29th Feb 2016 07:29
LONDON (Alliance News) - Shares in London are set to open lower Monday, after concerns about an "uneven" global economic recovery were raised at the G20 meeting in Shanghai, while the pound remains under pressure amid Brexit fears.
IG says futures indicate the FTSE 100 index to open 45.21 points lower, at 6,050.80. The index closed up 1.4%, or 83.20 points, at 6,096.01 on Friday.
"Rather predictably the G20 communique was an exercise in saying a lot, while doing very little, though the UK did get its wish of a mention that the risks of a 'Brexit' would have on the global economy," says CMC Markets Michael Hewson, who called the outcome of the meeting "disappointing".
The G20 meeting of finance ministers said the global economic recovery has continued but remains "uneven", adding the risk of Britain leaving the European Union is among the downside risks causing concern.
Following their meeting in Shanghai, the ministers said the global economic recovery has continued and said the "magnitude" of recent volatility in markets had not reflected "underlying fundamentals" of the global economy. They expect "activity to continue to expand at a moderate pace in most advanced economies, and growth in key emerging market economies remains strong."
However, the G20 ministers said the downside risks threatening recovery have continued, including volatile capital flows, a large drop in commodity prices, escalated geopolitical tensions worldwide, and the "shock" of Britain's potential exit from the EU.
"The pound looks set to remain under some amount of pressure as uncertainty ahead of the June referendum 'Brexit' poll continues to push the prospect of a rise in interest rates ever further out into the future. It seems quite likely that the pound could well close at its lowest monthly level against the US dollar since 1985," Hewson says.
Sterling is quoted at USD1.3862 before the London equities open, compared to USD1.3863 at the close on Friday. If the pound were to go below USD1.3500 it would be exploring depths not seen in 30 years.
In Asia on Monday, the Japanese Nikkei 225 index closed down 1.0%.
Japan's housing starts increased unexpectedly in January, after falling in the previous month, data from the Ministry of Land, Infrastructure, Transport and Tourism showed. Housing starts rose 0.2% year-over-year in January, confounding economists' expectations for a 0.3% drop. In December, it had fallen 1.3%. The number of annualized housing starts grew to 873,000 in January from 860,000 in the preceding month. It was expected to rise to 862,000.
In China, the Shanghai Composite ended down 2.9%, while the Hang Seng index in Hong Kong is down 1.2%.
Wall Street ended mixed Friday, with the DJIA down 0.3%, the S&P 500 down 0.2% and the Nasdaq Composite up 0.2%.
Wm Morrison Supermarkets said it has entered a new supply agreement with US online retail giant Amazon.com and has agreed new terms in principle with online grocery delivery company Ocado Group.
Morrisons said it has struck a new supply agreement with Amazon, through which its products will be made available to Amazon Prime and Amazon Pantry, Amazon's food service, customers. Morrisons will provide a wholesale supply services to Amazon, allowing customers of Amazon to access a wide range of Morrisons ambient, fresh and frozen products.
Amazon Pantry currently provides only packaged food.
In addition, Morrisons has been in talks with Ocado to grow its Morrisons.com online grocery business and the pair have now reached an agreement in principle under which Morrisons will take space at Ocado's new Customer Fulfilment Centre in Erith and Ocado will deliver a "stock pick" service to Morrisons.
This, Morrisons said, will allow its online service to delivery groceries to customers across the UK. No financial details on the agreement were disclosed, and Morrisons said there is no certainty an agreement can be concluded.
Distribution and outsourcing company Bunzl said its pretax profit and revenue grew in 2015, mainly through the acquisitions it has made, and as it reported yet more bolt-on deals.
The FTSE 100-listed group said pretax profit rose 7.0% to GBP322.7 million from GBP299.8 million in 2014, as revenue increased 5.0% to GBP6.49 billion from GBP6.16 billion and operating margin improved 10 basis points to 7.0%. Bunzl will pay a final dividend of 26.25 pence, taking its total dividend up to 38.0p per share, a 7.0% rise year-on-year.
The revenue growth was driven primarily by acquisitions, the company said, as organic growth for the company remained broadly flat. The company made 22 acquisitions for a total of GBP327.0 million over the course of the year, including Brazil's Dental Sorria, a dental supplies business it announced the acquisition of on Monday but bought in December.
In addition to Dental Sorria, Bunzl announced another two acquisitions on Monday, of Earthwise Bag, a reusable bags supplier based in California, and Bursa Pazari Insaat Sanayi ve Ticaret, a Turkish food packaging company company. No financial details were disclosed on the new acquisitions.
Advertising and marketing group WPP said its Millward Brown brand, media and communications research unit has acquired India-based Analytics Quotient. Analytics Quotient supplies marketing analytics data used in marketing strategies. It was founded in India in 2008 and has offices in London and in the US also.
It will become part of Millward Brown Analytics, a unit of WPP's Kantar data investment management arm. No financial details were disclosed.
Barclays said it is continuing to evaluate the "strategic options" for its shareholding in Barclays Africa Group. The London-listed banking group said it will update the market on its plans for Barclays Africa Group on Tuesday, when Barclays is due to report annual results for 2015.
The bank's update comes after the Financial Times reported on Friday that Barclays has decided to exit its African operations. Barclays has a 62.3% stake in Barclays Africa.
Goldman Sachs upgraded Sky to Buy from Neutral, while it cut ITV to Neutral from Buy.
In the economic calendar Monday, UK consumer credit and mortgage approvals are due at 0930 GMT. Eurozone's consumer price index is due at 1000 GMT. In the US, the Chicago purchasing manager's index is due at 1445 GMT, while US pending home sales are due at 1500 GMT.
By Daniel Ruiz; [email protected]
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