LONDON MARKET Closing Update 17 July 2017

Market Commentary
CEO Carolyn McCalls departure from Easyjet came as a surprise, she is moving over to become CEO
of ITV. Easyjet shares jumped on speculation a new CEO will address the contentious policy of
Easyjets rapid fleet growth, which has hit seat pricing. Other executive news, Dixons Carphone
chairman Ian Livingstone acquired 50k worth of Dixons shares helping them recover from year
lows.
Go-Ahead Group rallied on news of an extension to its lucrative London Midland franchise.
UK blue chips equities rose 0.45% helped by gains in oil & gas, mining and banking stocks.
Ravi Lockyer MSc Llb ACSI Senior Analyst
Today's Closing Update
U.S. shares were little changed at the start of the week as investors largely brushed off a steep
decline in Chinese equities.
European and U.K. shares showed mixed trade as investors digested positive Chinese data
and kept an eye on earnings, all while the second round of Brexit talks started up.
Compass Group said it has paid the 1bn special dividend to shareholders that was announced
in May. The catering and support services firm proposed the special dividend, equal to 61p per
share, on 10th May, after it said it enjoyed a solid first half that saw free cashflow generation rise
27% year-on-year. Compass said the special dividend has been paid. When the special dividend
was declared, Compass reported that for the six months to 31st March it made a pretax profit of
831m, up from 666m in the same period the prior year. Revenue rose to 11.47bn from
9.54bn year-on-year. The company noted revenue benefited by over 15% from the translational
effects of weaker sterling.
Centrica has agreed with Bayerngas Norge to merge the companies' North Sea assets, creating
the region's largest non-major oil and gas producer and allowing Centrica access to younger
fields and to lower its decommissioning liabilities. The joint venture, to be led by Centrica's head
of exploration and production, will produce 50-55m barrels this year and have access to 625m
barrels of proved and probable oil and gas reserves. Centrica will own 69% of the new entity and
raise its interests in younger fields, including the Cygnus gas field which started producing in
December, as well as dilute its decommissioning costs and reduce its capital expenditure needs.
The UK Financial Conduct Authority set out the scope of its investigation into investment
platforms, that will explore if there is effective competition in the sector. The regulator said
investment platforms are increasingly used by consumers and financial advisers to access retail
investment products and to manage investments, and said the total amount of assets under
administration for both adviser and direct platforms jumped to 500bn in 2016 from just 108bn
in 2008. "Many platforms offer investors and their advisers a range of information and tools to
help them make investment decisions and some also offer their own investment products. As
part of the study, the FCA will explore whether platforms help investors make good investment
decisions and whether their investment solutions offer investors value for money," said the FCA.
One of America's best-known fashion retailers is vying with investors from the UK and China to
seal an 800m takeover of Jimmy Choo, the upmarket shoe designer. It has been reported that
Michael Kors, the New York-listed chain, has indicated that it will table an indicative bid for
Jimmy Choo, which was founded by the businesswoman and socialite Tamara Mellon, ahead

Formula One motor racing.

Touchstone Exploration said it saw an increase in average daily oil production for the second
quarter of the year, but a reduction in average prices. Average daily oil production for the three
months ended 30th June was 1,335 barrels per day, up by 4% from 1,280 barrels produced in
the last quarter, however realized pricing was $45.51 per barrel, down by 6% from $48.20 per
barrels in the first quarter of 2017. The reason for the decrease in pricing was due to an 8%
decrease in the Brent reference price over the period, and a reduction in the realized Brent
reference differential from 10% to 8%.
Go-Ahead Group said its joint venture Govia has been awarded an eight-week extension to the
London Midland rail franchise that it currently operates, and said a further extension could be
awarded. The transport firm owns 65% of Govia alongside partner Keolis, which owns the other
35%. Govia has operated the London Midland franchise since 2007. The Department for
Transport has awarded an eight-week extension to the current franchise until 10 December,
under the existing franchise terms. A further eight-week extension may be awarded to Govia if
the Department for Transport exercises an option to do so by 18th August.
Blue Apron shares dropped sharply, accelerating the slide since their debut amid fresh signs of
competition from Amazon. The internet giant has registered a trademark in the U.S. for a service
described as: "We do the prep. You be the chef," according to a filing. Blue Apron shares hit an
all-time intraday low of $6.51 a share, according to FactSet, and the stock was last down more
than 9%. Blue Apron, a meal-kit delivery service backed by major investors including Fidelity,
Bessemer Venture Partners and First Round Capital, has seen shares fall after hitting the public
market in late June. The stock has shed nearly 30% month to date.
Oil prices advanced in volatile trade, amid ongoing concerns that stockpiles will prove resilient to
production cuts led by the global oil cartel.
Gold climbed and was likely to see further gains after the dollar slumped to multi-month lows on
the back of data that pointed to weak U.S. inflation and dampened prospects for rate hikes.
Market Close - 4:35pm
Market Index Change % Change

UK 100 7404.1 +25.7 +0.4%

UK 250 19,520.6 +112.2 +0.6%

GER 30 12,587.2 -44.6 -0.4%

FRA 40 5,230.2 -5.1 -0.1%

U.S. 30 21,637.02 -0.72 -0.0%

U.S. 500 2,460.0 +0.8 +0.0%

OIL (BRENT) 48.95 +0.04 +0.1%

GOLD 1,234.33 +5.63 +0.5%

UK Major Risers & Fallers - 4:35pm

Company Price Change % Change

Carillion 67.3 +10.75 +19.1%

Ashtead 1635 +54 +3.4%

Micro Focus 2158 +69 +3.3%

Imperial Brands 3442.5 -57 -1.6%

Experian 1564 -24 -1.5%

Barr AG 580.25 -24 -4.0%

Reported Economic Data

Time/Date Previous Forecast Outcome

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

10:00am: European Final Core CPI y/y 1.1% 1.1% 1.1%

1:30pm: U.S. Empire State Manufacturing 19.8 15.2 9.8

Index

Interbank Spot FX Rates - 4:35pm

Pairing Rate % Change

GBP/USD 1.3055 -0.33%

EUR/USD 1.1467 -0.03%

GBP/EUR 1.1386 -0.33%

USD/JPY 112.7500 +0.20%

USD/CHF 0.9632 -0.03%

GBP/JPY 147.2390 -0.10%