24th Sep 2019 07:43
(Alliance News) - Stock prices in London are seen opening higher on Tuesday, tracking modest gains by Asian equity markets, while the UK Supreme Court is set to give its ruling on the UK prime minister's suspension of Parliament.
In company news, tour operator TUI said it is gauging the impact of rival Thomas Cook's collapse on its own business, budget airline Ryanair said its cabin crew has approved a four-year labour deal, and financial firm Close Brothers announced the departure of its chief executive.
IG futures indicate the FTSE 100 index is to open up 27.82 points at 7,353.90. The blue-chip index closed down 18.84 points, or 0.3%, at 7,326.08 on Monday.
The Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite is up 0.5%, while the Hang Seng index in Hong Kong is up 0.3%. Financial markets in Japan reopened on Tuesday after being closed on Monday for a holiday.
Japan's economy showed signs of "robust" growth in September, but suffered slowdowns in both its manufacturing and services sectors, according to survey result issued Tuesday. The Jibun Bank flash composite purchasing managers' index reading decreased in September to 51.5 from 51.9 in August.
"The resilience of Japan's service sector to the struggles of the country's manufacturers continued to shine through during September," said IHS Markit economist Joe Hayes. "As a result, it's looking like Japan will boast what will be a robust rate of growth in the current climate for the third quarter."
Anglo-German travel company TUI said it is assessing the short-term impact of smaller peer Thomas Cook's insolvency on its financial 2019 results.
TUI reiterated its financial 2019 underlying earnings before interest, tax and amortisation guidance, given in March, of negative 26% compared to underlying EBITA of EUR1.18 billion in financial 2018.
TUI said its Holiday Experiences unit was delivering strong results, but its Markets & Airlines arm was facing "a number of ongoing external challenges". These included the grounding of the Boeing 737 MAX aircraft, airline over-capacity, and continued Brexit uncertainty. However, the Summer 2019 season is "closing out in line with expectations", TUI noted.
Looking ahead to the coming financial year, TUI said it intends to be more cost competitive in Markets & Airlines in financial 2020.
"Where TUI customers are booked on Thomas Cook Airlines flights and these are no longer operated, replacement flights will be offered. We are currently assessing the short-term impact of Thomas Cook's insolvency under the current circumstances, on the final week of our 2019 financial result," said Chief Executive Officer Friedrich Joussen.
Irish carrier Ryanair Holdings said its cabin crew based in the UK voted by a majority of 80% in favour of a four-year Collective Labour Agreement, to cover all Ryanair's directly employed cabin crew in the UK until March 2023.
Ryanair said the CLA is to deliver a new pay structure, with increased guaranteed income. The agreement was negotiated between Ryanair and the union UNITE.
Soft drinks maker AG Barr said it is on course to deliver a full year performance in line with its revised expectations, following a profit warning in July.
For the six months to July 27, revenue fell to GBP122.5 million from GBP136.9 million last year, and pretax profit declined to GBP13.5 million from GBP18.2 million. The company said it incurred exceptional costs associated with a restructuring programme which started during the period.
AG Barr raised its interim dividend to 4 pence from 3.90 pence last year.
"The first half of 2019 has been disappointing," the company said. "However, it was always expected to be a year of pricing transition for the business which would lead to elevated levels of risk. We now have plans in place to address our specific brand related challenges and to ensure that the business is appropriately scaled to perform in the current market.
"We are entering a period of less demanding trading comparisons and, as our new pricing establishes and our strong second half brand plans take effect, our focus is now on returning to long-term growth. Despite continuing economic uncertainty we expect to meet the revised profit expectations communicated in July."
Merchant bank Close Brothers said it delivered a solid annual performance, as it also announced the departure of its chief executive.
For the financial year ended July 31, net interest income rose to GBP505.7 million from GBP486.1 million last year and its loan book on July 31, was up 5.7% to GBP7.6 billion from GBP7.2 billion a year ago.
The company's common equity tier one capital ratio increased to 13.0% and return on opening equity "remained strong" at 15.7%.
Close Brothers is proposing a full-year dividend per share of 66.0p, up 5%.
Separately, Close Brothers said Chief Executive Preben Prebensen will step down but remain with the firm for 12 months to ensure a smooth handover. The company has begun the search for a new CEO and is looking both internally and externally.
The pound was quoted at USD1.2430 early Tuesday, marginally lower than USD1.2440 at the London equities close Monday.
The UK's highest court will give its historic ruling on Tuesday morning over the legality of the five-week suspension of Parliament.
UK Prime Minister Boris Johnson, who has been accused of an unlawful "abuse of power", will be in the US when the Supreme Court announces its findings, following an unprecedented hearing last week.
Eleven justices have been asked to determine whether his advice to the Queen to prorogue Parliament, for what opponents describe as an "exceptionally long" period, was unlawful.
The Supreme Court decision is due at 1030 BST.
Meanwhile, Johnson failed to achieve a "New York breakthrough" on Brexit in a meeting with European Council President Donald Tusk.
Johnson had downplayed his chances of securing a new deal ahead of meetings with key EU leaders during the United Nations General Assembly.
After leaving their bilateral meeting on Monday, Tusk lamented that there had been "no breakthrough" and that there is "no time to lose" with the October 31 deadline looming.
The PM had told Tusk that the UK needs "to see movement and flexibility from the EU" in order to reach a deal, according to Downing Street.
An EU source said the meeting was "sincere and open" but stressed that there were "big gaps in substance".
The economic events calendar on Tuesday has UK public sector borrowing figures at 0930 BST.
By Arvind Bhunjun; [email protected]
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