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(Alliance News) - Stock prices in London are set to open higher on Monday with markets boosted by merger-and-acquisition dealmaking in Japan and the US.
In early UK company news, JD Wetherspoon said the public appeared to be reluctant to go to the pub over the weekend ahead of new virus rules in England, while construction firm MJ Gleeson reported a fall in annual profit but said the new financial year has got off to a strong start.
IG says futures indicate the FTSE 100 index of large-caps to open 30.61 points higher at 6,062.70 on Monday. The FTSE 100 closed up 28.77 points, or 0.5%, at 6,032.09 on Friday.
"European stocks managed to eke out a gain last week, and look set to open higher again as we start a new week, driven largely by M&A activity over the weekend," said Michael Hewson, chief market analyst at CMC Markets.
"M&A appears to be the main focus as we start a new week with US pharma company Gilead Sciences buying cancer drug maker Immunomedics for USD21bn, while Softbank appears to have finally agreed a price with US graphics chip maker NVidia, for UK chip company ARM Holdings of USD40 billion."
Japan's SoftBank Group Corp said it is selling British chip designer Arm to US chip company NVIDIA for up to USD40 billion, potentially creating a new giant in the industry.
If approved, the deal will be one of the largest acquisitions anywhere in the world this year, and will propel NVIDIA to the forefront of the semiconductor sector. The announcement also renewed speculation about SoftBank Group's future, with Bloomberg News reporting it is set to revive talks about going private via a management buyout plan.
Softbank shares closed up 9.0% in Tokyo.
Meanwhile, US pharmaceutical company Gilead Sciences confirmed Sunday that it is buying American biotech firm Immunomedics, which makes a breast cancer drug, for USD21 billion.
Under the transaction, to be finalized in the fourth quarter of 2020, Gilead will buy Immunomedics at a price of USD88 per share, more than double the current value of USD42.25. The California drug giant plans to fund the transaction with USD15 billion in cash and USD6 billion in new bonds.
Sterling was quoted at USD1.2818 early Monday, higher than USD1.2783 at the London equities close on Friday.
The coronavirus "rule of six" came into force in England on Monday, meaning any social gatherings of more than six people will break the law.
People face fines of up to GBP3,200 if they do not abide by the new measure, which applies to both indoor and outdoor settings and follows a rapid increase in the number of daily positive cases.
More than 3,000 Covid-19 cases were recorded in the UK for the third day in a row on Sunday – the first time since May that cases were above 3,000 on three consecutive days.
Meanwhile, Austrian Chancellor Sebastian Kurz told citizens the country was already facing "the beginning of the second wave" as new daily infections climbed towards 1,000.
France reported 10,000 new infections Saturday, close to the peak of the first wave in April. Prime Minister Jean Castex declined to announce any new major restrictions Friday despite noting a "clear worsening" in the country's outbreak.
The euro traded at USD1.1844 early Monday, firm on USD1.1836 late Friday.
On a positive note on the vaccine front, regulators have given AstraZeneca and Oxford University the all-clear for clinical trials to resume.
Researchers had "voluntarily paused" their vaccine trial after a UK volunteer developed an unexplained illness. Even during the pause, AstraZeneca said it remained hopeful that the vaccine could still be available "by the end of this year, early next year".
In early UK company news, JD Wetherspoon said it has had around 32 million customer visits to its 861 open pubs since the 10 weeks since reopening on July 4.
The pub operator noted that "trade was very quiet over the weekend" ahead of the new virus rules in England restricting meet ups to groups of six or less.
"The situation with regard to pubs has been widely misunderstood...In fact, trade was very quiet over the weekend, as the public weighed up the evidence about the alleged dangers of going out - Wetherspoon sales were 22.5% below the equivalent Saturday last year," said Wetherspoon Chair Tim Martin.
CLS said it has exchanged contracts to buy three office properties in greater London and the south east of England, for GBP59.7 million, from Aviva Investors.
The portfolio consists of One Church Road in Richmond, Priory Place in Chelmsford, and Kings Court in Leatherhead.
"We have remained disciplined in our approach to acquisitions and the strength of these assets, combined with our long-term conviction in the UK market, makes this an exciting addition to our portfolio," said Chief Executive Fredrik Widlund.
Housebuilder MJ Gleeson said Covid-19 hit its annual results, though it reported a good start to its new financial year.
Revenue for the financial year to June 30 was down 41% to GBP147.2 million, while pretax profit slumped 86% to GBP5.6 million.
The results reflect Covid-19's hit to the "historically critical" fourth-quarter period - though the company has seen a strong start to the 2021 financial year with a record order book and high levels of demand.
No dividend was declared in respect of the recently-ended year, and payouts will resume "as soon as prudent to do so".
Looking ahead, Chair Dermot Gleeson said: "We are currently seeing strong demand and expect this to continue through the year as the demographics of our customer base and the nature and price point of our product helps to insulate us from the impacts of rising unemployment, the end of the stamp duty holiday and the forthcoming changes to the Help to Buy scheme. We have therefore re-affirmed our interim target of delivering 2,000 homes per annum in 2022 and will prioritise investment in the business to achieve it."
The company is "cautiously optimistic" of "significant growth" in the current year and beyond, Gleeson added.
Burford Capital said the US Securities & Exchange Commission continues to review its registration statement, as the litigation finance firm eyes a listing on the New York Stock Exchange.
Assuming SEC approval, the NYSE has approved Burford's shares for listing. On the SEC approval, Burford shares will trade both in New York and in London.
In the US on Friday, Wall Street ended mostly higher, with the Dow Jones Industrial Average ending up 0.5% and the S&P 500 up 0.1%, but the tech-heavy Nasdaq Composite down 0.6%.
In Asia on Monday, the Japanese Nikkei 225 index closed up 0.7%. Against the yen, the dollar was slightly lower, quoted at JPY106.09 versus JPY106.18.
In China, the Shanghai Composite is up 0.2%, while the Hang Seng index in Hong Kong is up 0.6%. Â
Gold was quoted at USD1,943.82 an ounce early Monday, down from USD1,950.07 on Friday. Brent oil was trading at USD39.93 a barrel, lower than USD40.22 late Friday.
The economic events calendar on Monday has eurozone industrial production figures at 1000 BST.
By Lucy Heming; lucyheming@alliancenews.com
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