17th Mar 2025 07:49
(Alliance News) - Stocks in London are called to open flat on Monday, as investors digest plans by Chinese officials to boost consumption there, before focus later this week turns to central bank decisions.
The US Federal Reserve announces a rate decision on Wednesday, before the Bank of England on Thursday. Both are expected to leave rates unmoved.
"The Fed is expected to maintain the rates unchanged with a 99% certainty according to the activity on Fed funds futures. The dot plot and Jerome Powell's comments could give hints regarding how the Fed is planning to navigate the tariff war hammering the US economic prospects," Swissquote analyst Ipek Ozkardeskaya commented.
China has unveiled an action plan it hopes will help Beijing to overcome stubbornly low consumer demand and meet its ambitious growth target, state news agency Xinhua reported.
It intends to grow incomes through property reform, including in rural areas where it calls for "exploring ways to unlock the values of houses legally owned by farmers", it added.
In early UK corporate news, Phoenix Group lifted its 2026 profit outlook after meeting a cash generation goal sooner than expected. AstraZeneca announced a USD1 billion acquisition. Elsewhere, there are two planned floats announced for the AIM market.
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 just 2.3 points, largely flat, at 8,634.63
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Hang Seng: up 0.6% at 24,107.62
Nikkei 225: up 0.9% at 37,396.52
S&P/ASX 200: up 0.8% at 7,854.10
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DJIA: closed up 674.62 points, 1.7%, at 41.488,19
S&P 500: closed up 2.1% at 5.638,94
Nasdaq Composite: closed up 2.6%, at 17.754,09
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EUR: down at USD1.0872 (USD1.0879)
GBP: higher at USD1.2932 (USD1.2920)
USD: higher at JPY14886 (JPY148.34)
GOLD: lower at USD2,987.18 per ounce (USD2,988.54)
(Brent): lower at USD71.08 a barrel (USD70.32)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
12:30 GMT US New York empire state manufacturing index
12:30 GMT US retail sales
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The average price of a UK property has gone up in March with new buyers facing "decade-high choice", numbers from Rightmove have revealed. The average price of property coming to market for sale is GBP371,870 in March, Rightmove said. This marked a 1.1% or GBP3,876 on-year increase, and was "in line with the long-term March average increase, as many new sellers price sensibly amid decade-high competition to sell". The firm noted that according to its weekly mortgage tracker, the average five-year fixed mortgage rate is 4.74%. This is only a slight improvement on 4.84% at the same time in 2024, it said, but still lower than July 2023's peak of 6.11%. Nonetheless, Rightmove said the continued high rates are partially "dampening" market activity and optimism. Noting that the market is "typically busy" in March, Rightmove said that this spring new buyers "are looking at the best choice of properties for sale at this time of year since 2015".
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The threat of US tariffs on alcoholic drinks from the EU "is a very serious issue", Irish premier Micheal Martin has warned. The taoiseach said Irish whiskey products had benefited from "extraordinary growth" in the US market, and that a tariff dispute could damage parts of the Irish economy. He warned Europe "has to be strategic" in how it responds in the tit-for-tat trade dispute with US president Donald Trump. "Irish whiskey has enjoyed an extraordinary growth into the American market," Martin said on Friday. "We're going to engage strongly now with the Commission in respect of that issue, because it is a serious issue, not just for Ireland, but indeed for other European member states as well."
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Donald Trump is expected to speak to Vladimir Putin this week as military chiefs prepare to discuss peacekeeping plans in London. The call, announced by US special envoy Steve Witkoff, comes as Putin continues to resist a US-backed proposal for a 30-day ceasefire in Ukraine. Although Ukrainian President Volodymyr Zelensky has accepted the proposed unconditional ceasefire, the Russian president has said Ukraine must agree to give up its ambitions of joining Nato and cede territory to Russia before any pause in hostilities. UK Prime Minister Keir Starmer has accused Putin of seeking to "delay" a ceasefire, while French president Emmanuel Macron has said the Russian president "does not seem to be sincerely seeking peace. But on Sunday, Witkoff insisted that Putin was making "a constructive effort" and that the upcoming call with Trump showed there was "positive momentum".
Meanwhile, military chiefs from the "coalition of the willing" convened by Sir Keir and Macron will meet in London on Thursday to discuss plans for a Western peacekeeping force to be deployed to Ukraine in the event of a ceasefire. Following a virtual meeting on Saturday with the leaders of 26 other nations, plus representatives from the EU and Nato, the prime minister said there had been "new commitments" offered and planning would now move into an "operational phase".
