Smiths Group to spin out medical division, Prudential sees accelerated profit growth
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The FTSE 100 is expected to open 27 points lower on Wednesday, having closed up 0.01% at 7,053.76 on Tuesday.
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Global technology company Smiths Group said it expected to meet full year expectations based on first quarter performance where revenue for the three months to end October fell 1% on an underlying basis. Smiths said it expected to at least sustain the full year underlying growth rate, with its performance weighted towards the second half. The company also announced it intended to separate Smiths Medical from the group and concentrate on growing as an industrial technology group.
Prudential's profit growth accelerated in the third quarter of the year, including at its M&G Prudential arm as it prepares to demerge. In the first nine months of the year, life insurance new business profit increased 17% at constant currency rates, with Asia jumping 15% and the US roaring 22% higher.
Residential property business Grainger reported a 26% improvement in its adjusted earnings for the year ended 30 September, to £94.0m, on Wednesday, with profit before tax increasing 17% to £100.7m. At the same time, the FTSE 250 company said it has conditionally agreed to acquire the entire share capital and shareholder loans in GRIP REIT from its joint venture partner, APG, for £396m.
Newspaper round-up
The Exeter-based budget airline Flybe is putting itself up for sale as it struggles with currency headwinds and fuel costs. It is planning to officially announce to the London Stock Exchange that it is exploring sale options as well as looking into a possible merger. - Telegraph
Theresa May will put her future in the hands of senior ministers today as she asks them to sign off a Brexit deal in the face of accusations of betrayal. The prime minister was trying to sell the divorce deal and pact on the future relationship with Europe last night to a reluctant cabinet, which is due to meet at 2pm to agree it. - The Times
Theresa May summoned her cabinet to an emergency meeting on Wednesday afternoon to sign off her long awaited final Brexit deal, prompting hard-Brexit Tories to call for senior ministers to stand up and block it. The critical meeting is the culmination of months of negotiations and will see May’s senior ministers consider whether they can personally endorse the agreement that the prime minister has been able to reach. - Guardian
US close
US stocks closed mostly lower on Tuesday as a late push was offset by plummeting oil prices cratered, dragging the energy sector sharply lower.
At the close, the Dow Jones Industrial Average was down 0.40% to 25,286.49, while the S&P 500 closed 0.15% softer at 2,722.18 and the Nasdaq closed out the session flat on 7,200.87.
December West Texas Intermediate oil tumbled 7.76% to $55.69 a barrel, marking the twelfth consecutive daily decline as it hit the lowest front-month figure in almost twelve months.
Donald Trump voiced disapproval over a potential production cut by Saudi Arabia and OPEC, tweeting out that prices "should be much lower based on supply!"
Wall Street had sustained a bout of heavy profit-taking the day before, with the Dow Industrials retreating by roughly 600 points, as Apple led tech shares lower after a number of chip suppliers warned on their future earnings outlook, citing weaker mobile phone demand.
"This really shouldn’t have come as a shock given the break down in Apple’s numbers earlier this month, the surprise is that investors took so long to put two and two together," said CMC Markets analyst Michael Hewson.