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BOE's Comments Suprise More Than Its Deeds -2-

1119 GMT - U.K. gilts firm, causing yields to drop, after the Bank of England raised its key policy rate by 50 basis points to 1.75%, in line with expectations, but also warned it expects the U.K. economy to enter recession from the fourth quarter of 2022. The two-year gilt yield, which is more sensitive to changes in interest rates than yields of longer-dated bonds, fell to 1.823% after the decision from 1.873% beforehand, according to Tradeweb. The 10-year gilt yield, which is more impacted by the long-term outlook, declined to 1.860% from 1.906%, according to Tradeweb. The BOE is looking to fight surging inflation that is running way above its target. The drop in gilt yields pull down eurozone bond yields too, with the 10-year Bund yield trading near 4bps lower at 1.779%. (


Centamin Shares Rise After 1H Profits Fell Less Than Feared

1052 GMT - Shares in Centamin rise 5.3% after the gold miner reported lower profits and higher revenue for the first half of the year. The owner of the Sukari gold mine in Egypt generated Ebitda of $153 million and pretax profit of $85 million, beating consensus expectations of $130 million and $75 million, RBC's Tyler Broda says. "The newsflow over the second half of the year is going to be dominated by the underground expansion study (Q3 22), the capital structure review (Q3 22), Doropo PFS (Q4 22) and reserve and resources update (Q4 22)," the analyst says, reiterating an outperform rating on the FTSE 250 stock. (


Mondi 1H Looks Strong Given Difficult Conditions

1045 GMT - Mondi's first-half results were excellent given the context of difficult operating conditions, JPMorgan says. The paper-and-packaging company reported a small but solid Ebitda--excluding Russia--of EUR942 million, beating a market consensus of EUR918 million, JPM analysts say in a research note. "Overall market consensus of EUR1.8 billion Ebitda for 2022 [now] looks a bit conservative, particularly given the strong performance from flexibles," the U.S. bank says. Elsewhere, both Mondi's revenue and costs were higher than expected in the half, with revenue 7% higher and Ebitda costs 8%, JPM says. (


Mondi's Russian Presence Set to Weigh on Shares For Now

1041 GMT - Mondi shares are likely to face short-term pressure from its Russian presence, Citigroup says, despite the packaging company's plans to offload its Russian assets due to the Ukraine conflict. While low single-digit percentage rises in consensus estimates are likely following better-than-expected first-half results, the group's Russian exposure looks set to continue overshadowing the packaging company's stock this year, Citi says. "The [Russian] exit is planned, but likely won't complete for at least a few more quarters," Citi analysts say in a note. "Nonetheless, Mondi's integration and relatively diversified geographic exposure may stand it in good stead relative to peers in the event of a Euro-centric recession." (


Serco's Upgraded Guidance Could Spell Another Share Buyback

1040 GMT - Serco's first-half results didn't have many surprises, though 2022 guidance has been again upgraded and the medium-term outlook appears positive, Davy Research says. The U.K. outsourcing company raised underlying trading profit expectations, but more importantly raised free cash flow guidance to GBP140 million from GBP120 million, Davy analyst David Greenall says in a research note. If no larger acquisitions are forthcoming in 2023, that could spell another share buyback program, he says. "Despite being one of the best performers in the sector year-to-date, we still see significant upside in the stock considering free cash flow metrics that would be attractive to private equity," the Irish research firm says. Davy retains its outperform rating on the stock. Shares are up 1.6% at 188.0 pence. (


Mondi's 1H Results Point to Positive Outlook

1032 GMT - Mondi's excellent first-half results showed strong growth across all divisions, supported by greater-than-average selling prices, continued volume growth and its high level of vertical integration, Berenberg says. The paper-and-packaging company's EUR1 billion capex program will further enhance the efficiency and capacity of the business over the next few years, expanding packaging capacity, and improving sustainability and efficiency, Berenberg analysts say in a research note. "[The] near term outlook points to positive with sustained elevated paper and box prices expected... [an] overall encouraging update," the German brokerage says. Berenberg retains its buy rating. (


Serco Shares Look Good Value Amid Further Guidance Raises

1007 GMT - Serco's first-half results were strong, and it remains confident of its progress both financially and in the wider development goals of the group, Shore Capital says. The U.K. outsourcing company's order book and pipeline clearly provide a good measure of visibility through the second half and into 2023, and it increases its underlying trading profit guidance for 2022 by a further GBP5 million this morning to GBP230 million, Shore research analyst Robin Speakman says in a note. "Serco is firmly on a growth path, hand in hand with its clients, in our view," the U.K. investment group says, adding the share price is modest but with strong dividend potential. Shore retains its buy rating. Shares are up 2.0% at 188.7 pence. (


Capita Should See Share Price Rise as Year Progresses

0959 GMT - Capita PLC is set to report its first-half earnings on Friday and Peel Hunt expect catalysts over the next six to 12 months to drive the stock up in price. The outsourcing business said in June its first-half performance met its expectations, with revenue growth of up to 1%. Capita's restructuring is nearing completion and 2022 should be the last year of major transition, and the disposal program should be largely complete by year end, Peel Hunt analysts Christopher Bamberry and Andrew Nussey say in a note. "The shares should re-rate as Capita delivers improvements in both margins and cash generation," they say. Peel Hunt rates Capita's stock buy with a 48 pence price target. Shares are down 0.8% at 28.96 pence. (


National Express's Earnings Seen Resilient in Event of a Recession

0931 GMT - Transport operator National Express's solid set of 1H results should support a recovery in the shares, Berenberg analysts Owen Shirley and Ned Hammond say in a note. The company reported a swing to pretax profit of GBP20.5 million, with revenue rising to GBP1.32 billion, and earnings are expected to be resilient in the event of cost inflation and any recessionary effects, the analysts say. Before the pandemic, it generated significant shareholder value driven by strong underlying performance, its leading position in most of its markets and its increasingly strong ESG credentials, they say. "We are confident that it can return to this strategy, and noted that management seemed upbeat on its bid pipeline last week," Berenberg says. (


ConvaTec's 2022 Guidance Reiteration Seen as Welcome by the Market

0929 GMT - ConvaTec Group's 1H earnings and guidance reiteration for 2022 is welcome news for investors given the cost-pressures backdrop, analysts at RBC Capital Markets say in a note as shares in the medical products and technologies group rise 7.8%. The company reported better-than-expected growth across all its segments, while the advanced-wound-care and infusion-devices businesses outperformed, they say. Operating margin slightly beat consensus despite additional investment in growth initiatives, they add. RBC has a perform recommendation on the stock and a target price of 230.2 pence. (


Next Faces 2H Uncertainty Despite FY Profit Upgrade

0927 GMT - Shares in Next rise 2% after the U.K. fashion and homeware retailer reported higher second-quarter total full-price sales and increased its full-year pretax profit guidance. While the 5% rise in 2Q full-price sales was better than Next's guidance, the company didn't change its full-price sales guidance for the second half, Jefferies says. "The beat and GBP10 million pretax profit raise, largely from Q2 performance, won't stop investors focusing on a highly uncertain H2 outlook," Jefferies analyst James Grzinic says in a note, keeping the brokerage's hold recommendation on the stock. "And we presume major changes in demand patterns with back-to-school in September can't be excluded, as energy prices remain at peak levels." (


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(END) Dow Jones Newswires

August 04, 2022 08:38 ET (12:38 GMT)

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