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BROKER RATING CHANGES
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Bernstein raises National Grid to 'outperform' (market perform) - price target 1,120 (1,040) pence
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Oddo BHF cuts GSK to 'neutral' (outperform) - price target 1,700 (1,900) pence
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Oddo BHF raises AstraZeneca to 'outperform' (neutral) - price target 14,100 (12,500) pence
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COMPANIES - FTSE 100
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Insurer Phoenix Group Holdings hailed a strong 2024 performance and "good progress" in the execution of a three-year strategy. Phoenix reported a pretax loss of GBP1.11 billion for 2024, swinging from profit of GBP262 million in 2023. Its attributable loss totalled GBP1.45 billion, swinging from profit of GBP78 million. "Economic variances" hurt its bottom line by GBP1.30 billion, compared to a GBP377 million boost in 2023. These have "primarily arisen as a result of higher yields and a rise in global equity market". Total income shrunk 8.7% to GBP20.37 billion from GBP22.30 billion. Adjusted operating profit climbed 31% to GBP825 million from GBP629 million. "We made good progress in 2024 executing our 3-year strategy, delivering sustainable and profitable growth in both our Pensions and Savings and Retirement Solutions businesses. This has supported strong 2024 financial performance across our key metrics of cash, capital and earnings," Chief Executive Officer Andy Briggs said. "We are ahead of plan from both a strategic and financial perspective, delivering operating cash generation of GBP1.4 billion two years ahead of our 2026 target. We continue to operate in the top half of our shareholder capital coverage ratio range and our strong cash generation has enabled us to repay debt whilst also investing in our business." The CEO continued: "Our strong performance in 2024 and the operating momentum we have built will support us in delivering our growth strategy and have led us to upgrade our cash generation and adjusted operating profit targets through to 2026. Delivery will give us the financial flexibility to reduce our leverage, while also sustaining our progressive dividend for shareholders." Phoenix now expects operating cash generation to grow by a "mid-single digit percentage" per year going forward, after it achieved its 2026 target ahead of schedule. The firm added: "Total cash generation cumulative 3-year target increased from GBP4.4 billion to GBP5.1 billion across 2024-26 driven by the sustained growth in OCG. We therefore expect to generate excess cash of GBP1.1 billion across 2024-26 and this will be allocated in accordance with our capital allocation framework, with a clear focus on deleveraging." It is aiming from GBP1.1 billion in adjusted operating profit in 2026, upped from a previous target of GBP900 million. "This level of IFRS adjusted operating profit is expected to fully cover our recurring uses and create an excess to fund non-recurring uses. Our aim is for IFRS shareholders' equity, excluding economic variances, to grow in 2027," it said. Phoenix upped its final dividend by 2.6% to 27.35 pence per share. It raised its total dividend at the same pace to 54.00p from 52.65p.
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AstraZeneca announced an up to USD1 billion deal to acquire biotechnology company EsoBiotec. The pharmaceutical company will fork out an initial USD425 million on closing of the acquisition of the vivo cell therapies firm. The cash deal also has up to a USD575 million contingent consideration "based on development and regulatory milestones". "The EsoBiotec Engineered NanoBody Lentiviral platform empowers the immune system to attack cancers and could offer many more patients access to transformative cell therapy treatments delivered in just minutes rather than the current process which takes weeks," Astra said. "ENaBL uses highly targeted lentiviruses to deliver genetic instructions to specific immune cells, such as T cells, which programme them to recognise and destroy tumour cells for cancer treatment or autoreactive cells for potential use in immune-mediated diseases. This approach enables cell therapies to be administered through a simple IV injection and without the need for immune cell depletion." The deal is set to close in the second quarter of the year. Separately, AstraZeneca said Imfinzi has been approved in the EU to treat some adults with limited-stage small cell lung cancer. In addition, it said Eneboparatide met its primary endpoint in a phase III trial. The trial was in sufferers of chronic hypoparathyroidism, a rare disease where the body produces too little of the parathyroid hormone. It can cause low calcium levels. Finally, Astra said it has struck an exclusive license agreement for ALT-B4 with Alteogen. "Under the terms of the agreement, AstraZeneca will acquire worldwide rights to use ALT-B4 to develop and commercialise subcutaneous formulations of several oncology assets. Alteogen will be responsible for clinical and commercial supply of ALT-B4 to AstraZeneca," it explained. Subcutaneous formulations, those designed for injection, can offer patients and clinical "time savings" due to a shorter administration time.
