FTSE 100 closes; CRH leading gains -2-

UK growth concerns hold back sterling

0947 GMT – The inability of the pound sterling to benefit from the recent improvement in risk sentiment and expectations of the Bank of England to offer a higher peak interest rate could reflect concerns over weak British economic growth , according to MUFG Bank. “Even more restrictive BOE policy rates would worsen the economic slowdown in the UK,” Lee Hardman, currency analyst at MUFG, said in a note. Even if the BOE offers higher rates, they are still expected to remain well below inflation and deeply negative in real terms, he says. The performance of the pound has disappointed leveraged funds, which have been building long positions betting on the currency’s rise over the past month, he said. ([email protected])

Sibanye-Stillwater’s share price already factors in falling profits

09:31 GMT – Sibanye-Stillwater’s first-half earnings per share fell 50% year-on-year, in line with its recent trading update, while the interim dividend came in below expectations, Citi said. However, the South African precious metals mining company’s declining earnings and operational issues have already been priced into its share price by the market, Citi analysts said in a research note. Shares of Sibanye Stillwater are trading at a discount to its peers, but its full-year guidance suggests there will be significant improvements in the company’s performance in the second half of the year, particularly in the South African crude metals operations. platinum group – a positive catalyst for its shares, the US bank said. Citi maintains its buy rating and a target price of ZAR 50. Shares are up 2.1% at ZAR 40.47. ([email protected])

Harbor Energy may seek to invest outside the UK due to windfall tax

0928 GMT – Harbor Energy may seek to invest more outside the UK as directors believe spending in the country now comes with high fiscal risks following the introduction of the windfall tax on the UK energy, said Michael Hewson, chief market analyst at CMC Markets UK, in a note. Hewson says the oil and gas company’s interests in Indonesia, Vietnam, Mexico and Norway are minimal compared to its UK exposure, and in the fiscal context, “it would not be surprising to see the company target its future investment efforts towards its smaller interests to diversify its sources of income.The shares are trading up 11% at 476.60 pence.([email protected])

Harbor Energy seen in prime location amid historically high gas and oil prices

0912 GMT – Harbor Energy appears to be in an ideal position in terms of cash generation as it benefits from historically high gas and oil prices, Peel Hunt analysts Werner Riding and Matt Cooper say in a research note. The oil and gas company’s balance sheet continued to strengthen rapidly amid soaring commodity prices, with interim results showing strong operational and financial performance, they say. A headwind it could face is a higher tax bill due to the windfall tax which will reduce profitability to some extent over the next few years, they add. Peel Hunt has an added note on the stock with a target price of 525 pence. The shares are trading up 10% at 473.70 pence. ([email protected])

Hays shares may have more to do after upbeat fiscal year

0911 GMT – Hays gains 3% to 119 pence after the UK recruitment group reported higher annual profit and declared a special dividend. The results were in line with expectations, RBC Capital Markets said, adding that the company’s shares could beat the brokerage’s 165p price target, given the unprecedented discount at which endowment shares are trading. compared to defensive alternatives. “History has shown that these stocks tend to move early and generally outperform in the face of the worst economic news/uncertainty,” RBC analysts said in a note. “While macro sentiment is feverish as Europe watches the barrel of potential primary energy shortages this winter, we nonetheless see a favorable risk-reward balance at Hays in the context of the broader sector.” ([email protected])

British Pound Could Benefit From ‘Short Compression’ Against Dollar

0905 GMT – The pound could rally further against the dollar as speculators betting on the rising dollar take profits on such trades, ING said in a note. Rising sterling prices may prompt traders to buy back the currency, pushing it even higher. “With the long dollars in the market, Cable [GBP/USD] is at risk of a short compression,” ING analyst Chris Turner said in a note. “We see 1.1880 as key intraday resistance above which we could look at a retest of 1, 20,” he said. GBP/USD rises 0.3% to 1.1851. ([email protected])

UK inflation set to peak at 14.5% in January as petrol prices rise

0827 GMT – UK inflation is expected to pick up to a high of 14.5% in January from 10.1% in July due to the recent spike in wholesale gas prices, the economist says British chief of Capital Economics, Paul Dales, in a note. UK energy regulator Ofgem is set to raise the utility price cap by around 80% for October instead of the previously planned 60% hike, which will further increase consumers’ electricity and gas bills, he said. While inflation will most likely fall further in 2023, the average rate next year is expected to be 8.6% instead of the previously forecast 7.2%, according to Dales. “CPI inflation is unlikely to return to the 2% target until early 2024 at the earliest,” he says. ([email protected])

Harbor Energy seen with more takeovers to come

07:29 GMT – Harbor Energy looks set for more share buybacks to come after increasing its current program to $300m from $200m in its first-half results, say Jefferies analysts Mark Wilson and Ruben Dewa in a research note. The oil and gas company posted strong interim results, with net income of $984 million well exceeding the company’s compiled consensus of $495 million, they say. This in turn helped ensure a strong pace for net debt, which was $1.1 billion against expectations of around $1.5 billion, they add. Jefferies has a buy rating on the stock with a target price of 490 pence. The shares are trading up 9.8% at 472.70 pence. ([email protected])

Delivery Hero Stock Has Potential As Company Heads Towards Profitability

07:21 GMT – Delivery Hero posted a bigger net loss in the first half but shares of the German food delivery company could see a repricing as the business turns profitable next year, RBC Capital Markets analysts write in a note to customers. . “Our confidence in Delivery Hero’s path to profitability ultimately stems from its operational execution, which we believe is industry-leading. Delivery Hero’s scale, highly predictable cohort behavior and significant future cash flows make the valuation attractive at these levels,” the analysts wrote. . Delivery Hero shares are trading down 1.3% at EUR 47.25. ([email protected]; @MauroOrru94)

Farfetch played an important role in the YNAP deal with Richemont

06:23 GMT – Farfetch appears to have called many of the shots in the deal with Richemont to take a stake in e-commerce firm YNAP, Jefferies analysts write in a note. The Anglo-Portuguese luxury online marketplace company will acquire almost half of YNAP – with the possibility of taking a 100% stake in the future – in exchange for Farfetch shares transferred to the Swiss group Richemont. Through this deal, Richemont completes the long-awaited deconsolidation of YNAP, although Farfetch will arguably get more: not just the YNAP business, but the e-concessions of the Richemont brands and the group as a major shareholder and, essentially , the free recapitalization of YNAP by Richemont, says Jefferies. With few other players seemingly interested in taking a stake, it appears Farfetch was able to largely make the decisions, according to the bank. ([email protected]; @joshualeokirby)

 

Contact: London NewsPlus, Dow Jones Newswires; [email protected]

 

(END) Dow Jones Newswire

August 25, 2022 12:04 p.m. ET (4:04 p.m. GMT)

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