03/08/2016
HSBC profit drops 29 percent, but markets undeterred
Banking giant HSBC has reported a 29 percent fall in profits for the first six months of the year, as the group continues to face “considerable uncertainty”.
Profits for the last quarter fell 45 percent with pre-tax profits falling to $3.1 billion, down from $6.1 billion for the previous three months. Revenue also fell to $29.4 million, down 4 percent on the first half of 2015.
However, HSBC cheered analysts and investors by announcing a share buy-back of up to $2.5 billion, demonstrating the “strength and flexibility” of the group’s balance sheet.
The markets have reacted calmly to the disappointing figures, sending HSBC (LON:HSBCA) shares up over 3 percent. CEO Stuart Gulliver gave a nod to the “difficult” economic conditions but maintained that the group’s performance was “reasonable” in the face of “considerable uncertainty”.
HSBC is currently trading up 3.29 percent at 498.80 (0937GMT).
Invest in the UK’s growing population and shortage of land
Almost every London borough is facing a critical shortage of plots for burials. We now have the opportunity to acquire plots in a new extension to a London cemetery at a ‘wholesale’ cost and receive a 40% premium when they are acquired on behalf of families by local funeral directors.
The first phase of this development sold out in just 12 weeks. That’s 2,500 plots acquired by investors excited by the prospect of a 40% capital gain in two years. Now, we have just launched phase 2 of the project with a further 2,500 plots being made available to private investors.
It’s possible that these will be the last plots to be made available on this model as the developer believes they will have sufficient retained profits after this phase to secure the remainder of the development. Detailed designs of the new cemetery are now under way and will set new standards for memorial gardens in the UK. This is your opportunity to join the hundreds of investors already on board with this project, at a time when the project has been significantly de-risked now that the transfer of land ownership to the developer has been completed.
Just fill in the form below and watch for an email from us with a link to the download page.
What is the level of investment needed?
The burial plots require an investment of £2400 each with a minimum of 4 plots, so £9,600 minimum.
What returns can I expect?
With the burial plots you sign an agreement giving the developer up to 24 months to sell them on your behalf. If they are sold you will receive a 40% premium, that is £3,360 for each plot sold. If they are not sold after 24 months you receive the premium at that time.
Is there a limit on how many plots I can invest in?
No, the only limit is the minimum of 4 burial plots. During Phase 1 the average investment was £25,000 to £30,000.
Who handles the legal element of the investment?
An independent lawyer handles the conveyancing for a fixed fee of £299 + VAT for the first 4 plots and £25 + VAT for each subsequent plot.
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Bank of Japan disappoints investors by leaving rates unchanged
The Bank of Japan has decided to leave interest rates unchanged at -0.1% despite analysts’ predicting a further stimulus increases by reducing rates to -0.2%. The unexpected decision sent the Japanese Yen surging upwards and yields on 10-year bonds sore as investors were disappointed at the absence of further rate easing.
Rate remains at -0.1%
At the end of the BoJ two-day policy meeting to set measures and targets for the coming two-months, it announced early Friday morning that it will keep interest rates at -0.1%. Analysts’ had expected the rate to be lowered to -0.2 to tackle the issue of deflation in the Japanese economy. The decision came as a surprise and disappointment to investors who had hoped for further easing through a reduction in the interest rate. Yields on 10-year bonds jumped a 9 point basis after the decision became public.Bank of Japan promises further stimulus to tackle deflation
While leaving the benchmark policy rate unchanged, the Bank of Japan did state that it is prepared to add further stimulus to the economy in order to achieve its inflation target of 2%. The agency committed to keep its expansion of the monetary base steady at ¥80tn per year and expanded its’ purchases of exchange traded funds from ¥3.3tn to ¥6tn. It also decided to double the size of its’ US dollar lending program to $24bn.Data on Japan’s economic performance remain worrying
The decision to commit to further stimulus comes on the same day major data on the performance and inflation levels of the Japanese economy were released. Inflation figures are still looking very unfavourable for the country’s economy. The Japanese Consumer Price Index ex-fresh food for June came in at -0.5%. The shows an increase of 0.1% in deflationary movement of price levels year on year compared to May’s figure and missed analysts’ estimates who believed the rate would remain unchanged to the previous month at -0.4%. Overall household spending, which was expected to improve was down a staggering 2.2% compared to June 2015 figures. The figure missed analysts’ estimates by 1.9% and undercut May’s rate by 1.1%. The unemployment rate improved slightly from 3.2% in May to 3.1% in June. Retail trade improved by more than expected in June. With decline in growth of 1.5% compared to sales in the same month 2015, which represents an improvement to last month’s figure of 0.7%.Japanese Yen continues its’ surge against other main currencies
In the aftermath of the results, the currency yo-yoed widely over following coming hours but on average gained in strength to reach its highest level against the dollar in over three weeks, with the USD/JPY standing at 103.323 at 12.54pm. The JYP has been gaining strength across the past 12 months which has hurt earnings through exports of many Japan based companies, such as Sony who had to record on 74% losses in quarterly profits this morning. Effort to depreciate the Yen have so far been largely unsuccessful.UK consumer confidence drops to lowest since late 2013
A figure on July’s consumer confidence in the UK market published by the GfK group this morning showed discouraging levels of consumer pessimism.
