London pre-open: Stocks seen flat; NatWest in focus
By Michele Maatouk
Date: Friday 14 Feb 2025
(Sharecast News) - London stocks were set for a steady open on Friday following losses in the previous session.
The FTSE 100 was called to open broadly unchanged at 8,765.
Kathleen Brooks, research director at XTB, said: "The market was waiting for a tariff announcement on Thursday that did not come. Tariffs are still on Trump's agenda, however, rather than smother the global economy with blanket tariffs, the President has signed a directive to get the US Trade Representative to impose tariffs on a country-by-country basis.
"This is extremely complicated to administer, and reports suggest that the first reciprocal tariffs could be implemented on April 1st. New tariffs could go beyond just reciprocal tariffs. For example, they may also include non-tariff barriers like what the Americans consider to be unfair national subsidies, VAT, regulation and exchange rates. The list goes on, from a market perspective, how are traders meant to price this in?
"The short answer to this question is that they are unwilling to do so. This is evident not only at the index level - with decent rallies for most of the global blue-chip indices on Thursday, bar the FTSE 100, but also the lack of concern in bond markets: US Treasuries and global bonds rallied on Thursday, and the Vix, Wall Street's fear index, remains below the 12-month average of 15.93.
"Is the market being too complacent? Do traders believe that reciprocal tariffs could take much longer to plan and won't be ready for April? Or is the market focusing on fundamentals rather than politics? We think that it is a mixture of all three."
In UK corporate news, annual profit at NatWest beat expectations as operating costs and tight margins weighed on earnings.
Pre-tax operating profit rose 0.3% to £6.2bn in the 12 months to 31 December compared with estimates of £6.1bn.
Net interest margin - the difference between loan and savings rates - was 1 basis point higher at 2.13%.
NatWest said it expected to achieve a return on tangible equity in the range of 15-16% this year.
Elsewhere, Bloomberg cited people familiar with the matter as saying that HSBC will initiate a fresh round of layoffs at its investment bank as early as Monday.
The first cuts will be carried out in Asia and then be expanded to the rest of the lender's staff. The number of redundancies was not clear.
Wood Group flagged full-year adjusted EBITDA of $450m to $460m and adjusted EBIT of $205m to $215m in an update, saying it was actively managing costs and working capital to offset weaker-than-expected fourth-quarter trading.
The company noted that the ongoing independent review was expected to lead to prior year adjustments related to the projects business unit, but was not anticipated to materially impact its cash position.
It projected double-digit profit growth in 2025, but was now expecting negative free cash flow of $150m to $200m, with planned asset disposals to maintain debt levels.
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