The UK's main stock indices treaded water in morning trading; perhaps investors and traders are on holiday or taking time to enjoy the lovely weather. World indices drifted downward, perhaps in response to real estate billionaire Donald Trump's public acceptance of the Republican presidential nomination last night.
IC TIP UPDATES:
J Sainsbury (SBRY) has received an initial thumbs-up from the Competition and Markets Authroity (CMA), green-lighting its acquisition of Argos-owner Home Retail Group (HOME). The two groups finally agreed a set of takeover terms back in April: Home Retail shareholders will receive 0.321 Sainsbury shares and 55p in cash per share, plus a 25p payment relating to the sale of Homebase to Australian buyer Wesfarmers earlier this year. They will also receive a final dividend worth 2.8p in relation to FY2016. We remain buyers.
Inland Homes (INL) has been busy pushing sites through the planning process, and the brownfield redeveloper and housebuilder has a total of 1,268 currently going through the planning process, of which 246 plots are expected to receive consent in the coming weeks. A total of 315 homes are currently under construction across eight sites, and further schemes are expected to come on stream in the six months to December 2016. However, a reduction in the number of legal completions from 248 to 147, not helped by a contractor going bust, means that underlying profits are expected to be slightly below market consensus forecasts of £15.9m. We remain buyers.
Shares in Vodafone (VOD) climbed 4 per cent after the mobile telecoms titan revealed a 2.2 per cent rise in organic service revenues in the first quarter to 30 June. Despite regulatory pressure on roaming rates, they rose by more than 1 per cent in Germany, Spain and Italy. The group also doubled its total 4G customer base to 52.5m, driving data volumes up 63 per cent. Buy.
KEY STORIES:
The bad press rumbles on for Sports Direct (SDI) founder Mike Ashley, who has been heavily criticised by MPs over his supposed lack of knowledge about employment policies at the discount sporting chain. Mr Ashley has defended himself, saying the company grew too big to keep a close eye on low-level practices, but a parliamentary report said his significant shareholding and the fact Mr Ashley visits the company’s warehouses regularly means he is at fault. The market doesn’t seem all that fussed - the shares actually nudged up 1 per cent in early trading.
A lot of expectation is riding on gold miners, which have risen to eye-watering valuations in the last month. Acacia Mining (ACA) is one company meeting that challenge, having posted a 12 per cent production increase just in time for higher prices. What’s more, all-in sustaining costs of $926 (£706) an ounce in the second quarter were well below market predictions of $1,005, and sharply down on the comparable period in 2015. This, together with higher grades, pushed the share price up 7 per cent.
OTHER COMPANY NEWS:
LSL Property Services (LSL) expects to deliver first-half results for the six months to June slightly ahead of the previous period. However, the shares fell more than 8 per cent after the estate agent and lettings agency warned that uncertainty in the wake of the EU referendum will mean it's unlikely to meet earnings expectations for the full year.
