Morning Report

18th July 2017

READ OUR FULL RISK WARNING. The value of investments and any income from them can fall as well as rise, and
you may get back less than you invested. An investments past performance is not a reliable indicator of future
performance. Tax allowances depend on your personal circumstances and the benefits of tax-efficient accounts could
change in the future.
Market News in Brief
RIO TINTO: Global miner Rio Tinto on Tuesday lowered its forecast for shipments of iron ore in
calendar 2017 by up to 10 million tonnes due to bad weather and ongoing work to modernise its rail
haulage lines.
STANDARD LIFE: India's HDFC Standard Life Insurance Co Ltd said on Monday it had revived a
planned initial public offering, as it struggles to get regulatory approval to buy smaller rival Max Life.
BRITAIN MOTOR INSURANCE: The average price of UK motor insurance hit a record high in the
second quarter of the year, driven by new rules for personal injury claims and a rise in the insurance
premium tax, the Association of British Insurers (ABI) said.
BRITAIN ECONOMY: London's economy is wobbling from the early effects of Brexit judging from the
capital's faltering housing market, fewer European Union citizens seeking work and weaker job
creation, according to a report from the Centre for London think tank.
BREXIT: British lawmakers said restricting the movement of EU citizens' data after Brexit would hurt
trade and security co-operation, and transitional arrangements should be made by the government to
keep information flowing after Britain leaves the bloc.
OIL: Oil prices were stable on Tuesday, supported by strong consumption but weighed by ongoing
high supplies from producer club OPEC and also the United States.
Markets Summary Last Change Proportion
FTSE 100 7404.13 +25.74 +0.35%
FTSE 250 19520.59 +112.23 +0.58%
DJIA 21629.72 +76.63 +0.36%
S&P 500 2459.14 +11.31 +0.46%
Euro Stoxx 50 3516.35 -9.59 -0.27%
Nikkei 225 19983.53 -135.33 -0.67%

US 10yr Yield 2.33% Oil (WTI) $45.97 Gold $1234.10

EUR/GBP 0.8795 GBP/USD $1.3101 EUR/USD $1.1525
Macro Commentary
Bourses in Europe are expected to open lower on Tuesday with global sentiment dampened by a gridlock in
U.S. politics over health-care reform. The FTSE 100 is set to start lower by 24 points at 7,387; the CAC 40 is
set to open off by 9 points at 5,224 and the DAX is seen lower by 21 points at 12,570. Markets in Asia fell from
their two-year highs as the U.S. dollar sank overnight. The greenback took another hit on Tuesday after the
Trump health-care bill failed to get enough backing to proceed to a debate. Back in Europe, the focus was on
earnings. The Swiss pharmaceutical Novartis confirmed its full-year guidance with net income at $2.87 billion in
the second quarter of the year. The firm added that it sees potential for "several highly innovative products."
Ericsson, Telekom, and Royal Mail are also due to report on Tuesday. In terms of data, the U.K. will see the
release of June's inflation data at 9.30 a.m. London time, Sweden's Riksbank is also releasing minutes of its
latest meeting at 8.30 a.m. London time and at 10 a.m. there will be the release of the German ZEW economic
sentiment index. Later in the session, Bank of America and Goldman Sachs are due to report before the U.S.
opening bell.
Major Economic Announcements
Time Country Data Consensus Previous
09:30 GBP GBP Core CPI (Y/Y)(JUN) 2.60% 2.60%
09:30 GBP GBP CPI (M/M)(JUN) 0.20% 0.30%
09:30 GBP GBP CPI (Y/Y)(JUN) 2.90% 2.90%
10:00 EUR German ZEW Survey (Economic Sentiment)(M/M) 18 18.6
 Morning Report
18th July 2017

Corporate Announcements

FTSE 100 Stocks

Royal Mail (RMG) Trading Update

Parcel volumes were up 5%, with growth driven by a good performance in Royal Mail account parcels
where we have won new contracts and gained more traffic from existing customers.
In particular, Royal Mail Tracked services saw strong volume growth of 39%.
Our international parcels business benefitted from a new initiative to attract cross-border traffic3 from
Asia into Europe.
This accounted for nearly 2 percentage points of the volume growth and 1 percentage point of the
revenue growth in the period. International volume trends continued to reflect the relative weakness in
Sterling, with slowing imports (outside of our cross-border initiative) and improving contract export
volumes, compared with the prior period.
Parcelforce Worldwide also saw an improvement in recent trends with volumes up nearly 1% in the
period.
Total parcel revenue was up 3%, reflecting the mix within the domestic and international traffic
channels.

Experian (EXPN) Trading Update

We have started the year in line with our expectations, with total revenue growth of 6% and organic
revenue growth of 4%.
Our business-to-business services have performed well, with 7% organic growth and good
performances across all regions, demonstrating the breadth of our business as well as successful
investment in new product innovation, helping our clients apply more data and analytics to drive better
business outcomes.
We are also taking important steps to reposition Consumer Services as we introduced two new
services in the US, and over the coming months we will continue our efforts to build up scale in these
new initiatives through greater education of and engagement with consumers.
As we look ahead, we continue to expect growth for the year to be within our target mid single-digit
organic revenue range, with stable margins and further progress in Benchmark earnings per share.
In the three months ended 30 June 2017, total revenue growth from ongoing activities was 6% at
constant exchange rates and organic revenue growth was 4%. At actual exchange rates, total revenue
growth from ongoing activities was 5%.

Rio Tinto (RIO) Production Update

Pilbara iron ore shipments were 77.7 million tonnes in the second quarter.Shipments were impacted by
accelerated rail track maintenance.
Iron ore shipments guidance for 2017 is around 330 million tonnes (previously 330 to 340 million
tonnes). This takes into consideration first half production and further rail maintenance in the second
half to improve track conditions.
Record quarterly bauxite production of 12.9 million tonnes was seven per cent higher than the
corresponding quarter of 2016, driven by strong production at Weipa and Gove. Third party shipments
of 8.0 million tonnes were achieved in the second quarter.
Mined copper production recovered compared to the previous quarter, however was six per cent lower
than the second quarter of 2016 as Escondida continued to ramp up following a labour strike.
Titanium dioxide slag production increased by 34 per cent compared to the second quarter of 2016,
reflecting higher market demand.
On 26 June 2017, Rio Tinto confirmed Yancoal Australia as its preferred buyer of Coal & Allied, after
an improved offer from Yancoal of $2.69 billion. Rio Tinto shareholders have since approved the sale.
The sale is expected to complete in the third quarter of 2017.
 Morning Report
18th July 2017

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FTSE 250 Stocks

IG Group (IGG) Year End Results

Net trading revenue up 8% at 491.1 million

Operating expenses up 14%, reflecting continued investment in effective marketing
Profit before tax up 3% to 213.7 million; profit before tax margin 43.5% (FY16: 45.6%)
Diluted EPS up 3% at 45.9 pence
Final dividend of 22.88 pence per share; full year dividend up 2.9% to 32.3 pence per share

Dairy Crest (DCG) Interim Management Statement

Trading in the first quarter was in line with expectations and the outlook for the full year remains
unchanged.
Combined sales volumes of Dairy Crest's four key brands - Cathedral City, Clover, Frylight and
Country Life - are 7% ahead of the same period last year.
Cathedral City, Clover and Frylight have all grown strongly; in particular, Cathedral City volumes are up
15% on last year.
Cream prices, which determine input costs for the butter business, have increased substantially during
the first quarter. This will put pressure on margins in our butter business.
We have reduced our promotional activity on Country Life, which is adversely impacting volumes but
mitigates some of the margin pressure.

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