LONDON MARKET PRE-OPEN 14 July 2017

DCC In-Line; US Data Eyed After Dovish Yellen

LONDON (Alliance News) Stocks in London are seen opening higher on Friday, shaking off the
effects of a stronger pound against the dollar due to a dovish tone from Federal Reserve Chair Janet
Yellen, with US consumer price data in focus for the day.
IG says futures indicate the FTSE 100 index to open 5.46 points higher at 7,418.90. The blue-chip
index closed down 0.1%, or 3.49 points, at 7,413.44 on Thursday.
In early UK corporate news, blue-chip Irish distribution firm DCC said all its divisions traded in line
with expectations for its first quarter to June 30, with trading ahead of the prior year.
DCC reiterated its full-year guidance, but warned it remains at a very early stage, with its profit
significantly weighted to the second half. The firm also said Donal Murphy is taking up his role as
chief executive on Friday, replacing Tommy Breen, as previously announced.
Mid-cap emerging markets asset manager Ashmore said its assets under management increased by
USD2.80 billion in the quarter to June 30, rising to a total of USD58.70 billion. The increase included
USD1.20 billion in net inflows.
Retailer Dixons Carphone said it has agreed to sell its Phone House Spain and a number of other
European assets to Spanish firm Global Dominion Access for a total of EUR55.0 million.
The pound was quoted at USD1.2961 early Friday, rising against USD1.2933 at the London equities
close on Thursday.
Sterling has risen against the dollar on the back of Federal Reserve Chair Janet Yellens testimony to
Congress on Wednesday and Thursday, which was perceived as more dovish than previous
messages. Yellen talked of gradual rate hikes over the next few years but said Fed officials are
ready to adjust policy in case of an undershoot in inflation.
The Fed is currently expected to raise interest rates once more this year, most likely in December,
and announce plans to start reducing its roughly USD4.5 trillion balance sheet following years of
US Treasury and Mortgage Backed Securities purchases. Markets have struggled to get on board
with one more rate hike though and Yellen's comments on Wednesday suggest Fed officials are
not entirely convinced either, says Craig Erlam, senior market analyst at OANDA.
US retail sales and consumer price data due at 1330 BST will now be closely watched for evidence on
the rate of inflation.
Wall Street ended higher on Thursday, with the Dow Jones Industrial Average up 0.1%, while the
S&P 500 index and the Nasdaq Composite both climbed 0.2%.
Quarterly trading updates are due from US banking giants JPMorgan Chase, Citigroup and Wells
Fargo on Friday.
Telecommunications giant AT&T Inc is planning major organisational changes to follow its USD85.4
billion acquisition of Time Warner Inc, including a redefined role for Chief Executive Officer Randall
Stephenson, according to Bloomberg.
Stephenson will drop the CEO title he has held for 10 years and become executive chairman,
overseeing a pair of CEOs who will independently manage the companys telecommunications and
media businesses.
Meanwhile, US Senate Republicans on Thursday released a revised version of their bill to repeal and
replace Obamacare. The new draft includes a controversial amendment from Senator Ted Cruz,
Republican-Texas, in order to attract support from more conservative lawmakers.
The amendment from Cruz would allow insurers to offer cheaper plans that dont meet Obamacares
requirements as long as they also offer at least one Obamacare-compliant plan.
In Asia on Friday, the Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite is
down 0.1% and the Hang Seng index in Hong Kong is trading flat.
Fitch Ratings maintained the sovereign ratings of China at A+ with stable outlook on Thursday. The
ratings reflect strength of Chinas external finances and macroeconomic track record. The near-term
growth prospects remain favorable.
However, a further increase in economys overall leverage in the context of continued adherence to
ambitious GDP growth targets raises the potential for economic and financial shocks, the agency
noted. Fitchs said it will constrain growth prospects over the medium-term.
In Fridays economic calendar, the eurozone trade balance is at 1100 BST. Investors will be closely
watching US retail sales and Consumer Price Index at 1330 BST alongside industrial production at
1415 BST. The Michigan Consumer Sentiment Index is released at 1500 BST.
By Adam Clark; adamclark@alliancenews.com
Copyright 2017 Alliance News Limited. All Rights Reserved.
Asian Markets
Asian shares were mixed as investors awaited a raft of corporate earnings due out next week. The
Federal Reserve chair's second day of testimony to Congress generated little market-moving news.
U.S. Markets
U.S. shares made modest gains as Banks and technology companies led the major indices higher,
pushing the U.S.30 industrial average to its second record close in two days
Today's News
Rupert Murdoch will not look to strike a deal with UK Culture Secretary Karen Bradley to make
Sky News more independent and fast-track 21st Century Fox Inc's 11.7m takeover of Sky.
Bradley has given Fox until today to offer further concessions to avoid the deal being referred to
the UK Competition & Markets Authority, after saying late June that she was "minded" to refer
the deal on the grounds of media plurality. According to the Guardian report, the lack of
concessions will simplify Bradley's review of the submissions her department has received,
making it "highly likely" Bradley will "just have time" to announce she is calling in the competition
regulator before parliament breaks for summer recess at the end of next week.
Nearly 1.5m new cars were sold in the European Union last month, the best June result since
2007, the European Automobile Manufacturers Association said. On a yearly basis, the market
expanded by 2.1%, with the best results registered in Italy and Spain, while Germany and the UK
bucked the trend, with sales slipping by 3.5% and 4.8% respectively From January to June, more
than 8.2m cars were sold, up 4.7% on the first half of 2016. Italy and Spain were again the best
performers among major EU markets, with year-on-year increases of 8.9% and 7.1%, ACEA
said.
DCC said first quarter trading was in line with expectations and expected the full year to produce
profit and growth. Were current foreign exchange rates to prevail for the remainder of the year,
the group would benefit modestly, relative to current market consensus, from a favourable
translation of non-sterling profits into sterling, DCC said. The processes to complete the
acquisitions of Esso Retail Norway and Shell Hong Kong & Macau are progressing to plan and
are expected to complete by the end of the third and fourth quarters of DCC's financial year
respectively.
Ashmore reported a 5% jump in fourth-quarter assets thanks to a positive investment
performance and net inflows. Total assets under management rose to $58.7bn, with net inflows
of $1.2bn and a positive investment performance of $1.6bn. The company said momentum in
gross sales continued across the product range in the quarter and gross redemptions fell again
on the quarter. Meanwhile, subscriptions were from a diverse range of client types, and included
both new mandates and additional allocations from existing clients.
Hays saw continued growth in net fees for the quarter ended 30th June and it expects full year
operating profits to be marginally ahead of market forecasts. Group net fees in its fourth quarter
increased 15% on a headline basis and 7% on a like-for-like basis against the prior year- the
group's 17th consecutive quarter of year-on-year growth. It said the difference between headline
and like-for-like growth was primarily the result of the significant appreciation of the euro and the
Australian dollar against sterling.
Workspace said it has had a very busy and successful start to the new financial year with robust
demand from customers. "We have continued to expand and upgrade our property portfolio with
two exciting acquisitions and the opening of a new business centre in the quarter," said CEO
Jamie Hopkins in a statement. Strong customer demand in the first quarter with enquiries
averaging 1,055 per month and lettings averaging 95 per month. Two significant acquisitions in
Fitzrovia, W1 and Moorgate, EC2 adding 333,000 sq. ft. of lettable space at a total cost of
257m. The Record Hall, a new 58,000 sq. ft. flagship business centre in Holborn, EC1 opened
in May with 50% let or under offer by the end of June 2017.
NewRiver REIT said, looking ahead, it has significant firepower that it will deploy into accretive
acquisition opportunities and its inbuilt risk-controlled development pipeline. "We believe that with
our proven business model and increased scale we are well-placed to continue to deliver
growing and sustainable cash returns to our shareholders," said CEO David Lockhart. He noted
a busy and successful Q1 for the company.
Oil prices dipped, pulled down by high fuel inventories and improving industry efficiency, but
were still on track for a solid weekly gain.
Gold was largely unchanged as the dollar steadied ahead of key U.S. economic data, but the
metal remained on course for its first weekly gain in three.
Companies Reporting this Week
Day Companies

