18th Jul 2016 07:12
LONDON (Alliance News) - A return to deal making provided a welcome distraction from military coups, terrorism, and Brexit for the London market early Monday.
All three main stock indices opened higher, with the FTSE 100 led by chip-maker ARM Holdings, up 46%. ARM agreed to be acquired by Japan's SoftBank Group for the premium price of GBP24.3 billion.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 6,706.43
FTSE 250: up 0.4% at 16,785.78
AIM ALL-SHARE: up 0.1% at 724.62
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Hang Seng: up 0.7% at 21,800.35
Nikkei 225: Tokyo market closed Monday
DJIA: closed up 0.1% at 18,516.55 Friday
S&P 500: closed down 0.1% at 2,161.74 Friday
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GBP: flat at USD1.3220 (USD1.3232)
EUR: flat at USD1.1057 (USD1.067)
GOLD: flat at USD1,327.60 per ounce (USD1,329.24)
OIL (Brent): flat at USD47.58 a barrel (USD47.59)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in BST)
holiday Japan Marine Day
11:00 Germany Bundesbank monthly report
15:00 US NAHB housing market index
21:00 US net TIC flows
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Turkish President Recep Tayyip Erdogan pledged the "cleansing" of state institutions will continue, as around 6,000 people were arrested, and the military announced the formal end of the failed coup. The plotters "have nowhere to flee," Erdogan said in a fiery speech delivered at a funeral ceremony for several people killed during Friday night's coup attempt by a group within the armed forces. He said a "cancer" had spread but vowed no pause in the counterstrike. Erdogan blames Fethullah Gulen, a US-based, Turkish-born preacher and one-time ally turned rival accused of running a "parallel state." Gulen strongly denies any involvement in the coup, which left 290 people dead, including more than 100 alleged mutineers, Turkey's Foreign Ministry said, and more than 1,100 injured.
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UK Prime Minister Theresa May will tell members of Parliament not to gamble with the safety of British families ahead of a Commons vote on whether to renew the Trident nuclear deterrent. MPs are set to vote later Monday on renewal, which is estimated to cost around GBP40 billion, and May will tell them it would be "grossly irresponsible" not to back Trident. She will accuse anti-nuclear Jeremy Corbyn of "misplaced idealism" as his Labour Party looks set to split on the issue, with the shadow cabinet calling for MPs to abstain but senior figures such as deputy leader Tom Watson and leadership candidate Owen Smith backing renewal. Despite the opposition of the Scottish National Party and reportedly less than half of Labour MPs, the government will expect to win the vote and proceed with renewing the submarine deterrent.
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The UK shadow chancellor is expected to announce Labour plans to create a "bank of the North" and other national and regional lenders in an effort to "unlock" GBP500 billion of investment for small businesses. The move is aimed at "left behind" communities which voted to leave the European Union and who feel they have been forgotten by successive governments, according to Labour.
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The average asking price of a house in the UK was down 0.9% i July on the month before, property tracking website Rightmove said - coming in at GBP307,824. That followed the 0.8% increase in June. On a yearly basis, prices advanced 4.5% - slowing from 5.5% in the previous month.
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British retailers logged the steepest decline in footfall since early 2014, data published by the British Retail Consortium and Springboard showed. Footfall dropped 2.8% in June from from the year before, compared to a 0.3% increase in May. This was the sharpest fall since February 2014.
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House prices in majority of the Chinese cities increased in June, figures from the National Bureau of Statistics showed. On a monthly basis, home prices climbed 55 cities out of 70 surveyed by the government. It dropped in 10 cities and remained flat in 5 cities.
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The Asian Development Bank has trimmed growth projection for the region's developing economies in 2016, amid disappointing growth in the US and short-term impact from the Brexit vote. Gross domestic product in Asia and the Pacific is now projected to expand 5.6% for the year, down from an initial forecast of 5.7% in March, the Manila-based bank said. For 2017, the growth projection is unchanged at 5.7%, it said.
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Three police officers were killed and three wounded in a shootout Sunday in the Louisiana capital of Baton Rouge with a gunman who died at the scene, authorities said. Police responding about 8:40 am (1240 GMT) to a report of a man carrying a rifle came under heavy fire in a gun battle that lasted several minutes, Louisiana State Police Superintendent Colonel Mike Edmonson said.
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A man and a woman were arrested Sunday in connection with last week's terrorist attack in Nice in which 84 people were killed, French news agency AFP reported citing sources from the French Justice Ministry. The two arrests come in addition to the four men and the attacker's wife, all of whom remain in custody. The attacker was identified as 31-year-old Tunisian national Mohamed Lahouaiej Bouhlel. Bouhlel on Thursday was killed by police after driving a delivery truck for 2 kilometres through crowds of people along Nice's main promenade as a fireworks display to celebrate Bastille Day was coming to an end.
