Centrica and Bunzl lift expectations, Henry to step down from Shell
London open
The FTSE 100 is expected to open on Thursday, after closing down 0.28% at 6,949.19 on Wednesday.
Stocks to watch
Centrica published a trading update on Thursday, prior to entering its close period on 1 January, saying it was continuing to make good progress against its strategic priorities and now expected to exceed the 2016 targets originally set out at its 2015 preliminary results. The FTSE 100 firm said adjusted operating cash flow was now expected to be in the range of £2.4bn-£2.6bn. Group capital investment, including small acquisitions of less than £100m each, was now expected to be around £900m, below the £1bn limit set as part of the group’s financial framework, and full year adjusted earnings per share should now be around 16.5p.
Distribution and outsourcing company Bunzl expects revenue to increase for the year mainly due to several acquisitions and after slow growth in the first three quarters. Revenue for the year ended 31 December, is expected to rise between 14% and 15% at actual rates, while at constant currency it is expected to nudge up between 4% and 5%.
Royal Dutch Shell’s chief financial officer Simon Henry will retire after more than seven years in the role, to be succeeded by Jessica Uhl, who will take on the job with effect from 9 March. Henry will remain on the board as CFO until Uhl starts and will be available to her and the board to help with the transition until the end of June.
Newspaper round-up
London’s lead in financial services technology risks being blunted by bureaucratic new migration rules, according to business leaders cited by the latest House of Lords report on leaving the European Union. Peers conclude that the fast-growing sector is one of a number of world-beating industries at risk if London loses its status as an international melting pot for talent, partly because Europeans may not be able to come to work in the UK so freely. - Guardian
Yahoo said on Wednesday it had discovered another major cyber attack, saying data from more than 1bn user accounts was compromised in August 2013, making it the largest such breach in history. The number of affected accounts was double the number implicated in a 2014 breach that the internet company disclosed in September and blamed on hackers working on behalf of a government. - Guardian
It is vital to fight for the City in the Brexit negotiations, and the Government should not be ashamed to stand up for Britain’s banking expertise, a committee of Lords has announced. Senior financiers have told The Daily Telegraph that ministers have warned that they cannot be seen to prioritise the City over other sectors, as bankers are perceived as unpopular figures. – Telegraph
Nearly a quarter of workers at the accountancy giant KPMG attended a private secondary school, the firm has revealed, as it tries to broaden access to the profession. The company said 23pc of its 13,500 workers came from private school, compared to the national average of about 7pc, and a further 14pc came from a selective state school. – Telegraph
21st Century Fox is expected today to make a formal offer to buy Sky in an £18.5 billion takeover. The American company, which is the majority shareholder in Sky with a 39 per cent stake, will offer to buy the remaining shares for £10.75 each, less future dividends, after an informal agreement was reached between the companies last Friday. – The Times
Britain’s unemployment rate remained at an 11-year low in the three months to October but employment fell as economists warned that resilience in the economy since the Brexit vote had begun to fade. The number of people out of work fell by 16,000 to 1.62 million, the Office for National Statistics said. However, employment fell by 6,000 to 31.76 million compared to the previous three-month period— the first drop in a year — knocking the employment rate down from its record high of 74.5 per cent to 74.4 per cent. – The Times
US close
The US central bank hiked the range for its main policy rate by 25 basis points to between 0.50% and 0.75% and appeared to signal that more interest rate increases were in the pipeline for 2017 than it did at its meeting in September, when it last published projections.
Rate-setters in Washington DC were unanimous in their decision to tighten policy.
Significantly, in her post-meeting press conference Fed chief Janet Yellen said there was no "obvious" case for fiscal stimulus to be applied now.
On Wall Street, the Dow Jones Industrial Average fell 0.6% to 19,792.53, the S&P 500 lost 0.81% to 2,253.28, and the Nasdaq 100 was off 0.3% at 4,921.22.
According to the newly-submitted, and sometimes controversial, 'dot-plot' graphs of interest rates projections from the Federal Reserve´s board members and regional Fed presidents, the median expectation now was for three quarter-point interest rate hikes in the following year, up from two beforehand.
A further three hikes were projected in 2018, followed by another three in 2019, the graphs showed.
Similarly, the median projection for the Fed funds rate in 2017, which was contained in a separate table of the Summary of Economic Projections, rose from 1.1% to 1.4%, the Fed said