1st Apr 2016 06:37
(Correcting location of the two Euromoney businesses sold.)
LONDON (Alliance News) - Stocks in London are set to open lower Friday, taking their cue from equities in Asia which fell after Japanese business sentiment indexes came in worse than expected.
In UK company news, J Sainsbury said it has agreed a deal to acquire Home Retail Group, ending its long-running pursuit of the Argos owner.
Sainsbury's will pay 55.00 pence per share in cash, plus 0.321 of a Sainsbury's share to acquire Home Retail, valuing the company at GBP1.2 billion. Including the GBP200.0 million capital return Home Retail shareholders already stood to get from the sale of the Homebase DIY and garden centre business, the deal values Home Retail at GBP1.4 billion.
Sainsbury's said the deal values Home Retail at a premium of around 74% to its closing price on January 4, the day prior to Sainsbury's disclosing its offer.
The agreement ends Sainsbury's pursuit of Home Retail. The FTSE 100-listed grocer disclosed in January it had approached Home Retail in November about a possible cash and shares acquisition.
IG says futures indicate the FTSE 100 to open 49.9 points lower at 6,125.0. The index closed down 0.5%, or 28.27 points, at 6,174.90 on Thursday.
In Asia, the Bank of Japan's Tankan survey showed Japanese companies losing confidence amid slumping domestic spending and slow growth in emerging economies.
The large manufacturers' index came in with a score of 6 for the first three months of the year, down sharply from the reading of 12 recorded for the fourth quarter. Economists had expected a decline to a score of 8, but the drop was steeper than predicted. It is also the first time the index in the quarterly survey has fallen to below 10 since June 2013.
Among non-manufacturing companies, which covers sectors such as retail, construction and real estate, there was a decline in the first quarter, though the drop was not as pronounced as with manufacturing firms. The non-manufacturing index slipped to 22 from the fourth quarter's 25.
The results of the surveys weighed on the Nikkei 225 index in Tokyo, which ended down 3.6%. The Shanghai Composite is down 0.7% and the Hang Seng in Hong Kong is down 1.1%.
Also released early Friday were purchasing managers' index readings from China. The Caixin manufacturing PMI rose to 49.7 in March from 48.0 in February.
Although a reading below 50 signals contraction, this was the highest score in 13 months, as the benefits of stimulus measures adopted by the government started to penetrate into the economy.
At the same time, the official PMI survey showed a recovery in Chinese manufacturing activity in March. The factory PMI climbed to 50.2 in March from 49 in February, a joint survey by the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed. Economists had forecast a score of 49.3.
Likewise, the official non-manufacturing PMI improved to 53.8 in March from 52.7 in prior month.
In New York on Thursday, the DJIA and the S&P 500 both ended down 0.2% and Nasdaq Composite closed flat.
Investors are awaiting the US jobs report Friday, released at 1330 BST. According to FXStreet, the market expects the US economy to have added 205,000 nonfarm jobs in March, lower than the 242,000 seen in February. The US unemployment rate is expected to hold steady at 4.9%.
Also in the economic calendar are Markit manufacturing purchasing managers' indices for France at 0850 BST, Germany at 0855 BST, the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST. Eurozone unemployment is at 1000 BST, and the US Reuters/Michigan consumer sentiment index is at 1500 BST, as is ISM manufacturing PMI and construction spending.
In other UK corporate news, RSA Insurance Group said it has completed the sale of its Colombian operations to Suramericana, the insurance subsidiary of Colombia's Grupo de Inversiones Suramericana.
RSA agreed in September to sell all its Latin America businesses to Suramericana for GBP403 million, part of a wide-ranging restructuring by the FTSE 100 insurer to focus on its core operations.
RSA expects to complete the sale of the remaining assets in Latin America, in Chile, Argentina, Mexico and Uruguay, in the next six months.
Life insurance and investment management group Standard Life said it has secured regulatory approval to increase its stake in its Indian joint venture.
Standard Life has spent GBP179.0 million to increase its stake in HDFC Standard Life Insurance Co Ltd to 35% from 26% previously. The company is a joint venture with HDFC Ltd, the Indian financial group.
Information and events group Euromoney Institutional Investor said it has agreed to sell its energy publishing businesses for USD18.0 million.
Euromoney has sold the businesses, Gulf Publishing Co in Houston and the Petroleum Economist in London, to a consortium led by John Royall, the chief executive of Gulf Publishing, and media investor Russell Denson.
By Neil Thakrar; [email protected]; @NeilThakrar1
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