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Market buzz: Tullow increases debt fundraise, and what's NEX worth?
1701: Tullow Oil has increased its bond offer to $880m from $650m. It's raising cash from debt by issuing senior debt notes offering 7%, due 2025 at par.
1656: Brexit negotiators will have a busy weekend, says Capital Economics. "It is widely expected that the EU Council will on Thursday confirm that the UK will enter into a transition period following its departure from the EU next March. That said, judging by the EU's latest draft of the withdrawal agreement, any agreement would entail the UK making a number of concessions."
1645: The FTSE 100 finishes higher for the second day, rising 24.38 or 0.34% to 7,164.14.
1439: Olivier Blanchard (ex IMF) telling BBG TV he does not expect further weakness in the greenback.
1438: Analysts at Liberum reportedly expect "substantial" premium for NEX. Analyst Justin Bates reportedly described NEX as a valuable, strategically important asset which is an integral part of the global financial infrastructure, going on to say that in a competitive situation it might fetch a price of over 1,000p. Numis on the other hand has revised its target price for the shares to 800p, up from 671p.
1411: Analysts at Berenberg still see the positives of Irish sandwich maker Greencore, standing by their 'buy' rating on the Irish firm despite its recent profit warning, but cut its target price on Greencore to 225p from 250p.
Morgan Stanley meanwhile likes the look of pub group Greene King, saying the firm's decision to support its dividend meant it was time to "Greene loght" the landlord as they upgraded it to 'overweight' from 'equal-weight' and upped its price target to 640p from 610p.
1400: The University of Michigan's consumer confidence index jumped from a reading of 99.7 in February to 102.0 for March (consensus: 99.5), despite a fall in the expectations sub-index from 90.0 to 88.6.
1338: Deutsche Bank turns underweight on European small caps versus large caps, highlights Ocado, Eutelsat and Cobham among 'sell'-rated names in its coverage universe.
1315: Total US industrial production rose by 1.1% month-on-month in February, driven by sharp increases in factory and mining output, while capacity in use printed at 78.1%. Economists had been anticipating a much smaller increase in total output of 0.3% and a rate of capacity use of 77.7%. The index for oil and gas extraction was roughly 12% higher than one year ago and at a record high, according to the US central bank.
1201: Strategists at BofA-ML pointing out record $43.3bn of inflows into equities over week ending 14 March, despite which their Bull&Bear indicator edges lower, from 6.8 to 6.5.
However, they add "flows indicate clients positioned for higher EPS, higher short rates, higher bond yields, lower US dollar; Treasuries & bunds hinting at "growth scare" makes stocks vulnerable; LIBOR leading to tighter financial conditions, higher US dollar required to ding tech & EM."
1200: Cheltenham's foremost company, Spirax-Sarco, "offers far more secure returns than on offer at the local racetrack this week", says analyst David Larkam at Numis after the strong annual results, where there was a 15% increase in the dividend. Numis has a 6,350p target price and an 'add' rating on the shares.
1128: Emerging markets still offer good potential consumer growth, says Credit Suisse after completing its giant annual survey of around 14,000 consumers across the eight 'most important' emerging economies. The Swiss bank said this year's survey reinforces its positive view on the growth characteristics of the EM consumer theme because of strong demographics and growing urbanisation driving strong income growth (populations in EM are young and still expected to grow for at least another few decades in stark contrast to stagnant demographics observed across DMs). The urbanisation theme is expected to drive superior EM per capita income growth compared to DM "for at least a few more decades", helped by role of the younger consumer.
Countries that score best on the Credit Suisse consumer confidence scorecard are led by India, followed by China and Indonesia in third. "While the top three countries in our scorecard have not changed we would note there have been significant improvements in Brazil, Mexico, Russia and Turkey where consumers are growing increasingly optimistic about their income prospects."
Of western companies exposed to the EM consumer, the Credit Suisse 'playbook' includes Adidas, AB InBev, Estee Lauder, London-listed Global Payments, Nexon, Nike, Straumann, Swatch, UBS and Visa.
1101: Mitie shares are down less than earlier at above 156p having been around 148p. The facilities manager reported good progress with its transformation, allowing it to increase its guidance on run-rate cost savings to circa £50m by year end 2019/20. It admitted that cash generation is likely to be adversely impacted by higher costs of change and a reduced reliance on invoice discounting, increasing year end net debt by £50-70m, but the company expects to continue to comfortably trade within its banking covenants.
