Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Equities

AB Foods advances on Primark hopes


Posted on October 31, 2013

What next for Primark? Owner AB Foods hit a record high on Thursday, up 2 per cent to £22.67, ahead of annual results on Tuesday.

The stock surged 20 per cent in October on optimism about the global expansion of its Primark chain, which has revived talk of a potential break-up.

    Analysts expect Primark to overtake sugar as AB’s biggest profit contributor, providing nearly half of group earnings for the year.

    And with sugar likely to remain in decline ahead of an EU quota change in 2017, speculation has been building that a standalone Primark might be better equipped to accelerate growth.

    The US offered one likely avenue for expansion, analysts said, with Westfield the most likely partner.

    The success of Primark’s Stratford store in east London was “paving the way for [a] potential global collaboration”, Morgan Stanley said.

    The wider market stuttered, with the FTSE 100 down 0.7 per cent, or 46.27 points, to 6,731.43.

    Marks & Spencer was the day’s main talking point after William Adderley, the former boss of soft furnishings specialist Dunelm Group, revealed a maiden 3 per cent stake worth about £240m.

    Ahead of results on Tuesday, M&S jumped 2.1 per cent to 503.5p.

    Much weaker than expected results gave Royal Dutch Shell its biggest fall in two years with its B shares falling 5.2 per cent to £21.60.

    High exploration expenses and weak refining margins combined with myriad operational problems to cut year-end earnings forecasts by about 6 per cent.

    By contrast, BG Group was up 2.2 per cent to £12.74 after its results beat forecasts in spite of UK maintenance work and turmoil in Egypt.

    Chemical maker Croda dropped 7.6 per cent to £24.36 after delivering quarterly earnings that missed consensus forecasts and tempering guidance for the rest of the year. Subdued end markets took the blame.

    Rentokil Initial sunk 6.8 per cent to 104.5p after its biggest shareholder Invesco Perpetual sold an 11 per cent stake.

    The news intensified speculation that Invesco would have to liquidate more UK investments after star fund manager Neil Woodford said he was leaving the group.

    Capita edged down 0.1 per cent to 986p and Drax fell 3.7 per cent to 636p.

    Among the gainers, Reckitt Benckiser took on 1.2 per cent to £48.48 on a reheat of speculation that its pharmaceuticals division was attracting interest from drugmakers including Shire, down 0.4 per cent to £27.51.

    BWin edged up 0.3 per cent to 122.8p after its founder shareholders agreed to sell their combined 14.3 per cent stake to help the gaming group’s application for a licence to operate in New Jersey.

    The pair, who are divorcing, put their stock into a trust to submit individual licence applications to the gambling regulator.

    Ashtead drifted 1.1 per cent to 655p in spite of Redburn Partners starting coverage with a “buy”.

    Data warehouse operator Telecity dropped on news its long-serving finance director was stepping down in January. Ahead of a trading update due on Monday, the stock dropped 3.5 per cent to 762.5p.

    In August, Telecity said it had misstated key operational metrics for 2012 and half of 2013.

    The group has also faced claims of underinvestment, with Merrill estimating that the group employs half the number of sales and marketing staff as rival Equinix Europe in spite of similar revenues.