The figure came in at -12, representing an 11-point reduction from the previous month. It also presents the lowest level the index has taken since December 2013 and the greatest one month drop the index recorded since March 1990 when Margaret Thatcher hiked interest rates to 15%. The figure also missed analyst estimates by 4 points meaning that the index dropped 57% further than expected. June’s figure, which was published only 5 days after the UK’s decision to leave the European Union was made, could only reflect little of the impact the political move had on consumer sentiment. However, this month’s shockingly low level shows the first indication of the full impact Brexit may have on the economy over the coming months. Consumer confidence is a good indicator for GDP growth rates in the coming months and current levels indicate that UK growth is likely to reduce greatly due to lower consumption activity in the markets. The figure adds to a growing herd of UK data which suggests that the country may be entering a longer period of recession due to economic uncertainty post-Brexit. The BoE earlier this month decided to refrain from introducing stimulating measures at this point in time to wait until the impact of Brexit on the wider economy becomes more clear. The next policy meeting is scheduled for the coming week and amid the new influx of new post-Brexit economic data it is becoming more likely that the BoE is set to act by introducing new stimulus.Kumamoto earthquake and continuous strong Yen see Sony profits slump 74%
Sony Corporation this morning reported quarterly profits ending 30th June were down 74.3% from the same period last year. The poor results were attributed to a strong Japanese Yen, as well as the Kumamoto earthquake in mid-April which forced a temporary production halt.
Sony reports major losses in earnings
Sales & operating revenue fell to ¥1,613.2bn, down 10.8% from the ¥1,808.1bn recorded for the same time period the prior year. Operating income decreased as much as 42% compared to the same quarter in 2015, to stand at ¥56.2bn. Net income attributable to stockholders dropped from ¥82.4bn to ¥21.2bn – a staggering 74.3%. Income per share fell even further, by 76.6%, from ¥70.36 recorded in the same quarter in 2015 to ¥16.44 in this quarter.Kumamoto earthquake weighed heavy on revenues from camera sensor production
Earlier this year the earthquake in Kumamoto strongly affected the corporation’s production of cameras, which weighed heavily on quarterly earnings. The earthquake of a magnitude of 7.0 on the Richter scale shocked the city in the early hours of the 16th April. Sony had to shut down its predominant factory for the production of CMSO sensors, security cameras and micro-display devices for close to four weeks to investigate damages and complete repairs. The halt in production caused major delays and losses in deliveries of products to a multitude of camera manufacturers including Nikon and Leica. In its’ latest earnings report Sony estimated the total impact of the earthquake at a loss of ¥34.2bn. ¥26.1bn are attributed to opportunity losses, ¥6.8bn to physical damage and ¥1.3bn to recovery expenses and miscellaneous costs.Strong Japanese Yen depresses income from exports
Income of the multinational corporation was also negatively impacted by the continuous strength in the Japanese Yen which weighs heavy on income from exported goods. The Yen has been rising in value against the USD and other major currencies such as the GBP over the past year. The UK’s vote to leave the European Union last month reinforced this movement. In addition, it looks as if the Yen is set to continue its’ rally further as this morning’s release of the BoJ’s decision to leave interest rates unchanged sparked a new rise in the strength of the JPY today. While sales from semiconductors, the segment most largely affected by the earthquake in Kumamoto recorded losses of 22.9%, sales revenues from Imaging Products and Solutions fell as much as 25.8% compared to the same quarter the prior year, 8% of which were attributed to the impact of foreign exchange. Earnings from components fell as much as 22.7% with the impact of foreign exchange being estimated at 9%. Highest decrease in sales revenues was recorded for the mobile communications segment which saw a 33.7% decrease from ¥280.5bn the same quarter in 2015 to ¥185.9bn in the three-month period ending the 30th June 2016. However, the company could for the first time record green figures in operating income for this segment. Operating income now stands at ¥400million, up ¥23.3bn from – ¥22.9bn in the same period last year. This reflects the successful heavy reductions Sony has previously undertaken in this sector to make it a profitable competitor. In the corporations most profitable segment, Game & Network Services the company documented increases in income from sales of 14%, to stand at ¥330.4bn. Operating profits were up ¥24.6bn to stand at ¥44.0bn.Share prices rise on forward guidance
In the forecast on full year results for 2016, Sony signalled to mostly be on track to deliver expected results predicted in May. It adjusted sales & operating revenues down 5.1% to a total of 7,400bn but kept operating income as well as net income to shareholders flat at 300 and 80 respectively. Sony Corporation’s share prices responded with by opening 1.82% up from previous market close at ¥3,250. Over the day the share price yo-yoed but finished up 2.82% at ¥3,282 by market close in Japan.Amazon breaks targets yet again in Q2 results
Today Amazon posted its latest quarterly results showing that record profits alongside strong sales have bolstered its revenue growth to the fastest rate in five years.
