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UK stock market morning note (March 01, 2013)

The FTSE 100 is called to open lower this morning with investors likely to focus on the US and its unresolved budget cuts. It had been hoped that a deal between the country's political parties could be reached in order to stop sequestration (automatic cuts) happening ahead of the midnight US time deadline today but this is not looking likely. Overnight we had two sets of manufacturing PMI data out from China with the official figures coming in below forecast at 50.1 and the final reading of the HSBC survey at 50.4. The economic diary today will see the release of domestic manufacturing PMI data and US personal spending, the revised University of Michigan consumer sentiment index and ISM manufacturing PMI figures. Commodity prices are mixed and on the foreign exchanges, the pound is up slightly against both the dollar and the euro.

Company Announcements

Glencore Merger Timing Update. The company will provide an update on its expectation of timing of closing its merger with Xstrata with its preliminary results on 5 March 2013. This is because of the ongoing regulatory process and Xstrata court timetable and hence it will not be possible to complete now by 15 March 2013. 

Lloyds Banking Group Final Results saw a statutory loss of GBP570m mainly due to PPI provisions of GBP3.57bn and including GBP3.20bn of gains from sales of government securities. Costs have been further reduced and its core tier one capital ratio now stands at 12%. It expects further progress in 2013 and beyond and is confident of meeting its medium term guidance. 

William Hill Final Results, Rights Issue and Proposed Acquisition. Final Results saw operating profit up 20% to GBP330.6m on net revenue ahead 12% at GBP1.27bn driven by William Hill Online. The dividend is raised 17% to 11.2p a share. It separately announced the proposed acquisition of its outstanding 29% stake in William Hill Online from Playtech for GBP424m which will be subject to approval by shareholders. William Hill intends to raise GBP375m (net of expenses) via a fully underwritten rights issue of 2 new ordinary shares for every 9 existing shares at 245p.