17th Jun 2019 07:44
(Alliance News) - Stock prices in London are seen opening higher on Monday, tracking gains in Asian equity markets, with investor attention likely to be on a triple-header of central bank interest rate decisions to come this week.In UK company news, Kier halted its dividend and put some of its businesses up for sale, Babcock International confirmed it rejected a merger approach from Serco, and Airtel Africa's big London listing moved a step closer. IG futures indicate the FTSE 100 index is to open 27.92 points higher at 7,373.70. The blue chip index closed down 22.79 points, or 0.3% at 7,345.78 on Friday.The Japanese Nikkei 225 index closed flat. In China, the Shanghai Composite is up 0.1%, while the Hang Seng index in Hong Kong is up 0.5%.Following the conclusion of its strategic review Kier Group suspended dividend payments and earmarked several business for disposal as it looks to get its balance sheet under control.FTSE 250-listed Kier Group has put up Kier Living, its housebuilding business, for sale, saying that, despite being a strong business, it would require significant funding to keep growing. So far there have been "a number" of expressions of interest.Kier Property also has been put up for sale, with the investment required likewise "incompatible" with Kier's capital requirements, and Kier also will be quitting the Management and Environmental Services businesses.Kier has suspended dividend payments for its year ending June, and the following financial year. At the interim stage, Kier slashed its first half dividend 79% to 4.9 pence a share. The business sales and dividend suspension are expected by Kier to lead to a "material reduction" in overall debt, and the focus going ahead will be on Regional Building, Infrastructure, Utilities, and Highways. Babcock International Group confirmed it received an "unsolicited and highly preliminary" proposal from outsourcer Serco Group over a potential merger between the two companies in January. The aerospace and defence business confirmed that no further proposal has been received.Babcock's board unanimously rejected the proposal, having concluded that a combination of the two companies had "no strategic merit" and was not in the best interests of Babcock's shareholders, customers or wider stakeholders.The Sunday Times reported that Serco made at least two attempts to merge with Babcock International Group. Serco has a market capitalisation of GBP1.67 billion and Babcock GBP2.35 billion, which would have made the potential combination worth more than GBP4 billion.Noting the merger between Alawwal bank and Saudi British Bank, Royal Bank of Scotland Group said the tie-up would reduce risk weighted assets by GBP4.7 billion. RBS is part of a consortium that owned 40% of Alawwal following the takeover of ABN Amro in 2007.Over the weekend, Saudi British Bank said that its merger with Alawwal Bank was completed.Following the merger RBS's NatWest Markets arm received an aggregate shareholding of 10.8% in SABB, RBS said, noting the merger will lead to GBP0.7 billion in profit attributable to shareholders."We are pleased that this merger has now concluded; it will help facilitate the future exit of our shareholding as we continue to focus on our key target markets. The release of capital will also have a positive and material financial impact for RBS," said RBS Chief Executive Ross McEwan. Telecommunication services provider Airtel Africa priced its initial public offering in London in a range of 80 pence to 100 pence. Airtel Africa is to issue 595.2 million to 744 million new shares in its IPO to raise proceeds of GBP595 million. The company expects a market capitalisation on admission between GBP3.01 billion to GBP3.62 billion.Airtel Africa is to undertake a listing on the Nigerian Exchange concurrently with the London listing. Deutsche Bank is preparing to create a bad-bank and shift billions of euros of assets into the unit as part of a restructuring of its trading operations, the Financial Times reported Sunday, citing four people briefed on the plan.According to the newspaper, the German lender is planning to either shrink, or close, its equity and rates trading businesses outside continental Europe and instead is planning to focus on providing transaction banking and wealth management services.The pound was quoted at USD1.2595 early Monday, down from USD1.2604 at the London equities close Friday.The British Chamber of Commerce cut its UK growth forecasts for the next two years, it revealed Monday, despite a more positive outlook on 2019.For 2020, the BCC has cut its growth forecast to 1.0% from 1.3%, and for 2021 to 1.2% from 1.4%. But for 2019, the BCC has upgraded its UK growth estimate to 1.3% from 1.2%, mainly due to "exceptionally rapid" stockbuilding early in 2019, as manufacturers prepared for the intended end-March Brexit."However, the immediate boost to UK GDP is forecast to come at the cost of more subdued growth in 2020 and 2021 as the unwinding of historically-high inventory levels, coupled with weaker business investment, weigh on economic activity," said the BCC.UK house prices have increased month-on-month, but made no movement on an annual basis, according to figures released by Rightmove on Monday.Asking prices in June rose by 0.3% month-on-month compared to May; however there was no movement on an annual basis. For London alone however, asking prices slipped by 0.4% month-on-month, and declined by 2.0% annually.In UK political news, Boris Johnson's Tory leadership bid has received a new boost with the backing of Health Secretary Matt Hancock who pulled out of the contest last week.Despite having ruled out a no-deal Brexit during his campaign, in contrast to Johnson, he said the former foreign secretary was now the best candidate to re-unite the fractured Conservative Party.His endorsement came after the clear frontrunner was criticised for failing to appear in the first of the televised leadership debates staged by Channel 4 on Sunday evening.In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.1%, S&P 500 down 0.2% and Nasdaq Composite 0.5% lower.Ahead this week, there is the US Federal Reserve interest rate decision on Wednesday and UK and Japan interest rate decisions on Thursday.CMC Markets analyst Michael Hewson said: "Investors are growing increasingly convinced that the US Federal Reserve, may well cut interest rates up to three times this year, though judging by the rally in the US dollar in the last few days foreign exchange markets have a different view. This dovish bond market view seems hard to square with what is happening on the data front, after some strong US retail sales data from April and May showed that the US consumer had started to spend again."While the Federal Reserve rate meeting is probably the main event this week, at least as far as central banks are concerned, we also have the latest meetings from the Bank of Japan, as well as the Bank of England. No changes are expected from either of the meetings, though as far as the Bank of England are concerned it will be interesting to see if other MPC members echo recent comments from chief economist Andrew Haldane, as well as external member of the MPC Michael Saunders warning about the prospect for higher rates."The economic events calendar has Ireland first-quarter GDP data at 1100 BST.
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