28th Jun 2021 07:51
(Alliance News) - Stock prices in London are seen opening marginally higher on Monday as investors brush aside fears of a shift in policy by the US Federal Reserve.
In early company news, fashion house Burberry Group said its chief executive will step down at the end of the year. Miner and commodities trader Glencore agreed to buy BHP's and Anglo American's interests in the Cerrejon coal mine in Colombia for USD588 million. Sportswear retailer JD Sports Fashion's subsidiary made an acquisition in Spain.
IG futures indicate the FTSE 100 index is to open 6.63 points higher at 7,142.70. The blue-chip index closed up 26.10 points, or 0.4%, at 7,136.07 on Friday.
Burberry Group said CEO Marco Gobbetti will step down as CEO and leave the company at the end of 2021.
Burberry explained that Gobbetti - who it said has led the transformation of the brand and business - will be stepping down to take up "another opportunity that will enable him to return to Italy and be closer to his family".
Separately, Italian fashion firm Salvatore Ferragamo said it has hired Gobbetti as CEO and general manager.
Gobbetti was appointed at CEO of Burberry in 2016 and alongside Chief Creative Officer Riccardo Tisci was tasked with turning the business around after investors lost confidence in previous CEO Christopher Bailey. Gobbetti took over from Bailey in November 2017.
The luxury retailer, famed for its trench coats, will now begin the search for a successor. Burberry anticipates Gobbetti will remain with the company until the end of the calendar year. In that time, he will work with Chair Gerry Murphy to provide full support to the executive leadership team on an orderly transition, Burberry added.
Murphy commented: "The board and I are naturally disappointed by Marco's decision but we understand and fully respect his desire to return to Italy after nearly 20 years abroad. With the execution of our strategy on track and our outlook unchanged, we are determined to build on Burberry's strong foundations to accelerate growth and deliver further value for our shareholders."
Anglo American said it has finalised its transition from thermal coal via the sale of its shareholding in Cerrejon, its 33.3% owned coal mine in La Guajira, Colombia.
Anglo said it entered into an agreement for the sale of its interest in the Cerrejon joint venture to Glencore for a total of USD294 million. The move represents the final stage of Anglo's previously announced transition from thermal coal peer operations, it noted.
Glencore and BHP currently each also hold a 33.3% interest in Cerrejon. Glencore intends to acquire both Anglo American's and BHP's interests and will thereby assume full ownership of Cerrejon upon completion, Anglo explained.
CEO Mark Cutifani said: "Today's agreement marks the last stage of our transition from thermal coal operations. During that transition, we have sought to balance the expectations of our wide range of different stakeholders as we have divested our portfolio of thermal coal operations, in each case choosing the exit option most appropriate for the asset and its distinct local and broader circumstances."
Glencore said it "strongly believes" that acquiring full ownership of Cerrejon is the right decision and the progressive expiry of the current mining concessions by 2034 is in line with its commitment to a responsible managed decline of the company's coal portfolio.
Glencore said production volumes are expected to "decline materially" from 2030.
"Disposing of fossil fuel assets and making them someone else's issue is not the solution, and it won't reduce absolute emissions," said Glencore CEO Ivan Glasenberg
"We are confident we can manage the decline of our fossil fuel portfolio in a responsible manner that is also consistent with meeting the goals of the Paris Agreement, as demonstrated by our strengthened total emission reduction targets," added Glasenberg.
JD Sports Fashion said Iberian Sports Retail Group, the retailer's existing 50% intermediate holding company in Spain, has entered into a conditional agreement to acquire 80% of the shares of Deporvillage.
JD said Iberian Sports Retail is to pay maximum of EUR140.4 million for the Spain-based online retailer focused on specialist sports equipment.
Chair Peter Cowgill said: "Deporvillage has a strong consumer-centric approach and is the market leader in its categories in Spain with significant potential for further international development."
Wall Street ended mostly higher on Friday. The Dow Jones Industrial Average closed up 0.7% and the S&P 500 up 0.3%, but the Nasdaq Composite finished 0.1% lower.
The bipartisan agreement among US lawmakers last week on a huge infrastructure deal provided an extra boost to investors, who also have been reassured by the Fed's pledges to maintain record-low interest rates and vast bond-buying for as long as the recovery requires.
The Japanese Nikkei 225 index closed down 0.2% on Monday. In China, the Shanghai Composite was down 0.1%. The Hang Seng index in Hong Kong was down 0.1%, after resuming trading following a morning suspension due to heavy rain. The S&P/ASX 200 in Sydney ended flat.
"As we head towards the end of the month and the end of the quarter it is notable that so far in 2021 equity markets look set to complete five successive months of gains, since the modest losses seen in January, with markets here in Europe set for a quiet start this morning, with Asia markets subdued and Hong Kong markets delayed by a rainstorm warning," said CMC Markets analyst Michael Hewson.
"It would appear, on the face of it that investors have recovered some of the confidence that was briefly lost in the immediate aftermath of the most recent Federal Reserve policy decision," Hewson added.
The pound was quoted at USD1.3906 early Monday, lower from USD1.3910 at the London equities close Friday.
On the political front, Sajid Javid said his "most immediate priority" will be getting the UK through the coronavirus pandemic, as he took up the job of UK health secretary.
Speaking to the media for the first time since he took over from Matt Hancock on Saturday, Javid said he recognises the "huge responsibility" facing him. Javid's return to the Cabinet came just 90 minutes after Hancock announced his resignation on Saturday evening, following the leaking of video footage showing him breaking social distancing rules by kissing an aide in his ministerial office.
Javid, a former chancellor and home secretary, said Hancock had worked "incredibly hard" and "achieved a lot", and he added: "We are still in a pandemic and I want to see that come to an end as soon as possible and that will be my most immediate priority, to see that we can return to normal as soon and as quickly as possible."
Javid on Monday is expected to make his first Commons statement since rejoining the Cabinet as lockdown-sceptic MPs hope he breaks from the approach of his predecessor and pushes for a swift lifting of restrictions.
Hancock became unpopular with some Tory MPs who believed that he was an obstacle to the easing of coronavirus restrictions.
The euro was priced at USD1.1928, down from USD1.1945. Against the yen, the dollar was trading at JPY110.63, down from JPY110.75.
Brent oil was quoted at USD76.12 a barrel Monday morning, up from USD75.81 late Friday. Gold stood at USD1,784.38 an ounce, slightly higher from USD1,781.20.
The economic events calendar on Monday has Ireland retail sales at 1100 BST.
By Arvind Bhunjun; [email protected]
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