29th Aug 2019 07:36
(Alliance News) - Stocks in London are set to open slightly lower on Thursday, easing after the boost given to the previous session by a weaker pound amid political crisis in the UK.
In early UK company news, Micro Focus International warned it will be unable to meet its annual revenue guidance.
IG says futures indicate the FTSE 100 index of large-caps to open 11.61 points lower at 7,103.10 on Thursday. The FTSE 100 index closed closed up 25.13 points, or 0.4%, at 7,114.71 on Wednesday.
London's blue-chip index outperformed its European counterparts on Wednesday - the CAC 40 in Paris and DAX 30 in Frankfurt both finishing 0.3% lower - after the pound sank on UK Prime Minister Boris Johnson's decision to suspend Parliament
The pound was quoted at USD1.2214 early Thursday, down from USD1.2233 late Wednesday. This in turn was lower than USD1.2290 at the close on Tuesday.
Legal challenges against Johnson's decision are mounting, with separate bids launched in London and Edinburgh courts seeking an emergency injunction to prevent Parliament being suspended. Further, more than one million people have signed a petition against Johnson's move.
Johnson's prorogation plan came just a day after opposition leaders struck a deal to try to block a no-deal Brexit through legislative means.
Meanwhile, Scottish Conservative leader Ruth Davidson is expected to resign on Thursday, in part due to opposition to Johnson's Brexit strategy, although sources say she will also cite personal reasons for her decision.
Elsewhere in European politics, Italy's populist Five-Star Movement has formally asked the nation's president to give caretaker premier Giuseppe Conte the mandate to try to form a new coalition government in a bid to forestall an election that could put right-wing nationalist Matteo Salvini in power.
Movement leader Luigi Di Maio said he informed President Sergio Mattarella that the Five-Stars had reached an agreement on a potential coalition with the opposition Democratic Party, an arch-rival.
Many analysts have said a government made up of such bitter political foes was not likely to last long, in all probability only delaying the election Salvini wants to snag the premiership for himself. Conte resigned a week ago after Salvini's League party, the Five-Stars' previous governing partner, bolted from their long-squabbling coalition.
In the US on Wednesday, Wall Street ended well in the green, with the Dow Jones Industrial Average finishing 1.0% higher, the S&P 500 up 0.7% and the Nasdaq Composite up 0.4%.
In Asia on Thursday, the Japanese Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite is down 0.1%, while the Hang Seng index in Hong Kong is 0.2% lower.
"Amidst all of the news flow it is becoming apparent that investors appear to be hunkering down for further economic weakness and the prospect of additional losses for stock markets. How else to explain the moves we are seeing into bond markets and precious metals, as well as haven currencies like the Swiss franc and Japanese yen," said Michael Hewson, chief market analyst at CMC Markets.
Gold was quoted at USD1,545.51 an ounce early Thursday, up from USD1,536.29 late Wednesday.
In early UK company news, Micro Focus International warned it does not expect to meet its annual guidance.
Recent trading has led the board to conclude that the software firm will not hit its constant-currency revenue guidance of a 4% to 6% year-on-year drop for the financial year to October 31, now expecting a larger fall.
"Weak sales execution has been compounded by a deteriorating macro environment resulting in more conservatism and longer decision making cycles within our customer base," said Micro Focus.
The FTSE 100 constituent now expects revenue to fall around 6% to 8% year-on-year.
Against this backdrop, Micro Focus said it has decided to accelerate a strategic review of its operations.
Stephen Murdoch, chief executive officer, said: "Following the recent disappointing trading performance, we have determined that it is appropriate to accelerate the undertaking of a strategic review of the group's operations with a view to determining where performance can be improved and how the business can be better positioned to optimise shareholder value."
AstraZeneca said a phase three trial of anifrolumab, a potential new medicine for the treatment of systemic lupus erythematosus, met its primary endpoint.
Anifrolumab achieved a statistically-significant and clinically-meaningful reduction in disease activity versus placebo.
Consumer goods firm PZ Cussons said it has agreed to sell Greek food subsidiary Minerva and Polish personal care brand Luksja.
Minerva is being sold for GBP41.0 million in cash, with the proceeds to be used to reduce debt and drive "focused investment" in core brands. Minerva was the first company to sell branded packaged olive oil in Greece.
PZ Cussons did not give financial details of the Luksja deal, but said completion of the sale is subject to competition clearance being granted in relevant territories, including Poland. PZ Cussons and Sarantis, the buyer of Luksja, have also agreed to enter into a distribution agreement for PZ Cussons's core brands in Poland.
Following completion, PZ Cussons's on-the-ground operations in Poland will be wound down.
"We are streamlining the group to focus investment on core Personal Care and Beauty brands to deliver higher margin earnings, in geographies that can scale, with the aim of returning the group to sustainable, profitable growth," said Chief Executive Alex Kanellis.
Guarantor loans provider Amigo Holdings reported a sharp rise in quarterly profit
Revenue in the three months to June 30 was up 14% year-on-year to GBP71.5 million, with pretax profit up 33% to GBP22.6 million. The firm's net loan book grew 14% to GBP728.4 million.
In response to "an evolving regulatory and economic environment", Amigo said it will be prioritising new customer lending over re-lending to existing clients, while its credit policy has been "further enhanced and tightened".
"This positive action means that we are hitting the ground running ahead of what we recognise is a changing regulatory and economic landscape. By doing this, we are being proactive and pragmatic. We are focused on achieving the best customer outcomes - all with long-term returns as a key driver," said Chief Executive Hamish Paton.
Recruitment firm Hays reported a slight dip in annual profit amid "weaker market conditions".
Net fees were up 5% to GBP1.13 billion in the year to June 30, up 6% on a like-for-like basis, while pretax profit slipped 3% to GBP231.2 million. Before exceptional items, however, profit was up 3% to GBP246.3 million.
In Germany, Hays saw record net fees despite weakening market conditions, while the firm noted signs of reduced business confidence in the UK & Ireland in the fourth quarter.
Hays raised its full-year dividend by 4% to 3.97 pence and its special dividend by 9% to 5.43p.
"Looking ahead, despite an increasingly tough global economic backdrop, our market positions, combined with our highly experienced global management teams and strong financial position, means I am confident we will continue to appropriately balance our long-term potential with the more challenging markets we currently face," said Chief Executive Alistair Cox.
In Thursday's economic calendar, there is French GDP at 0745 BST and eurozone consumer confidence at 1000 BST, followed by German inflation at 1300 BST. At 1330 BST, there is US GDP, with personal consumption expenditures due at the same time.
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AstrazenecaHaysMCRO.LPz CussonsAmigo