(Alliance News) - London Stock Exchange Group said Tuesday it delivered a good first-quarter performance against an "unprecedented market backdrop".
For the quarter ended March 31, total income increased 13% to GBP615 million. It said this was driven by increased equity trading in Capital Markets and higher clearing activity across listed and over-the-counter products, leading to higher net treasury income in the Post Trade unit.
Post Trade Income rose 17% to GBP271 million, while LCH revenue was up 11%. Capital Market revenue added 15% to GBP112 million, and Information Services revenue increased 7% to GBP215 million.
LSEG said its integration planning for market data and trading technology provider Refinitiv is progressing well and still expects to complete the acquisition in the second half of 2020.
"While the group has performed well in Q1, it is too early to comment specifically on the impact of the coronavirus pandemic on the outlook for LSEG and its customers for the remainder of the year. The group believes the longer-term drivers of growth in each of its business lines remain intact," LSEG said.
The exchange confirmed it will pay its 2019 final dividend, citing a strong balance sheet.
LSEG shares were up 1.4% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.3% at 5,740.22
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Hang Seng: down 2.0% at 23,856.21
Nikkei 225: closed down 2.0% at 19,280.78
DJIA: closed down 592.05 points, 2.4%, at 23,650.44
S&P 500: closed down 1.8% at 2,823.16
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GBP: down at USD1.2412 (USD1.2458)
EUR: down at USD1.0839 (USD1.0873)
Gold: soft at USD1,691.27 per ounce (USD1,692.55)
Oil (Brent): down at USD24.72 a barrel (USD26.22)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
0930 BST UK house price index
1100 CEST EU general government deficit and debt
1600 CEST EU flash consumer confidence indicator
0700 EDT US MBA weekly mortgage applications survey
0900 EDT US monthly house price index
1030 EDT US EIA Weekly petroleum status report
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UK job vacancies dived in the three months to March as the labour market contracted in the face of the coronavirus, official statisticians have revealed. The Office for National Statistics said the number of job vacancies plunged by 52,000 to 795,000 for the quarter. ONS economists also revealed on Tuesday that unemployment increased by 22,000 to 1.36 million in the three months to February, before Covid-19 gripped the UK. The unemployment rate in the UK increased to 4.0% in February, prior to the major impact of the new coronavirus outbreak, up from 3.9% in January. Consensus estimates had expected the jobless rate to remain at 3.9%. The increase in average earnings including bonuses came in at 2.8% in February, slowing from 3.1% in January. The rise in average earnings excluding bonuses slowed to 2.9% in February from 3.1% in January.
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Borrowing could hit GBP300 billion this year as the UK government races to keep the economy alive during the coronavirus crisis, according to a new report. The Centre for Policy Studies predicts the Treasury will spend GBP127 billion in direct bailout costs, including the employee furlough scheme which launched on Monday. It forecast a further GBP119 billion will be spent in indirect costs such as lower tax revenues, using the Office for Budget Responsibility's scenario of a three-month lockdown followed by three months of looser restrictions.
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President Donald Trump said the US would take advantage of the historic drop in oil prices to replenish its national strategic stockpile, pending approval by Congress. "We are filling up our national petroleum reserves...You know, the strategic reserves," Trump told reporters at his daily coronavirus press conference. "And we are looking to put as much as 75 million barrels into the reserves themselves," he added. Later in the briefing, he specified that he would only buy that amount if Congress authorized the funding – or if the federal government could rent storage space to third parties for a fee. US oil prices crashed to unprecedented lows Monday as futures in New York ended in negative territory for the first time amid a devastating supply glut that has forced traders to pay others to take the crude off their hands.
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Late-stage negotiations in Washington on a new USD450 billion coronavirus aid package dragged past Monday's hoped-for deadline, but the White House insists a deal is within reach. Trump said he expects a Senate vote "hopefully" on Tuesday. As talks continued, the basics of the deal appear largely set with most of the funding going to a small-business payroll loan program that is out of money. Additional help would be given to hospitals and billions more would be spent to boost testing for the virus, a key step in building the confidence required to reopen state economies.
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North Korean leader Kim Jong Un is said to be in a critical condition following a medical procedure, according to news reports. US television network CNN cited an intelligence source as saying that Kim is "in grave danger after a surgery". The online newspaper Daily NK in South Korea, which specializes in news from North Korea, Tuesday claimed that Kim was undergoing treatment after a reported cardiovascular system procedure on April 12. However, the president's office in Seoul could not confirm the reports, saying there were no indications that Kim was suffering serious health problems. There were also no indications of any "unusual activities" in North Korea.
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BROKER RATING CHANGES
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UBS RAISES RBS TO 'BUY' ('NEUTRAL') - TARGET 150 (215) PENCE
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GOLDMAN CUTS CAPITA TO 'BUY' ('CONVICTION BUY LIST') - TARGET 70 (200) PENCE
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JEFFERIES RAISES JD WETHERSPOON TO 'BUY' ('HOLD') - TARGET 1150 (1590) PENCE
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COMPANIES - FTSE 100
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Associated British Foods said it delivered an "encouraging" trading performance in the first half of its financial year, prior to the worst of the coronavirus outbreak in Europe and the US. For the half-year ended February 29, revenue rose 2% to GBP7.65 billion from GBP7.53 billion the year before, but pretax profit fell 42% to GBP298 million from GBP515 million. AB Foods attributed the fall in profit to exceptional items of GB309 million charged in the half-year compared to GBP79 million in the same period last year. In light of the pandemic, AB Foods has decided not to declare an interim dividend, saying it was prudent given the focus on managing the group's cash outflow in the second half of the financial year. "Our expectation for the aggregate operating result for our Sugar, Grocery, Ingredients and Agriculture businesses in the second half is unchanged. We have good visibility that we will be able to mitigate half of the operating costs of the Primark business while the stores remain closed. The timing of the reopening of the stores, however, remains uncertain; moreover, the process of reopening, once it begins, is likely to be complex. As a result, it is too early to provide earnings guidance for the remainder of the current financial year," Chair Michael McLintock.
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BHP Group reported a rise quarterly iron ore and copper output despite the Covid-19 disruption, but the miner said it will cut its capital and exploration expenditure for the next financial year. In the nine months ended March 31, iron production was 3% higher in the year to date at 181 million tonnes, rising 7% annually in the third quarter alone. BHP reported "record" production at Western Australia Iron Ore. Quarterly copper production edged 1% higher annually to 425,000 tonnes, helping year-to-date production rise 5% to 1.3 million tonnes. BHP said that its timeline at the Spence copper mine in Chile is under review, with first production now expected in the 2021 financial year, following delays due to social distancing measures being imposed.
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COMPANIES - INTERNATIONAL
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Hundreds of Amazon.com employees in the US are expected to strike from Tuesday to protest conditions they say are unsafe and demand better protection in the workplace against the coronavirus pandemic. This is "the biggest mass action by workers yet, as frustrations mount around the company's failure to protect workers and public health in the wake of the coronavirus epidemic," said the Athena coalition, a group of workers' rights organizations, in a statement released Monday. The protest by more than 300 warehouse workers comes three days before an online strike by Amazon coders and engineers.
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Tuesday's Shareholder Meetings
Porvair
London Stock Exchange
SEGRO
GlobalData
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
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