Shares in London are off a little ahead of what could be another testing week on the markets with further unrest in Hong Kong, Brexit rumbling on and US-China trade talks prompting yet more uncertainty. Click here for The Trader Nicole Elliott's latest thought on the global stock markets.
IC TIP UPDATES:
The Financial Times reports that HSBC (HSBA) is preparing to axe up to 10,000 jobs in a massive cost-cutting drive initiated by interim chief executive Noel Quinn. The redundancies appear to more than double initial plans to cut around 2 per cent of the lender’s 238,000-strong workforce, unveiled earlier this year. Shares in the group are down 1 per cent in early trading, and are under review.
Time Out (TMO) has announced a proposed placing of up to 13.5m shares at 127p each, to raise gross proceeds of up to £17.1m. Net proceeds of the placing are to be used for continued investment in the roll-out of the group’s Time Out Market proposition, and to reduce its debt. The placing is being conducted via an accelerated bookbuild process, with Liberum acting as the sole bookrunner, and is open to new and existing institutional and other eligible investors. The shares were up by around 1 per cent this morning. Buy.
TP Group (TPG) shares rose 4 per cent in early trading after the specialist engineer announced a military satellite communications contract with the Ministry of Defence, working with PA Consulting on a contract worth £150m over five years. Buy.
Sainsbury’s (SBRY) recent decision to overhaul its store portfolio has begun to win support from the analyst community. This morning broker Shore Capital upgraded its recommendation on the shares to hold, from sell previously. Following the supermarket’s recent capital markets day, the broker commended plans for “closing unproductive space and investing across its estate judiciously”. We want to see more evidence before changing our tune, however. Sell.
KEY STORIES:
SIG (SHI) fell by more than a fifth in early trading after the building supplies specialist issued a profit warning. The recent further weakening of markets for both its specialist distribution and roofing merchanting businesses, as the group enters its traditionally strongest period of the year, has lowered SIG’s full-year outlook. Elsewhere, the group announced that it is disposing of its Air Handling division and its Building Solutions business.
Mike Ashley is rumoured to be preparing to shut “almost every” House of Fraser store after Christmas, according to reporting in The Times. The move would mark a messy end to Sports Direct’s (SPD) failed bet on the department store. The Sunday Telegraph reported over the weekend that the group was not paying rent or preparing to end the leases of most of the department store’s 59 outlets - seven of which are empty.
OTHER COMPANY NEWS:
Following Unite Group’s (UTG) half-year results, we reckoned investors in the student accommodation group should take profits. Today, we note that has done the same with two wholly-owned properties in Coventry, comprising 1,127 beds. The sale, for £96m, is in line with the assets’ carrying book value, and brings Unite’s total disposals for the year to date to £250m.
Having just finalised the disposal of Plumbase, builders merchants Grafton Group (GFTU) has completed the sale of its Belgian subsidiary to a private equity firm. The deal, which was sealed on Friday, exits a business which generated £45.3m of revenue and £0.6m in operating profit in the first half of the year.
Vodafone (VOD) has said that it is trialling innovative new technology which could greatly increase the number of companies that can supply mobile network equipment to telecom operators. It says that developing ‘Open Radio Access Networks’ (OpenRAN) will enable it, and the telecom industry, to introduce a wave of new 2G, 3G, 4G and 5G technology vendors to improve supply-chain resilience. More of the world’s rural communities will be able to connect to the internet using standardised, lower-cost network equipment. OpenRAN will also improve city coverage. Vodafone has started the first European trials of OpenRAN in the UK, and has also started trials of the technology in Democratic Republic of Congo (DRC) and Mozambique.
