18th Jun 2018 07:45
LONDON (Alliance News) - Stock prices in London are seen opening marginally higher on Monday, with China's retaliation against US trade tariffs set to weigh on investor sentiment, while Virgin Money agreed to a GBP1.70 billion all-share takeover by fellow UK challenger bank CYBG.IG futures indicate the FTSE 100 index is to open 14.99 points higher at 7,648.90. The blue chip index closed down 1.7% at 7,633.91 on Friday.In early UK corporate news, CYBG said fellow mid-cap lender Virgin Money Holdings has agreed terms for an all-share offer, valuing Virgin Money at GBP1.70 billion. Under the terms of the offer, Virgin Money shareholders will receive 1.2125 new CYBG shares in exchange for each Virgin Money share, valuing each Virgin Money share at 371 pence. This is above the 355p at which Virgin Money closed on Friday and 19% above its price of 312p on May 4, before CYBG's approach was first known.Virgin Money shareholders will have 38% of the combined lender. CYBG said Richard Branson's Virgin Holdings supports the offer with its 34.8% stake in Virgin Money.Following completion of the offer, CYBG Chairman Jim Pettigrew, Chief Executive David Duffy and Chief Financial Officer Ian Smith will lead the combined group, with Virgin Money CEO Jayne-Anne Gadhia acting as a consultant for the period after the takeover. Recycled packaging firm DS Smith said 2018 was a year of very strong growth, supported by acquisition of Europe of EcoPack and EcoPaperin Europe and Interstate Resources in the US.For the year ended April 30, revenue came increased to GBP5.77 billion against GBP4.78 billion last year. Pretax profit came in at GBP292 million compared to GBP264 million last year. DS Smith proposed a final dividend of 9.8 pence per share down from 10.6 pence the year before. "The current year has started well, with the volume growth momentum seen in 2017/18 continuing into the new financial year and the ongoing recovery of the paper price rises announced earlier this calendar year progressing as expected," the company said. In economic news, China announced USD50 billion worth of tariffs on goods from the US on Saturday in retaliation to new US tariffs announced the day before.The list includes a 25% duty on 659 imported items including agricultural products, automobiles and aquatic products, according to a statement from the Ministry of Finance. It did not provide further details on the exact items.The tariffs on USD34 billion worth of goods come into effect on July 6, the same day as US tariffs on China, with the additional USD16 billion to be imposed later.The ministry criticized the new US tariffs on USD50 billion worth of Chinese goods, announced by President Donald Trump on Friday, as a violation of the World Trade Organization rules.On Monday, the FTSE Russell index review changes come into effect. Online grocer Ocado Group and gambling firm GVC Holdings are promoted to the FTSE 100. Conversely, private hospital group Mediclinic International and outsourcer G4S are demoted from the large cap index.In a light economic events calendar on Monday there are Italy trade data at 0900 BST and the US NAHB Housing Market Indexat 1500 BST.Sterling was marginally lower quoted at USD1.3271 early Monday, against USD1.3294 at the London equities close on Friday.In early economic news, the average asking price for a house in the UK was up 0.4% on month in June, property tracking website Rightmove said.That followed the 0.8% increase in May. On a yearly basis, house prices advanced 1.7%, accelerating from 1.1% in the previous month.In addition, British households' financial pressures intensified slightly in June, largely reflecting greater living costs, results of a survey by IHS Markit and market research company Ipsos Mori revealed.The seasonally adjusted Household Finance Index dropped to 43.4 in June from May's 25-month peak of 44.9. Any score below 50 suggests pessimism regarding finances among the UK households.In the US, Wall Street ended lower on Friday, with the Dow Jones Industrial Average down 0.3%, S&P 500 down 0.2% and Nasdaq Composite down 0.1%.The Japanese Nikkei 225 index ended down 0.8%. Financial markets in China and Hong Kong are closed for the Dragon Boat Festival.Related Shares:
Virgin Money HoldingsSmith (DS)CYBG