UK shares struggled to get going in early morning trading, as Standard Charter’s woes and underwhelming construction data stole the headlines. Click here to find out what The Trader Nicole Elliott thinks of the markets.
IC TIP UPDATES:
Royal Dutch Shell (RDSA) has revealed that savings from its pending £43bn merger with FTSE 100 peer BG (BG.) will create operating cost savings of $2bn, representing nearly double what was previously estimated. Shares in both companies climbed 1 per cent off the news. Buy.
Imperial Tobacco (IMT) reported a 4.8 per cent rise in adjusted pre-tax profit in the year to September, despite difficult trading in war-torn Iraq and Syria. Management confirmed that the cigarette maker is well placed to meet forecasts and responded by hiking the dividend 10 per cent to 141p per share. We maintain our buy recommendation.
Simon Thompson buy tip K3 Business Technology (KBT) bagged a major contract for its "axlis fashion" solution with German online retailer K - Mail Order. The contract is the software company’s second channel partner win in Germany, following an agreement with TriStyle Mode in September.
Mondi (MNDI) has bought a 95 per cent stake in a flexible packaging company serving the food, pet food and drinks industries. That coincides with plans to discuss ways to expand capacity and improve operations at the group’s capital markets day. We keep our buy rating.
Shares in Faroe Petroleum (FPM) fell 7 per cent after the independent oil and gas company’s exploration of a well in the Norwegian Sea disappointed. On a more positive note, management claimed production is continuing to perform above expectations, prompting the group to increase full-year guidance to 9,500-10,500 barrels of oil equivalent per day. Buy.
KEY STORIES:
Lower crude prices continue to weigh on Weir (WEIR). Reduced activity in the North American oil and gas sector triggered a 29 per cent drop in third-quarter orders, leading the industrial valve and pumpmaker to announce further job cuts. Investors reacted by sending shares up 6 per cent.
Shares in Just Eat (JE.) got hammered in early morning trading, despite the online takeaway food company reporting that poor weather over the summer boosted orders by 50 per cent.
The slowdown in China and a slump in commodity prices led Standard Chartered (STAN) to report a pre-tax loss of $139m (£90m) in the three months to September. The Asia-focused UK bank reacted to the difficulties by announcing plans to cut 15,000 jobs, raise £3.3bn through a rights issue and review one-third of the group’s risk-weighted assets. Shares plummeted 6 per cent off the news.
Shares in Avanti Communications (AVN) soared 9 per cent in early morning trading after word got out that the group has signed a deal with Telkom to provide high-speed broadband coverage in South Africa.
Jardine Llyod Thompson (JLT) shares fell 3 per cent after the provider of insurance, reinsurance and employee benefits related advice warned that profits had been hit by a strong pound and a disappointing performance from its UK employee benefits business.
Associated British Foods (ABF) blamed a strong pound and food commodity deflation for weak results in the 52 weeks to 12 September 2015. Those issues saw revenues and shares in the owner of Primark and Twinings tea both fall 1 per cent.
Advanced Medical Solutions (AMS) has won US Food and Drug Administration approval for two new topical skin adhesive formulation products. Shares surged 6 per cent as a result.
OTHER COMPANY NEWS:
National Grid (NG.) chief executive Steve Holliday is stepping down after nearly a decade in the job. John Pettigrew, currently executive director of UK operations, will take over when Mr Holliday retires next year.
Vehicle retailer Pendragon (PDG) reported that underlying pre-tax profit jumped 6.6 per cent on a like-for-like basis in the third-quarter, following strong performances in both its used and new cars businesses and aftersales services unit.
Direct Line (DLG) overcame competitive motor and home insurance markets to report growth in third-quarter premiums. The insurer, whose brands include Churchill, Green Flag and Privilege, reported an 8.4 per cent rise in risk-adjusted motor prices.
Mobile virtual network operator The People's Operator (TPOP) has inked a deal with mobile company Three to provide network coverage of voice, text and data to UK customers.
