LONDON MARKET PRE-OPEN 17 August 2017

Lower Call; Kingfisher Cautious On Outlook

LONDON (Alliance News) Stocks in London are called for a negative open on Thursday, ahead of UK
retail sales, due at 0930 BST, while the market took the Federal Reserve minutes released late
Wednesday as dovish.
In early UK company news, FTSE 100 DIY retailer Kingfisher said group sales rose to GBP3.1 billion in
the three months to July 31, up 4% from a year earlier. The company, however, said total group sales
fell 1.7% at constant currencies compared to a year before.
Kingfisher, which owns B&Q and Screwfix in the UK and Brico Depot and Castorama elsewhere in
Europe, said like-for-like sales fell 1.9% at constant currencies.
The second quarter has broadly followed a similar course to the first although B&Qs performance
was impacted by seasonal swings across the periods. We have also continued to experience some
disruption across the businesses, although on an improving trend, said Kingfisher.
Availability of this years unified and unique product is now approaching normal levels. We
continue to adapt new processes as our transformation progresses, which will support the
significant amount of change planned for the second half, noted the company.
Kingfisher said it remains cautious on its outlook for the second half of its financial year for the UK
and France as previously guided.
IG says futures indicate the FTSE 100 index to open 12.43 points lower at 7,420.60. The blue-chip
index closed up 0.7%, or 49.18 points, at 7,433.03 on Wednesday.
The dollar has weakened against its major counterparts on Wednesday afternoon, following the
release of the minutes from the Federal Open Market Committee meeting held on July 26.
The Fed remains on track to unwind its USD4.5 trillion balance sheet at an upcoming meeting,
according to the minutes of the central banks July monetary policy decision.
Policy makers also expect to raise their benchmark lending rate by a quarter percentage point one
more time this year despite ongoing concerns about stubbornly tame inflation.
However, some members said they want to be patient on raising interest rates, as they lowered
their forecast for underlying inflation.
Many senior officials saw a greater likelihood that inflation might remain below 2% for longer than
they currently expected.
It is clear that the weak inflation numbers are giving some FOMC members serious pause for
thought, particularly since the Feds preferred measure of PCE is lower now at 1.5% than it was at
the beginning of the year, and as such it is highly unlikely that we will see interest rates move
again until December at the earliest, says CMC Markets chief market analyst Michael Hewson.
Sterling was quoted at USD1.2892 early Thursday compared to USD1.2857 at the London equities
close on Wednesday.
The European Central Bank will follow the Fed on Thursday publishing its monetary policy meeting
accounts of the meeting held on July 20.
Wall Street ended higher on Wednesday, with the Dow Jones Industrial Average and the S&P 500 up
0.1% and the Nasdaq Composite up 0.2%.
In Asia, the Japanese Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite is up
0.3%, while the Hang Seng index in Hong Kong is down 0.2%.
Elsewhere in the economic calendar on Thursday, the eurozone consumer price index is at 1000 BST
and the eurozone trade balance is at 1100 BST. The European Central Bank monetary policy meeting
accounts are at 1230 BST. In the US, initial and continuing jobless claims are at 1330 BST, while
industrial production is at 1415 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2017 Alliance News Limited. All Rights Reserved.
Market News and Views
The FTSE 100 is called to open lower this morning following the mixed overnight performances on
Wall Street and in Asia with the FOMC minutes showing members divided on interest rates and
inflation with uncertainty now over the timing on another US hike in rates this year. The economic
diary today sees the release of domestic retail sales data, followed at lunchtime in the US with the
Philly Fed manufacturing index and the latest US weekly jobless claims. Commodity prices are firmer
and on the foreign exchanges, the dollar is slightly weaker against the pound, euro and yen but all
are within narrow trading ranges ahead of these data releases.
Company Announcements
Marshalls
Half Year Results from the specialist landscape products group sees revenue ahead 8% at 219.1m
with PBT up 16% to 29.1m. The interim dividend has been raised 17% to 3.4p a share with ROCE
up 19% at 23.7%. It noted that its focus remains on the delivery of its growth initiatives set out in its
2020 Strategy, whilst continuing to maintain a strong Balance Sheet and flexible capital structure. It
added that it was confident of achieving its expectations for 2017.
Kingfisher
Q2 Trading Update to end July 2017 sees reported sales up 4% at 3.1bn although total sales were
1.7% lower at constant currency with lfl down 1.9% in constant currency terms. It noted that Q2 had
followed a 'broadly similar course' to Q1, although B&Q's performance was impacted by seasonal
swings with it also seeing some ongoing disruption to its businesses, although on an improving
trend. It remains cautious on the H2 outlook for the UK and France as previously guided, adding that
it remains on track to deliver its Year 2 strategic milestones. Further detail on its wider progress will
be provided in its H1 Results.
Markets Results
Markets Summary Previous Change

