Investors bet on William Hill

Wednesday, August 2: Indices were fairly static as equity markets await comment from the Bank of England tomorrow. Standard Chartered and miners weighed the primary index lower(-0.16%) as Brent crude bounced off intraday lows shortly before we closed out trade in London.

William Hill(+7.85%) led the FTSE 250 higher after recording an increase in first-half adjusted pretax profit and a bullish outlook for 2017 and beyond. Statutory profit fell due to exceptionals incurred from the implementation of a transformation programme, but reported lifts in revenues, adjusted profit and to the interim dividend. Investors are starting to climb aboard, enticed by the cost progress made and a rosier outlook.

Standard Chartered(-5.60%) fell in trade today, despite reporting a sharp rise in profit. The emerging markets lender reported pretax profit of $1.8bn for the six months to June 30, rising from $963.0m for the same period in 2016. Operating income rose $400.0m to $7.2bn year-on-year after reporting bullish trade in Greater China and North Asia, bolstered by 8% income growth in Hong Kong. Impairment losses fell by nearly half to $583.0m, from $1.10bn the prior year for the same period, as return on equity more than doubled from 2.1% year-on-year to 5.2%. Despite a much improved financial performance, the bank did not re-instigate its interim dividend as it was “mindful” of more regulation emerging in forthcoming months – to the dismay of investors.

Markit/CIPS purchasing managers’ index on construction sector activity fell to its lowest level since August 2016 in July, at 51.9, down sharply from 54.8 in June. The slowdown in July reflected “lower volumes of commercial building and a softer expansion of housing activity”. The survey also highlighted reduced new business volumes for the first time since August 2016, while prices for construction materials increased at one of the sharpest rates since the second half of 2011.

Across Europe, indices were down at the close with the FTSE 100 -0.16%, the DAX 30 -0.57% and the CAC 40 -0.39%.

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