DJ FTSE Rises, Brexit Headwinds Seen Weighing on Pound in 2022

Brexit Headwinds Seen Weighing on Pound in 2022

The economic fallout from Brexit is crystallizing and the market looks set to put greater focus on the issue in 2022, weighing on sterling, Bank of America says. The U.K. is not only having to deal with a global rise in energy prices and supply-chain issues, but its own "idiosyncratic shock" due to Brexit, BofA analysts say. "The pandemic may have provided some cover for Brexit-related headwinds, but as global supply chain pressures ease next year, we believe the U.K.'s ability to readily dismiss continued supply chain issues will be hard," the analysts say. The Bank of England may have to rein in some of the market expectations on interest rate rises due to the implications of Brexit, they say.

Companies News:

Equals Group Revenue Increased in 3Q

Equals Group PLC said Monday that its revenue for the third quarter of 2021 increased amid strong demand for its services.

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Argentex Expects Higher 1H Revenue

Argentex Group PLC said Monday it expects revenue to increase 33% for the first half of fiscal year 2022 as client trading volumes recovered.

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Intercede Group 1H 2022 Revenue Boosted by New Orders

Intercede Group PLC said Monday that revenue for the first half of fiscal 2022 was up 9% on a constant currency basis compared with the same period last year, reflecting orders from both new and existing customers.

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Civitas Social Housing Says Performance Remains in Line With Views

Civitas Social Housing PLC said Monday that its assets and revenue continue to perform in line with expectations, and reaffirmed its dividend target for fiscal 2022.

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Spectra Systems Gets New Order; Expects to Beat 2021 Market Forecasts

Spectra Systems Corp. said Monday that it has received a new yearly order from a long-time central bank customer and therefore expects to beat market forecasts for this year.

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EDF's Pod Point Considers London IPO

U.K. electric-vehicle-charger provider Pod Point said Monday that it is considering an initial public offering on the London Stock Exchange.

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Harmony Energy Income Trust Intends to Raise GBP230 Mln in London IPO

Harmony Energy Income Trust PLC said Monday that it intends to float on the London Stock Exchange, with the fund targeting an initial placing and offer of up to 230 million new shares at a price of 100 pence each.

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Tungsten West to Raise GBP39 Mln in London IPO

Tungsten West said Monday that it has secured a 39 million-pound ($53.1 million) fundraising as part of its initial public offering in London.

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Pantheon Infrastructure to List on London's Main Market

Pantheon Infrastructure PLC said Monday that it plans to list on London's main market and that it expects to raise 300 million pounds ($408.5 million) via a placing, a subscription, and an intermediaries offer on admission.

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Autins Shares Rise as Shareholder Increases Stake to 11.99%

Shares in Autins Group plc rose Monday after Braveheart Investment Group PLC said that it has increased its stake in the company to 11.99%.

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Highway Capital Agrees to Reverse Takeover of Guinevere Capital

Highway Capital PLC said Monday that it has agreed to acquire Guinevere Capital Esports & Entertainment, a sports and esports investment and advisory firm, via a reverse takeover.

Market Talk:

Bearish Momentum on UK Gilts Looks Set to Continue

1255 GMT - A fresh wave of selling is driving U.K. sovereign bond prices lower and yields higher Monday, with no signs of a reversal in sight, says Mizuho. "The bearish momentum is proving difficult to overcome," analysts at the bank say. Mizuho's positioning indicators show a "sizable" investor base selling U.K. sovereign bonds in the expectation that prices will fall further. "Relative to other markets we don't see particularly good risk-reward in Gilt longs," the analysts say, adding that tentative market moves are likely at least until the November's Monetary Policy Committee policy meeting. Meanwhile new supply of gilts keeps coming, with next Green Gilt bond likely to be launched on Oct. 19, they add.

