1st Jun 2015 06:33
LONDON (Alliance News) - London share prices are set to open higher Monday, despite uncertainty amongst investors over the Greek debt negotiations and disappointing economic data from China, while Playtech has announced an agreement to acquire of Plus500.
IG says futures indicate the FTSE 100 to open 19 points higher at 7,003.3. The index closed down 0.8% at 6,984.43 points Friday, the last trading day of May, as Greece debt negotiations continued to trouble market participants.
"Claims and counter claims with respect to the closeness of some form of deal between Greece and its creditors continued to go back and forth last week, with the end result that, despite yet another looming deadline, the two sides appeared to remain as far apart as ever," says Michael Hewson, chief market analyst at CMC Markets UK.
Last week, European Commission President Jean-Claude Juncker said the Greek stand-off will be resolved in the ?coming days and weeks", but his comments were later offset by German Finance Minister Wolfgang Schaeuble, who ruled out an early breakthrough in the tortuous negotiations.
Hewson thinks that, with Greece due to make the first of four payments to the International Monetary Fund this coming Friday, the prospect of any form of agreement between now and then looks fairly slim. "This belief appears to be reinforced by the rhetoric coming out of Athens over the weekend, after Greek Prime Minister Alexis Tsipras accused bailout monitors of making absurd demands on his country."
Oanda analyst Craig Erlam says Greece has been very open about the fact that it doesn?t have the cash to pay on Friday the EUR300 million owed to the IMF. However, the analyst says it has been suggested that Greece could take all four repayments due to the IMF in June, totaling EUR1.6 billion, and pay them at the end of the month, to which the IMF has suggested it may be open.
"While that would once again nudge the can down the road, I can?t see what they would hope to achieve in a few more weeks that hasn?t proved possible in four months," writes Erlam.
Meanwhile, the manufacturing sector in China continued to contract in May, the latest report from HSBC Bank showed on Monday, with a manufacturing PMI score of 49.2.
That was in line with expectations, and it represented a slight upward revision from last month's flash estimate reading of 49.1. It was up from 49.9 in April, although it remains beneath the line of 50 that separates expansion from contraction in a sector.
"With some end of week volatility in Hong Kong and Chinese markets, investors appear to be treading carefully with respect to taking on large amounts of new large scale exposure to equities," says Hewson.
In Asia on Monday, the Japanese Nikkei 225 closed flat, while the Hang Seng is up 1.0% in Hong Kong and the Shanghai Composite trades up 4.2%.
Wall Street ended lower Friday, with the DJIA, the S&P 500 and the Nasdaq Composite all down 0.6%.
In the corporate front, FTSE 250-listed Playtech said it has reached an agreement to acquire troubled online contracts-for-difference trading platform Plus500 Ltd in a GBP459.6 million deal.
Under the deal, Playtech, which provides software and services for the gaming industry and which has recently moved into the foreign exchange trading sector, will pay 400 pence per share for Plus500, which has seen its revenue take a hit in recent weeks after it suspended some of its UK accounts as part of actions on its anti-money laundering processes.
Entertainment One has denied reports that it is considering abandoning its London listing following comments made by its chief executive in an interview with The Sunday Telegraph.
Darren Throop, the chief executive of the film and television company, which makes the Peppa Pig children's series, told the newspaper that the company is considering shifting its listing to New York in order to court more supportive investors.
In the economic calendar Monday, manufacturing PMIs from Italy, France and Germany are due at 0845 BST, 0850 BST and 0855 BST, respectively. Meanwhile, manufacturing PMI readings from the eurozone and the UK are due at 0900 BST and 0930 BST, respectively. Germany's consumer price index is due at 1300 BST. In the US, manufacturing PMI is due at 1445 BST
By Daniel Ruiz; [email protected]
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