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COMPANIES - FTSE 250
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Energean said there is "significant risk" that a deal to sell its portfolio in Egypt, Italy and Croatia to private equity firm Carlyle may be terminated. The exploration and production company said regulatory approvals in Italy and Egypt for the deal have not yet been obtained by Carlyle. Energean said it has "no assurance" that these will be achieved before the a deadline of Thursday. "Additionally, as of the date of this announcement, the company has not been able to reach agreement with Carlyle to extend the longstop date beyond 20 March 2025," Energean added. "Accordingly, there is a significant risk that the outstanding conditions precedent will not be satisfied (or waived) by the relevant long stop date and that, therefore, (absent an extension being agreed) the transaction may be terminated." The firm said it "remains committed to closing the transaction". Energean in June announced it would sell its oil and gas portfolio in Egypt, Italy and Croatia in order to focus on its gas fields in Israel and Morocco. The company said the deal with Carlyle International Energy Partners, part of private equity firm Carlyle Group, is worth up to USD945 million.
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Qinetiq said tough trading conditions continued in its fourth-quarter, but it believes its long-term future is promising. The defence technology firm said there were "further delays to a number of contract awards". "In addition, recent geopolitical uncertainty has impacted our usual fourth quarter weighting to higher margin product sales from the US," it cautioned. For the year which ends on March 31, it expects to report organic revenue growth of around 2%, with an underlying margin of around 10%. For the following year, it expects organic growth to pick up to a 3%-5% range, with margins between 11% and 12%. Qinetiq said it will book a non-cash impairment in the US this year. "Within the context of the market environment and following the appointment of Tom Vecchiolla in January to lead our US Sector, we reviewed our US operations and are embarking on a restructuring to support future growth, building on our core capabilities in the US and leveraging incumbent positions across the group. As a result of these actions and the assumption of a higher discount rate we expect to take a goodwill impairment charge on the US business of GBP140 million at year end," it said. "In addition, against the backdrop of challenging US market conditions and as part of our year-end balance sheet review process, we have identified a number of one-off, largely non-cash charges and provisions primarily relating to inventory and cost recovery in our legacy US operations. Around GBP25-30 million is included in the updated underlying profit guidance for the year end and GBP35-40 million we expect to be reported through exceptional items."
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OTHER COMPANIES
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Harmony Energy Income Trust said it would be "minded to accept" a GBP190.8 million offer from funds managed by Foresight Group, should one be made. In a joint statement, the duo announced a possible offer for HEIT by Foresight. It values the investor in commercial-scale battery energy storage systems at 84.0 pence per share, GBP190.8 million in total. It represents a 29% premium to its Friday closing price of 65.2p. "As previously announced, the company has made substantial progress through its ongoing asset sale process towards the conclusion of a definitive agreement to sell its entire portfolio to a third party. However, having carefully considered the possible cash offer with its advisers, the HEIT board has concluded that the possible cash offer, on balance, delivers a superior outcome for shareholders," HEIT said. "There can be no certainty that an offer will ultimately be made for the company."
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Recently-listed RC Fornax said it expects to meet full-year market expectations. For the six months to August 31, the consultancy for the defence sector expects revenue of GBP3.8 million, growth of 30% on-year and in line with board expectations. "The current pipeline underpins the board's confidence in meeting current market expectations for the year ended 31 August 2025," it added. CEO Paul Reeves said: "I'm delighted with the performance of company and our team during this period, during which we met our targets while completing an IPO that marked a seminal moment in RC Fornax's development. We are now fully focused on building our business for the benefit of all our stakeholders. With that in mind, I welcome the UK government's recent commitment to bolster defence spending. This can only be a positive for the UK's security and armed forces, which RC Fornax is dedicated to serving."
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Audit, accountancy and advisory services provider MHA announced it intends to float on London's AIM market, where it is set to be joined by quantum science company Quantum Base, which also reported initial public offering plans. MHA plans to raise up to GBP125 million on its IPO through a placing, with an extra GBP6 million to come in a retail offer. Cavendish Capital Markets is acting as nominated adviser, bookrunner and broker. "The directors believe that admission would provide a strong platform for the group to strengthen its market position as a fast-growing accountancy firm, enhance its profile with existing clients, target clients, introducers of new business and potential acquisition targets, and continue to attract, incentivise, develop and retain staff," MHA said. Quantum Base, founded in 2013 as a spin-out from Lancaster University, plans to raise between GBP3 million and GBP5 million new institutional and other shareholders through a placing. This will be alongside a public offer to retail investors. "This is a very exciting time for Quantum Base. For over a decade, we have been developing our patented Q-ID solution - a quantum-secure tag that is virtually impossible to replicate or clone. As the first innovation of its kind to be easily integrated with the most common printing methods and quickly authenticated with a smartphone, it has been vital for us to maintain independence and credibility so that we can grow our solution in a sustainable manner. We believe that floating on AIM will provide us with this independence, whilst also enabling us to leverage access to a world-leading market and potential investor base," CEO Tom Taylor said. Strand Hanson will be the nominated and financial adviser, with Cavendish as broker. Quantum Base expects to IPO during April. MHA expects an admission "in the coming weeks".
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By Eric Cunha, Alliance News news editor
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