Sterling Expected to Gain as Rate Rise Debate Heats Up
0948 GMT - News headlines have displayed negative stories about the U.K. economy lately but data should continue to fuel the debate about interest-rate rises, lifting sterling, UBS Global Wealth Management says. It's worth noting that the final September U.K. manufacturing and services purchasing mangers surveys beat expectations while the release of jobs data next Tuesday will likely show a tight labor market, UBS strategist Gaetan Peroux says. "Combined with high inflation numbers, which Bank of England policymakers believe less and less are transitory, this should continue to heat up the rate hike debate within the U.K. central bank, and support sterling in the next few months." GBP/USD falls 0.1% to 1.3596 and EUR/GBP rises 0.1% to 0.8495. (renae.dyer@wsj.com)
Companies News:
Hollywood Bowl FY 2021 Boosted by Demand After Covid-19 Restrictions Were Lifted
Hollywood Bowl Group PLC said Friday its performance for fiscal 2021 was strong since its centers were allowed to reopen in England and Wales, boosted by a rebound in customer demand.
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Royal Mail to Buy Mid-Nite Sun Transportation (Rosenau Transport) for $286.8 Mln
Royal Mail PLC said Friday that its subsidiary General Logistics Systems will acquire Canadian logistics company Mid-Nite Sun Transportation Ltd., which operates as Rosenau Transport, for 360.0 million Canadian dollars ($286.8 million).
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Brighton Pier Group Sees FY 2021 Earnings GBP2 Mln Above Market Views
Brighton Pier Group PLC said Friday that it has received five million pounds ($6.8 million) of business interruption insurance claims and now expects to report fiscal 2021 earnings GBP2 million above market expectations.
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N. Brown 1H Pretax Profit Rose Significantly
N. Brown Group PLC reported on Friday a rise in pretax profit for the first half of fiscal 2022 amid a significant decrease in costs, and said that it has dealt well with global freight disruptions.
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Electrocomponents 1H 2022 Comparable Revenue Increased 31%; Raises FY Guidance
Electrocomponents PLC said Friday that like-for-like revenue for the first half of fiscal 2022 rose 31%, with strong growth across all three regions, and raised its full-year guidance.
Market Talk:
Interest Rate Expectations Should Drive Yields of Sterling Bond ETFs Higher
0947 GMT - The yields of sterling-denominated corporate bond exchange-traded funds should rise on expectations that the Bank of England may start raising borrowing costs later this year, says Mizuho. The yield of iShares Core GBP Corporate Bond UCITS ETF, or SLXX, looks too tight compared to the iShares UK Gilts 0-5 year UCITS ETF, or IGLS, and Mizuho analysts think this is a good opportunity to bet the spread between the two will widen. "The likelihood of the BOE tightening sooner may bring some turbulence in the GBP credit market, where more term- and credit-risk premia will be priced in," they say. (lorena.ruibal@wsj.com)
Pennon Can Cope With Cost Rises, Should Do More M&A
0929 GMT - Pennon Group has scope to counter cost rises and should do further merger-and-acquisition deals, HSBC says, increasing its recommendation on the U.K. water utility to hold. HSBC, which cut its rating on Pennon to reduce in July, also raised its target price to 1180 pence from 1160p. While higher costs are likely to offset volume increases, increased inflation indexation and potential efficiency improvements should help to counter that in 2022, HSBC says. "We still think an acquisition of Bournemouth Water's neighbor, Portsmouth Water, would make strategic sense," HSBC analyst Verity Mitchell adds. "The CMA's review of recently acquired Bristol Water is progressing, so Pennon is awaiting the outcome before detailing its synergy and integration plans." Shares fall 0.2% to 1136p. (philip.waller@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires; Dow Jones Newswires; paul.larkins@wsj.com
(END) Dow Jones Newswires
10-08-21 0608ET
