29th Dec 2020 07:47
(Alliance News) - Stock prices in London are seen opening higher on Tuesday following the Christmas break, after the UK secured a historic trade agreement with the EU and as the sought-after US stimulus package was made official.
In early company news, airlines Wizz Air and Ryanair Holdings said they would issue restricted share notices to UK shareholders following Brexit. Insurer Admiral sold its price comparison businesses and Hut Group owner THG Holdings made a US acquisition.
IG futures indicate the FTSE 100 index is to open 77.19 points higher at 6,579.30. The blue chip index closed up 6.36 points, or 0.1%, at 6,502.11 last Thursday.
The UK will mark the dawn of a new era when the country leaves the EU at the end of the week, having reached an agreement which allows for continued tariff-free trade with the EU single market.
EU ambassadors have given provisional approval for Britain's post-Brexit trade deal, which will be implemented from Friday.
A spokesman for the German EU presidency said the ambassadors had unanimously agreed to "green light" the settlement hammered out on Christmas Eve. It comes as UK MPs were preparing to vote on the deal in a special sitting of Parliament called for Wednesday.
The agreement came as ministers stepped up calls for businesses and individuals to prepare for the new procedures that will apply in just four days' time, regardless of the agreement.
In addition, US President Donald Trump signed into law the USD900 billion coronavirus relief bill and the USD1.4 trillion federal government budget on Sunday after days of delays, providing investors with more reasons to be upbeat heading into the new year.
"A coronavirus vaccine is the process of being rolled out, a Brexit agreement is in place and President Trump finally signed the stimulus bill into law. With a few days left until the end of the year, there's a lot to be optimistic about," commented analysts at BK Asset Management.
Wizz Air Holdings said it is to issue restricted share notices to UK shareholders as the UK departs the EU on Friday. The company said this is because UK nationals will no longer be treated as qualifying nationals in relation to ongoing European airline ownership requirements from January 1.
Wizz Air said that as a result and without any action, from that date, the company will be 80% owned by non-qualifying nationals.
"Therefore, the board has resolved to exercise its power under the articles to serve restricted share notices on non-qualifying national shareholders specifying that, from 1 January 2021, in respect of their restricted shares they can not attend or speak or vote at any general meetings of the company. The rights to attend (whether in person or by proxy), to speak and to demand and vote on a poll in respect of the restricted shares, shall vest in the chairman of such meeting, who will be a director who is a qualifying national," Wizz Air said.
Wizz Air will send Restricted Share Notices to affected shareholders on Tuesday, with an effective date of January 1. The board expects to serve restricted share notices in respect of around 60% of the ordinary shares.
Ryanair Holdings also said it "must take steps" to ensure that it will remain majority EU owned and controlled following Brexit. The Irish carrier said restricted share notices will be issued in due course, specifying that the holders of such shares shall not be entitled to attend, speak or vote at any general meeting.
Admiral Group said it has reached an agreement with ZPG Comparison Services Holdings UK's RVU business over the sale of the insurer's Penguin Portals and Preminen comparison businesses for a total of GBP508 million.
Penguin Portals is made up of online comparison portals Confused.com, Rastreator.com and LeLynx.fr, technology operations Admiral Technologies and its 50% share of Preminen Price Comparison Holdings. Admiral expects net proceeds of around GBP450 million, with a majority of this to be returned to shareholders.
THG Holdings said it has agreed to acquire US-based online skincare and specialty beauty brands retailer Dermstore.com, for USD350 million in cash from retailer Target Corp, subject to US regulatory approval.
THG said the Dermstore.com acquisition provides the opportunity to accelerate the growth of its own beauty brands via a new and large US customer base.
In addition, THG acquired two of its long-standing UK-based nutrition product suppliers, Claremont Ingredients Ltd and David Berryman Ltd, for a combined purchase price of GBP59.5 million in cash.
"We are also pleased to announce the acquisitions of Claremont and Berryman's. These two businesses are highly complementary, with Berryman's accelerating our capabilities in drinks range development for the individual brands within THG Nutrition. Claremont will play a key role in developing flavours tailored to local tastes across the globe. Together these acquisitions will enable THG to significantly accelerate the launch of further product innovation to global markets, while increasing the proportion of THG Nutrition products wholly manufactured in-house," said Chief Executive Matthew Moulding.
Meanwhile, the Democratic-controlled US House of Representatives has voted to override Trump's presidential veto of a defence policy bill.
House members voted 322-87 to cancel the veto, well above the two-thirds needed to override. If approved by two-thirds of the Senate, the override would be the first of Trump's presidency.
Trump rejected the bill last week, saying it failed to limit social media companies he claims were biased against him during his failed re-election campaign. Trump also opposed language that allows for the renaming of military bases that honour Confederate leaders.
The defence bill, known as the National Defence Authorisation Act, or NDAA, affirms 3% pay raises for US troops and authorises more than USD740 billion in military programmes and construction.
The Japanese Nikkei 225 index closed up 2.7% on Tuesday. In China, the Shanghai Composite ended down 0.5%, while the Hang Seng index in Hong Kong is up 0.8%.
The pound was quoted at USD1.3500 Tuesday morning, down from USD1.3587 at the London equities close on Christmas Eve.
The euro was priced at USD1.2250, up from USD1.2197. Against the yen, the dollar was trading at JPY103.70, higher than JPY103.62.
Brent oil was quoted at USD51.25 a barrel Tuesday morning, higher than USD50.74 at the London equities close Thursday. Gold was priced at USD1,878.35 an ounce, up from USD1,874.60.
By Arvind Bhunjun; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
AdmiralWizz AirRYA.L