Today: No companies reporting

Early Market Movements

Market Index Change % Change

UK 100 7,408.3 -5.2 -0.1%

UK 250 19,391.8 -26.5 -0.1%

GER 30 12,622.4 -19.0 -0.2%

FRA 40 5,231.0 -4.4 -0.1%

U.S. 30 21,553.09 +20.95 +0.1%

U.S. 500 2,447.8 +4.6 +0.2%

OIL (BRENT) 48.45 +0.03 +0.1%

GOLD 1,217.94 +0.36 +0.0%

UK Major Risers & Fallers - 8:15am

Company Price Change % Change

Pearson 636.5 +7.5 +1.2%

Standard Life 415.6 +4.7 +1.1%

Carillion 57.5 +2.05 +3.7%

Balfour Beatty 258.55 -6.45 -2.4%

Astrazeneca 4896.5 -116.5 -2.3%

Sky 967 -8.0 -0.8%

Latest Broker Views

Company Broker Recommendation Price Target

Aberdeen Asset HSBC Buy 315.00 350.00

Management

ASOS Barclays Overweight 5,751.00 6,670.00

Capital
Company Price Change % Change

Provident Financial Berenberg Hold 2,290.00 2,310.00

Standard Life HSBC Buy 416.00 460.00

Forthcoming Economic Data

Time/Date Previous Forecast Outcome

1:30pm: U.S. CPI m/m -0.1% 0.1% -

1:30pm: U.S.Core CPI m/m 0.1% 0.2% -

1:30pm: U.S.Retail Sales m/m -0.3% 0.1% -

2:15pm: U.S Capacity Utilization Rate 76.6% 76.7% -

Interbank Spot FX Rates - 08:05am

Pairing Rate % Change

GBP/USD 1.2958 +0.15%

EUR/USD 1.1414 +0.14%

GBP/EUR 1.1349 -0.03%

USD/JPY 113.2500 -0.03%

USD/CHF 0.9671 -0.01%

GBP/JPY 146.7720 +0.13%

Upcoming UK Dividend Dates

Company Dividend Ex Dividend Date

Halma 8.38p 13/07/2017

Safestore Holdings 4.2p 13/07/2017

WH Smith 14.6p 13/07/2017