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Senior PLC's 3Q Update Unlikely to Affect 2021 Consensus Forecasts

1151 GMT - Senior PLC's third-quarter update provided no surprises, Jefferies says. Consensus estimates for the U.K.-based engineering company aren't likely to change much following the update: pretax profit and EPS forecasts are in good shape, while projections on net debt are sensibly positioned, the bank says. There might just be some tweaking in division forecasts within consensus, it says. "Looking out to 2022 forecasts there are plenty of moving parts to consider (particularly at the moment) on the cost side, but we remain confident that the group's recovery is well-set, and top line momentum should be strong," Jefferies says. The bank has a buy rating on the stock, with a 200 pence target price.

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BOE Policy Comments Raise Alert of Looming Interest Rate Rises, says Societe Generale

1131 GMT - U.K. markets have opened this week on alert for early interest rate increases, says Societe Generale. Comments by Governor Andrew Bailey and policymaker Michael Saunders over the weekend stressing the risk of higher inflation and backing market pricing of expectations of increased interest rates this year "poured further fuel on the fire," says Societe Generale's Brian Hilliard. Still, he thinks the market forecasts of a November move are premature because the government and the markets seem to be ignoring the potential damage to activity from the energy situation. The French bank expects to review its current forecast of no rate increase until August 22 after this week's labour and GDP data because it looks "increasingly over-cautious," he adds.

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Just Eat Takeaway Likely to Start Strategic Review of US Business

1116 GMT - Just Eat Takeaway needs to show it can adapt at its upcoming capital markets day, which could include a strategic review of its US business, Jefferies says. The food-delivery platform needs to show it understands delivery, rather than the gross value of its marketplace, is now key and adopt a clear view on grocery delivery, Jefferies says. Just Eat only completed its acquisition of US business Grubhub in June but Jefferies notes Grubhub founder Matt Maloney is already departing. "The balance of probability suggests that the US is now non-core and will be put into strategic review," the investment bank says, suggesting the company will exit all non-Tier 1 markets. However, Jefferies says the company is likely to deliver good third-quarter growth.

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ArcelorMittal Seen Posting Record Earnings

1108 GMT - ArcelorMittal is expected to deliver a record third quarter, with Ebitda of $6.24 billion, up 24% quarter-on-quarter, Jefferies says. The steel maker should sound a confident tone on the medium-term outlook, despite slowing automotive demand, the brokerage says. Jefferies forecasts a 14% drop in Ebitda in the final quarter of the year, however, as any incremental strength in Europe and the Nafta region will be offset by the company's seaborne and ACIS production segments. ArcelorMittal reports earnings on Nov. 11. Jefferies confirms its buy rating with a EUR40 target price. Shares rise 4.6% to EUR26.29.

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Entain Investors Wonder Whether Upbeat Bid Is Likely

1026 GMT - Entain's share-price retreat implies skepticism on the part of investors over whether an attractive takeover bid is likely, says Peel Hunt ahead of the betting company's third-quarter trading update. While M&A discussions with DraftKings continue, the update is likely to prove a sideshow, Peel says. "Retail is recovering, but we expect a tough comparative and regulatory changes to hold back online growth," Peel analysts say. "There's an appealing long-term opportunity for Entain, but we want to see the 3Q statement before turning more positive. We reiterate our hold recommendation and 2,300 pence target price." Shares drop 0.8% to 2,115 pence.

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Anglo American's Earnings Momentum Seen as Cusp of Turning Positive

1023 GMT - Anglo American's commodity mix has been a headwind in recent months as iron ore and platinum group metals prices have sharply declined from their peaks of earlier this year, and the miner has been on a declining mark-to-market earnings trend, Jefferies says. However, platinum group prices should begin to recover when the global chip shortage eases; copper, nickel and diamond prices should rise in 2022; and most of the damage in iron ore prices is done, Jefferies forecasts. The bank says that Anglo American is now its top mining pick in the U.K., replacing Glencore.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

October 11, 2021 09:11 ET (13:11 GMT)

