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LONDON BRIEFING: Keywords Studios agrees takeover by EQT

3rd Jul 2024 07:46

(Alliance News) - Stocks in London are expected to open higher on Wednesday, as investors shake off pre-election nerves.

Meanwhile, stocks in New York got a boost on Tuesday, thanks to interest rate talk from US Federal Reserve Chair Powell.

In early corporate news, Keywords Studios has agreed to a takeover by EQT. Vodafone announced a new network deal with Virgin Media O2.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called up 0.6% at 8,168.30

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Hang Seng: up 0.9% at 17,936.05

Nikkei 225: closed up 1.3% at 40,581.02

S&P/ASX 200: closed up 0.3% at 7,739.90

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DJIA: closed up 162.33 points, 0.4%, at 39,331.85

S&P 500: closed up 0.6% at 5,549.01

Nasdaq Composite: closed up 0.8% at 18,028.76

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EUR: up at USD1.0739 (USD1.0735)

GBP: up at USD1.2681 (USD1.2678)

USD: up at JPY161.88 (JPY161.54)

GOLD: up at USD2,333.10 per ounce (USD2,327.05)

OIL (Brent): down at USD86.60 a barrel (USD86.99)

(changes since previous London equities close)

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ECONOMICS

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Wednesday's key economic events still to come:

08:30 EDT Canada trade balance

10:00 CEST eurozone composite PMI

10:00 CEST eurozone European Central Bank vice-president Luis de Guindos speaks

11:00 CEST eurozone PPI

11:00 CEST eurozone European Central Bank executive board member Piero Cipollone speaks

12:30 CEST eurozone European Central Bank Governor Philip Lane speaks

16:15 CEST eurozone European Central Bank president Christine Lagarde speaks

11:00 IST Ireland unemployment

09:30 BST UK composite PMI

08:30 EDT US initial jobless claims

08:30 EDT US trade balance

09:45 EDT US composite PMI

10:00 EDT US factory orders

10:00 EDT US ISM services PMI

10:00 EDT US total vehicle sales

10:30 EDT US EIA crude oil stocks

12:00 EDT US EIA natural gas stocks

14:00 EDT US FOMC meeting minutes

US Financial markets close early before Independence Day.

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Irish service activity growth continued to be "solid" in June albeit slowing from May, data published by S&P Global showed Wednesday. The AIB Ireland services business activity index declined to 54.2 in June from 55.0 in May. Falling towards the 50-mark separating growth from contraction, it indicates the pace of growth slowed. The rate of growth was "solid" albeit the weakest since January and below the long-run trend, S&P Global highlighted. Meanwhile, the AIB Ireland composite PMI output index fell to 50.1 in June from 52.5 in May. "Incoming new business declined slightly, as a slower rise in demand for services was accompanied by a stronger fall in manufacturing new orders," S&P Global said, adding that employment growth was at the weakest since February 2021.

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The UK Labour party is 99% "certain" to secure more seats in Thursday's general election than when it won a landslide victory in 1997, a major new poll said. The centre-left opposition party – out of power since 2010 – is predicted to claim 484 out of a total of 650 seats in what would be an unprecedented victory in modern British history, pollster Survation said. Meanwhile, the right-wing ruling Conservatives and the centrist Liberal Democrats are in a close race to come a distant second and form the country's official opposition, it added. Survation said its data indicated that Labour would win around 42% of the overall vote, ahead of the Conservatives on 23%. However, due to the UK's winner-takes-all electoral system in each of its 650 constituencies, that would see the Conservatives capture just 64 seats, with the Lib Dems predicted to claim 61. Labour's estimated 484 seats would exceed the 418 won by ex-prime minister Tony Blair in 1997, and even top the Tories' landslide haul of 470 in 1931.

