EmailDespite Scottish shares mounting a mini-revival after a new poll, markets have edged lower as nervousness about the referendum in a week's time and the global outlook continues.
The poll - for the Daily Record - showed a majority against independence ahead of the vote. Andy McLevey at Interactive Investor said:
Although the latest poll indicates a lead for those opposed to Scottish Independence the uncertainty surrounding the outcome of the referendum vote and potential repercussions continue to be a concern for investors and we can expect a nervy and potentially volatile week ahead.
Even so, companies with Scottish links have rallied. Standard Life has been lifted 11.2p to 418.6p, Royal Bank of Scotland has risen 4.2p to 346.4p and Lloyds Banking Group is up 0.57p to 73.80p. SSE has added 30p to £14.75, helped by RBC analysts raising their target price from £15 to £15.80. RBC said:
SSE is potentially a significant winner from the introduction of the UK capacity market which we forecast will add just over £300m of EBITDA. This positive exposure to the UK capacity market, clarity on regulated networks and actions taken to correct the balance sheet net-off against continued political and retail market risk.
We see limited downside to our conservative assumptions. The double whammy of Scottish Independence and a Labour victory may not ultimately impact longer term profitability at SSE, although we recognise a potential hit to sentiment.
But Next is leading the losers, down 160p at £70.05. It reported a 19.3% rise in first half profits to £324m and repeated its July guidance of a full year profit of £775m to £815m. But the figures, impressive as they were, came in slightly below some expectations, and the retailer said part of its strong performance had come from external factors - such as the improving economy, low interest rates and availability of credit - which may not last into next year. Analyst Alistair Davies at Investec said:
Next has had a stellar first half, but numbers are a little short of consensus (£5m at a pretax profit level)... Within the numbers, retail had an exceptional first half – the strength of full price sales (up 8.6%) having a key role in improving the earnings before interest and tax margin by 180 basis points. Directory earnings rose 10.2%, but we note a 130 basis point decline in the operating margin with higher levels of advertising and change in sales mix all having a dilutive earnings margin effect. No changes to forecasts this morning. Hold.
Overall the FTSE 100 is down 4.64 points at 6825.47, with mining shares dipping as metal prices edged lower. Chinese inflation came in lower than expected, prompting concerns about future growth rates in the country, a key consumer of commodities. So Antofagasta has fallen 8.5p to 770.5p while Anglo American is down 13p at 1501.5p.
On a busy day for retail results, Ocado is up 11.4p to 323.2p, while partner Morrisons has added 1.2p at 177.8p as it raised it dividend despite a 51% slump in first half profit, with some traders even reviving talk it could be a takeover target. But Argos and Homebase owner Home Retail is down 9.4p at 178.2p after like for like sales came in below expectations.
Arm has recovered 10.5p to 959.5p following Wednesday's dip on profit taking following the iPhone and watch launch from Apple, one of the chip designer's key customers.
Among the mid-caps Ashmore has fallen 23.3p or nearly 7% to 321.6p as the emerging market money manager reported a 34% fall in full year profits to £87.3m, hit by currency fluctuations.
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