25th Nov 2024 08:53
(Alliance News) - Stock prices in London opened higher on Monday, with a US Treasury chief pick calming market nerves, while there was a slew of M&A updates among early corporate updates.
Bookending the FTSE 100, meanwhile, were two retail names. JD Sports added 3.5%, recovering after slumped 16% on Thursday and losing another 2.1% on Friday. B&Q owner Kingfisher plunged 11% after trimming the top end of its profit outlook.
The FTSE 100 index added 26.90 points, 0.3%, at 8,288.98. The FTSE 250 rose 82.43 points, 0.4%, at 20,664.12, and the AIM All-Share rose 2.53 points, 0.4%, at 734.73.
The Cboe UK 100 was up 0.3% at 833.76, the Cboe UK 250 added 0.4% at 18,140.28, and the Cboe Small Companies was flat at 15,602.21.
The CAC 40 in Paris added 0.5%, and the DAX 40 in Frankfurt advanced 0.6%.
"The start of this week could be dominated by news about President-elect Trump's choice of Scott Bessent as his pick for Treasury Secretary. This is a clear nod to Wall Street, Bessent is a hedge fund manager, thus it could be a catalyst for a year-end rally, which is typically a strong period for risk sentiment and stock markets," XTB analyst Kathleen Brooks commented.
"Bessent is seen as an antidote to Trump's most extreme economic views. He is considered a fiscal hawk, and he is in favour of less government spending. Trump's election pledges were expected to boost the US deficit more than Kamala Harris's, and a key plank of the Trump trade was to sell bonds."
In New York on Friday, the Dow Jones Industrial Average added 1.0%, the S&P 500 rose 0.3% and the Nasdaq Composite added 0.2%.
In China on Monday, the Shanghai Composite ended down 0.1%. The Hang Seng Index in Hong Kong lost 0.4%. In Tokyo, the Nikkei 225 ended 1.3% higher, while the S&P/ASX 200 in Sydney closed up 0.3%.
The pound was quoted at USD1.2559 on Monday morning, shooting up from USD1.2511 at the time of the London equities close on Friday. It had traded above USD1.26 earlier on Monday. The euro climbed to USD1.0454 from USD1.0394. Against the yen, the dollar was trading at JPY154.49, down from JPY154.87.
Analysts at ING commented: "The euro is recovering a little after its mini collapse on Friday. However, further eurozone confidence data this week could still spell trouble and tilt the market towards a 50bp ECB cut in December. In the US, the market is split on whether the Fed will cut next month after all and in Japan, fiscal stimulus is shifting expectations towards a BoJ rate hike."
For the Bank of England, meanwhile, weaker data at the end of last week got traders betting on an extra cut next year.
In a quiet economic diary on Monday, Bank of England Deputy Governor Clare Lombardelli and fellow Monetary Policy Committee member Swati Dhingra speak at the BoE Watchers' Conference at 0900 GMT and 1030 GMT.
Attention then turns to US data as an abbreviated trading week across the Atlantic progresses. The personal consumption expenditures inflation gauge is released on Wednesday, as it the latest initial jobless claims reading. Before that, there are Federal Reserve meeting minutes on Tuesday.
US markets are closed on Thursday for Thanksgiving. They re-open for a shorter trading day on Friday.
Brent oil was quoted at USD74.42 a barrel early Monday, easing slightly from USD74.46. Gold faded to USD2,670.66 an ounce from USD2,703.04.
In London, Anglo American rose 2.2%. It said it has struck a deal to sell its remaining steelmaking coal portfolio, netting USD3.78 billion.
The miner said it will sell the business to Peabody Energy. Coupled with the USD1.1 billion sale of its roughly 33% stake in the Jellinbah is a joint venture, it expects to net about USD4.9 billion from the disposal of its steelmaking coal business.
The portfolio being sold to Peabody consists of coal mines in Australia. Peabody is to pay USD2.05 billion in upfront cash. There is a USD725 million deferred cash consideration and the potential for up to USD550 million in a price-linked earnout.
In addition, there is another possible USD450 million cash portion hinging on the reopening of the Grosvenor mine. Anglo American suspended output at the Queensland asset in June "following an underground coal gas ignition incident".
Chief Executive Duncan Wanblad said: "The sale of our steelmaking coal business is another important step towards delivering the strategy that we set out in May to create a world class copper, premium iron ore and crop nutrients business." The CEO added: "All the transactions to deliver our portfolio transformation are well in train - the demerger of Anglo American Platinum is expected by mid-2025 and we have seen strong interest in our nickel business with the sale process well progressed. We expect De Beers to follow, recognising its unmatched industry and brand position and good progress in working with stakeholders to position the business for long term success as we work toward separation for value.
Anglo American in May unveiled a "radical" strategy that will see it keep copper and iron ore assets, while getting rid of platinum and diamond businesses. The move, which followed a "comprehensive asset review" and it was announced at a time when Anglo American was fending off a takeover approach from larger peer BHP.
To unlock shareholder value and to simplify its portfolio, Anglo American said early this year it intends to "demerge" Anglo American Platinum and also "divest" or "demerge" De Beers as part of its new strategy.
Also rising is ITV, up 7.0%, on M&A chatter. ITV's boss has been mulling with advisers a possible separation of a unit, Sky News reported on Saturday, while possible bidders are in early talks about teaming for a tilt at buying all or parts of the FTSE 250 listing.
Sky, citing television industry sources, reported that CVC Capital Partners and a "major European broadcaster" are among those that are mulling over the merits of making a bid to acquire ITV.
The European broadcaster is believed to be Television Francaise SA, which operates the TF1 TV channel in France.
Sky News sources also stated that All3Media and Mediawan are possible suitors for the ITV Studios production arm.
Mediawan is a production company but also distributes third-party and in-house content. All3Media is in TV and film production, and it was sold by Liberty Global and Warner Bros Discovery in May to the RedBird IMI joint-venture for USD1.45 billion.
ITV had previously looked into acquiring All3Media, but in July last year announced it had opted against pursuing a deal.
Sky News, citing one source, said that work on bids are not yet advanced enough to require a disclosure under UK stock market rules.
Sky News also reported that ITV Chief Executive Officer Carolyn McCall has spoken to the company's financial advisers about a possible demerger or form of separation of its two main business units.
Benchmark rose 13%, among the best performers on the AIM market. It said it has struck a deal to sell its genetics business for GBP260 million.
The sale of the unit, whose services include breeding programmes in the aquaculture market, means the fish farming technology company can focus on its Advanced Nutrition and Health offerings.
The genetics business has been sold to Novo Holdings, an investment entity responsible for managing the assets and the wealth of the Novo Nordisk Foundation. Novo Holdings is the controlling shareholder of Bagsvaerd, Denmark-based drugmaker Novo Nordisk, Benchmark noted.
Novo Holdings will pay GBP230 million upfront, and there is a GBP30 million additional contingent consideration.
Benchmark CEO Trond Williksen said: "I am pleased to announce this agreement to sell our genetics business to Novo Holdings. The transaction will unlock significant value and enable us to return capital to shareholders."
The proceeds will "reduce leverage and return capital to shareholders".
By Eric Cunha, Alliance News news editor
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