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BROKER RATING CHANGES

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Morgan Stanley cuts 3i Group to 'equal-weight' - price target 3,192 pence

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Barclays cuts JD Sports Fashion to 'underweight' - price target 110 pence

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COMPANIES - FTSE 100

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Vodafone UK and Virgin Media O2 have agreed to extend and enhance their existing mobile network sharing agreement for more than a decade. It said that the agreement provides stability for the proposed merger between Vodafone and Three UK. However, it added that "many elements" of the agreement are independent of the merger outcome. Ahmed Essam, chief executive of European Markets at Vodafone said: "With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK for the long-term, providing significant network improvements including more choice, better quality and greater coverage across the country. These benefits extend to both retail and wholesale MVNO customers. The proposed merger, together with this agreement, will boost competition by establishing a strong third player in the UK mobile market and will improve the balance of spectrum holdings, levelling the playing field between the UK's mobile operators."

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GSK and CureVac announced that they have restructured their collaboration into new licensing agreement. GSK has acquired full rights to develop, manufacture and commercialise globally mRNA candidate vaccines for influenza and Covid-19, including combinations. CureVac will receive EUR400 million upfront and up to an additional EUR1.05 billion in development, regulatory and sales milestone payments as well as tiered royalties. GSK said the agreement will allow "each company to prioritise investment and focus their respective mRNA development activities."

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COMPANIES - FTSE 250

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Baltic Classifieds reports results for financial year ended April 30. Revenue in the year grew 19% to EUR72.1 million from EUR60.8 million a year earlier. Pretax profit jumped to EUR34.9 million from EUR26.4 million. On the back of the results, Baltic announced a final dividend of 2.1 cents, up from 1.7 cents. This bring the full year dividend to 3.1 cents. Looking ahead, Baltic is guiding to 15% revenue growth in 2025, with Auto, Real Estate and Jobs & Services expected to grow marginally ahead of this number and Generalists below the overall group average. CEO Justinas Simkus said: "2024 marked another year of solid financial, operational and strategic execution for BCG, with strong momentum observed across each of our business segments. We are in the early stages of our monetisation journey, which underpins the resilience of our top line and Ebitda growth, and, we are particularly pleased that our operational leverage is once again flowing through to our Ebitda margin now that public listed company costs have been normalised."

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OTHER COMPANIES

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Keywords Studios said it has reached an agreement for its takeover by EQT for 2,450p each Keywords share. The price represents a 67% premium to the closing price on May 17, the last business day before the start of the offer period. Keywords Studios said the acquisition values the company at about GBP2.1 billion on a fully diluted basis, and implies an enterprise value of approximately GBP2.2 billion. "I am extremely proud of our passionate world-class teams and the leading technology-enabled global platform we are building together, which have enabled us to develop innovative solutions and foster strategic partnerships with our clients. We have consistently delivered strong financial performance, creating significant value for our shareholders," CEO Bertrand Bodson said. "This offer from EQT marks an exciting new chapter on our growth journey, with a like-minded partner who possesses deep sector expertise and a desire to accelerate the pace of our growth, both organically and through M&A, to unlock the many opportunities ahead of us across the entertainment landscape."

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Cairn announced a EUR45 million share buyback programme, which represents EUR40 million in respect of a new programme and the remaining EUR5 million of the financial 2023 buyback. The new programme will begin Wednesday. Cairn also updated markets on the sic months ended June 30. It said the increase in housing output and profitability that the company has delivered in recent trading periods has continued in the year-to-date. CEO Michael Stanley said: “Cairn experienced a very strong spring sales season for first time buyer homes, which has added to our order book of over 3,000 homes. We will grow our output by 30% this year and invest heavily in 10 new site commencements, including eight in the second half of 2024. Recent data on increased mortgage approvals for first time buyers is positive news and the broader homebuilding industry is also responding to improved realisable demand by increasing the supply of new family homes."

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IntelliAM AI shares will begin trading on the Aquis Stock Exchange Growth Market on Wednesday. On admission, and following a GBP5.1 million placing, the software company leveraging the power of AI and machine learning in the manufacturing industry will have 16.4 million shares in issue and the market capitalisation of the company will be GBP15.4 million.

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By Sophie Rose, Alliance News senior reporter

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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