Market report

FTSE 100 surges | Evraz ‘deeply concerned’ | L&G milestone


10pm: Markets rally

US markets soared, following earlier gains in Europe. The Dow Jones closed up 2%, while the S&P 500 jumped 2.5% and the Nasdaq ended 3.5% higher.

The FTSE 100 index rose strongly, up 226.61 points (3.25%) as investors latched on to talk of a diplomatic solution to the Ukraine conflict.

Russian metal-based pair Polymetal International and Evraz topped the risers, up 69% and 19% respectively, as investors gambled on their being oversold, but others warning that the price remains volatile (see below).

Both issued statements designed to reassure the markets, saying there had been no disruption to their operations in Russia despite sanctions.

Lloyds Banking Group, also heavily sold in recent days, was up 8.15% to 45.4p.

The FTSE 250 surged 4.43%, having touched bear territory this week. National Express surged 26% after Stagecoach called off their merger. Stagecoach gained 36% in line with the new bid.  Full story here.

Airline constituents Wizz Air, up 15.6% and EasyJet, up 12.6%, were among the big risers.

The rally spread across Europe, with Germany’s Dax index surging 6.9% in its biggest jump since March 2020. The French Cac 40 was also up more than 6%.

In Paris the CAC 40 ended 7.1% higher, while the DAX 40 in Frankfurt surged 7.19%.

Brent oil was quoted in a range of $112 to $115 a barrel, down sharply from $132.65 on Tuesday.

Evraz update on sanctions

Russian steelmaker Evraz, whose London-listed shares plummeted after Russia invaded Ukraine, said that in the light of sanctions it does not consider itself to be an entity owned by, or acting on behalf or at the direction of, any persons connected with Russia, notably Roman Abramovich who is its biggest shareholder, Alexander Abramov and Alexander Frolov.

The company said that in the event that it becomes an entity owned by, or acting on behalf or at the direction of, a person “connected with Russia” under the regulations, any further share issuance may be subject to the UK sanctions regime and may result in a suspension of its listing on the London Stock Exchange.

“Although the imposition of international sanctions against Russia and the restrictions imposed by Russia are creating certain frictions in supply, logistics and financial flows, to date there has been no material direct impact on day-to-day operations, trading or the financial position of Evraz,” it said in an unscheduled update.

“The company will continue to keep Evraz shareholders updated in accordance with its legal and regulatory obligations.”

It said the proposed demerger of its coal assets is proceeding, though it is keeping the situation under review. It believes it will serve the long-term interests of Evraz’s shareholders, employees, clients and other stakeholders.

It said it is “deeply concerned and saddened” by the Ukraine-Russia conflict and hopes that a peaceful resolution will be found soon.

Legal & General hits milestone

Legal & General said post-tax profit exceeded £2 billion for the first time, coming in at £2.05 billion, up 28% (2020: £1,607m). Operating profit was £2.26bn, up 11% (2020: £2.04bn).

LGIM assets under management are up 11% to £1.4tn, of which £479bn (34%) is International.

The group recommends a full year dividend of 18.45p, up 5% (2020: 17.57p).

Sir Nigel Wilson, group chief executive, said: ” In 2021, cash and capital generation and book value per share were all up over 10% year on year, and we delivered EPS of 34.19p, DPS of 18.45p and a return on equity of 20.5%.

“We have a track record of value creation and a longstanding commitment to Inclusive Capitalism and ESHG.  

“The expected reform of Solvency II, the roll-out of the UK government’s levelling up programme, and our growing international businesses underscore our confidence in our ability to continue delivering on a broad range of profitable growth opportunities.”

STV posts strong growth

STV posted profit before tax of £20.1m against £6.7m in 2020 and £18.4m in 2019. Total revenue came in at £144.5m, up 35% on 2020 and 17% on 2019, reflecting continued momentum in Studios and a resurgent advertising market.

Adjusted operating profit was £25.2m, 39% up on 2020 and 12% on 2019.

The board proposes a final dividend of 7.3p per share for 2021, giving a full year dividend of 11p per share, +22% on 2020.

Full story here


Prudential said adjusted operating profit increased 16% to $3.23bn, beating the consensus of $3.19bn. New business profit rose 13% to $2.5bn.

A final dividend of 11.86 cents is proposed, making a total of 17.23 cents per share for the full year, up 7%.

New business levels in Hong Kong, its Asia headquarters, continued to face pressure from the extended mainland China border closure, the company said.

“The timing of the opening of the Hong Kong border remains uncertain and Covid-19 will continue to have an impact”, said outgoing chief executive Mike Wells.

Kier Group

The construction group said adjusted operating profit for the half year to the end of Decembercame in at £54m (HY21: £48m) and adjusted profit before tax was £43m against £27.8m a year earlier. Revenue fell to £1.54bn (HY21: £1.62bn).

Andrew Davies, Chief Executive, said: “The performance of the group over the last six months reflects our significantly enhanced resilience and strengthened financial position.

“We achieved our medium-term plan margin target in the first half of the year. The group is well positioned to continue benefiting from UK Government infrastructure spending commitments and has seen strong levels of awards in the first half of the year.

“We continue to trade in line with expectations. Our high quality order book underpinned by long-term frameworks and agreements, gives us confidence in our medium-term value creation plan and the continued success of the group.”

Global markets

On Wall Street the Dow Jones Industrial Average was down 0.56% while the S&P 500 was 0.72% softer and the Nasdaq Composite was 0.28% weaker.

The Dow extended losses recorded in the previous session after oil prices surged to a multi-year high amid the ongoing Russia-Ukraine war, heightening fears the conflict will slow the US economy and raise inflation.

Brent crude, which hit its highest price since July 2008 on Monday, was another 4.5% higher at $128.75 a barrel.

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