Below are the key morning press headlines, featuring the The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Clients of Citigroup were told to plough into UK blue-chip stocks, which it says look “very cheap”. Despite all the goings-on on the markets of late, Citi analysts expect the FTSE 100 to pick up and break through the 8,000-point barrier for the first time by the end of next year. Brexit fears are overdone, they argue, pointing to the fact that almost three quarters of the Footsie’s earnings come from overseas. The political uncertainty has still held back share prices and as a result Citi has now made the UK its “preferred value trade”.
Anglo American (AAL) lost some of its sparkle after reporting another weak sales cycle for its De Beers diamond business. At its latest “sight” De Beers sold $295 million worth of rough diamonds, compared with $482 million at the same event last year. For the third sight in a row, it offered customers more “flexibility”, meaning they could be pickier with the diamonds they bought and defer purchases until later in the year. Analysts said the drop-off reflected the “tough rough market”, given that many of the cutters and polishers who De Beers sell to have lots of diamonds in their inventory after a disappointing Christmas and New Year last time around. RBC cut its forecast for De Beers.
Metro Bank (MTRO) crucial £350m fundraising “comes at a price” as it means the troubled lender is unlikely to return to profit until 2021, City analysts have warned. The bank, which is searching for a new chairman to replace founder Vernon Hill, successfully relaunched a bond issue this week that offered extremely high returns. It also said that Mr Hill – who once said he was so committed to Metro he would “probably die there” – will step down this year and leave the board altogether. Although shares in the lender shot up on the fundraising and American billionaire’s exit, the generous terms of the bond issue will cost the bank about £33m a year.
The chequered reign of Imperial Brands (IMB) boss Alison Cooper has finally been stubbed out, and according to outgoing chairman Mark Williamson she has made a “tremendous contribution” at the tobacco giant. Investors will take issue with that glowing assessment. She certainly made a tremendous contribution to remuneration, scooping £30m in total over nine years, but sadly not the same contribution to the share price. The first half of Cooper’s tenure started well enough – the share price doubled – but since then it has halved, leaving the shares roughly where they were when she took charge in 2010.
Investors raised a glass to Diageo (DGE) on Thursday, with the drinks giant looking set to weather the impact from the United States’ new tariffs against European goods. Traders breathed a sign of relief that a 25% tax levied by Washington would only impact single-malt Irish or Scotch whiskies. Although Diageo is the biggest whisky producer in the world, analysts at Jefferies reckon the Gordons to Johnnie Walker maker will be able to cope with the extra costs in the short term without raising prices. The analysts said the list of tariffed products, issued by the Office of the US Trade Representative, was “less penal” upon alcoholic drinks than had been feared.
Shares in Ted Baker (TED) tumbled Thursday morning after the fashion firm issued its third profit warning in seven months and slumped to a £23million half-year loss. It said heavy discounting, consumer uncertainty and weak demand for its spring/summer collection all contributed to the losses, which compare to profits of nearly £25million this time last year. The cost of overhauling its struggling Asian business also took a £12million chunk out of the bottom line. Ted Baker simultaneously warned that it would continue to struggle in the second half of the year unless conditions improved.
Tower Resources (TRP) has shared key technical and commercial information with an unnamed ‘major international oil company’ in the hopes of securing a partnership. The energy minnow has several oil blocks off the coast of Namibia, in south-west Africa, that it is looking to develop. Chief executive Jeremy Asher cautioned that talks are at an early stage and may not lead to a deal.