LONDON (Alliance News) - Supermarket operator J Sainsbury is the biggest faller on the FTSE100 Wednesday after the surprise resignation of long-time chief Justin King, while FTSE250-listed Carphone Warehouse is doing well after signing a deal to run the stores that Samsung is set to open in a big European expansion.
The London equity markets overall are slightly higher, but there is little in the way of direction ahead of the Federal Reserve's decision tonight on whether to continue to reduce its asset buying programme. That news is likely to set the direction for the markets for the rest of the week. The focus Wednesday therefore is on individual stocks.
Sainsbury said King, who has been at the helm for 10 years, will step down at its next annual meeting in July and be succeeded by Commercial Director Mike Coupe.
"This was not an easy decision for me to make, and in truth it will never feel like the right time to leave," King said in a statement.
When King took charge, Sainsbury, which had been the UK market leader, had been overtaken by Tesco and Asda in terms of market share and was in a dire position. However, it has made steady progress since and in the past couple of years has undoubtedly been the best performing of the UK's big four supermarket groups.
King has modernised its stores, expanded into non-food products and more recently, grown the business through convenience stores and online sales. Its market share is now just below that of Asda.
The news comes as struggling rival Wm Morrison's newly employed online operations director, George Dymond, has resigned after just weeks into the job, according to a person familiar with the situation.
Dymond was hired at the beginning of January by Bradford-based Morrisons from the Australian retailer Coles Group Ltd, to oversee its new online operations, which also only launched at the beginning of the year. The UK's fourth-biggest supermarket group has been falling behind its rivals, mainly because it has been very slow to get into the online and convenience store business.
In the luxury good sector, AIM-listed Mulberry Group has issued a profit warning after it was hit by the discounting seen in the UK sector during the key Christmas trading period. Its wholesale business in Korea is also struggling due to "significant" order cancellations.
Anglo American and Antofagasta are the biggest gainers on the FTSE100 after positive production updates. Anglo said production of all its major metals were up in the fourth quarter of 2013, while Antofagasta said it had achieved record copper production during the year as a whole after a big increase in the fourth quarter. Antofagasta did warn that production of all three metals is produces will be lower in 2014.
Carphone Warehouse meanwhile is the top gainer on the mid-cap index after Samsung Electronics said the British company will operate over 60 of its Samsung stand-alone stores across Europe, and said there was the potential to further expand the store partnership in the future.
Carphone already runs three Samsung stores that the electronics giant opened in Spain in 2013. The new stores, which will sell Samsung mobile products including phones, tablets, and laptops, will be rolled out in the next three months across seven European markets: the UK, Ireland, Germany, Spain, Portugal, Sweden and the Netherlands.
The overall markets have been supported Wednesday after Turkey's central bank lifted its key interest rates aggressively at an emergency midnight policy meeting to combat the weakness in the lira and high inflation. Its one-week repo rate more than doubled to 10%, from 4.5%. The decision came even though Prime Minister Tayyip Erdogan has been resisting interest rate hikes in a bid to support growth ahead of elections.
The Turkish lira is one of the most volatile emerging market currencies, and it's been hit hard in recent days as investors continued to pull money out of emerging markets and re-direct it back to the US ahead of an expected Federal Reserve decision to continue reducing its economic stimulus package.
In UK economic news, UK house prices increased at the fastest pace in more than three-and-half years in January, supported by strong growth in employment, record low mortgage rates and rising confidence, data from a survey by the Nationwide Housing Society showed.
The house price index climbed 8.8% annually in January, marking the fastest growth since May 2010, when prices rose by 9.8%. Prices are now around 4% below their 2007 peak.
The EU has taken new steps to curb the risky speculative activities of the bloc's 30 largest banks, but critics have argued that the measures are too weak to be effective.
The lenders would be banned from proprietary trading - a practice under which banks make bets using their own money and not on behalf of customers - and could be forced to separate other risky trading activities from their deposit-taking business. But critics charge that the proposals, which still require the approval of the European Parliament and member states, contain too many loopholes to have an impact.
German Chancellor Angela Merkel has set out her coalition government's plans for the next four years, including sweeping and costly pension reforms. Addressing parliament, Merkel also came out strongly in support of a financial transaction tax and urged employers to sign off on new wage agreements before the government introduces its planned national minimum wage.
That came after US President Barack Obama late Tuesday called for "a year of action" to make progress in the recovering US economy while combatting inequality and expanding opportunity for Americans. In his annual State of the Union message to Congress, Obama promised action against inequality, even if he has to act on his own without Congressional action.
He asked Congress to raise the income floor to 10.10 dollars an hour, from 7.25 an hour, and tie the minimum wage to inflation for the first time.