FTSE 100 7433.03 +49.18

FTSE 250 19859.24 +164.43

Dax 12263.86 +86.82

Dow Jones 22024.87 +25.88

Nasdaq 6345.10 +12.10

S&P 2468.11 +3.50

Hang Seng 27325.48 -83.59

Nikkei 19702.63 -26.65

Commodities Summary Previous Change

Oil 50.43 +0.06

Gold 1287.20 +4.04

Silver 17.11 +0.02

LME copper 3MO $ 6534.00 +2.00

Currency Summary Price Change

/$ 1.2898 +0.0009

/$ 1.1777 +0.0006

$/ 109.84 -0.2760

/ 1.0951 +0.0002

Time Country Indicator Median Previous

9:30 UK Retail Sales m/m 0.2% 0.6%

1:30 US Philly Fed Manufacturing Index 18.3 19.5

1:30 US Unemployment Claims 240k 244k

 Asian Markets
Most Asian markets trended higher after a rally in the dollar was halted on political turbulence
stateside while investors digested the Federal Reserve's minutes.
U.S. Markets
Wall Street edged higher but closed well off session highs as the U.S. Federal Reserve meeting
minutes showed worries about low inflation.
Today's News
Kingfisher's second quarter sales totalled 3.1bn - up 4% on a reported basis but down 1.9%
like-for-like. The group said it remained on track to deliver year 2 strategic milestones and it had
entered into a binding acquisition agreement to significantly strengthen its position in Romania,
subject to regulatory approval. Chief executive Veronique Laury said: "Q2 has broadly followed a
similar course to Q1 although B&Q's performance was impacted by seasonal swings across Q1
and Q2.
Allied Minds has reported further losses for the first half of 2017. Pre-tax losses at the company
increased to $58.2m for the six months to June 30, compared with $52.2m for the same period a
year earlier. Revenues were up over the six month period to just under $2m, compared to $1.3m
for the first half of 2016
Hikma Pharmaceuticals has reported stable profitability and strong cash generation in H1 and
announced new licensing agreement with Takeda for products in the Middle East and North
Africa. Hikma's group revenue totalled $895 million, up 1% in H1 2017 and up 5% in constant
currency, reflecting the consolidation of an additional two months of West-Ward Columbus and
continued Injectables growth, partially offset by lower branded revenue.
Marshalls grew its profit before tax by 16% to 291 million in the first half, with revenue 8%
higher at 219.1 million. EBITDA increased by 13% to 36.7 million. The return on capital
employed for the 12 months ended 30 June 2017 increased by 19% to 23.7%. The company had
net cash of 1.2 million, compared with net debt of 8.8 million the year before. It increased the
interim dividend by 17% to 3.4p.
KAZ Minerals' gross revenues increased by 2.3 times to $837m in the six months to the end of
June on higher volumes and commodity prices. The group said copper output more than doubled
to 118kt in the first half ; Aktogay ramp up was progressing well and Bozshakol was expected to
achieve full capacity in second half.
Oil prices edged up, clawing back some ground after losses in the previous session.
Gold prices rose as the dollar remained subdued after minutes from the U.S. Federal Reserve's
July meeting hinted at a delay in further rate hikes
Companies Reporting this Week
Day Companies

Today: Allied Minds * Hikma Pharmaceuticals * Kaz Minerals

Early Market Movements

Market Index Change % Change

UK 100 7,415.9 -17.1 -0.2%

UK 250 19,832.9 -26.4 -0.1%

GER 30 12,228.9 -35.0 -0.3%

FRA 40 5,157.7 +17.4 +0.3%

U.S. 30 22,024.87 +25.88 +0.1%

U.S. 500 2,468.1 +3.5 +0.1%

 OIL (BRENT) 50.38 +0.11 +0.2%

GOLD 1,288.86 +5.75 +0.5%

UK Major Risers & Fallers - 8:15am

Company Price Change % Change

Qinetiq 251.75 +15.55 +6.6%

Johson Matthey 2809 +55 +2%

Randgold Resources 7410 +135 +1.9%

Evraz 253 -15.7 -5.8%

Kingfisher 297.8 -9.6 -3.1%

Legal and General 268.3 -4.8 -1.8%

Latest Broker Views

Company Broker Recommendation Price Target

Hammerson Jefferies Underperform 577.5 464

Land Securities Jefferies Hold 1029 969

National Grid Deutsche Bank Sell 969.5 900

Pennon Group Deutsche Bank Buy 808 870

Forthcoming Economic Data

Time/Date Previous Forecast Outcome

9:30am: U.K. Retail Sales m/m 0.6% 0.2% -

10:00am: European Final CPI y/y 1.3% 1.3% -

1:30pm: U.S. Unemployment Claims 244k 240k -

Interbank Spot FX Rates - 08:05am

Pairing Rate % Change

GBP/USD 1.2889 -0.02%

EUR/USD 1.1764 -0.03%

GBP/EUR 1.0956 +0.01%

USD/JPY 109.9300 -0.24%

USD/CHF 0.9668 +0.10%

 GBP/JPY 141.7290 -0.23%

Upcoming UK Dividend Dates

Company Dividend Ex Dividend Date

Imperial Brands 25.85p 17/08/2017

Ashtead Group 22.75p 17/08/2017

Reckitt Benckiser 66.6p 17/08/2017

British American Tobacco 56.5p 17/08/2017

Schroders 34p 17/08/2017

Renewables Infrastructure Group 1.6p 17/08/2017

Man Group 3.79p 17/08/2017

Millenium and Copthorne Hotels 2.08p 17/08/2017

Kennedy Wilson Europe Real Estate 12p 17/08/2017

Merlin Entertainments 2.4p 17/08/2017

Pearson 5p 17/08/2017

Legal and General Group 4.3p 17/08/2017

Ibstock 2.6p 17/08/2017

Evraz 0.3 17/08/2017