FTSE 100 closes 0.6% higher after July Chinese exports -2-

10:54 GMT – A sale by Playtech of Italian betting company Snai would make strategic sense and transform it into a purely B2B business while delivering a significant capital return to shareholders, analysts at Peel Hunt say in a research note. If sold, the gaming technology company would become a key and more digestible acquisition target in an industry that continues to consolidate, analysts say. Elsewhere, taking Caliente to the United States has the potential for greater long-term value, they add. Peel Hunt reiterates its buy rating on the stock with a price target of 800 pence. ([email protected])

Joules shares soar amid talks news with Next

10:54 GMT – Joules Group shares jumped 45% after the fashion and homeware brand confirmed media speculation that it was in talks with Next over selling a stake in the fashion retailer listed on the FTSE 100 and the use of its online services. Joules could follow in the footsteps of other brands that use Next’s “Total Platform” system to increase sales without significant capital costs, operational risks or the time required to develop sophisticated infrastructures, says AJ Bell. “Next does not generally buy businesses directly, so it seems unlikely that an initial investment in Joules will lead to a full takeover,” writes AJ Bell financial analyst Danni Hewson. “Instead, expect him to become an influential shareholder and more Joules products to appear on Next’s website.” ([email protected])

PageGroup seems able to weather a short-term downturn

1018 GMT – PageGroup reported strong first-half performance on Monday, but management remains mindful of the deteriorating macro backdrop after a slowdown in July, Davy Research analyst David Greenall said in a research note. Although the market expects a slowdown in 2H, it should only be temporary, says Greenall, adding that the recruitment company has already proven its ability to withstand a sharp short-term decline during the pandemic. The Irish research firm has an outperformance recommendation for the stock. ([email protected])

Lok ‘n Store Update Shows Strong Performance and Positive Outlook

1017 GMT – Lok ‘n Store’s year-end statement for fiscal 2022 outlines continued strong trading and positive outlook, says FinnCap. The self-storage company’s revenue has increased, high occupancy levels have been maintained and early performance from new stores has been strong, FinnCap analyst Guy Hewett said in a research note. “We reiterate our view that the current portfolio and development pipeline will support a share price of 1,550 pence – up 50% – with further upside to come from future additions to the pipeline,” said said the British investment bank. ([email protected])

Playtech could benefit from a restructuring

09:01 GMT – Playtech could benefit from a comprehensive corporate restructuring by its own management or a third party, Deutsche Bank analyst Simon Davies said in a research note. The gaming technology company is trading 30% below Aristocrat’s October 680p cash offer, which was not approved by a shareholder vote, Davies said. The German bank sees a favorable valuation gap between the company’s shares and those of other gaming technology peers. Deutsche upgrades its rating on the stock to buy pending, but lowers the target price to 602 pence from 693 pence. The shares are trading down 0.8% at 466 pence. ([email protected])

Clarkson’s outlook looks bright despite choppy waters

0912 GMT – Clarkson tumbles 2% after the FTSE 250-listed ship broker reported higher first-half profits, revenue and dividends and said the outlook was strong despite geopolitical uncertainty, inflation and supply chain disruptions. Shipping demand far exceeds supply, creating conditions for companies like Clarkson to raise prices, financial services firm eToro said. “As a result, Clarkson had a very strong first half, delivering record revenue and earnings, a strong cash position and a growing dividend, which it has been doing for the past 19 years,” the analyst said. from eToro Mark Crouch in a note. “There are ongoing risks to the business – both macro-economic and geopolitical – but it will address them from a very strong financial position and an unmatched market position.” ([email protected])

Pound drop on UK recession fears capped by rate hike bets

08:34 GMT – The prospect of another big interest rate hike by the Bank of England has likely limited sterling’s declines after the central bank forecast a recession in the UK at its last meeting, according to ING. “The pound probably hasn’t sold further as investors are unsure what to do with a reserve currency that will be backed by rates at 2.25% if we are right with our call for the BOE for the meeting of September,” ING analyst Chris Turner said in a note. The BOE raised its key rate by 50 basis points to 1.75% last week. Given that the euro is expected to remain weak, EUR/GBP may struggle to break above 0.8450 this week, Turner said. EUR/GBP fell 0.1% to 0.8427 and GBP/USD rose 0.2% to 1.2093. ([email protected])

Oil beats after Chinese trade data

0754 GMT – Oil prices rise, supported by economic data from China. Brent crude rose 0.7% to $95.53 a barrel while WTI added 0.6% to $89.55 a barrel. Chinese exports grew at a faster than expected pace last month, suggesting the major economy is not yet feeling the impact of a slowdown in Western economies. Meanwhile, supply risks from Russia will put a floor under prices, Capital Economics said in a note. A limited increase in OPEC+ supply means the oil market is expected to remain tight and prices should stay near $100 a barrel, the company said. ([email protected])

Next May have poorly calculated investment plans

07:51 GMT – Fashion retailer Next may have overshot its online channel investment plans in connection with the acquisition of a minority stake in fashion brand Joules Group, Jefferies analyst Eleonora Dani has said in a research note. The potential investment in Joules marks another client for Next’s total platform, but the UK Revenue and Customs investigation into whether Next paid below minimum wage indicates the company has undertaken more than ‘She can’t handle it, according to the bank. Jefferies has a hold recommendation on the stock and a target price of 6,444 pence per share. Shares at 0739 GMT rose 24.00 pence, or 0.4%, to 6,468.00 pence per share. ([email protected]; @sabelaojeaguix)

AstraZeneca’s US Enhertu Approval Was Faster Than Expected

07:39 GMT – AstraZeneca’s Enhertu breast cancer treatment has been approved for use in the US ahead of schedule, Shore Capital has said. Major pharma’s approval, though expected based on overwhelmingly positive trial data, is coming much faster than expected, underscoring FDA’s recognition of Enhertu’s remarkable efficacy, Shore analysts say Susie Jana and Sean Conroy in a research note. “Enhertu has the potential to become best-in-class and we believe it can capture a significant share of the HER2+ metastatic breast cancer market,” the investment group states. Shore reiterates its Buy recommendation, which it says is based on its “industry-leading earnings growth and pipeline outlook.” The shares are down 0.9% at 10,774 pence. ([email protected])

Metals up an inch amid positive Chinese trade data

0717 GMT – Metal prices edge higher after China reported better-than-expected export figures for July. Three-month copper is up 0.5% at $7,928 per metric ton while aluminum is up 0.6% at $7,435.50 per ton. Gold, meanwhile, is stable at $1,790.60 per troy ounce. China’s exports and trade surplus both beat expectations, with the former rising 18% in dollar terms and the trade surplus reaching $101.3 billion in July. Stephen Innes, managing partner at SPI Asset Management, said in an email that the Chinese trade figures allay some concerns about falling global demand, weighed down by rising prices and rising interest rates. However, Innes adds that manufacturing data still remains weak, weighing on commodity prices for now. ([email protected])

 

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(END) Dow Jones Newswire

August 08, 2022 12:40 p.m. ET (4:40 p.m. GMT)

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