DJ FTSE 100 Closes up on Financials, Resources Outperformance

The FTSE 100 closed up 0.7% on Monday, largely due to outperformance in financial and basic resource stocks. Rising aluminum and copper prices helped push mining companies higher, while oil prices hitting more than $80 a barrel gave a lift to oil stocks, CMC Markets UK chief market analyst Michael Hewson says. U.K. yields also sharply rose as investors priced in the prospect of a Bank of England rate rise by the year-end, which boosted banks as investors hope to see improvements in net interest margins. Meanwhile, higher costs and rising inflation wieghed on the likes of retailers, with JD Sports Fashion PLC, Tesco PLC and Ocado Group PLC underperforming.

Companies News:

Equals Group Revenue Increased in 3Q

Equals Group PLC said Monday that its revenue for the third quarter of 2021 increased amid strong demand for its services.

---

Argentex Expects Higher 1H Revenue

Argentex Group PLC said Monday it expects revenue to increase 33% for the first half of fiscal year 2022 as client trading volumes recovered.

---

Intercede Group 1H 2022 Revenue Boosted by New Orders

Intercede Group PLC said Monday that revenue for the first half of fiscal 2022 was up 9% on a constant currency basis compared with the same period last year, reflecting orders from both new and existing customers.

---

Civitas Social Housing Says Performance Remains in Line With Views

Civitas Social Housing PLC said Monday that its assets and revenue continue to perform in line with expectations, and reaffirmed its dividend target for fiscal 2022.

---

Spectra Systems Gets New Order; Expects to Beat 2021 Market Forecasts

Spectra Systems Corp. said Monday that it has received a new yearly order from a long-time central bank customer and therefore expects to beat market forecasts for this year.

---

EDF's Pod Point Considers London IPO

U.K. electric-vehicle-charger provider Pod Point said Monday that it is considering an initial public offering on the London Stock Exchange.

---

Harmony Energy Income Trust Intends to Raise GBP230 Mln in London IPO

Harmony Energy Income Trust PLC said Monday that it intends to float on the London Stock Exchange, with the fund targeting an initial placing and offer of up to 230 million new shares at a price of 100 pence each.

---

Tungsten West to Raise GBP39 Mln in London IPO

Tungsten West said Monday that it has secured a 39 million-pound ($53.1 million) fundraising as part of its initial public offering in London.

---

Pantheon Infrastructure to List on London's Main Market

Pantheon Infrastructure PLC said Monday that it plans to list on London's main market and that it expects to raise 300 million pounds ($408.5 million) via a placing, a subscription, and an intermediaries offer on admission.

---

Autins Shares Rise as Shareholder Increases Stake to 11.99%

Shares in Autins Group plc rose Monday after Braveheart Investment Group PLC said that it has increased its stake in the company to 11.99%.

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Highway Capital Agrees to Reverse Takeover of Guinevere Capital

Highway Capital PLC said Monday that it has agreed to acquire Guinevere Capital Esports & Entertainment, a sports and esports investment and advisory firm, via a reverse takeover.

Market Talk:

Bearish Momentum on UK Gilts Looks Set to Continue

1255 GMT - A fresh wave of selling is driving U.K. sovereign bond prices lower and yields higher Monday, with no signs of a reversal in sight, says Mizuho. "The bearish momentum is proving difficult to overcome," analysts at the bank say. Mizuho's positioning indicators show a "sizable" investor base selling U.K. sovereign bonds in the expectation that prices will fall further. "Relative to other markets we don't see particularly good risk-reward in Gilt longs," the analysts say, adding that tentative market moves are likely at least until the November's Monetary Policy Committee policy meeting. Meanwhile new supply of gilts keeps coming, with next Green Gilt bond likely to be launched on Oct. 19, they add.

