BT to loosen hold of Openreach, Lloyds profit fall
London open
Traders are forecasting the FTSE 100 will rise roughly 60 points on Thursday morning, reversing the prior day's falls.
Stocks to watch
BT Group may still be forced spin off its Openreach infrastructure arm, regulator Ofcom said, unless it effectively opens up the network to rivals and implements major reforms. A review carried out by telecoms the found under the current model of BT ownership Openreach lacks independence and "has an incentive to make decisions in the interests of BT".
Robustness was a key theme in the annual financials for Lloyds Banking Group, with the company reporting rises in underlying income and underlying earnings for the 2015 calendar year and recommending a final ordinary dividend of 1.5p per share plus a special dividend of 0.5p per share. The bank saw underlying profit increase 5% to £8.1bn during the year, with an underlying return on equity of 15% - up from 13.6%, with statutory profit before tax down to £1.6bn from 2014's £1.8bn due to increased PPI charges.
Currency headwinds have eroded British American Tobacco’s full year revenue for 2015. The tobacco giant said revenue had dropped 6.2% from £13.9bn in 2014 to £13.1bn, however at constant currency rates it had risen 5.4% to £14.7bn. That has led the company to marginally increase its profit from operations from £4.54bn to £4.56bn at actual rates.
Newspaper round-up
The European trading giant planned by Deutsche Börse and the London Stock Exchange Group will be based in London but headed by the German group’s chief executive, according to people close to the two sides. They are set to proceed with plans to make London the domicile for the new holding company, despite the looming June 23 referendum on British membership of the EU, in a boost to the City’s role as Europe’s dominant financial centre. – Financial Times
The International Monetary Fund has urged the UK to ease back on austerity should the economy slow further, as it warned finance ministers at the G20 summit in Shanghai to boost public spending on infrastructure to fuel global growth. In a report on the UK’s economic outlook, the IMF said the risks of a more severe downturn were mounting as David Cameron’s government battled sluggish productivity growth, a balance of ayments deficit, high levels of household debt, and the forthcoming referendum on EU membership. - Guardian
BHP Billiton’s legal woes have worsened after it emerged that executives at its Brazilian joint venture have been accused of murder by police over the Samarco disaster that killed 19 people. The allegations, which could lead to criminal charges, came after BHP warned that it could take years to draw a line under the liabilities arising from the bursting of a huge dam holding waste materials last November. It has written off the value of the business on its balance sheet. – The Times
US close
US stocks mounted a contrarian comeback after a deluge of seemingly depressing data early in the session that tipped most stocks into the red initially.
But a spirited revival over the course of the day, helped by the stemming of oil future losses, saw the Dow Jones finish 0.32% higher at 16,485, the S&P 500 up 0.45% at 1,930, Nasdaq rise 0.88% to 4,543.
Helping oil were crude inventory numbers from the Department of Energy, with gasoline inventories falling last week for the first time since November, while strong demand for gasoline also helping lift crude futures.