30th May 2018 07:44
LONDON (Alliance News) - Stocks in London are set to open marginally higher on Wednesday despite political unease in Italy, where efforts to form a government continue.In early UK company news, AstraZeneca said the Terranova trial for Fasenra failed to reach its primary endpoint, Royal Bank of Scotland's chief financial officer has resigned, and B&M European Value Retail saw strong annual revenue and profit growth.
Perhaps most intrigingly, former WPP chief Martin Sorrell is back as the head of a London-listed company.IG says futures indicate the FTSE 100 index of large-caps to open 5.76 points higher at 7,638.40 on Wednesday. The FTSE 100 index closed down 1.3%, or 97.64 points at 7,632.64 on Tuesday.AstraZeneca and MedImmune, its global biologics research and development arm, said the Terranova trial - the second of two "pivotal" Phase III trials for Fasenra - did not meet the primary endpoint of a statistically-significant reduction of exacerbations in patients with chronic obstructive pulmonary disease."These results are disappointing because uncontrolled COPD patients already on dual or triple inhaled therapy need new treatment options. We will now analyse the complete data sets from the GALATHEA and TERRANOVA trials to further understand these results," said Sean Bohen, executive vice president, global medicines development and chief medical officer.A full evaluation of the data is ongoing, and the results will be submitted for presentation at a forthcoming medical meeting. Astra added that it does not currently intend to make a regulatory submission.State-backed lender RBS said Ewen Stevenson has resigned as CFO "to take up an opportunity elsewhere". The effective date of his departure will be confirmed in due course, RBS said, but he will remain in his position to oversee a handover. The search for a successor will commence immediately."The board and I are sorry to learn that Ewen has decided to move elsewhere. He will go with our thanks for a job well done and our good wishes," said Chairman Howard Davies.Cash Shell Derriston Capital confirmed the acquisition of an investment vehicle of former WPP boss Martin Sorrell, with Sorrell to be executive chairman of "a company that aims to build a multi-national communication services business focused on growth", with more than GBP200 million at its disposal.Sorrell, who built WPP into an advertising and public relations giant over the course of 33 years, resigned as chief executive officer in mid-April following the conclusion of an investigation into what WPP called "an allegation of misconduct" which it said did not "involve amounts that are material" to the company.Coming just over a month after this, London-listed cash shell Derriston Capital confirmed early Wednesday a Sky News report that it will purchase Sorrell's newly incorporated S4 Capital in a reverse takeover.Derriston said S4 recently raised GBP51 million in equity, with Sorrell himself contributing GBP40.0 million of his own money and the remaining GBP11 million provided by institutional and other investors. S4 Capital also has received non-binding letters of support from institutional investors indicating a willingness to provide more than GBP150 million more to support its acquisitions plans.Gold miner Fresnillo, ahead of its annual general meeting on Wednesday, said it started the year well, delivering a "solid" operating performance in the first quarter, with its annual outlook unchanged."The board and I reiterate our confidence in our established and proven strategy and in the capacity of the executive committee to execute it. While volatility in exchange rates or precious metals prices may present short-term challenges, we anticipate further growth and returns over the longer term," said Chairman Alberto Bailleres.In the FTSE 250, B&M European Value Retail reported strong revenue and profit growth for its recently-ended financial year.Revenue for the 53 weeks to March 31 rose 22% to GBP2.98 billion, as UK B&M fascia store like-for-like sales grew 4.7%. Pretax profit climbed 25% to GBP229.3 million.The retailer proposed a final dividend of 4.8p, up 23% on last year, bringing its full-year payout to 7.2p, an increase of 24%.The company said it has seen a "pleasing start" to first quarter trading, with 3.1% like-for-like growth in B&M fascia stories in the UK, excluding the Easter week."Whilst there are five weeks still to go to the end of the period, we are confident of a solid outcome for the quarter," said B&M.Heat treatment services provider Bodycote said, ahead of its annual general meeting, revenue for the first four months of 2018 was 7% higher than a year ago, up 10% at constant currency. At this early stage, and notwithstanding the group's limited visibility, Bodycote said it now expects full-year revenue to be higher than previously expected and headline operating profit to be slightly ahead of