22nd Dec 2021 08:00
(Alliance News) - Stock prices in London are seen opening slightly higher on Wednesday following a strong close in New York overnight and after the UK government resisted calls to implement lockdown restrictions over Christmas.
In early company news, property company Land Securities bought a further stake in the Bluewater shopping mall outside London.
The UK Competition & Markets Authority was active just ahead of Christmas. It ended its probe into housebuilder Taylor Wimpey over ground rents. The CMA also said Pennon's acquisition of Bristol Water may impede regulator Ofwat's ability to compare companies in the water sector. The competition watchdog also launched an inquiry into CVS Group's acquisition of Quality Pet Care.
IG futures indicate the FTSE 100 index will open 11.89 points higher at 7,309.30. The blue-chip index closed up 99.38 points, or 1.4%, at 7,297.41 on Tuesday.
Land Securities Group said it has completed the acquisition of an additional 25% share in Bluewater from Lendlease Retail Partnership for GBP172 million, representing a net initial yield of 8.15% and an equivalent yield of 8.25%.
In a separate deal, Landsec said it will sell 25% of this share - a 7.5% stake - to co-owner M&G for its pro rata share of the purchase price with the deal completing in April 2022. After this, Landsec's ownership of Bluewater will be 48.8%.
Bruce Findlay, managing director of Retail at Landsec said: "We're making this acquisition at a time when retail values and rents are starting to stabilise. Together with our co-owners, we have a clear vision for Bluewater which builds on what is already a thriving retail destination. This investment underlines our strategic commitment to major retail destinations that offer something that can't easily be replicated online."
Taylor Wimpey said the CMA investigation into the historical sale of leasehold properties with doubling ground rent clauses by the company is closed, following the agreement of voluntary undertakings.
The housebuilder said the cost of the undertakings falls within the original provision Taylor Wimpey made in 2017. By entering into the undertakings there is no finding that Taylor Wimpey has infringed UK consumer law, it noted.
Chief Executive Officer Pete Redfern said: "Taylor Wimpey has always sought to do the right thing by its customers, shareholders and other stakeholders, and we are pleased that today's voluntary undertakings will draw this issue to a full close, within our original financial provision."
The CMA said Pennon has until December 31 to give undertakings for its Bristol Water acquisition.
The regulator said the Pennon acquisition of Bristol Water may impede Ofwat's ability to make comparisons between water companies.
In response, Pennon said it intends to provide undertakings to CMA for Bristol Water by December 31.
"The proposed undertakings would seek to maintain separate price controls for the Bristol Water region within a merged water business. This combined entity would enable the most effective and efficient delivery of services for our customers in all the regions we serve, whilst also providing Ofwat with comparative cost and performance data," Pennon said.
Pennon said the CMA will have until January 10 to reach a decision on whether to provisionally accept the proposed undertakings.
Finally, the competition regulator launched an inquiry into CVS Group's acquisition of Quality Pet Care. It has until February 18 to make a phase 1 decision.
Calls for a higher market open in London stem from a positive finish in New York overnight.
On Wall Street, the Dow Jones Industrial Average closed up 1.6%, S&P 500 up 1.8% and Nasdaq Composite up 2.4%.
In Asia on Wednesday, the Nikkei 225 index in Tokyo closed up 0.2%. In China, the Shanghai Composite closed down 0.1%, and the Hang Seng index in Hong Kong was up 0.3%. The S&P/ASX 200 in Sydney closed up 0.1%.
New York ended three consecutive down sessions as US President Joe Biden unveiled steps to contain Covid-19 and expressed optimism about his domestic agenda.
In a televised address, Biden formally announced a raft of new measures to combat the winter Covid-19 surge, including shipping half a billion at home tests, while imploring unvaccinated Americans to get jabbed.
Sentiment also was also helped by expectations that the US Food & Drug Administration will authorise pills from Pfizer and Merck & Co to treat Covid-19 as soon as this week.
"It is slowly being recognised that lockdowns are a crude tool which inflict considerable economic, social and mental health damage, which some in government thankfully appear to be slowly beginning to recognise, and yesterday's market rebound appears to be a reflection of that realisation," commented CMC Markets analyst Michael Hewson.
The pound was quoted at USD1.3253 early Wednesday, up from USD1.3248 at the London equities close Tuesday.
UK Prime Minister Boris Johnson has given the go-ahead for people's Christmas plans, although he warned tougher restrictions could be implemented post-December 25.
Johnson said "continuing uncertainty" about the severity of the Omicron variant and hospital admission rates means he does not believe there is enough evidence at the moment to justify stricter measures.
But the situation remains "finely balanced" and people should "exercise caution", Johnson added.
Johnson's comments come after Chancellor Rishi Sunak offered a GBP1 billion support package to hospitality and leisure businesses hit by Covid restrictions amid concerns over the high transmission of Omicron.
The euro was priced at USD1.1265, flat from USD1.1267. Against the Japanese yen, the dollar was trading at JPY114.13, unmoved from JPY114.14.
Brent oil was quoted at USD74.04 a barrel on Wednesday morning, up from USD73.48 late Tuesday. Gold stood at USD1,786.23 an ounce, firm from USD1,785.40.
Wednesday's economic calendar has US GDP at 1330 GMT.
By Arvind Bhunjun; [email protected]
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