Berkeley defers capital return, Kingfisher pulls current-year guidance
London open
The FTSE 100 is expected to open 31 points higher on Wednesday, having closed up 2.94% at 6,242.79 on Monday.
Stocks to watch
Berkeley deferred returning £455m of surplus capital to shareholders for two years as the housebuilder reported a 35% drop in annual profit and £1.9bn of forward sales. Pretax profit for the year to the end of April fell to £503.7m from £775.2m a year earlier as revenue dropped 35.1% to £1.92bn.
DIY retail group Kingfisher pulled current year guidance but said second quarter like-for-like sales to June 13 rose 21.8% as coronavirus lockdowns were eased across Europe. The company, which owns B&Q in the UK and Brico Depot in France, on Wednesday reported a 65.7% slump in pre-tax profits for the year to January 31 to £103m.
Energy company SSE reported an adjusted operating profit 37% higher in its preliminary results on Wednesday, at £1.488bn, despite a negative Covid-19 impact of £18.2m, related to electricity demand. The FTSE 100 firm said its reported operating profit was down 40% to £963.4m, while adjusted earnings per share were 35% higher in the year ended 31 March, at 83.6p. It said a final dividend of 56p per share was recommended for payment on 18 September, making a full-year dividend of 80p per share, in line with its five-year dividend plan.
Newspaper round-up
The boss of the banking lobby group UK Finance has resigned just weeks before his alleged sexist remarks about the financier Amanda Staveley are due to be revealed in the high court. Stephen Jones, a senior Barclays executive during the financial crisis who became the first chief executive of UK Finance in 2017, said he had also apologised to Staveley and the body’s staff about the comments, which were made as the bank scrambled to save itself from nationalisation in 2008. – Guardian
The NHS England director of mental health has warned betting companies not to exploit the return of televised football with “reckless” advertising campaigns that could cause more problem gambling while health service resources are stretched responding to the Covid-19 pandemic. Claire Murdoch, who has overseen the establishment of 14 clinics across the country to treat people with addiction and mental ill health because of gambling, said the service will struggle to cope with “avoidable harm” caused by gambling marketing. – Guardian
A record share of investors fear the stock market is overvalued after a summer surge erased losses triggered by Covid-19 despite the economic damage the virus has caused. More than half of investment managers have predicted the rally that has taken Wall Street close to record highs will falter, according to Bank of America’s closely watched monthly survey. – Telegraph
More than half of British businesses will have to cut staff numbers when the government’s job retention scheme expires, a survey suggests. The government’s job retention scheme is paying the incomes of about a quarter of the workforce and has helped to keep a lid on rising unemployment since the lockdown was imposed in March. Economists are warning, however, that many of those people will lose their jobs when the scheme closes in the autumn. – The Times
Regulators are anticipating a wave of disputes between businesses and banks when lenders start to demand interest or repayment of the £38 billion of government-guaranteed loans that have been paid out in the past few weeks. The Financial Ombudsman Service and the embryonic Business Banking Resolution Service have been asked to build up capacity to ensure that they can handle complaints from a likely wave of business borrowers being pursued to repay the money. – The Times
US close
Wall Street stocks closed in the black on Tuesday, amid stronger-than-expected retail figures and news of more monetary and fiscal policy support from the Federal Reserve and the White House.
The Dow Jones Industrial Average ended the session up 2.04% at 26,289.98, the S&P 500 added 1.9% to 3,124.74, and the Nasdaq Composite was 1.75% firmer at 9,895.87.
It was a positive session throughout for the Dow, which opened 784.84 points higher, continuing on a rally started in the previous session despite market participants struggling with signs of a second wave of Covid-19 cases as the US economy emerges from lockdown.
Sentiment was boosted late in the previous session following an announcement from the Federal Reserve that it would look to purchase individual corporate bonds.
Driving markets on Tuesday, however, was a report from Bloomberg that stated the President was in the process of putting together a $1trn infrastructure proposal.
The report indicated that the White House would be setting aside the majority of the funds for more traditional infrastructure projects, like roads and bridges, but said funds would also be reserved for 5G wireless infrastructure and rural broadband.