4th Feb 2020 07:42
(Alliance News) - Stock prices in London are seen opening higher on Tuesday following positive trading in Asian equity markets amid efforts to contain the coronavirus.
In early UK company news, plumbing and heating products supplier Ferguson said it was looking at options over the demerger of its UK operations and announced a big share buyback. Property company Land Securities announced the start date for its new chief executive, and Irish support services firm DCC said its third quarter was in line with expectations.
IG futures indicate the FTSE 100 index is to open 54.49 points higher at 7,380.80. The blue-chip index closed up 40.30 points, or 0.6%, at 7,326.31 on Monday.
FTSE 100-listed Ferguson said it is considering two options for its listing structure going forward.
Last year, Ferguson - which makes a bulk of its revenue in the US - announced plans to demerge its UK business Wolseley from its Ferguson operations in the US. While Wolseley will be London-listed, the company's board believes the US is the "natural long-term listing location" for Ferguson, it said Tuesday.
The first option is to seek shareholder approval for an additional listing of ordinary shares in the US. Ferguson would seek an additional listing of its shares on a major US stock exchange whilst maintaining its existing premium listing on the London Stock Exchange.
The second option is to seek shareholder approval for a primary listing in the US. Ferguson would seek a change of primary listing of Ferguson's ordinary shares to a major US stock exchange.
To become eligible for inclusion in major stock indices in the US, the company would need to change its premium listing in London to a standard listing, and consequently Ferguson would no longer be eligible for inclusion in the FTSE 100 index. In this scenario, it is likely that there would be a period of time between the company ceasing to be eligible for a spot in FTSE 100 index and becoming eligible for inclusion in major US stock indices, it said.
Ferguson said it expects to make a further announcement following the conclusion of the consultation, likely to be in the spring of 2020.
"In assessing Ferguson's future listing structure, the board's approach has been to consider carefully what is in the best interests of the company and its stakeholders over the long-term. The board believes that Ferguson's natural long-term listing location is the USA, but it is mindful that this is a complex issue for many of our existing shareholders. We will now commence a period of further consultation with our major institutional shareholders and will listen carefully to their feedback before setting out any firm proposals in the spring," Chair Geoff Drabble said.
In addition, Ferguson commenced a USD500 million share buyback to take place over next 12 months, citing its confidence in the business and strong cash generation.
DCC said its trading performance and, more specifically, operating profit for the third quarter to December 31 was in line with management's expectations. The company said annual results for the year to March 31, will be "another year of development and good growth operating profit", in line with current market consensus expectations.
Land Securities said Mark Allan will start as new chief executive on May 1, having been appointed late last year. Current CEO Robert Noel will step down from the role and as a director on March 31. Martin Greenslade will be acting CEO in addition to his role as chief financial officer during April, the company added.
Ryanair Holdings said January traffic rose by 5% to 10.8 million passengers. The airline's load factor for January came in at 92%. Ryanair said it operated over 62,000 scheduled flights in January. On Monday, Ryanair had said it swung to a third-quarter operating profit of EUR91.3 million, compared to a loss of EUR68.0 million for the same period a year before.
Wizz Air reported its own January figures, with passenger numbers up 23% on a year before to 3.2 million, with a load factor of 90.2%, up from 88.1%.
Meanwhile, JP Morgan said 12.5 million Wizz Air shares were successfully sold by Indigo Partners at 4,015 pence each, raising GBP500 million. Indigo continues to hold 2.5 million shares. The sale plan had been announced late Monday.
The Japanese Nikkei 225 index closed up 0.5%. In China, the Shanghai Composite ended up 1.2%, while the Hang Seng index in Hong Kong is up 1.2%.
Investor focus is on authorities' efforts to contain an outbreak that has now infected 20,000 and killed more in mainland China than the SARS epidemic, which hurt Asian economies in 2003.
"Overnight stocks in mainland China rebounded a little as the dust settled from the panic selling witnessed yesterday. Traders are clearly still fearful as the gains achieved pale in comparison to losses incurred on Monday [in Asia]," said CMC Markets analyst David Madden.
The Shanghai Composite closed down 7.7% on Monday.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.5%, S&P 500 up 0.7% and Nasdaq Composite up 1.3%.
The pound was quoted at USD1.3015 early Tuesday, firm from USD1.3008 at the London equities close on Monday.
The euro was quoted at USD1.1061 early Tuesday, flat against USD1.1059 late Monday.
Against the yen, the dollar was trading at JPY108.85, firm from JPY108.63 late Monday.
Gold was quoted at USD1,572.30 early Tuesday, down from USD1,576.67 late Monday.
Oil was quoted at USD54.84 early Tuesday, marginally lower than USD54.90 late Monday.
In the economic events calendar on Tuesday, there are UK construction PMI at 0930 GMT and eurozone producer prices at 1000 GMT. In addition, the latest UK grocery share figures are due from Kantar at 0800 GMT.
By Arvind Bhunjun; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Wizz AirRYA.LFergusonDCC