Micro Focus boosts first-half revenue, Old Mutual to float most of asset management business
London open
The FTSE 100 is expected to open 24 points lower on Wednesday, after closing up 1.13% at 6,968.57 on Tuesday.
Stocks to watch
Software product group Micro Focus International announced it unaudited interim results for the six months to 31 October on Wednesday, with revenues of $684.7m, 14.2% higher than the prior year's constant currency figures. The FTSE 100 firm said underlying adjusted EBITDA was $320.3m, 20.9% higher at constant currencies, and adjusted diluted earnings per share increased by 20.5% to 89.20 cents.
First-half profits from Dixons Carphone grew faster than expected and upped its dividend as it confidently prepared for its crucial festive season and various eventualities as the UK exits from the EU. In the 26 weeks to 29 October, group revenue rose 11% to £4.9bn and profit before tax by 19% to £144m, beating the consensus analyst forecast of £141m.
In a bid to break up its business, Old Mutual is to float two thirds of the asset management business on the London Stock Exchange.Some 13m shares will be sold at $14.24 in the public offering expected to close on 19 December, brokered by Bank of America Merrill Lynch, Morgan Stanley, Citi, Credit Suisse and Evercore. The underwriters have a 30-day option to buy an additional 1.95m shares.
Newspaper round-up
HSBC has revealed that it is shutting more than four branches a week and that at least 57 more will be axed in the first few weeks of 2017. High-street banks have closed more than 1,000 branches in the UK during the past two years, according to consumer body Which?. It has called on banks to consult with communities before implementing closures to ensure that the needs of their customers are being met. The organisation said its research had found that 1,046 bank branches were shut, or due to shut, between January 2015 and January 2017. It added that HSBC had axed the most branches over this period: a total of 321, representing a quarter of its network. HSBC told the Guardian it had closed 222 in 2016 alone, taking its current tally to 755. – Guardian
Tens of thousands of banking jobs could be lost to continental Europe from next year if ministers do not agree a transitional deal on single market access with the EU, a Lords report on financial services after Brexit is expected to warn. Peers on the committee, due to report on Thursday, have been struck by the urgent need for financial institutions to make decisions on their location because they cannot wait until the end of Brexit negotiations in 2019 to find out if they can trade in the single market from London. – Guardian
Taxpayers are footing a £50 million bill for the biggest series of rail strikes in a generation, while the company in charge of the train line stands to save money, it has emerged. The walkout by drivers and conductors on the Southern rail line led to trains being cancelled for 300,000 commuters in the South Easton Tuesday, prompting ministers to indicate that they are prepared to strengthen anti-strike laws. – Telegraph
BP is struggling to maintain safety standards at some of its biggest manufacturing sites, according to a leaked internal report that has exposed serious flaws in its monitoring of operations at refineries and chemicals plants. At least two potentially fatal “near misses” have taken place at BP plants at Whiting in the US state of Indiana and at Hull in the UK in recent years, the report said. – The Times
The US Federal Reserve is poised to raise interest rates today for only the second time in a decade. In doing so, it will be setting out on a different path from the Bank of England and most western central banks. With economists unanimous in forecasting an increase, the first since last December, the focus has shifted to projections for future rises and Janet Yellen’s handling of press questioning now that Donald Trump, a prominent critic, is president-elect. – The Times
US close
The Dow Jones index flirted with the 20,000 milestone on Tuesday but ultimately had to make-do with second best of a seventh straight record finish as traders prepared for an almost certain interest rate hike from the Federal Reserve the following day.
Record finishes all round saw the Dow close up 0.58% at 19,911.21, the first time it has finished above that level, while the S&P 500 rose 0.65% to 2,271.72 and the Nasdaq finished up 0.96% to 5,463.83.
The Dow has now risen around 9% in the five weeks since Donald Trump won the presidential election.
While many eyes were on Trump Tower as the president-elect also picked his energy secretary and met rapper Kanye West to discuss "multicultural issues", the Fed remained a key focus at the south end of Manhattan.
Wall Street has priced in with almost 100% certainty the second US rate rise in a decade, with the Fed predicted to hike the base rate a quarter of a percentage point to a new target range of 0.50-0.75%, from 0.25-0.5%.
The Federal Open Markets Committee will make an announcement on Wednesday around 1900 GMT and Fed head Janet Yellen's comments and the 'dot plot' median expectations around future hikes will be keenly watched.
"We think there is a major threat for the dollar bulls that the Janet Yellen may disappoint them tomorrow," said analyst Naeem Aslam at Think Markets.
"The strength of the dollar is something which the Fed has started to pay attention and Donald Trump is not going to be very much happy with the higher dollar when he takes the office next year. “