Sterling Falls After Weak UK PMI Data -2-

Capricorn Energy CEO Simon Thomson, Nonexecutive Chairwoman Nicoletta Giadrossi Step Down

Capricorn Energy PLC said Tuesday that Chief Executive Simon Thomson and Nonexecutive Chairwoman Nicoletta Giadrossi have stepped down from their roles with immediate effect.

 
Market Talk: 

AB Foods Update Lacks of Overall Upgrades, Jefferies Says

0820 GMT - AB Foods backed FY 2023 guidance, which confirms that Primark's lack of price elasticity is helping drive sales gains amid shallower margins in the current year, but the lack of overall upgrades could be an issue, Jefferies analysts say in a note. The British conglomerate's guidance on Primark's EBIT margin isn't explicitly reiterated, despite saying this metric was better than expected in the period, they note. The sugar business also raises concerns, with EBIT broadly in line due to adverse weather and cost-related losses despite increased sales, they add. Shares are down 0.5% at 1,860.0 pence. ([e-mail])

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AB Foods' Revenue Beat Views Thanks to Strong Primark Sales, RBC Says

0820 GMT - AB Foods' update shows a stronger-than-expected revenue performance across its businesses, led by Primark's improved performance, RBC Capital Markets analysts Richard Chamberlain and Manjari Dhar say in a note. The British conglomerate's retail arm reported sales growth of 18%, outstripping RBC's forecast of 13%, leading to a better-than-expected adjusted operating margin but still down compared with a year ago given inflationary pressures, they add. "We think that Primark's margin outlook has improved recently given a firmer GBP, lower raw-materials costs and improved supply terms," the analysts say. ([e-mail])

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Gilt Market Participants Skewed Towards More Short and Medium Maturity Gilt Issuances in FY2023/24

U.K. gilt market-makers and gilt investors support issuance of more short and medium maturity gilts in the fiscal year 2023/24 compared to FY2022/23, says the U.K. Debt Management Office after consultations with them. The participants also support increased issuance of green gilts, with recommendation for new maturities to be launched, the DMO says. Nonetheless, there are mixed views on the size of long-dated gilts issuance with some market-makers in favor of a reduction of the issuance of long-maturity government debt. ([e-mail])

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UK Borrowing Jumped in December as Energy Prices Soared

0928 GMT - Sky-high energy prices are taking a big bite out of the U.K.'s public finances, AJ Bell says after data Tuesday showed government borrowing reached a record December high. "The cost of energy support schemes so far has come in at almost GBP5 billion but it's the impact that energy prices had on inflation in October when our bills jumped that's had the biggest impact," AJ Bell analyst Danni Hewson says in a note. "With around a quarter of government bonds linked to retail price index, debt interest payable doubled compared to last year's figure." Public sector net borrowing, excluding state-owned banks, amounted to GBP27.4 billion in December compared to GBP10.7 billion a year ago. ([e-mail])

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Retail Investors Likely to Contribute Significantly to UK's Financing Needs in FY2023/24

Retail investors are likely to contribute more significantly to U.K. government financing needs by investing in the gilt market as public sector net borrowing needs rise in FY2023/24, says the Debt Management Office after consultations with gilt market makers and gilt investors. ([e-mail])

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Gilt Market Participants Skewed Toward More Short and Medium Maturity Gilt Issuances in FY 2024

0939 GMT - U.K. gilt market-makers and gilt investors support issuance of more short and medium maturity gilts in fiscal 2024 compared to fiscal 2023, says the U.K. Debt Management Office after consultations with them. Participants also support increased issuance of green gilts, with recommendation for new maturities to be launched, the DMO says. Nonetheless, there are mixed views on the size of long-dated gilts issuance with some market-makers in favor of a reduction of the issuance of long-maturity government debt. ([e-mail])

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European Natural Gas Prices Fall as Forecasts Point to Warmer Weather

0939 GMT - European natural gas prices slump as a cold spell is expected to pass and temperature increase next week. Benchmark TTF gas futures drop 11% to EUR59 a megawatt-hour while U.K. gas prices fall 10% to 150 British pence a therm. Western Europe has been in the grip of a cold spell which has boosted demand for natural gas for heating. Prices have remained subdued however as stockpiles remain healthy and the cold weather is not expected to last long. Temperatures in London are expected to rise to 10 degrees celsius on Monday while temperatures in Paris are also expected to return to double digits, according to the U.K.'s Met Office. ([e-mail])

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Retail Investors Likely to Contribute More to UK Financing Needs in 2023/24

0940 GMT - Retail investors are likely to contribute more significantly to U.K. government financing needs by investing in the gilt market as public sector net borrowing needs rise in FY 2023/24, the Debt Management Office says after consultations with gilt market makers and gilt investors. ([e-mail])

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UK Dec. Borrowing Isn't as Bad as It Looks

1000 GMT - December's record borrowing will limit the U.K. government's fiscal elbow room for now but the figures aren't as bad as they might first seem, analysts at Capital Economics write in a research note. Public-sector borrowing reached GBP27.4 billion, the highest December level on record and nearly GBP10 billion higher than forecast by the Office for Budget Responsibility. This leaves the U.K. finance minister unlikely to cut taxes or increase spending at March's budget, CE says. But the surprisingly high borrowing was largely down to outstanding student loans, while tax revenue was higher amid a more resilient economy, the economic-research firm says. "We suspect that by March 2024, borrowing will be lower than projected and the [finance minister] will be in a position to cut taxes/raise spending ahead of the next general election," CE says. ([e-mail]; @joshualeokirby)

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(END) Dow Jones Newswires

01-24-23 0528ET