the Anglo-Dutch company's shares in the near-term, RBC Capital Markets warns. In addition, some downtime and additional costs are likely to be expected, the bank says. Shell said Thursday evening that it has identified damage at the platform, and that around 80% of its Gulf of Mexico production remains offline. "This maps to 360kboed production on our estimates, or 11% of the group, implying an 80% hit would leave [circa] 290kboed off line for a period," RBC says.

 

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

 

(END) Dow Jones Newswires

September 03, 2021 12:36 ET (16:36 GMT)

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