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UK stock market morning note (January 18, 2013)

The FTSE 100 is called to open flat this morning although sentiment may be helped from the overnight economic news from China that GDP in Q4 2012 came in slightly better than expected at 7.9%. The much trailed speech on Europe due to be delivered by the Prime Minister today has however been postponed due to the hostage situation in Algeria. Today's economic diary sees the release of domestic retail sales and later this afternoon, the US preliminary reading of the University of Michigan consumer sentiment. Commodity prices are firmer and on the foreign exchanges, the pound is lower again against both the dollar and the euro.

Company Announcements

Bovis Homes Trading Statement reports that it expects PBT for 2012 to be ahead of market expectations as a result of the growth in legal completions, an increase in average sales prices and rise in operating profit margins. It also expects a return on capital of around 7.5% for the year. It added that it expects to grow its active sales outlets further in 2013 and assuming stable market conditions, this increase will enable it to continue to drive growth in returns this year.

Spectris Trading Update reports that lfl sales in Q4 2012 rose by 4% with sales growth for the full year on a reported basis ahead 11% to leave lfl sales for 2012 overall up 3%. Adjusted operating profit rose to around GBP229m (2011: GBP201.5m) resulting in an increased adjusted margin of 18.6%. Cash conversion continues to be strong and it describes its financial position as robust. It added that for 2013 it was well positioned and will continue to focus on its strategic priorities.

Glencore/Xstrata Merger Update. In December 2012 the parties announced an extension of the long stop date for the merger to 31 January 2013 due to the ongoing regulatory processes in South Africa and China. As these remain ongoing, it has been agreed to further extend the long stop merger date to 15 March 2013. Completion of the merger is conditional upon receipt of the Chinese and South African regulatory approvals and completion of the Xstrata court process as set out last October, giving effect to the commitments required by the European Commission.