News that North Korea had fired a missile over Northern Japan saw Japanese shares sink earlier. The Nikkei sank -0.6% initially to near 19,330. At 6.45 UK time they had lifted to 19,362, down -0.45%. The Nikkei also slipped under its 200-day moving average.
The yen rose against the dollar on flight-to-quality anxiety. As markets worry, much money is repatriated home creating demand for the yen as other currencies flow out of Japan – normal behaviour for Japan despite its huge debt-to-GDP ratio.
Meanwhile the euro nears the $1.20 handle. At 7am it was trading at $1.1981 against the dollar, up +0.03% on the day and more than +1.8% on the week as doubt grows over the speed of further US rate rises – some ambiguity remains over Fed boss Janet Yellen’s words at the Jackson Hole central bank retreat last week.
Oil supply chain anxiety remains as the cost of Hurricane Harvey is still unclear but higher US gas prices look likely. WTI crude is currently priced at $46.85, up +0.6%. Gold is up +0.93% to $1,321.8.
- UK FTSE 100 7,401.46 -0.08%
- Dow 21,808.40 -0.02%
- S&P 500 2,444.24 +0.05%
- Nasdaq 6,283.02 +0.28%
- Nikkei 225 19,362.26 -0.45%
- DAX 12,123.47 -0.37%
- CAC 40 5,079.75 -0.48%
- Gold 1,322 +0.52%
- Oil WTI 46.85 +0.6%
First half Polymetal earnings hit
Polymetal International says net earnings dropped to US$120 million compared with US$165 million in the first half of 2016; adjusted earnings are down -12% to $257m. The lower numbers are part-blamed on a stronger Russian rouble plus higher capital expenditure costs for the miner.
Net debt, up to $1,582m, is substantially up. "We expect stronger production, lower costs and materially higher cash flow generation in the second half of the year,” said group CEO Vitaly Nesis. Polymetal’s share price is up +10.5% YTD but more than -14.6% down on the year as a whole. Polymetal will issue a higher dividend, $0.14 per share.
Worker-to-boss pay ratios to go ahead
New government reforms that attempt to grapple with fat cat pay will include a ratio of average pay compared to chief exec salaries. The new rules will force the issue upon some 900 publicly listed operations but don’t come into force till June 2018.
Company workers will be better represented at board level with a nominiated director. However the move does not impress yet TUC General Secretary Frances O’Grady. "Firms will rightly have to publish the pay gap between bosses and ordinary workers, but we are concerned that the government’s calculations will take the focus off the lowest-paid.”
The TUC wants companies to have worker directors elected by all staff, as done in Germany and Sweden.
Breaking news: Outsourcer Mitie is to be investigated by the Financial Conduct Authority over concern about a September profit warning.