current consensus.Phoenix Group Holdings launched a fully underwritten GBP950 million rights issue to fund part of the cash consideration for its purchase of Standard Life Assurance from Standard Life Aberdeen. Phoenix will pay a total cash consideration of GBP1.97 billion for the deal, with this figure excluding a dividend of GBP312 million paid by Standard Life Assurance to Standard Life Aberdeen prior to completion.The rights issue will be on the basis of 7 new shares at 518 pence for every 15 existing shares, and will result in the issue of 183.5 million shares shares, of 47% of Phoenix's existing share capital.In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average ending down 1.6%, the S&P 500 down 1.2% and Nasdaq Composite closing 0.5% lower."It was a bad start to the week for markets in Europe and the US as stocks on both sides of the Atlantic fell sharply over concerns that political instability in Europe might cause financial dislocation to the banking system across the continent, as banking stocks got hammered," says CMC Markets chief market analyst Michael Hewson.Italy's anti-establishment Five Star Movement and the anti-immigrant League party failed to form a coalition government at the weekend after President Sergio Mattarella refused to approve their nominee for finance minister because he was known for his criticism of the eurozone and Germany.The M5S and the League have since vowed to use their parliamentary majority to sabotage plans for an interim government set up by economist Carlo Cottarelli, making fresh elections later this year all but certain.In Italy on Tuesday, the FTSE MIB index closed down 2.7%, with banking stocks among the worst hit as Banco BPM fell 6.7% and Unicredit tumbled 5.6%."These concerns look set to continue this morning with another lower open as investors continue to eye the latest developments in Rome, as well as the prospect of elevated trade tensions after President Trump announced that the US would be proceeding with USD50bn worth of tariffs on Chinese in imports. With EU exemptions on US tariffs also due to expire this Friday, markets are likely to find it difficult to catch a break today," Hewson adds.Cottarelli is to meet Mattarella again Wednesday as efforts to form a government continue amid unprecedented political wrangling. Cottarelli met Mattarella on Tuesday to give the president his suggestions as to who should be part of an interim cabinet. After the two met, a spokesman said they would meet again Wednesday, without providing any further details.After initially seeking Mattarella's impeachment over his stance on their nominated finance minister, the Five Star Movement appeared more reciprocal and willing to work with the president and form a coalition government.Meanwhile, the trade battle between the US and China rumbled on. The tariffs on USD50 billion in Chinese products, first announced in March, will be imposed on a list of products to be issued by June 15, the White House said Tuesday.Beijing said the move was "contrary to the consensuses", the countries had reached previously in Washington, state media reported. The White House statement is both unexpected and within expectation, China's Ministry of Commerce was quoted as saying by news agency Xinhua.At the same time, the US continues to "actively prepare" for President Donald Trump's "expected summit" in Singapore with North Korean leader Kim Jong Un."The North Koreans have been engaging" since Trump's letter last week cancelling the June 12 meeting, said White House spokeswoman Sarah Sanders. She gave no date for the possible summit, but said Trump was meeting Japanese Prime Minister Shinzo Abe on June 7 at the White House.Kim Yong Chol, regarded as Kim Jong Un's right-hand man, will meet this week in New York with US Secretary of State Mike Pompeo, the White House said.In Asia on Wednesday, the Japanese Nikkei 225 index closed down 1.5%. In China, the Shanghai Composite is down 1.5%, while the Hang Seng index in Hong Kong is down 1.4%.In the economic calendar on Wednesday, France's GDP is at 0745 BST with German CPI at 0800 BST, and the unemployment rate at 0900 BST. Eurozone consumer confidence and business sentiment is at 1000 BST, with US ADP employment change at 1315 BST and GDP at 1330 BST, with personal consumption expenditures due at the same time.In UK data on Wednesday, the British Retail Consortium showed UK shop prices continued to fall in May. The BRC-Nielsen shop price index declined 1.1% year-on-year in May, the biggest fall since January 2017. Prices of non-food products slid 2.5%, while food prices rose 1.2% as weather, oil prices and other geopolitical factors influenced agricultural markets.Still to come in UK retail data on Wednesday, the latest Kantar Worldpanel grocery share figures for the 12 weeks ending May 20 is due at 0800 BST.Related Shares:
AstrazenecaBodycotePhoenix Group HoldingsRBS.LFresnilloB&M