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(Alliance News) - Stock prices in London were seen opening higher on Monday, with optimism over a US stimulus package offsetting concerns about the AstraZeneca and Oxford University Covid-19 vaccine.
IG futures indicate the FTSE 100 index is to open 30.2 points higher at 6,519.53. The blue-chip index closed down 0.2%, or 14.39 points at 6,489.33 on Friday.
In early corporate news on Monday, Experian said it is continuing a "detailed forensic investigation" following a Brazilian data leak, but noted that evidence suggests its technology systems have not been compromised.
Among mid-caps, Electrocomponents posted improved revenue for the four-months to January 31 and Drax unveiled a sizeable Canadian acquisition.
AIM-listed online retailer boohoo Group has forked out just over GBP25 million for the e-commerce and digital assets of Burton, Dorothy Perkins and Wallis, three Arcadia Group brands.
Equity markets rallied early on Monday with Asian stocks soaring and London futures in positive territory, despite "significant bad vaccine news over the weekend", analysts at Danske Bank noted.
"A new study suggests that AstraZeneca has only limited efficacy versus the South African variant, at least for mild diseases," Danske Bank analysts said.
South Africa has temporarily suspended the AstraZeneca and Oxford University jab against a new variant found in the country, according to the health department and top local scientists.
The AstraZeneca-Oxford vaccine protects against the original Covid-19 strain, but its efficacy drops off substantially when it comes to the new variant called B.1.351 or 501.V2, raising serious concerns, said Shabir Madhi, the professor of vaccinology at the University of the Witwatersrand, citing a new local study involving 2,000 participants.
Danske Bank analysts also noted the "expectations for a significant fiscal stimulus package from US".
US President Joe Biden seized on feeble US employment data, published on Friday, to argue the world's largest economy needs his USD1.9 trillion pandemic relief package, which cleared a key Senate hurdle without support from the Republican opposition.
"I believe the American people are looking right now to their government for help," Biden said after a meeting with top Democratic lawmakers. "So I'm going to act. I'm going to act fast."
Back in the UK, Rolls-Royce is planning to shut down its jet engine factories this summer due to insufficient work, the Telegraph reported on Saturday.
According to the newspaper, this is a first time Roll-Royce has done this and results from what Rolls-Royce described as a "significantly reduced" workload resulting from the Covid-19 pandemic.
The two-week closures, focused around its headquarters in Derby, will affect all of the 19,000 staff within Rolls-Royce's civil aerospace division, including 12,500 UK staff, who make airliner jet engines.
On Monday, boohoo joined online peer ASOS in snapping up retail brands from the failed Arcadia Group.
boohoo will buy the e-commerce and digital assets and associated intellectual property rights of Burton, Dorothy Perkins and Wallis for GBP25.2 million from Arcadia's joint-administrators.
"This is a great acquisition for the group as we extend our market share across a broader demographic, capitalising on growth opportunities as more and more customers shop online. We continue to grow our portfolio of brands and customer base, strengthening our position as a leader in global fashion e-commerce," boohoo Executive Chair Mahmud Kamani said.
The deal does not include any stores, however.
Philip Green's Arcadia Group went under back in November, putting 13,000 jobs at risk.
The UK high street continues to suffer from restrictions to control Covid-19. Like Arcadia Group, department store chain Debenhams also sunk into administration.
boohoo in January announced a deal for all of the intellectual property assets of Debenhams Retail for GBP55 million in cash.
Credit checking firm Experian noted that "data which is being illegally offered for sale on the internet, some of which may have been sourced from Serasa's non-sensitive marketing data". Serasa is a Brazilian unit owned by Experian. Like its parent, Serasa provides credit granting and validation services.
Experian said it is "continuing to carry out a detailed forensic investigation".
So far, the company explained, it knows that data offered includes photographs, social media logins, vehicles registrations, and "social security INSS", the latter concerning social security contributions in Brazil.
Experian however, noted that this data is not collected by Serasa.
"There is no evidence that positive or negative credit data has been illegally obtained from Serasa," the company said. "In spite of exhaustive investigations to date there is no evidence that our technology systems have been compromised."
In the FTSE 250, Electrocomponents posted improved revenue over the past four months, but noted "heightened freight, labour and logistical costs".
Revenue in the four months ended January 31 was up 8% annually on a life-for-like basis. In the second quarter to September, like-for-like revenue had fallen 4%. In the first-quarter ended June, it plunged 11%.
The distributor of industrial and electronic products left its annual profit outlook unchanged, "with stronger revenue growth offset by additional ongoing costs".
"The heightened freight, labour and logistical costs we are experiencing are likely to persist at a time of ongoing investment in our proposition. Despite these pressures, our confidence in our strategy remains strong," Electrocomponents said.
Power station operator Drax Group said it plans to bolster its Canadian unit with the purchase of Pinnacle Renewable Energy.
It will acquire Pinnacle at CAD11.30 per share, valuing the renewables firm's fully diluted equity at CAD385 million, about GBP226 million. The sum implies an enterprise value of CAD741 million.
Drax added: "The acquisition, which remains subject to Drax and Pinnacle shareholder approval, court approval, regulatory approvals and the satisfaction of certain other customary conditions, has been unanimously recommended by the board of Pinnacle and has the full support of Pinnacle's major shareholder, affiliates of ONCAP."
ONCAP holds about 31% of Pinnacle's shares, Drax noted.
Elsewhere in London, a regulatory filing showed Mike Ashley's Frasers Group sold its entire 24.93% stake in French Connection Group in a transaction on Thursday.
French Connection on Friday noted it received two separate takeover approaches. The proposals were from Spotlight Brands in conjunction with Gordon Brothers International and from Go Global Retail in conjunction with HMJ International Services.
Sterling was trading at USD1.3730 on Monday morning, largely flat from USD1.3728 at the London equities close on Friday.
The euro stood at USD1.2036 on Monday morning London time, up from USD1.2025 at the European equities close on Friday. Against the yen, the dollar was trading at JPY105.51, improved from JPY105.45 at the London market close on Friday.
The Japanese Nikkei 225 index jumped 2.2% on Monday, closing above the 29,000-point mark. In China, the Shanghai Composite closed 1.0% higher, while the Hang Seng index in Hong Kong is up 0.1%.
Brent oil was quoted at USD59.93 a barrel, up from USD59.62 a barrel at the London equities close Friday. Gold fetched USD1,816.77 an ounce, up from USD1,808.40.
By Eric Cunha; ericcunha@alliancenews.com;
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