The Seattle-based company is enjoying a surge of customers subscribing to the company with it’s new video streaming service ‘Prime’ which is urging customers to spend more on site. As such, the cloud unit is the fastest growing branch of the business and is now a key driver for economic growth.
Analysists had predicted $29.6bn revenue but the retail giant was ready to crush expectations for the fifth quarter in a row at $30.4bn. As a result, the revenue averaged a profit of $1.78 per share up 19 cents compared to the same period last year.
Amazon recorded earnings of $857m in the Q2 yet it announced that operating income may drop for the current quarter to near $650m as the company seeks to increase investment in 18 warehouses compared to 6 in 2015 and producing original content for its Prime service.
There was also high numbers in the company’s web services revenues that leaped 58.2% to $2.89bn. The rise came alongside a surge of sales in the company’s biggest market, North America that grew up to 28% to $17.67bn during the quarter.
In July Amazon’s share price reached $756 setting new heights for the company, but today that number stood at $768 up 2% from its close.
At 8:19am GMT-4 Amazon.com Inc, traded at 752.61 + 15.94 (2.16%) with its pre-market value standing at 769.01 + 16.40 (2.18%)
29/07/2016
Barclays profits dip 21%
Today Barclay’s (LON:BARC) reported in their first half year results ending 30 June that profits have fallen 21% down from £2.6bn in 2015 to £2bn.
The bank also reported that net profits stood at £803m, a 18% decline from £1.2bn in the same period last year. The decline is thought to be due to the uncertainty across the markets following Britain’s decision to leave the EU which has drastically damaged the bank’s interest in assets.
As a result of the difficult economic environment, Barclay’s reported a loss of £1.9bn of it’s ‘non’core assets’ it had planned on offloading towards the end of the 2017 season. As such, was the group’s revenue which was down 7.5% falling to £5.97bn.
A mix of conduct charges and marginal compensation costs meant that operating expenses dropped to £7.7bn.
There was positive signs for the global giant however, as profits from its core business which accounts for its credit cards, consumer lending and investment, grew by 19% to £2.4bn.
Also rising was the bank’s core capital ratio, which grew from 11.3% to 11.6% beating expectations.
Chief Executive, Jes Staley said:
“Taken together, the picture in the second quarter is one of strong and accelerating progress against our strategy. We remain confident that it is the right plan for Barclays, and see no reason to adjust it, or the pace of delivery, in light of the vote by the UK last month to exit the EU.”
The direction Jes Staley hopes to lead the company, is for it to become a ‘transatlantic’ bank securing ties between the US and Britain. As such, the banks dividend prices remain at 3p in 2016 down from 6.5p from earlier cuts in order to sustain capital levels.
The group reaffirmed it’s target of delivering a full year cost target of £12.8bn.
One of the main points from the report announced that the bank has taken a £400m ‘provision for payment protection insurance’ meaning that the overall costs from the scandal so far have amounted to £7.8bn.
In early morning trading, Barclays share price increased 3% trading shy of 150p.
At 10:10am BST Barclays PLC traded at 155.88 + 9.38 (6.40%)
29/07/2016
Lloyds earnings beat expectations, but news of more job cuts send shares downwards
Lloyds Banking Group (LON: LLOY) today reported higher than expected half-year earnings but announced 3,000 further job cuts, stressing that the UK’s vote to leave the European Union makes further cost cutting measures necessary.
