7th Jan 2019 07:39
LONDON (Alliance News) - Stock prices in London are seen opening marginally higher on Monday, following gains in Asia after a particularly strong close in the US on Friday.However, continued political divisions in UK over Brexit are likely to temper sentiment in London. The pound was marginally higher, quoted at USD1.2745 against USD1.2723 late Friday.In early UK corporate news, retailer Dunelm said it remains cautious on the outlook for its full financial year despite reporting revenue growth in the first half, ContourGlobal acquired assets in Mexico, and MJ Gleeson issued a positive trading update. IG futures indicate the FTSE 100 index will open 18.18 points higher at 6,855.60. The blue chip index closed up 144.76 points, or 2.2%, at 6,837.42 on Friday.The Japanese Nikkei 225 index closed up 2.4%. In China, the Shanghai Composite is up 0.8%, while the Hang Seng index in Hong Kong is up 0.7%.A US trade delegation is set to arrive in Beijing on Monday for talks with Chinese counterparts about how to solve their months-long trade spat. The two-day visit follows a "ceasefire" in the trade war reached by US President Donald Trump and Chinese President Xi Jinping in December.Wall Street ended sharply higher on Friday, with the Dow Jones Industrial Average up 3.3%, S&P 500 up 3.4% and Nasdaq Composite up 4.3%.Federal Reserve Chairman Jerome Powell noted the central bank "will be patient" with monetary policy as it watches the economy evolve. Powell stressed that monetary policy is not on a "preset path" after the Fed raised interest rates four times in 2018 and forecast two rate hikes in the new year.In addition, China's central bank on Friday cut the reserve requirement ratio for banks by 100 basis points, to ensure more liquidity as markets worry over the health of the economy.FTSE 250-listed retailer Dunelm said that total revenue growth, for the 26 weeks to December 29, the end of the key Christmas trading period, was 1.2% on the prior year, with like-for-like sales up 6.9%.The 13 weeks making up the homewares retailer's second quarter saw total sales up 2.0% with like-for-like sales up 9.0%, which the company described as a "pleasing result" building on the positive trading experienced in the first quarter.Dunelm now expects its first-half pretax profit to be around GBP70.0 million, up 17% from GBP60.0 million a year ago.Despite the growth experienced in the first half, Dunelm said it "remains cautious" about its outlook for the full-year, given the uncertainty facing UK consumers and businesses. "Despite our strong performance in the year to date, we remain cautious on the outlook for the second half given the ongoing uncertainty in the UK economy. However, in the medium term, we see significant opportunity to grow the business by focusing on our customers and seizing opportunities in a digital world," said Chief Executive Nick Wilkinson.FTSE 250 power generation company ContourGlobal said it acquired heat and power plants in Mexico from Mexican chemical manufacturer Alpek for USD724 million.ContourGlobal said the plants will provide multiple products of value for its industrial partners, including electricity, heat, steam, chilled water and in several facilities. The business is expected to deliver substantial growth beyond its existing portfolio of assets. "This accretive transaction fits squarely into our strategic and financial approach to acquisitions. It was highlighted during our IPO and reflects our commitment to pursue high quality growth through operationally led strategic acquisitions and to double adjusted Ebitda without issuing new equity within five years of our listing," said Chief Executive Joseph Brandt.MJ Gleeson said it has continued to see strong demand for its low-cost homes, supported by increased build activity on existing sites and the opening of new sites across its target market.The housebuilding and urban regeneration company said its Gleeson Homes arm completed the sale of 691 units during the period, which represents an increase of 17% from the previous first half-year's total of 593 unit completions. The Gleeson Strategic Land unit sold three sites, which was the same number as the previous first half-year. However, the company said these were larger sites and will lead to the division's half-year results being "considerably higher" than last year.MJ Gleeson said it expects half-year earnings at group level to be "significantly ahead of last year and results for its financial year ending June 30, to be "at least in line with expectations".LondonMetric Property said it sold three distribution warehouses for GBP24.3 million to various unnamed buyers, with the sale price achieved 4% above book value. Two of the properties are located in Wakefield and the third is a regional distribution warehouse in Ashby-de-la-Zouche."The market remains strong for real estate assets with structural support. Whilst we remain focused on growing our logistics portfolio, we have continued to monetise some of our shorter let assets, where we benefitted from yield compression, but where we believe rental growth, in the weaker geographies, is less certain," said LondonMetric Chief Executive Officer Andrew Jones. In domestic political news, Theresa May will intensify efforts to win over her Brexit critics and seek fresh guarantees from Brussels ahead of next week's crunch vote on her deal.The UK prime minister acknowledged she was "still working on" getting further assurances from the EU to address concerns about the backstop measure aimed at preventing a hard border with Ireland.But as MPs returned to Westminster after the Christmas break she was warned that the attitudes of Tory Brexiteers had hardened, with Boris Johnson stating that a no-deal Brexit was closest to what people voted for in the referendum.
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