Standard Chartered lifts guidance, Fresnillo reports first-half growth

London open

The FTSE 100 is expected to open 20 points lower on Tuesday, having closed up 0.08% on Monday at 8,292.35.

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Asia-focused bank Standard Chartered on Tuesday unveiled its biggest-ever share buyback and lifted guidance as interim earnings beat estimates. The company said it would buy back $1.5bn in shares starting immediately. Pre-tax profit for the first six months of the year rose 5% to $3.5bn, compared with average forecasts of $3.46bn. StanChart said it now expects operating income to grow more than 7% at constant currency rates compared with a previous projection of between 5% and 7%.

Fresnillo reported a strong set of interim results on Tuesday, with adjusted revenue increasing 9% to $1,560.2m and gross profit rising 38.8% to $392.4m, driven by higher prices and volumes of silver, zinc, and lead despite a drop in gold volume. EBITDA surged 55.1% to $544.2m, and profit before tax rocketed 480.4% to $277.8m, while free cash flow improved significantly to $187.4m from $18.7m in the same period last year. Adjusted earnings per share, however, were down 57.7% at 4.4 cents. Despite higher production costs and decreased gold production, the company maintained a strong balance sheet with net debt-to-EBITDA reduced to 0.17x, and declared an interim dividend of 6.4 cents per share.

BP swung into the red on a reported basis in the second quarter as a result of $2.8bn of so-called “adjusting items”, but that didn’t stop the energy giant from beating market forecasts on an underlying basis and unveiling another $1.75bn share buyback programme. The company booked a replacement cost loss – which reflects the replacement cost of inventories sold, adjusted for inventory holding gains and losses – of $16m for the three months to 30 June, compared with a profit of $2.34bn a year earlier. Nevertheless, underlying RC profit – BP’s preferred measure of profitability – improved by 6% to $2.76bn, well ahead of the consensus forecast of $2.54bn.

Newspaper round-up

House prices are expected to rise over the second half of the year across the UK, according to a forecast, with the market bolstered by more people selling their homes. Prices are likely to increase by 2% towards the end of 2024, Zoopla has predicted. The improved outlook for the housing market was the result of an increased number of homes for sale, the property portal said. The number of sales agreed in the four weeks to 21 July was 16% higher than the same period a year ago and the average estate agent had more homes for sale than at any point in the past six years. – Guardian

Ofgem is pushing ahead with plans to make it easier for British homeowners to reap the benefits of using electric car chargers and heat pumps at non-peak times, as the grid becomes more reliant on wind and solar power. The energy regulator for Great Britain has put forward proposals to encourage flexible electricity use in the home by creating a single register in which flexibility service providers (FSPs) can access more markets and better rates for owners of energy assets such as EV chargers and battery storage systems. – Guardian

Rishi Sunak’s decision to scale back HS2 cost the taxpayer more than £2bn, new documents have shown. In the latest annual report for the high-speed railway, bosses have revealed the fees associated with cancelling “phase two” of the project between Birmingham and Manchester. This includes a £1.1bn writedown for work already carried out on the northern leg, as well as an additional £1bn in accountancy charges. – Telegraph

A “Tell Sid”-style sale of NatWest shares to the public by the government has been scrapped amid fears that it would have cost taxpayers as much as £450 million. The plan to offload part of the state’s near-20 per cent stake in the FTSE 100 bank to individual investors had been floated by the last Conservative government in November. – The Times

BDO and Forvis Mazars have been warned that they risk being banned from signing off the accounts of some of their biggest clients if the quality of their audit work does not improve soon. The two accountancy firms, which are the fifth and sixth largest auditors in Britain respectively, have been scolded once again by the Financial Reporting Council for their work over the past year, which the regulator found to be “significantly below [its] expectations”. – The Times

US close

US stocks started the new trading week in subdued fashion, with markets rangebound ahead of hotly anticipated earnings reports from the likes of Microsoft, Meta, Amazon and Apple over the next few days.

The Dow finished the day down 0.1%, while the S&P 500 and Nasdaq rose just 0.1%.

An upcoming meeting at the Federal Reserve on Wednesday was also likely keeping investors cautious, though no change in policy is expected just yet.

Shares in fast food giant McDonald's were up nearly 4% by the close despite posting quarterly revenue and earnings that fell short of expectations, as the company reiterated its guidance for the full year.

Insurance group Enstar fell sharply despite agreeing to be bought by investment firm Sixth Street in a $5.1bn deal.