Next raises full-year profit guidance, Bovis Homes completes Galliford Try acquisitions
London open
The FTSE 100 is expected to open 28 points lower on Friday, having closed up 0.82% at 7,604.30 on Thursday.
Stocks to watch
Fashion retailer Next raised full year profit guidance as a colder November and improved stock availability provided a boost for sales over the Christmas period. Fourth quarter full price sales to December 28 were up 5.2%, 1.1% of Next's own forecasts. Full year profit guidance increased by £2m to £727m. Next said initial guidance for the year ending January 2021 was for a 3% rise in full price sales, profit up 1%, and earnings per share growth of 3.5%.
Bovis Homes Group completed the acquisition of Galliford Try’s Linden Homes and Partnerships & Regeneration businesses, it announced on Friday. It also confirmed that, with effect from completion, Graham Prothero - who was the chief executive officer of Galliford Try - had been appointed chief operating officer of the company.
Newspaper round-up
The dependence of the UK gambling industry on high-spending VIPs, customers who are disproportionately likely to be addicts, has been laid bare in a secret report obtained by the Guardian. The Gambling Commission is considering whether to ban VIP schemes in Britain after collecting data from betting firms, including one that took 83% of all deposits from 2% of its customers. – Guardian
Royal Dutch Shell is at risk of falling short on plans to invest up to $6bn (£4.6bn) in green energy projects between 2016 and the end of 2020, with its slow progress likely to raise concern that oil companies are not moving fast enough to help tackle the climate crisis. – Guardian
Carlos Ghosn is to be grilled by Lebanese authorities after an international wanted notice was issued following his daring escape from Japan. The former Nissan and Renault boss will be quizzed by officials next week over the corruption charges in Tokyo which he fled from, and how he made it out of Japan despite being under heavily guarded house arrest. – Telegraph
Footfall across Britain’s shopping destinations fell over the crucial post-Christmas trading period even as retailers slashed prices to lure customers. Total customer visits declined by an average of 4 per cent year-on-year for the period between Boxing Day and New Year’s Day, according to Springboard, the retail analyst. – The Times
Germany’s farming lobby has urged the European Union to strike a soft trade deal with Britain to stave off losses that could run to billions of euros in the event of a hard Brexit. The UK is one of the German agricultural industry’s most lucrative customers, importing €4.5 billion of goods a year while sending only €1.3 billion in the other direction. No other country furnishes Germany with such a big surplus in food and drink. – The Times
US close
US stocks closed higher on the first day of 2020 thanks to some encouraging news out of China.
The Dow Jones Industrial Average closed up 1.16% at 28,868.80, the S&P 500 added 0.84% to 3,257.85, and the Nasdaq Composite was ahead 1.33% at 9,092.19.
At the open, the Dow waa 187.65 points firmer on Thursday after Wall Street's banner year came to an end on Tuesday.
Sentiment received a boost late on Tuesday after President Donald Trump revealed he would be signing a first phase trade deal with China at the White House on 15 January.
Trump also announced that he would be heading to Beijing at a later date to initiate phase two talks.
Also in focus was news that China's central bank would cut the required reserve ratio for commercial lenders by 50 basis points from 6 January, in a bid to bolster its slowing economy.
According to the People’s Bank of China, the move will release around CNY 800bn (£87.0bn) of liquidity into the financial system.
At present, the required reserve ratio is 13.0% for big banks and 11.0% for smaller ones.