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BROKER RATING CHANGES
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HSBC RAISES RENTOKIL INITIAL TO 'HOLD' ('REDUCE') - TARGET 1,90 (1,45) PENCE
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BERNSTEIN RAISES ASOS PRICE TARGET TO 5300 (4900) PENCE - 'OUTPERFORM'
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COMPANIES - FTSE 100
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ARM Holdings confirmed it has agreed to be acquired by Japanese technology and telecommunications conglomerate SoftBank Group for GBP24.3 billion. The agreement earlier had been reported by the Financial Times newspaper. ARM, which makes chips used in smartphones and other connected devices, said SoftBank will pay 1,700.00 pence per share, a 43% premium to ARM's closing price on Friday of 1,188.73p and a 42% premium to the all-time high that ARM shares hit in March 2015. SoftBank said is intends to maintain ARM's existing management team and brand and will maintain the company's headquarters in Cambridge. It plans to at least double ARM's UK headcount over the next five years. ARM's board said it unanimously recommends the offer.
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British Land Co said that, while too early to assess the impact the UK's vote to leave the European Union will have on property markets in the UK, it does anticipates some extra caution from occupiers and investors. The commercial property investor said that, in the first quarter to the end of June, it secured 256,000 square feet of retail lettings and renewals. Retail footfall in its properties was flat in the quarter, it said. Office lettings and renewals in the quarter totalled 25,000 square feet. British Land said its occupancy rate is at 99% and confirmed its dividend for the first quarter of 7.30 pence per share, 3.0% higher year-on-year.
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Santander UK is considering a restructured deal to take on millions of customers from Royal Bank of Scotland Group through an asset transfer deal, Sky News reported. The UK arm of Spain's Banco Santander is understood to be looking at taking on the Williams & Glyn spin-out from RBS via an asset transfer, by which Santander would take on the GBP24.0 billion in customer deposits housed in the Williams & Glyn arm. Through doing the deal via an asset transfer, Santander would take on the deposits of around 2.0 million customers without RBS having to complete an IT programme to create a separate banking platform for the Williams & Glyn unit.
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Drugmaker AstraZeneca said its Tagrisso lung cancer treatment met its primary endpoint in phase 3 trials. AstraZeneca said the drug demonstrated superior progression-free survival rates in comparison to standard platinum-based doublet chemotherapy. The group added the objective response rate, disease control rate and duration of response also achieved clinically-meaningful improvement against standard chemotherapy.
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Pharmaceutical company GlaxoSmithKline said China's Food & Drug Administration has approved its Cervarix vaccine for the prevention of cervical cancer. The treatment is the first vaccine against human papilloma virus to have been approved in China and a commercial launch of the drug is anticipated in early 2017. Glaxo said the drug was tested over the course of six years in China and has been registered for use in the country on girls and women between 9 and 25 years old.
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COMPANIES - FTSE 250
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Defence contractor Ultra Electronics Holdings said it has secured a firm one-year contract with the US Navy covering production of ADC MK2 countermeasures. The contract, worth "just over" USD4.0 million, will see Ultra continue producing the ADC MK2, a countermeasure used on ships and submarines to protect against torpedo threats. The contract includes an option to be extended for a further four years, which could increase the total value to USD34.0 million, Ultra said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Drinks wholesaler Conviviality reported marginal growth in profit in its recently-ended financial year, as revenue more than doubled, bolstered by Conviviality's acquisition of fellow drinks wholesaler Matthew Clark last year. Conviviality said its pretax profit in the year ended May 1 rose to GBP9.1 million from GBP9.0 million the year before, as revenue more than doubled to GBP864.5 million from GBP364.1 million. Since the year end, it said, there was some softening in Conviviality Retail in June, leading to like-for-like sales to July 3 declining by 2.1% year-on-year in that area of the business. Conviviality will pay a total dividend of 9.5 pence for the year, which is up 14% on the prior year's 8.3p.
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Business services company Christie Group said operating profit for 2016 is likely to be lower than it had previously anticipated. Christie said its Agency division has seen a small number of transactions lost following the UK's vote to leave the European Union. While first half revenue will be broadly flat year-on-year, second half revenue is expected to grow on the prior year, albeit not enough to drive profit to the previously expected level.
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COMPANIES - INTERNATIONAL
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Google chief executive Sundar Pichai warned that Britain's decision to leave the EU may bring difficulties for internet companies as digital regulation diverges. "As companies we see great value in Europe as a unified digital market," Pichai told German newspaper Welt am Sonntag. For a global company, it is a challenge to keep up with varying laws and regulations in every country, he said. "The complexity makes a bigger commitment difficult, which can be seen in investments."
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Monday's Shareholder Meetings
Mereo BioPharma Group
Dekeloil
North River Resources
MS International
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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