"Despite recent media sector coverage and speculation, Mitie has seen limited impact on it operational business as a result of competitor or industry activity," says broker Canaccord Genuity. "We retain our favourable stance on Mitie as the implementation of its strategic initiatives should, in our view, significantly enhance the medium- to longer-term prospects of the group in terms of competitiveness as well as profitability. We retain our 'buy' recommendation and 300p target price."
1040: There is a potential 'inflection point' in the euro-dollar, reckons Jane Foley, a currency strategist at Rabobank. The dollar has performed well since the start of February, with only the safe haven Japanese yen in the G10 currency basket to have outperformed the greenback, but it feels like a change is gonna come.
"In the same period the USD has outperformed all currencies in the LATAM region and most in E. Europe and Asia. Following the downtrend that has been in place since the start of last year, there is a real risk that the USD has reached an inflexion point," she said, revising down her 12-month EUR/USD forecast from 1.28 to 1.21 with a continuation of choppy range trading in the months ahead.
1024: Following recent snow, UK retail store like-for-like sales "roared back to life" last week, finds the BDO high street sales tracker. In-store sales were up 8.22%, which "will be very encouraging to retailers as they continue on the run in to Easter".
1016: Housebuilders remain a weight on the FTSE 350 after Berkeley's unscheduled trading statement earlier, but share price losses are being pared. Analyst George Salmon at Hargreaves Lansdown says the statement highlights "the development of something of a Mexican stand-off between housebuilders and the government".
"Theresa May is saying builders need to open up their land banks and develop more sites, while Berkeley is unwilling to aggressively ramp up production. With conditions in the capital starting to look more precarious, it's easy to see why Berkeley has reservations. After all, adopting overly ambitious strategies just before the market turns has caught out many a builder over the years."
1011: London and South East-focused housebuilder Berkely Group is a focus this morning after it reported a resilient level of house sales in the past four months and while it made confident sounds about the "compelling" fundamentals of its local market to maintain profit and dividend guidance, there was a fairly aggressive political message. In the statement, which comes as the government carries out an investigation into the gap between the numbers of houses coming onto the market and the large amount of land that big housebuilders own, Berkeley said it was "unable" to increase production beyond current levels due to several factors outside its control.
Analyst Robin Hardy at Shore Capital suggested the warnings about the market were rather undermined by the company's stable profit and dividend guidance. "There is often an attack on the tax and duty infrastructure impacting on the group's markets but the tone of today's statement is more aggressive than usual and could even be taken as indicating that the market climate is getting noticeably tougher, although that does not square with the stable guidance," he said.
0955: A spokeswoman for the National Grid says while it is monitoring the rise of cryptocurrencies, future growth in the UK is not expected to be significant, despite fears to the contrary. The National Grid said: "At present, their mining is not a major contributor to demand in GB. Any GB cryptocurrency demand would likely appear as a small component within the data centre element of our Industrial and Commercial electricity demand modelling (data centres themselves perhaps accounting for only around maybe 1% of total GB demand although data is limited). Whilst cryptocurrency mining is clearly growing at a fast rate globally, the miners are likely to be most attracted to countries with the very lowest electricity prices and so future growth in GB is not currently expected to be significant."
0943: The Bank of England's financial policy committee says cryptocurrencies "do not currently" pose a material risk to UK financial stability. The FPC, in a statement on its meeting earlier in the week, said it will act to ensure the core of the UK financial system remains resilient "if linkages between crypto-assets and systemically important financial institutions or markets were to grow significantly" and in the event that one or more cryptocurrency seems likely to become widely used for payments, or as an asset intended to store value, the FPC "would require current financial stability standards to be applied to relevant payments and exchanges".
0859: Friday's London open market report finds stocks resuming their indecisive shift sideway as the week draws to a close, 10 years to the day that JP Morgan originally agreed to buy the stricken Bear Stearns.
After almost half an hour of trading on Friday, the FTSE 100 was down four points but 10 minutes later was up by four at 7,143.50. Asian markets were in the red after a mixed Wall Street session, where the Dow Jones, like the Footsie before it, ended a three-day losing streak but the S&P 500 and Nasdaq closed lower.
There's also an FT report about William Hill and Ladbrokes Coral being investigated by the FCA for creating a false market in their shares by making public findings of review about possible curbs to fixed odds betting terminals. Royal Dutch Shell has sold out of NZ and Mitie shares are down