(Alliance News) - Stock prices in London are seen opening slightly lower on Tuesday following a long holiday weekend in the UK and US and ahead of a swathe of manufacturing PMI releases.
In early company news, athletic apparel retailer JD Sports Fashion hit back at a weekend press report over its corporate governance structure. Waste management firm Biffa swung to an annual loss. Software company Kainos Group made an acquisition.
IG futures indicate the FTSE 100 index is to open 7.91 points lower at 7,014.70. The blue-chip index closed up 2.94 points at 7,022.61 on Friday.
"Stock futures are trading primarily flat after recording one of the quietest Mays in a long time. Despite inflation concerns, investors are still happy to support riskier assets, but this view isn't shared by most as they continue to wait for another major catalyst that is likely to set the tone for markets. This was one of the major reasons that we have not seen any decent trading volume during the last month," said AvaTrade analyst Naeem Aslam.
JD Sports noted a media report over the weekend with regards to the position of Executive Chair & Chief Executive Peter Cowgill.
The Times on Saturday reported that the blue-chip retailer stepped up succession planning for Cowgill after coming under pressure from institutional investors. Cowgill has been executive chairman of JD since 2004 and assumed CEO responsibilities in 2014.
However, the Times reported that investors are becoming increasingly concerned about Cowgill's joint roles, which flout usual corporate governance standards.
"JD can confirm to both investors and to its international brand partners that the board is not engaged in a process to recruit a chief executive officer or chairman. JD can also confirm that it is continually reviewing the depth of its management team to ensure that the senior operational leadership team in the business has the necessary skills and experience to exploit the ongoing global development opportunities," the company said.
Biffa said it delivered a resilient financial performance in the year just past despite the damage of pandemic lockdowns.
For the financial year that ended March 26, Biffa posted revenue of GBP1.04 billion, down 10% from GBP1.16 billion last year as it swung to a pretax loss of GBP52.8 million from a GBP56.4 million profit.
Biffa declared no dividend for financial 2021, having paid out 2.47p in financial 2020.
"We are conscious of the importance of returning to paying dividends and will continue to review the timing of a dividend reinstatement," the company said.
Looking ahead, Biffa said full-year expectations for financial 2022 remain unchanged, and it has been encouraged by recent trading.
"We have been pleased with the recovery of our performance in recent months and are confident that the year ahead will see a good recovery in our trading performance, as we benefit from the economic rebound that is emerging follow the easing of lockdown restrictions. We will also see the benefit of the investments and acquisitions that we have made over the course of the year," said CEO Michael Topham.
Kainos Group said it has acquired Finland-based payroll system provider Cloudator's Workday division for an undisclosed sum.
Cloudator offers services for the full suite of Workday enterprise cloud applications, including Workday Financial Management, Workday Human Capital Management and Workday Adaptive Planning. It has been a Workday Services Partner since 2012.
Kainos said the acquisition of Cloudator's Workday segment will further increase its Workday presence in Europe, adding 55 specialist Workday employees across the continent.
Kainos CEO Brendan Mooney said: "We are delighted to welcome Cloudator's Workday team to Kainos as we continue to expand our Workday Practice. The team's expertise, experience and strong track record of customer delivery aligns with our business, and we are thrilled to have them on board.
"We are proud to be a European partner-of-choice for forward-thinking companies looking to deploy Workday's enterprise management cloud. This acquisition confirms Kainos as one of the largest Workday partners in the Nordics region, underpinning our ability to support the accelerating customer base here in Europe."
The Japanese Nikkei 225 index closed down 0.2%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was up 0.4%.
China's manufacturing sector continued to expand in May, with firms reporting the strongest increase in new work for five months, data from Caixin and IHS Markit showed on Tuesday.
China's general manufacturing purchasing managers' index - a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy - inched up to 52.0 in May from 51.9 in April. The figure rose further away from the 50.0 threshold, which separates expansion from contraction.
The growth rate of the Japanese manufacturing sector was sluggish in May, but still saw "moderate improvement" according to the au Jibun Bank PMI.
The au Jibun Bank Japan manufacturing PMI edged lower to 53.0 in May from 53.6 in April. The figure fell closer to the 50.0 threshold, "signalling a softer but still moderate improvement in the health of the manufacturing sector".
The dollar was lower against major counterparts. The pound was quoted at USD1.4235 early Tuesday, well up from USD1.4175 at the London equities close Friday.
The euro was priced at USD1.2227, up from USD1.2185. Against the yen, the dollar was trading at JPY109.51, down from JPY110.00.
Ireland's manufacturing sector continued to grow in May, marking an improvement for the seventh time in eight months. The headline AIB Ireland manufacturing PMI rose to 64.1 points in May from 60.8 in April - setting a new survey high. The sharp growth was attributed to "booming" demand, benefiting from Covid restrictions lifting and the economy - in Ireland and Europe - beginning to reopen.
In commodities markets, the OPEC group of oil-producing countries and its allies look set to boost production further when they meet Tuesday, as pandemic-hit demand for crude recovers.
The OPEC+ alliance, consisting of 23 countries, implemented sharp output cuts to support prices after the coronavirus pandemic crushed the global economy last year.
But since early May the cartel has started implementing more generous production increases as oil prices have recovered and the health situation improves in developed economies.
Currently the production roadmap for OPEC+ members consists of a series of increases between May and July adding up to some 1.2 million barrels per day. On the agenda at Tuesday's meeting, expected to start at 1100 GMT, will be whether this can be extended into August.
Brent oil was trading at USD70.33 a barrel Tuesday morning, up from USD69.77 late Friday.
Gold was quoted at USD1,915.60 an ounce, higher from USD1,895.00.
The economic events calendar on Tuesday has manufacturing PMI readings, with France at 0815 BST, Germany at 0830 BST, the eurozone at 0900 BST, the UK at 0930 BST, and the US at 1445 BST. Eurozone inflation figures are due at 1000 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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