The Group reported underlying profits were down 5% compared to the same period last year. However, the figure of £4.2bn beats analyst estimates by £200million. Total net income was £8.9bn, 1% lower than in the first half of 2015 with net interest income up 1%, standing at £5.8bn and other income decreasing 5% to £3.1bn. The company also cited improved performance in the second quarter compared to the first. Earnings per share decreased by 0.7p compared to the first half of 2015 to 3.9p. Interim dividend however rose by 13% to 0.85p per share. The company was also successful at cutting operating costs by 3% to £4.0bn with the cost/income ratio improving to 47.8% due to its’ ‘continuous cost initiative’. Giving guidance on future cost cutting, Lloyds said it is set to target savings of between £1.0bn and £1.4bn by the end of 2017. With the purpose of protecting profits from post-Brexit shocks, it will accelerate its’ cost cutting measures further. In addition to already announced 9,000 job cuts and 200 branch closures, it has proclaimed a further reduction of 3,000 jobs and a further 200 branches. The new move is expected to result in savings of as much as £400 million. Full year cost/income ratio is expected to be lower than the figure of 49.3% in 2015. Although the earnings results showed better than expected performance, the news of new job cuts and branch closures send Lloyds Banking Group (LSE: LLOY) share prices falling 2.4% in the first few minutes after market open. Over the day Lloyds Banking Group (LSE: LLOY) share prices dropped further, to close at 52.5p (-5.83%).S&P Global reports 13% income growth in Q2 as bond market recovers from Q1 slump
Standards & Poor Global Inc. (NYSE: SPGI) today reported a 13% increase in net income in the second quarter. The figure beats analyst estimates thanks to new acceleration in the bonds market.
S&P Global’s adjusted net income stood at $385million in Q2, beating estimates by $33million. Revenues grew by 10% to $1.48bn, in respect to the same period last year. The company is the owner of the largest credit rater – S&P Global Ratings. However, income from credit ratings suffered in the first quarter as raising volatility in financial markets inclined borrowers to delay debt rises which prompted lower demand for new ratings. In the second quarter uncertainty in the markets seemed to ease as bond issuance increased 18% prompting a 4% increase in revenues for the S&P Global Ratings, to $682 million, comprising the largest share of S&P Global Inc.’s income. Transaction revenues this quarter grew by as much as 5% to $343 million. Non-transactional revenue was up 3%, to $339million, thanks to growth in surveillance, CRIDIL, commercial paper activity as well as royalties from Risk Services. Out of other sectors in the S&P business, Global Market Intelligence performed best, with revenues increasing 29% to $416 million in Q2, compared to the same period last year. The company reported that operating profits in this sector grew as much as 48% to $93 million thanks to SNL acquisition, organic growth, and progress on integration-related synergies. Adjusted diluted earnings per shares increased to $1.44, up 17% compared to the second quarter in 2015. The company has also made progress in reducing costs. Adjusted Expenses decreased by 5% over partly due to reduced outside services.President and CEO of S&P Global, Douglas L. Peterson stated:
“We are pleased that every business segment delivered revenue growth despite macroeconomic pressures including low commodity prices and ongoing volatility in the markets we serve. Increasingly, market participants look to S&P Global for the benchmarks and essential intelligence needed to conduct business.”He continued:
“In addition to our progress on creating revenue growth, we continue to make progress on our productivity initiatives and SNL integration synergies. Overall, our performance enables the Company to continue investing in our portfolio of great assets to improve our customer experience while simultaneously delivering excellent financial results.” Forecasting developments for the two quarters to come, S&P Global reflected on the still pending sale of J.D. Power. The company stated that it “expects to rellie on stepped up repurchases of shares to minimize dilution from the sale.” Revenue growth has been forecast at mid-single-digit as it will no longer include income from J.D. Power. The company has however adjusted its guidance on adjusted diluted EPS upwards by $0.05. It expects figures at the end of the year to range between $5.05 and $5.20. The share price of S&P Global Inc. (NYSE: SPGI) dropped sharply early on in the year as fear that growing volatility in the financial markets would affect revenues. January saw a drop in share prices of as much as 19.23% to a low of 80.77 in early February. It began to recover after mid-February but saw another slump due to the Brexit vote losing 10% over the three-day period after the vote, to stand at 99.38. Since then the share price has recovered and the positive earnings report has seen share prices jump 3.44% to a high of $121.5 in early market trading. At 4.23pm S&P Global Inc. (NYSE: SPGI) shares were trading at $121.34 (+3.34%).Sky reports 7% increase in earnings, share prices recover to pre-Brexit levels