---

Senior PLC's 3Q Update Unlikely to Affect 2021 Consensus Forecasts

1151 GMT - Senior PLC's third-quarter update provided no surprises, Jefferies says. Consensus estimates for the U.K.-based engineering company aren't likely to change much following the update: pretax profit and EPS forecasts are in good shape, while projections on net debt are sensibly positioned, the bank says. There might just be some tweaking in division forecasts within consensus, it says. "Looking out to 2022 forecasts there are plenty of moving parts to consider (particularly at the moment) on the cost side, but we remain confident that the group's recovery is well-set, and top line momentum should be strong," Jefferies says. The bank has a buy rating on the stock, with a 200 pence target price.

---

BOE Policy Comments Raise Alert of Looming Interest Rate Rises, says Societe Generale

1131 GMT - U.K. markets have opened this week on alert for early interest rate increases, says Societe Generale. Comments by Governor Andrew Bailey and policymaker Michael Saunders over the weekend stressing the risk of higher inflation and backing market pricing of expectations of increased interest rates this year "poured further fuel on the fire," says Societe Generale's Brian Hilliard. Still, he thinks the market forecasts of a November move are premature because the government and the markets seem to be ignoring the potential damage to activity from the energy situation. The French bank expects to review its current forecast of no rate increase until August 22 after this week's labour and GDP data because it looks "increasingly over-cautious," he adds.

---

Just Eat Takeaway Likely to Start Strategic Review of US Business

1116 GMT - Just Eat Takeaway needs to show it can adapt at its upcoming capital markets day, which could include a strategic review of its US business, Jefferies says. The food-delivery platform needs to show it understands delivery, rather than the gross value of its marketplace, is now key and adopt a clear view on grocery delivery, Jefferies says. Just Eat only completed its acquisition of US business Grubhub in June but Jefferies notes Grubhub founder Matt Maloney is already departing. "The balance of probability suggests that the US is now non-core and will be put into strategic review," the investment bank says, suggesting the company will exit all non-Tier 1 markets. However, Jefferies says the company is likely to deliver good third-quarter growth.

---

ArcelorMittal Seen Posting Record Earnings

1108 GMT - ArcelorMittal is expected to deliver a record third quarter, with Ebitda of $6.24 billion, up 24% quarter-on-quarter, Jefferies says. The steel maker should sound a confident tone on the medium-term outlook, despite slowing automotive demand, the brokerage says. Jefferies forecasts a 14% drop in Ebitda in the final quarter of the year, however, as any incremental strength in Europe and the Nafta region will be offset by the company's seaborne and ACIS production segments. ArcelorMittal reports earnings on Nov. 11. Jefferies confirms its buy rating with a EUR40 target price. Shares rise 4.6% to EUR26.29.

---

Entain Investors Wonder Whether Upbeat Bid Is Likely

1026 GMT - Entain's share-price retreat implies skepticism on the part of investors over whether an attractive takeover bid is likely, says Peel Hunt ahead of the betting company's third-quarter trading update. While M&A discussions with DraftKings continue, the update is likely to prove a sideshow, Peel says. "Retail is recovering, but we expect a tough comparative and regulatory changes to hold back online growth," Peel analysts say. "There's an appealing long-term opportunity for Entain, but we want to see the 3Q statement before turning more positive. We reiterate our hold recommendation and 2,300 pence target price." Shares drop 0.8% to 2,115 pence.

---

Anglo American's Earnings Momentum Seen as Cusp of Turning Positive

1023 GMT - Anglo American's commodity mix has been a headwind in recent months as iron ore and platinum group metals prices have sharply declined from their peaks of earlier this year, and the miner has been on a declining mark-to-market earnings trend, Jefferies says. However, platinum group prices should begin to recover when the global chip shortage eases; copper, nickel and diamond prices should rise in 2022; and most of the damage in iron ore prices is done, Jefferies forecasts. The bank says that Anglo American is now its top mining pick in the U.K., replacing Glencore.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

October 11, 2021 11:54 ET (15:54 GMT)

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