BAE presents strong set of numbers, Rio Tinto to return $3bn to shareholders
London open
The FTSE 100 is expected to open 12 points higher on Wednesday, after closing up 0.7% at 7,423.66 on Tuesday.
Stocks to watch
BAE Systems' new chief executive Charles Woodburn presented a strong set of interim results on Wednesday, keeping the aerospace and defence group on an even keel and firing off a confident view on the outlook. The FTSE 100 giant generated £9.57bn of revenues in the six months to 30 June , up 10% or 4% if currency tailwinds are ignored, while underlying earnings per share increased by 14% to 19.8p and the interim dividend was hiked 2% to 8.8p per share.
AstraZeneca and its haematology research and development centre of excellence, Acerta Pharma, announced on Wednesday that the US Food and Drug Administration (FDA) has accepted and granted priority review for the New Drug Application (NDA) for acalabrutinib. The FTSE 100 company described acalabrutinib as a “highly-selective, potent” Bruton tyrosine kinase (BTK) inhibitor. “FDA's acceptance of the acalabrutinib application and Priority Review illustrates the impact it could have on patients with relapsed or refractory mantle cell lymphoma as we work to bring this potential medicine to those in need as quickly as possible,” said AstraZeneca’s chief medical officer and executive vice president of global medicines development, Sean Bohen.
Rio Tinto said it would returning $3bn of cash to shareholders for the first half of 2017, declaring an interim dividend of 110 cents per share as well as a share buy-back of $1bn by the end of 2017. The mining giant generated operating cash flow of $6.3bn in the first half of the year.
Newspaper round-up
Britain’s economy will surge back to life in the next six months following its slow start this year, a leading forecaster has predicted, prompting the Bank of England to raise interest rates next spring – more than a year earlier than its previous projection. The National Institute for Economic and Social Research (NIESR) said a boom in exports after the fall in the pound and a return to bumper wage rises next year would be enough to increase GDP growth to almost 2% and convince the central bank to increase the cost of borrowing. – Guardian
London is at risk of damaging its reputation by giving oil giant Saudi Aramco an easy ride onto the stock exchange, one of Britain’s leading business groups has warned. The Institute of Directors has echoed the UK's investor community by warning the City watchdog that watering down rules to make it easier for state-owned companies such as Aramco to float in London could be damaging. – Telegraph
Yancoal is raising $2.5bn (£1.9bn) to fund its purchase of Rio Tinto's Australian coal mine, less than had previously been expected thanks to FTSE 100 Glencore's intervention last week. Australia-listed Yancoal said it was launching an "entitlement offer" to raise $2.35bn, with Yanzhou, a Chinese coal miner owned by state-backed entities, subscribing for $1bn. – Telegraph
The executive chairman of the AA has been sacked with immediate effect for allegedly lashing out at a colleague. Bob Mackenzie, 64, was removed from his role yesterday by the board of the AA, but no reason was given for his departure other than it involved “gross misconduct”. – The Times
US close
US stocks finished in the green on Tuesday, ahead of an eagerly awaited update from tech giant Apple after the close, despite a slightly mixed news flow on the corporate front.
The Dow Jones Industrial Average finished up 0.33% at 21,963.92, while the S&P 500 was ahead 0.24% at 2,476.35 and the Nasdaq 100 closed 0.25% firmer at 5,895.17.
Apple reported just after the closing bell, beating on every major top-line metric as it forecast total revenue of between $49bn and $52bn for the current, fourth quarter - above analyst expectations for $49.21bn as polled by Reuters.
That helped to allay fears that its next iPhone could be delayed, as the firm traditionally sees the first weekend of new iPhone sales just make it into its fourth quarter.
Sales of its flagship iPhone product were ahead 1.6% to 41.03 million handsets in the third quarter to 1 July, above market forecasts for 40.7 million units, although the average selling price of an iPhone dropped to $606 - far lower than Wall Street expectations for $621 per device.
Shares in Apple finished the New York session up 0.89%, and were last ahead 6.46% in after-hours trading.