12th Jan 2021 07:48
(Alliance News) - Stock prices in London are seen opening slightly higher on Tuesday as investors weigh rising coronavirus cases and the prospect for extra US fiscal stimulus after the opposition Democrats swept Congress.
In early company news, DIY retailer Kingfisher continued to benefit from strong demand for home improvement. Wealth manager Rathbone Brothers appointed a new chair, and housebuilder Vistry said a return to dividend payments is on the cards.
IG futures indicate the FTSE 100 index is to open 11.92 points higher at 6,810.40. The blue-chip index closed down 74.78 points, or 1.1%, at 6,798.48 Monday.
Kingfisher said it has continued to experience high demand during the fourth quarter, boosted by strong online sales.
Kingfisher said like-for-like sales in the fourth quarter to date were up 17%, supported by e-commerce sales growth of over 150%. In the financial year to date like-for-like sales were up 6.5%. Based on trading to date, Kingfisher expects annual adjusted profit before tax to be at the top end of the range of current sell-side analyst estimates.
"While the strength of our fourth quarter trading, to date, is reassuring, uncertainty over COVID-19 and the impact of lockdown restrictions in most of our markets continue to limit our visibility. Longer term, we are confident that the strategic and operational actions we are taking are building a strong foundation for sustainable long-term growth. We also believe that the renewed focus on homes is supportive for our markets," said Chief Executive Officer Thierry Garnier.
Johnson Matthey has appointed Stephen Oxley as its new chief financial officer, with interim CFO Karen Hayzen-Smith returning to her role as financial controller.
Oxley joins the speciality chemicals firm from Big Four accountancy KPMG, where he has spent almost 30 years.
"I am extremely pleased that Stephen will join JM in April, and I am looking forward to working with him. I would also like to thank Karen for her valuable contributions and ongoing support over the past few months," said CEO Robert MacLeod.
Rathbone Brothers reported a rise in funds under management and administration and named a new chair.
The wealth manager said total FUMA at December 31 was GBP54.7 billion, up 8.6% from GBP50.4 billion at the same time in 2019. Rathbones said this reflected not only strong market movements in the last quarter, but also continuing net inflows and strong investment performance.
"Although we continue to expect market volatility during 2021 as well as continuing low interest rates, we remain focused on enhancing our services to clients and delivering growth. We will continue to balance this investment with prevailing market conditions, maintaining strict cost discipline and identifying inorganic opportunities that are a strong cultural fit," the company said.
Rathbones named Clive Bannister as chair-designate and non-executive director to replace the outgoing Mark Nicholls who will retire at the next annual general meeting in May. Bannister was CEO of Phoenix Group Holdings for nine years, retiring in March 2020.
Vistry Group said it delivered a strong second half performance with 2020 pretax profit expected to be at the top end of the anticipated range at GBP140 million.
The housebuilder delivered a total of 4,652 completions, down from 6,884 in 2019. These included 820 from joint ventures. The total housebuilding average selling price for 2020 was GBP302,000 with a private average selling price of GBP344,000.
"Looking to FY21 we are alert to the wider market uncertainty, including the potential implications of the most recent lockdown, as well as for housebuilding specifically the changes from an end to the stamp duty holiday and existing Help to Buy scheme at the end of Q1. We are encouraged by the strength of the market in 2020 and the levels of demand during the second national lockdown in November, and whilst very early, we have seen no impact from this third national lockdown. Assuming stable market conditions, the group remains confident it can deliver a step-up in completions for both Housebuilding and Partnerships in FY21 and increase profit before tax to GBP310 million," the company said.
Vistry reported a net cash position of GBP38 million as at December 31, reflecting its "strong second half performance and firm focus on cash management". Given the robust balance sheet position, the company now expects to resume dividend payments with a modest final dividend for 2020.
UK Health Secretary Matt Hancock said the NHS is under "very significant pressure" and told the public to reduce all social contact that is "not absolutely strictly necessary" in a bid to curb the spread of the virus.
He said vaccination was the "fastest route to safely lifting restrictions" and the UK government was on track to vaccinate the 15 million people most at risk by the middle of February.
Almost 2.3 million people in the UK have been given a first dose of a coronavirus vaccine, according to new figures, while 388,677 second doses have also been given.
The main focus of attention for investors is Washington. Democrats are pushing ahead with a historic second impeachment of President Donald Trump as they accuse him of inciting Wednesday's storming of the Capitol Building that delayed lawmakers' certification of Joe Biden's election win.
Analysts believe the chances of Trump being convicted were slim but there was a concern that the latest moves could foment more unrest, with some reports saying the president's supporters were planning fresh demonstrations at the weekend and during Biden's inauguration next week.
Biden has pledged to push for more direct stimulus checks to taxpayers, and said he was speaking with Republican lawmakers about moving on a second package "sooner rather than later".
"Whether one wants to discuss the epidemic or the [Washington] situation, there's light at the end of the tunnel. The problem is that, for now, the green light has temporarily given way to a state of investors' political angst," said Axi's Stephen Innes. "Fortunately, the promise of brighter days ahead on the back of the three-pronged puts of vaccination, fiscal and monetary policy backstops make it difficult for equities to sell off in a determined fashion."
The pound was quoted at USD1.3564 on Tuesday morning, up from USD1.3506 at the London equities close Monday.
The euro was priced at USD1.2168, up slightly from USD1.2163. Against the yen, the dollar was trading at JPY104.24, little changed from JPY104.21.
Brent oil was quoted at USD55.75 a barrel early Tuesday, up from USD55.58 late Monday. Gold was trading at USD1,856.26 an ounce, higher against USD1,845.86.
The Japanese Nikkei 225 index closed up 0.1% on Tuesday. In China, the Shanghai Composite is up 1.3%, while the Hang Seng index in Hong Kong is up 0.8%. Markets in Japan reopened after being closed for a holiday on Monday.
By Arvind Bhunjun; [email protected]
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