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Dealers' early call: 21.02.2018

Market commentary

The FTSE 100 is called to open 10 points lower at 7236.

U.S. stocks halted a six-day rally as disappointing results from Walmart Inc. weighed on major indexes as the dollar pushed higher. Treasuries fell amid a heavy slate of U.S. debt issuance, with short-end auctions drawing some of the highest yields in almost a decade. The S&P 500 Index slipped below its average price for the past 50 days. Walmart sank the most since 1988, while a rally in chipmakers boosted the Nasdaq 100 Index. The Treasury’s auctions of two-year notes and three- and six-month bills went off at rates unseen since 2008, while the 10-year rate was up to 2.89 percent. The greenback gained versus major peers.

Press commentary

Financial Times: Walmart’s challenge to the might of Amazon in eCommerce sputtered over the holiday period, sending its shares tumbling; its US online sales rose just 23% in the three months to the end of January – a sharp deceleration after growth of more than 50% in the previous three quarters.

Upgrades and downgrade

* Aeroports de Paris raised to outperform at MainFirst
* Bankia upgraded to neutral at UBS; PT 3.90 Euros
* Bertrandt upgraded to neutral at MainFirst; PT 110 Euros
* Covestro upgraded to buy at Independent Research; PT 105 Euros
* Dufry upgraded to neutral at MainFirst; PT 135 Francs
* Fortum upgraded to buy at HSBC; PT 20 Euros
* Hellenic Petroleum upgraded to buy at HSBC; PT 10 Euros
* PGS upgraded to overweight at Morgan Stanley; PT 34 Kroner
* Proximus upgraded to buy at HSBC; PT 32 Euros
* Puma SE upgraded to buy at HSBC; PT 425 Euros
* RWE upgraded to buy at Commerzbank; PT 19.40 Euros
* Sopra Steria upgraded to buy at HSBC; PT 190 Euros
* Swedish Match upgraded to buy at Berenberg
* Zurich Ins. upgraded to overweight at JPMorgan
* Aurubis downgraded to underperform at Credit Suisse; PT 62 Euros
* Dunelm downgraded to equal-weight at Barclays; PT 6.30 Pounds
* Fraport downgraded to reduce at HSBC; PT 75 Euros
* Fraport downgraded to underperform at MainFirst; PT 75 Euros
* Pfeiffer Vacuum downgraded to neutral at MainFirst; PT 154 Euros
* Sampo cut to underweight at JPMorgan; PT 50 Euros
* Siemens Gamesa downgraded to underweight at JPMorgan
* Sydbank downgraded to sell at SEB Equities; PT 243 Kroner
* Zurich Airport downgraded to neutral at MainFirst; PT 220 Francs
* 7digital Group rated new buy at Arden Partners; PT 10 Pence
* Aena rated new underperform at MainFirst; PT 150 Euros
* Deutsche Konsum REIT-AG rated new buy at Bankhaus Lampe
* Esprinet rated new neutral at Intermonte Securities; PT 5 Euros
* Telecom Italia rated new buy at Intermonte Securities

Company news

Lloyds Starts up to GBP1b buyback, to invest GBP3B on strategy. The U.K.-focused bank reported a pretax profit of GBP5.28 billion for 2017, compared with GBP4.32 billion in 2016. Total income rose to GBP18.53 billion, from GBP17.50 billion.

Barratt Developments pretax profit for the first half of fiscal 2018 rose 6.8%, as it sold more plots at higher prices, and raised both its regular and special dividends.

Orange Earnings Rise, Bolstered by Sales Recovery in France.

Glencore Trading Profits Jump on Metals; Raises Dividend.

BHP Billiton Ltd., its net profit off 37%, signaled it may be willing to yield to an activist investor’s latest assault on its corporate structure, even as it lifted its dividend 38%.

Unite Group intends to place up to 22.2m new ordinary shares, representing up to approximately 9.2% of co.’s existing issued ordinary share capital, to help fund two university development projects.

Telefonica Deutschland 4Q Revenue Flat; Sees 2018 Revenue Stable.

FirstGroup still sees “substantial” cash generation for the year, co. says in statement. Bond refinancing under way, with $275m raised in private placement in U.S. U.S. tax revision seen reducing group’s effective tax rate to mid-20% range.

Temenos, Fidessa Boards Reach Pact on Recommended Cash Deal.

Deutsche Bank Asset Mgmt IPO Likely to Start Monday: FAZ.

WPP Share Sale of 7.6m Shares Priced at 1,375 Pence Per Share.

Deutsche Boerse Full-Year Net Revenue Meets Estimates.

Eramet FY Ebitda EU871M Vs Est. EU843M; Resumes Div. EU2.30/Share.

Lloyds Starts up to GBP1b buyback, to invest GBP3B on strategy. The U.K.-focused bank reported a pretax profit of GBP5.28 billion for 2017, compared with GBP4.32 billion in 2016. Total income rose to GBP18.53 billion, from GBP17.50 billion.

 

Barratt Developments pretax profit for the first half of fiscal 2018 rose 6.8%, as it sold more plots at higher prices, and raised both its regular and special dividends.

Orange Earnings Rise, Bolstered by Sales Recovery in France.

Glencore Trading Profits Jump on Metals; Raises Dividend.

BHP Billiton Ltd., its net profit off 37%, signaled it may be willing to yield to an activist investor’s latest assault on its corporate structure, even as it lifted its dividend 38%.

 

Unite Group intends to place up to 22.2m new ordinary shares, representing up to approximately 9.2% of co.’s existing issued ordinary share capital, to help fund two university development projects.

Telefonica Deutschland 4Q Revenue Flat; Sees 2018 Revenue Stable.

FirstGroup still sees “substantial” cash generation for the year, co. says in statement. Bond refinancing under way, with $275m raised in private placement in U.S. U.S. tax revision seen reducing group’s effective tax rate to mid-20% range.

Temenos, Fidessa Boards Reach Pact on Recommended Cash Deal.

 

Deutsche Bank Asset Mgmt IPO Likely to Start Monday: FAZ.

WPP Share Sale of 7.6m Shares Priced at 1,375 Pence Per Share.

Deutsche Boerse Full-Year Net Revenue Meets Estimates.

Eramet FY Ebitda EU871M Vs Est. EU843M; Resumes Div. EU2.30/Share.

Wolters Kluwer Full-Year Revenue Meets Estimates.

Full-Year Revenue Meets Estimates.

Quilter Cheviot Limited is a private limited company registered in England with number 01923571, registered office at One Kingsway, London WC2B 6AN. Quilter Cheviot Limited has established a branch in Dublin, Ireland with number 904906, is a member of the London Stock Exchange, is authorised and regulated by the UK Financial Conduct Authority, is regulated by the Central Bank of Ireland for conduct of business rules, under the Financial Services (Jersey) Law 1998 by the Jersey Financial Services Commission for the conduct of investment business in Jersey and by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 to carry on investment business in the Bailiwick of Guernsey. Quilter Cheviot Limited (DIFC Representative Office) operates in Dubai as a representative office at Room 12, Level 13, The Gate, PO Box 121208, Dubai, UAE. Quilter Cheviot Limited (DIFC Representative Office) is regulated by the Dubai Financial Services Authority as a Representative Office. Accordingly, in some respects the regulatory system that applies will be different from that of the United Kingdom. You may not recover what you invest. Investments or investment services referred to may not be suitable for all recipients.

Investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future return.

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