25th Jan 2021 07:43
(Alliance News) - Stocks in London are set to open higher on Monday as the precarious coronavirus situation shows some signs of improvement.
In early UK company news, online clothing retailers boohoo and ASOS moved in on collapsed high street chains, with the former agreeing to buy the Debenhams brand and the latter confirming talks to snap up Arcadia's Topshop.
IG says futures indicate the FTSE 100 index of large-caps to open 19.03 points, or 0.3%, higher at 6,708.90 on Monday. The FTSE 100 closed down 20.35 points, or 0.3%, at 6,695.07 on Friday.
"Markets take a more positive turn on the risk axis as investors heaved a sigh of relief that Hong Kong is lifting lockdown while simultaneously assuaging some fears of China stepping back into the Covid-19 lockdown abyss despite increasing mobility restriction measure ahead of the Lunar New Year," said Stephen Innes, chief global markets strategist at Axi.
In Asia on Monday, the Japanese Nikkei 225 index closed up 0.7%. In China, the Shanghai Composite ended up 0.5%, while the Hang Seng index in Hong Kong is up 2.4%. Â
The S&P/ASX 200 in Sydney closed up 0.4%.
Innes added: "Possibly on back of the number of Covid patients in ICUs dropping last week amid the US vaccination rates picking up more positive momentum, views are likely turning more optimistic that the first 100 days of the Biden presidency will see the healthcare ship sail on a more even policy keel."
In the US on Friday, Wall Street ended mostly in the red, with the Dow Jones Industrial Average ending down 0.6%, the S&P 500 down 0.3% and the Nasdaq Composite down 0.1%.
Senior aides to US President Joe Biden have started talks with Republicans and Democrats over a USD1.9 trillion coronavirus relief package.
It comes as Biden, inaugurated last week, faces increasing problems in his effort to win bipartisan backing for the initial legislative effort of his presidency. The White House did not seem to budge on breaking up the package or reducing the overall price tag, even as it pushes for bipartisan support.
With more than 412,000 dead and the economy again losing jobs, Biden has argued there is no time to lose.
Meanwhile, border restrictions were being tightened around the world on Monday. The US was set to join France, Israel and Sweden in pulling up the drawbridge to certain arrivals, with special concern about new strains of the pathogen that originated in Britain and South Africa.
UK Prime Minister Boris Johnson warned that further measures could be required to stop new variants from South Africa and Brazil entering the UK following the decision to suspend all the government's travel corridors.
His warning came as England's chief medical officer, Chris Whitty, said that while infections were falling and hospital admissions were beginning to "flatline" - the situation across the country remained "extremely precarious".
Health Secretary Matt Hancock said the government is a "long, long, long way" from being able to lift coronavirus lockdown restrictions in England.
More positively, government figures showed 491,970 people across the UK received their first vaccine dose on Saturday, taking the total to more than 6.3 million. It suggests the programme is on course to meet Johnson's target of getting the jab to 15 million of the government's top priority groups – including all over-70s – by mid-February, provided supplies of the vaccine can be maintained.
In early UK company news, online clothing retailer boohoo said it has bought the Debenhams brand, while peer ASOS confirmed it is in talks to buy Arcadia's Topshop.
boohoo said it has acquired all of the intellectual property assets of department store chain Debenhams from its joint administrators for GBP55 million in cash.
The company will only be acquiring brands and associated intellectual property rights. The deal does not include Debenhams retail stores, stock, or any financial services.
"The transaction represents a fantastic opportunity to grow the group's target addressable market and increase the share of wallet opportunity through a new capital light and low risk operating model that is complementary to the group's highly successful direct-to-consumer multi-brand platform," said boohoo.
The AIM-listed firm said it intends to "rebuild and relaunch" the Debenhams platform. It expects to relaunch Debenhams on the group's platform in the first quarter of the 2022 financial year, which for boohoo begins in February.
boohoo Executive Chair Mahmud Kamani described the deal as "transformational".
"Our ambition is to create the UK's largest marketplace. Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion eCommerce, but in new categories including beauty, sport and homeware," said Kamani.
ASOS, meanwhile, confirmed that it is in exclusive discussions with Arcadia's administrators over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT brands.
"The board believes this would represent a compelling opportunity to acquire strong brands that resonate well with its customer base. However, at this stage, there can be no certainty of a transaction and ASOS will keep shareholders updated as appropriate," ASOS said.
Over the weekend, Sky News reported that ASOS was the frontrunner to buy fellow fashion retailer Topshop out of administration.
AstraZeneca said its Calquence has been approved in Japan for adults with relapsed or refractory chronic lymphocytic leukaemia.
In a separate release, the pharmaceutical firm said that results from a phase three trial showed Calquence met its primary endpoint demonstrating non-inferior progression-free survival for adults with previously treated, high-risk chronic lymphocytic leukaemia compared to ibrutinib.
The Elevate-RR phase three trial also met a key secondary endpoint for safety, showing patients treated with Calquence had statistically significantly lower incidence of atrial fibrillation compared to patients treated with ibrutinib.
TI Fluid Systems reported an "exceptional" performance in the closing months of 2020.
Revenue for 2020 is seen at EUR2.8 billion, and on a constant currency basis the performance is expected to be in line with the decline in global light vehicle production volumes. However, full-year adjusted earnings before interest and tax margin are estimated to be slightly better than expected.
TI Fluid - which makes products that store and move fluids such as fuel and brake fluid around automobiles - declared an interim dividend of 6.74 euro cents per share but said it won't be paying a final dividend.
"In light of the significant amount of the interim dividend now being declared and the anticipation that, despite exceptional operating and financial performance during 2020, adjusted net income for the 2020 financial year will be relatively low, the board has decided that it would not be practical to propose a nominal final year 2020 dividend under the dividend policy," the firm said, adding that it expects to return to its annual dividend policy in 2021.
The company said it has entered the new year with "solid momentum".
Professional services firm JTC said it performed well in the second half of the year and expects results in line with consensus expectations.
New business performance in the year was "strong" despite the ongoing pandemic, with the annualised value of new business won increasing 20% to GBP17.9 million with "good momentum" in the fourth quarter.
Sterling was quoted at USD1.3713 early Monday, higher than USD1.3665 at the London equities close on Friday. The euro traded at USD1.2178 early Monday, flat on USD1.2175 late Friday.
Against the yen, the dollar softened to JPY103.71 versus JPY103.80.
Gold was quoted at USD1,852.14 an ounce early Monday, lower than USD1,853.00 on Friday. Brent oil was trading at USD55.64 a barrel, firm on USD55.55 late Friday.
The economic events calendar on Monday sees the World Economic Forum's Davos Agenda get underway virtually, with keynote speakers including China President Xi Jinping and Bank of England Governor Andrew Bailey.
By Lucy Heming; [email protected]
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