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(Alliance News) - Stock prices in London are seen opening marginally lower on Friday amid continued concerns economic recovery could lead to a surge in inflation and interest rate hikes.
In early company news, lender NatWest Group said it will exit Ireland and property investor SEGRO raised its dividend after posting positive annual results. Magazine publisher Future was confident in its prospects after reporting strong recent trading.
IG futures indicate the FTSE 100 index is to open 6.05 points lower at 6,611.10. The blue-chip index closed down 93.75 points, or 1.4%, at 6,617.15 Thursday.
NatWest Group posted a pretax loss for 2020 and announced its exit from Ireland.
For 2020, NatWest posted a pretax loss of GBP351 million from a GBP4.23 billion profit in 2019 and total income was down 24% to GBP10.80 billion from GBP14.25 billion.
NatWest said a full year 2020 net impairment losses of GBP3.24 billion resulted in an expected credit loss coverage ratio of 1.66%.
The lender said its Common Equity Tier 1 ratio - a key measure of a bank's financial strength - was 18.5% in 2020, up from 16.2% in 2019.
NatWest proposed a final dividend of 3 pence per share.
Separately, the state-backed lender said it completed its strategic review of Ulster Bank. It said following careful and comprehensive deliberation by the board, the bank has concluded that, despite the significant progress that has been made in recent years, Ulster Bank in the Republic of Ireland "will not be in a position to achieve an acceptable level of sustainable returns over its planning horizon".
NatWest intends to begin a phased withdrawal from the Republic of Ireland over the coming years that "will be managed in an orderly and considered manner".
CEO Allison Rose said: "Following an extensive review and despite the progress that has been made, it has become clear Ulster Bank will not be able to generate sustainable long terms returns for our shareholders. As a result, we are to begin a phased withdrawal from the Republic of Ireland over the coming years which will be undertaken with careful consideration of the impact on customers and our colleagues."
NatWest has agreed to sell a EUR4 billion portfolio of performing commercial loans to AIB Group. The sale remains subject to due diligence.
NatWest is also in early talks with Permanent TSB Group and others about their potential interest in buying other Ulster retail and small and medium enterprise assets.
SEGRO said it delivered a strong set of financial results in 2020, with record lettings driven by the increasing demand for prime industrial properties from a wide occupier base.
For 2020, pretax profit was GBP1.46 billion, up 62% from GBP902 million in 2019 and adjusted pretax profit was GBP296.5 million, up 11% from GBP267.5 million in 2019.
The company saw a record leasing and asset management performance with GBP77.9 million of new headline rent in 2020, including GBP41.1 million of new pre-let agreements.
SEGRO declared a full-year dividend of 22.1 pence, up 7% from 20.7p paid in 2019.
"The pandemic has reinforced the importance of efficient and resilient distribution networks to facilitate the provision of a wide variety of goods and services, leading to increased demand for warehouse space. 2020 saw a record level of investment for SEGRO as we seek to capitalise on these favourable trends, giving us confidence in our ability to drive further growth in rental income, earnings and dividends over the coming years," said Chief Executive David Sleath.
Future said in the four months to the end of January it has continued to benefit from high levels of online engagement in the period, notably during Black Friday and Christmas.
The company said its Media division revenue grew strongly driven by continued momentum in eCommerce and digital advertising. The Events arm, which represent a small portion of total revenue, continued to be hurt by Covid-19 restrictions, while the Magazine division performed in-line with the trends seen from last year.
Following the integration of the TI Media business, Future said is on track to achieve the previously announced GBP20 million synergies.
Future has also completed its purchase of price comparison firm GoCo and is confident it will create substantial value for shareholders.
"Following a robust start to the year, we expect full year profitability to be materially ahead of current market expectations. We remain well positioned to continue executing our strategy and delivering on the ongoing growth momentum we have sustained over recent years," said CEO Zillah Byng-Thorne.
Assura said it has completed the acquisition of primary care developer Apollo Capital Projects Development.
Jonathan Murphy, CEO, said: "The acquisition of Apollo will further enhance our sector-leading in-house development capabilities and substantially expand our pipeline, which is already the largest in our history.
"Expanding our offer to the NHS as its partner of choice has never been more vital than it is today. As Apollo's colleagues integrate into Assura, we look forward to working together to continue creating outstanding spaces for health services in our communities."
The pound was quoted at USD1.3975 early Friday, up from USD1.3955 at the London equities close Thursday.
UK retail sales plunged in January as tighter nationwide coronavirus restrictions closed non-essential shops, the latest figures from the Office for National Statistics showed.
On an annual basis, UK retail sales fell 5.9% in January having posted growth of 3.1% in December. The print missed market consensus, cited by FXStreet, for just a 1.3% drop.
Retail sales plunged 8.2% month-on-month in January having risen 0.4% in December. The latest reading market missed consensus, cited by FXStreet, of negative 2.5%.
"The latest national lockdown led to a sharp monthly fall in January's retail sales, with April 2020 the only month on record to see a bigger slump," said Jonathan Athow, deputy national statistician for Economic Statistics at the ONS.
The euro was priced at USD1.2096, higher from USD1.2076. Against the yen, the dollar was trading at JPY105.61, lower against JPY105.72.
Brent oil was quoted at USD63.30 a barrel Friday morning, lower from USD64.49 late Thursday in London. Gold was trading at USD1,773.09 an ounce, down from USD1,776.28.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average and S&P 500 down 0.4%, while the Nasdaq Composite finished 0.7% down.
The Japanese Nikkei 225 index closed down 0.7% on Friday. In China, the Shanghai Composite ended up 0.6%, while the Hang Seng index in Hong Kong is up 0.1%. The S&P/ASX 200 in Sydney closed down 1.3%.
Consumer prices in Japan stayed in deflationary territory on an annual basis in January, according to figures released by the Statistics Bureau.
Consumer prices fell 0.6% annually in January, though deflation slowed from 1.2% in December. Monthly, consumer prices were 0.6% higher in January.
Japan's private sector showed a marginal improvement in February, but remained in decline, early purchasing manager survey results from au Jibun Bank showed.
Flash estimates showed that Japan's composite output index edged upwards to 47.6 index points in February, up from the final figure of 47.1 points from January, but still below the 50.0 neutral mark.
The flash manufacturing output index rose to 51.3 points in February from the final figure of 49.2 in January, as both output and new orders expanded at the fastest rates seen since December 2018. Business optimism also rose in February, marking the ninth consecutive month of positive sentiment among Japanese manufacturers.
Meanwhile, the flash Japan services business activity index dipped to 45.8 points in February from 47.1 points in January, with the fastest decline in new business activity in nine months.
In the economic calendar for Friday, there are purchasing managers' index readings for Germany, the eurozone and the UK at 0830 GMT, 0900 GMT and 0930 GMT respectively. The US PMI is out at 1445 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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