(MENAFN- ProactiveInvestors) The Markets
Market opening: Markets are likely to open higher today. FTSE 100 futures were trading 49.0 points up at 7:00 am.
New York: Wall Street declined as falling oil prices led to downward revisions in profit estimates for several companies this earnings season. Concerns regarding a possible rift between the ECB and Germany over the stimulus package also added to the fall. S&P 500 shed 0.3% to record a third consecutive day of losses.
Asia: Equities are trading in the red this morning as lower growth forecast from the World Bank hurt investor sentiment. Nikkei shed 1.7% at close whereas Hang Seng was trading 0.6% down at 7:00 am.
Continental Europe: Markets closed higher amid rising retail stocks that cheered investors. Weak inflation in the UK triggered speculation of more lenient policies from the government. Germany’s DAX and France’s CAC 40 climbed 1.6% and 1.5% respectively.
Crude Oil: Yesterday Brent and WTI crude oil prices decreased 1.8% and 0.4% respectively. The spread between the two varieties stood at US$0.7 per barrel.
UK small caps: The FTSE AIM All-Share index closed 0.24% lower yesterday at 702.24. To read our latest research
Today’s news
World Bank trims global GDP growth outlook
In view of the discouraging economic prospects in the Eurozone Japan and other emerging economies the World Bank lowered its global growth forecast to 3.0% for 2015 from 3.4% as estimated in June 2014. The bank also cut its global GDP growth estimate for 2016 to 3.3% from 3.5% predicted earlier.
BoE Governor hints at a gradual rate hike
Governor of the Bank of England (BoE) Mark Carney suggested that the central bank may raise interest rates at a slower pace than initially estimated. The governor expects inflation to remain low in the near term.
Company News
Holdings () – Speculative Buy
Yesterday Holdings provided a trading update for the financial year ended 31st December 2014. Sales are expected to be around €150000 as most of the existing 2014 order book was pushed to H1 2015. Confirmed orders for 2015 totalled to at least €1.5m. During the period the company extracted over 14000 tonnes of marble. On the other hand Offtake and distribution agreements were signed with Marmi E Graniti D’Italia Banyan Stone Limited and Zhong Shengdestone in Q4 2014. Moreover the Offtake agreement with Banyan provides a minimum commitment of €1.5m of block marble over the next 18 months. Since October 2014 the company has already shipped 300 tonnes of marble valuing €90000. The completed orders under the Pisani Offtake added to €250000. The distributors in London and New York along with the company’s office in Carrara continue to do well. The factory building at the site in Kosovo progressed during the period with operations expected to commence in Q1 2015.
Our view: saw lower-than-estimated sales during 2014 but the year brought in quite a few important material contracts and the order book for the year 2015 looks robust. Going forward we expect the company to witness significant growth in the orders on the back of new distribution and sales channels. The company now possesses a sizeable and varied marble inventory for a review by potential customers an important aspect to enhance sales. Moreover the planned completion of factory construction by Q1 2015 is likely to further improve the economics and profitability. With plans to establish partnerships in Middle East and India the company looks to expand its business significantly in the near term. In view of these positives we reiterate a Speculative Buy rating on the stock.
Economic News
UK CPI
The UK consumer price index (CPI) remained unchanged in December compared to a drop of 0.3% in November the Office for National Statistics (ONS) said yesterday. Market expected inflation to increase by 0.1%. On y-o-y basis consumer inflation stood at 0.5% in December lower than previous month’s 1.0% and the market expectations of 0.7%. Core consumer price inflation was recorded at 1.3% y-o-y in December in line with street forecast following a 1.2% growth in the previous month.
UK PPI
The UK producer price index (PPI) output fell 0.3% m-o-m in December following a 0.2% drop in November the Office for National Statistics said yesterday. The reading came in line with the economists’ expectation. On y-o-y basis output prices declined 0.8% in December after decelerating 0.1% in November. Markets had forecasted a fall of 0.4% in November.
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