27th May 2022 07:44
(Alliance News) - Stock prices in London are seen opening lower on Friday, failing to follow the lead of a rally in New York overnight, but still on track for a weekly gain.
In early UK corporate news, pharmaceutical firm GSK said watchdogs in China backed a two-dose vaccine to treat cancer-causing human papillomavirus. Stagecoach has agreed to buy east London bus operations, while Workspace is mulling selling light industrial assets formerly owned by recently-acquired McKay.
IG futures indicate the FTSE 100 index is to open down 27.0 points, 0.4%, at 7,537.92. The blue-chip index closed up 42.17 points, or 0.6%, at 7,564.92 on Thursday. Since last Friday, London's flagship index has advanced 2.4%.
While the FTSE was called lower, other markets were more positive. Asian stocks were largely higher on Friday, while Wall Street closed strongly on Thursday.
In Tokyo on Friday, the Nikkei 225 ended up 0.7%. The Shanghai Composite was marginally higher in late trade, while the Hang Seng in Hong Kong was 2.0% higher. The S&P/ASX 200 added 1.1%.
The Dow Jones Industrial Average finished up 1.6%, the S&P 500 up 2.0% and the Nasdaq Composite up 2.7%.
"US indices gained for the second day as the FOMC minutes helped improving the investor mood. Fed minutes released on Wednesday weren't as hawkish as many investors feared: the Fed deciders mostly agreed that inflation is too high and labour market is too tight and that they should raise the rates by 50bps for the next two meetings. But, there was no sign that the Fed would go down the 75bp hike road. Some members thought the price pressures won't get much worse, and the Atlanta Fed President [Raphael] Bostic even suggested that, given that economic data has taken a step backward, the central bank could even pause on rate hikes in September," Swissquote analyst Ipek Ozkardeskaya commented.
GSK said China's National Medical Products Administration has approved a two-dose vaccine schedule for Cervarix to be administered to girls aged between 9 and 14. The jab prevents certain types of cancer-causing human papillomavirus, a viral condition.
The green light adds to two-dose approvals in roughly 100 other countries, including in the European Union, Asia, Africa, and Latin America.
Earlier in May, the company formally changed its name to GSK from GlaxoSmithKline.
The west London-based firm at the time added that it is still proceeding with the demerger of its Consumer Healthcare business, which was first started in early 2020 and is expected to be completed in July.
FTSE 250-listed Workspace is considering disposing of the light industrial assets that were formerly owned by McKay. Workspace sealed the acquisition of property firm McKay earlier in May for GBP272 million.
Workspace, real-estate investment trust, on Friday said it has "received unsolicited indications of interest from a number of parties" for the portfolio of light industrial assets.
"Workspace confirms that it is now considering disposing of the light industrial assets," Workspace explained.
Following the completion of the McKay acquisition, Workspace's portfolio consisted of GBP2.9 billion worth of gross property assets, with 5.5 million square feet of lettable space.
Buying up assets, meanwhile, was transport firm Stagecoach, itself set to be taken over.
Stagecoach has entered into binding agreements to acquire Kelsian Group's east London bus operations and depot at Lea Interchange for GBP20 million.
"Upon completion, GBP10 million will be payable, with a further GBP1 million per annum payable for ten years commencing on the first anniversary following completion, subject to certain conditions," Stagecoach explained.
"The acquisition is a good strategic fit with Stagecoach's existing operations in east and south-east London. Lea Interchange depot is well located close to Stratford, the busiest station in the UK."
The new acquisition operates 11 contracts on behalf of Transport for London. It has an annual revenue of GBP38 million.
On Thursday, Stagecoach said its shares are to be cancelled by June 27. Earlier in May, Pan-European Infrastructure III SCSp, an infrastructure fund managed by DWS Infrastructure, said its GBP594.9 million offer for Stagecoach became unconditional.
Elsewhere in London, car dealer Caffyns resumed paying a final dividend, amid annual earnings growth, but cautioned on supply chain worries and UK consumer confidence.
In the financial year that ended March 31, revenue climbed 36% to GBP223.9 million from GBP165.1 million. Pretax profit jumped to GBP4.4 million from GBP1.4 million.
Caffyns declared a final dividend of 15.0 pence per share. Its annual payout totals 22.5p. It did not pay a dividend in financial 2021.
Chief Executive Simon Caffyn commented: "The underlying profit before tax of GBP4.6 million was a significant improvement on the prior year. Despite limited new car supply, operating profits improved due to very buoyant trading in used cars and our strong focus on improving operational effectiveness."
The company said it has kicked off the new year with "a sense of optimism" but it is "mindful" of supply chain disruption and consumer confidence.
The pound was quoted at USD1.2633 early Friday in London, up from USD1.2580 at the London equities close on Thursday.
The euro stood at USD1.0751, higher from USD1.0725. Against the yen, the dollar was trading at JPY126.88, fading from JPY127.37.
Still to come in Friday's economic events calendar is the latest US personal consumption expenditure price data at 1330 BST. The core index reading is the Fed's preferred gauge of inflation.
"Personal income & expenditure and the PCE index could settle nerves on inflation and Fed tightening if they print on the low side," Oanda analyst Jeffrey Halley commented.
According to FXStreet-ctied consensus, annual PCE inflation is expected to be stable at 6.6% in April. Core PCE inflation is forecast to slow to 4.9% from 5.2%.
Brent oil quoted at USD117.07 a barrel early Friday in London, flat from USD117.05 late Thursday. Gold stood at USD1,856.37 an ounce, up from USD1,846.75.
By Eric Cunha; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.