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FTSE Down, Pound Seen Falling Vs Euro Once ECB Starts Lifting Rates

Pound Seen Falling Vs Euro Once ECB Starts Lifting Rates

1049 GMT - Sterling should remain supported versus the euro in the near-term as the Bank of England continues raising interest rates but could weaken later this year when the European Central Bank starts lifting rates, Commerzbank says. The BOE took a somewhat more cautious stance at Thursday's meeting but raised its key rate 25 basis points to 0.75% and signalled further increases, which should support sterling for now, Commerzbank currency analyst You-Na Park-Heger says in a note. However, the ECB is likely to deliver its first rate rise in September, sending EUR/GBP higher, she says. "Two more hikes are likely to follow in December and March 2023." Commerzbank expects EUR/GBP to rise to 0.87 by December from 0.8425 currently.

 
Companies News: 

ContourGlobal Posts Record 2021 Earnings; Sees 2022 Performance Ahead of Expectations

ContourGlobal PLC on Friday reported record high earnings for 2021 and said that performance in the current year is better than expected.

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Essentra Swung to 2021 Pretax Profit on Higher Revenue; Strong Start to 2022

Essentra PLC said Friday that it swung to a pretax profit for 2021 as revenue rose, and that it had made a strong start to the year with sales and its order book ahead of 2021.

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Eurocell Swung to 2021 Pretax Profit; Starts 2022 With Strong Sales, Performance

Eurocell PLC reported on Friday a swing to a pretax profit for 2021 and said that it has started 2022 in a strong position, with sales volumes to the end of February up 6% on the previous year.

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IAG Agrees to Give Air Europa's Owner EUR100M Loan for Potential 20% Stake in Airline -- Update

International Consolidated Airlines Group SA said it has signed a deal with Air Europa's conglomerate owner Globalia Corporacion Empresarial SA to provide a 100 million euro ($110.3 million) seven-year unsecured loan in exchange for a potential stake of up 20% in the Spanish airline.

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Cenkos 2021 Profit Rose on Higher Transactions

Cenkos Securities PLC on Friday reported a profit rise for 2021, reflecting growth in transactions and clients.

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J.D. Wetherspoon 1H 2022 Pretax Loss Narrowed on Higher Revenue

J.D. Wetherspoon PLC said on Friday that its pretax loss narrowed for the first half of fiscal 2022 as revenue rose, and that trade in the last three weeks to March 13 was 2.6% below the equivalent period in 2019, reflecting an improving trend in the sector.

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Investec PLC Raises FY 2022 Earnings Guidance; Sees Operating Performance Above Pre-Pandemic Levels

Investec PLC on Friday raised its earnings guidance for fiscal 2022, citing strong momentum in the second half, and said its operating performance is better than pre-pandemic levels.

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Harland & Wolff Appoints Malcolm Groat as Chairman

Harland & Wolff Group Holdings PLC said Friday that it has appointed Malcolm Groat as chairman.

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Sycamore Partners Considers Bid for Ted Baker

Sycamore Partners Management LP on Friday confirmed that it is considering making a bid for the clothing brand Ted Baker PLC.

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Xeros Technology CEO to Step Down

Xeros Technology Group PLC said Friday that Chief Executive Officer Mark Nichols has informed the company that he intends to step down.

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Impact Healthcare Buys Two Care Homes in Mansfield, England, for GBP11.1M

Impact Healthcare REIT PLC said Friday that it has acquired two care homes for 11.1 million pounds ($14.6 million) from Woodleigh Care in Mansfield, Nottinghamshire, in England.

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Symphony International Swung to a 2021 Pretax Profit, Positive EPS

Symphony International Holdings Ltd. reported on Friday a swing to a pretax profit, as well as positive earnings per share for 2021 as a whole.

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Ferrexpo's Deadline for Publishing 2021 Results Extended to June 30

Ferrexpo PLC said Friday that the deadline for publishing its 2021 accounts has been extended to June 30 due to the impact of Russia's invasion of Ukraine.