"This will help families. It will give businesses customers with more money to spend," Obama told Congress. "It doesn't involve any new bureaucratic programme. So join the rest of the country. Say yes: Give America a raise."
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FTSE 100: flat at 6,572.88
FTSE 250: up 0.4% at 15,780.22
AIM ALL-SHARE: up 0.3% at 861.95
GBP-USD: 1.6550
EUR-USD: 1.3635
GOLD: USD1,258.50 an ounce
OIL (Brent): USD107.80 a barrel
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KEY UK CORPORATE NEWS:
FTSE 100: Royal Dutch Shell will sell a 23% stake in the Parque das Conchas project offshore Brazil for USD1 billion to Qatar Petroleum International, while continuing to be operator with a 50% working interest. Randgold Resources said its Loulo-Gounkoto gold mining complex in Mali is expected to beat its revised production target for 2013, although it is retaining its 2014 target of 640,000 ounces. ITV will launch a new pay TV channel, ITV Encore, as part of a wider four-year partnership with British Sky Broadcasting Group that will see ITV content made available across BSkyB's platforms including Sky+HD, Sky Go, Sky Store and its on demand service NOW TV. The new channel is ITV's first new channel launch in eight years. It will show ITV drama series as well as new original commissions.
FTSE 250: Britvic reported a good start to the year, as revenues in the first quarter were boosted by price increases and increased market share. The British maker of Robinsons cordial and Tango soft drinks said it saw revenue growth in its GB carbonates division, in Ireland, France and internationally during the period, despite a challenging consumer environment. It also said it has seen a good start to the second quarter. Chief Executive Officer Simon Litherland said the firm remains confident that earnings before interest and taxes this year will be within the range of GBP148 million to GBP156 million. Wealth manager Brewin Dolphin Holdings said the funds it manages rose in the first quarter as equity markets remained strong, while total income increased by 6.5% thanks to strong growth in income from discretionary, advisory and execution only services. Specialist healthcare company BTG said it has traded in line with expectations so far in its financial year as it reiterated full-year guidance for revenues to be between GBP275 million and GBP285 million.
AIM: Fusionex International shares are up after the enterprise software provider announced that it had won a first contract for its big data analytics product GIANT. The company said the contract is a multi-million dollar deal over five-years, with an option for renewal. Staffline Group shares have also risen after it reported higher profits and revenues for 2013 as it added new clients and retained old ones, and said it was on track to more than double sales over the next three years. Renew Holdings is doing well after it said trading had been strong in the first quarter of its financial year, a situation it expects to continue in the second quarter, as its rail, water and nuclear businesses all perform strongly. Chairman Roy Harrison said the company's order book at the end of December stood at GBP433 million, up from GBP340 million a year earlier. Mobile Streams sits at the bottom of the AIM market after the mobile content retailer warned that profits were hit by the fall in the Argentine peso in the first half of its financial year as well as higher spending on marketing, and a further fall in the Argentine currency means it won't meet market expectations for its full-year results.
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AFTERNOON WATCHLIST: US EIA Crude Oil Stocks change, US Fed Interest Rate Decision, Japan Foreign bond investment, Japan Retail Trade, BOE Governor speech on Scottish Independence
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Thursday's Key UK Corporate Events
Fuller Smith & Turner Interim Management Statement
National Grid Interim Management Statement
Johnson Matthey Interim Management Statement
Diageo Half Year Results
BSkyB Half Year Results
Cranswick Interim Management Statement
Kazakhmys Q4 Production Report
3i Group Interim Management Statement
Great Portland Estates Interim Management Statement
Royal Dutch Shell Full year results
Renishaw Interim Results
Safestore Holdings Preliminary results
United Utilities Interim Management Statement
Euromoney Institutional Investor Interim Management Statement
Haynes Publishing Interim Results
ITE Group Interim Management Statement
888 Holdings Interim Management Statement
Playtech Interim Management Statement
Polyus Gold International Trading Statement
Jupiter Second Split Trust Full year results
Hansa Trust Interim Management Statement
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Thursday's Key Economic Events
All Day China Chinese New Year Eve
01:45 China HSBC Manufacturing PMI
08:55 Germany Unemployment Rate
09:30 UK Consumer Credit
09:30 UK Mortgage Approvals
10:00 EU Consumer Confidence
10:00 EU Business Climate
13:00 Germany Consumer Price Index
13:30 US Gross Domestic Product Price Index
13:30 US Jobless Claims
13:30 US Core Personal Consumption Expenditures
15:00 US Pending Home Sales
15:30 US EIA Natural Gas Storage change
23:30 Japan National Consumer Price Index
23:30 Japan Overall Household Spending
23:30 Japan Unemployment Rate
23:50 Japan Industrial Production
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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1
Copyright © 2014 Alliance News Limited. All Rights Reserved.
2 Sep 2014 10:18
