8th May 2018 07:47
LONDON (Alliance News) - Stock prices in London are seen opening lower on Tuesday ahead of US President Donald Trump's decision on whether to scrap the nuclear deal with Iran, while in London Shire announced a takeover agreement with Japan's Takeda Pharmaceutical and CYBG has approached fellow UK challenger bank Virgin Money for an all-share merger.
Trump is set to make the announcement at the White House at 1900 BST.
France, Germany, and Britain have launched a diplomatic offensive in recent weeks to try to persuade Trump not to scuttle the deal. But French President Emmanuel Macron has already said their efforts may have failed.
Trump said he opposed the agreement during the 2016 presidential campaign and in office has repeatedly threatened to pull the US out of the pact, last week calling it a "horrible deal".
UK Foreign Secretary Boris Johnson said Monday that there was currently no viable alternative to the Iran deal.
The French and German foreign ministers pleaded with the US to uphold the agreement after a meeting in Berlin on Monday. There were "no alternatives" to the nuclear restrictions that Tehran had accepted, German Foreign Minister Heiko Maas said.
IG futures indicate the FTSE 100 index is to open 59.50 points lower at 7,566.10. The blue chip index closed up 0.9%, or 64.45 points, at 7,567.14 on Friday prior to a three-day holiday weekend in the UK, ending the week 0.9% higher.
In UK company news, Irish pharmaceutical firm Shire announced it has reached agreement for a takeover by Japanese peer Takeda.
Takeda is to pay USD30.33 in cash per share plus either 0.839 Takeda shares or 1.678 Takeda American depository shares.
Based on Takeda's closing price on April 23, the day before Shire said it would be willing to recommend a takeover, this values Shire at around GBP46.00 billion, though approximately GBP44.00 billion of this is based on Takeda's closing price on Monday in Tokyo.
Shire shareholders will own approximately 50% of the combined group
Meanwhile, CYBG confirmed on Tuesday it has made a "preliminary" approach regarding a GBP1.60 billion merger with Virgin Money Holding.
The bank would acquire all of Virgin Money at a ratio of 1.1297 CYBG shares per Virgin Money share, leaving the latter's shareholders with 36.5% of the enlarged company.
In the FTSE 100, Standard Life Aberdeen said it does not believe Lloyds Banking Group or Scottish Widows has the right the terminate the asset management arrangements between the parties.
Standard Life Aberdeen "does not agree" that following its creation through the merger of Aberdeen Asset Management and Standard Life that it is in competition with Lloyds in the UK, following the latter's mid-February cancellation of the asset management arrangements.
Chilean miner Antofagasta held full-year production guidance despite a blockage at its processing plant at the Los Pelambres mine.
The company said it will take three months for plant stockpiles to return to normal levels, with production in the first half at Los Pelambres to be around 10,000 tonnes of copper lower than expected and sales some 15,000 tonnes lower.
Back in the mid caps, bookmaker William Hill reported a 3% rise in group net revenue for the 17 weeks to April 24. Online revenue increased by 12% though retail fell 4%, with US operations posting revenue growth of 45% year-on-year.
Within online, sportsbook revenue fell 8% and in retail the figure dropped 13%.
William Hill said in online it had "very" strong football and horse racing results early in 20187, though an "average" Cheltenham festival and a flat Grand National year-on-year. A 1.3 percentage point increase in its gross win margin to 8.8% led to wagers falling 8% in the period.
Insurer Hiscox reported a 20% rise in first-quarter gross written premiums to USD1.16 billion at constant currency.
Hiscox's Retail gross written premiums increased 14% at constant currency year-on-year to USD572.9 million, London Market by 8.7% to USD219.8 million, and Re & ILS by 42% to USD363.1 million.
Chief Executive Bronek Masojada said: "After a costly year for catastrophes in 2017, our London Market and reinsurance businesses mobilised quickly to grasp the opportunity and grew strongly.
"Sadly, discipline and good sense is receding in the market, so for the rest of the year growth in big-ticket business will be more measured."
In the US on Monday, Wall Street ended up, with the Dow Jones Industrial Average 0.4% higher, S&P 500 up 0.4%, and Nasdaq Composite ending 0.8% up.
Crude oil prices reached a four-year high on Monday on the rising tensions between Iran and the US as Trump considers re-imposing sanctions on the country over its nuclear ambitions.
Oil was quoted at USD75.67 per barrel early on Tuesday.
In European economic news early Tuesday, Germany's industrial production recovered in March, provisional data from Destatis showed.
Industrial production grew by more-than-expected 1% month-on-month in March, reversing a 1.7% fall in February. Output was forecast to grow 0.8%.
Excluding energy and construction, industrial output advanced 1.1%. Energy output climbed 1.4% and construction advanced 0.6% in March.
On a yearly basis, industrial output logged a growth of 3.2% versus 2.2% increase in February. Economists had forecast an annual increase of 3%.
The Japanese Nikkei 225 index is closed 0.2% higher early Tuesday. In China, the Shanghai Composite is up 0.9%, while the Hang Seng index in Hong Kong is up 1.5%.
China's exports recovered at a faster than expected pace in April and imports growth accelerated notably, data from General Administration of Customs revealed Tuesday.
Exports advanced 13% year-on-year in April, reversing a 2.7% drop in March. Economists had forecast an increase of 8%.
At the same time, imports growth accelerated to 22% from 14% in the previous month. Imports were expected to rise 16%.
Consequently, the trade surplus totalled USD28.8 billion in April, above the expected level of USD27.75 billion.
In yuan terms, shipments gained 3.7% and imports logged a faster growth of 12% in April.
Still to come in the economic calendar on Tuesday, in the afternoon in the US the Redbook index is due at 1355 BST, with JOLTS job openings at 1500 BST.
Related Shares:
LloydsSLA.LWMH.LVirgin Money HoldingsAntofagastaShireHiscoxCYBGAntofag.5%pr