 
Market Talk: 

UK DMO Expected to Revise FY2021-22 Financing Remit Lower

1301 GMT - The U.K. Debt Management Office is likely to revise lower its gross financial requirement for the current 2021-22 fiscal year next week, says Bank of America. The figure is now likely to be around GBP145.5 billion instead of the GBP178.1bn the debt agency had projected in October last year, it says. "Our assumptions for the current fiscal year imply a GBP31.9bn overfund to be carried over that should translate into a GBP165bn gross financial requirement in 2022/23," they say. Generally, they expect meaningful gilt supply and an absent Bank of England this coming fiscal year, as the central bank stopped the reinvestment of the proceeds of maturing gilts and edges closer to active sales of its GBP895 billion bond portfolio.

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BOE's Caution Warrants Aggressive Tightening in May and Beyond

1121 GMT - The Bank of England's cautious policy decision Thursday may force the central bank to tighten monetary policy more aggressively, says Mizuho. "The BOE delivered a dovish hike, watering down some of their hawkish rhetoric, to wait-and-see how things pan out," analysts at the Japanese bank say, commenting on BOE's 25 basis-point rate rise to 0.75% on Thursday. "The BoE is focused on increasing energy costs and the negative impact on the U.K. consumer, to the point that they are seeing balanced risks to growth," they say. "We think this caution will force the BOE into a more aggressive tightening in May and beyond." They reiterate their projection that the BOE will raise rates by 25 basis points in May and August.

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Wetherspoon Would Benefit From No VAT Rise in April

1113 GMT - As a discounter, pub operator J.D. Wetherspoon would be one of the biggest winners if the U.K. doesn't increase the VAT rate on April 1, although there is a small chance this won't happen, analysts at Peel Hunt say. "With prices rising, supporting profitability, we see the shares' 2023 estimate equity free cash flow yield of 12% as attractive," the U.K. brokerage says. Peel Hunt has an add rating on the stock and a 1,000 pence target price. Shares are down 0.9% at 819 pence.

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Ted Baker Takeover Could Come With Additional Challenges

1050 GMT - U.S. private equity group Sycamore appears to have spotted an opportunity to buy Ted Baker while its valuation remains low, AJ Bell says. However, acquiring the British clothing brand now could come with additional challenges beyond those which have already shaken the business for years, given inflationary pressures on family finances, the investment platform says. "Ted Baker's latest trading update shows an acceleration in sales growth, improved margins, a small year-end net cash position and encouraging comments from the management. That's encouraging but the market has yet to be won over by the numbers, so Sycamore must be putting a lot of faith in the company's turnaround potential," AJ Bell says.

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Essentra Strategic Review Could Be Key to Share Price

1050 GMT - Plastic-and-fiber products supplier Essentra's 2021 results were in line with consensus with Ebit of GBP83.9 million and EPS up 55% at 18.2 pence a share, Peel Hunt says. The company reports a strong start to the year, continuing the momentum from 4Q with sales and order books ahead of last year, the U.K. brokerage says. "The key to the share price in the short term is the outcome of the strategic review--the process to move to a pure-play components business is ongoing and the review is progressing in line with expectations," Peel Hunt says. It rates the stock buy and has a 495 pence target price. Shares are down 0.2% at 313.50 pence.

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BOE Expected to Unwind QE More Aggressively

1014 GMT - After a more cautious-than-expected Bank of England rate decision Thursday, Mizuho analysts expect the central bank to unwind its GBP895 billion portfolio more aggressively than previously anticipated. Mizuho analysts expect policymakers to raise the bank rate by 25 basis points again in May, taking the key interest rate to 1%, the level at which the central bank said it would start selling the bonds it holds. "We keep our 25bp hike call for May and August, but can now envisage a more aggressive sales programme of BOE assets, after the May Monetary Policy Committee [meeting]." By then, the Retail Price Index, used as the benchmark for inflation-linked government bonds, is likely to be 10%, they say.

 

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

(END) Dow Jones Newswires

March 18, 2022 09:35 ET (13:35 GMT)

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