(Alliance News) - Two management clear-outs highlighted UK company news early Monday, ahead of a trading week in London that will be dominated by the UK general election and major central bank decisions.
Tullow Oil and Amigo Holdings both announced wholesale changes at the top, while Provident Financial poached its new CFO from Secure Trust Bank.
Tullow was down 45% while Amigo was up 2.2% in early trading Monday.
The UK general election is being held on Thursday, with results overnight to Friday. Ahead of that, the final interest rate decisions by the US Federal Reserve and European Central Bank are on Wednesday and Thursday, respectively.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 7,228.29
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Hang Seng: up 0.1% at 26,517.43
Nikkei 225: closed up 0.3% at 23,430.70
DJIA: closed up 337.27 points, 1.2%, at 28,015.06
S&P 500: closed up 0.9% at 3,145.91
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GBP: up at USD1.3170 (USD1.3105)
EUR: firm at USD1.1062 (USD1.1045)
Gold: up at USD1,461.70 per ounce (USD1,459.85)
Oil (Brent): flat at USD64.16 a barrel (USD64.15)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
WTO General Council meeting
1000 EST US employment trends index
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The UK's general election campaign enters its frenetic final stages on Monday, with Prime Minister Boris Johnson and Labour leader Jeremy Corbyn desperately seeking votes ahead of Thursday's crucial poll. Johnson is hoping to regain the Conservative majority lost by his predecessor Theresa May in the last election, just two years ago, while Corbyn is aiming to upset the odds and usher in the first Labour government for nine years. Hanging over the election is the issue of Britain's departure from the EU, which will be thrown into doubt altogether should Johnson fail to achieve a majority. The prime minister said on Sunday that the impact of Thursday's vote would be "felt for decades".
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The impeachment proceedings against US President Donald Trump in a sharply divided Congress enter a new phase Monday when the House Judiciary Committee convenes a hearing expected to result in specific charges against the Republican leader. Democrats accuse Trump of abusing his power by allegedly linking military aid for Ukraine and a White House meeting with President Volodymyr Zelensky to a request that Kiev investigate a potential 2020 rival, Democrat Joe Biden, and his son Hunter. The real estate mogul president has ridiculed the inquiry as a "hoax" but Democrats believe they have, in the words of Judiciary Committee chairman Jerry Nadler, a "rock-solid case" showing that Trump put his personal political interests above those of the country. The congressman, a long-time foe of Trump who hails from New York, did not rule out the possibility of a vote on impeachment in the Democratic-run House of Representatives by the end of the week.
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BROKER RATING CHANGES
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BARCLAYS CUTS CRODA TO 'EQUAL WEIGHT' (OVERWEIGHT) - TARGET 5000 (5300) PENCE
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PEEL HUNT RAISES BOVIS HOMES TO 'BUY' ('HOLD')
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JPMORGAN CUTS BODYCOTE TO 'UNDERWEIGHT' ('NEUTRAL') - PRICE TARGET 775 (750) PENCE
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COMPANIES - FTSE 100
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Tesco confirmed the potential sale of its Asian business, though noted a review of options remains in the early stages. Tesco, which has operations in both Thailand and Malaysia in the region, said the review of the business began after an expression of interest from elsewhere. The statement from the UK's largest supermarket came after the Times earlier on Monday had reported the company is mulling a potential sale worth up to USD9 billion. In Tesco's last financial year, ended February 24, Asian sales totalled GBP4.87 billion out of a company-wide figure of GBP44.88 billion. Sales in the region fell 6.2% like-for-like,
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AstraZeneca reported positive results from its phase 3 Elevate TN trial of Calquence plus obinutuzumab in leukaemia. The trial found that 93% of previously untreated chronic lymphocytic leukaemia patients taking Calquence, plus the cancer drug obinutuzumab, remained free of disease progression or death at 24 months. This compares to just 47% of patients taking the standard treatment of chlorambucil plus obinutuzumab. Furthermore, the trial found that 87% of patients taking Calquence alone were free of disease progression or death at the 24 month mark.
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COMPANIES - FTSE 250
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Tullow Oil said Chief Executive Officer Paul McDade and Exploration Director Angus McCoss have resigned with immediate effect by mutual agreement. The oil and gas firm said Dorothy Thompson will move from non-executive chair to executive chair on a temporary basis, and it has started the search for a new CEO. Following underperformance from its main oil producing assets - the TEN and Jubilee fields in Ghana - Tullow said it needs to reset its forward-looking guidance. For 2020, group production is forecast to average between 70,000 and 80,000 barrels of oil per day and group production for the following three years is expected to average around 70,000 bopd. In 2020, the company expects to generate underlying free cash flow of at least USD150 million at USD60 a barrel after a capital investment of USD350 million. Considering the level of expected free cash flow, Tullow has decided to suspend its dividend.
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Subprime lender Provident Financial has hired Secure Trust Bank Chief Financial Officer Neeraj Kapur as its new CFO. Kapur will replace Simon Thomas on April 1. Secure Trust Bank said it is starting to look for a new CFO.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Amigo Holdings said Richmond Group exercised its right to appoint non-executive directors to the board and named James Benamor and Kelly Black as its choices. Benamor is the founder and former CEO of Amigo and holds a 61% stake in the firm via Richmond. The company floated in June 2018 with a market capitalisation of GBP1.31 billion making Benamor one of the wealthiest businessmen in the UK. Since then however, the stock has plummeted, reducing the company's value to GBP288 million. In light of Benamor's return, Chair Stephan Wilcke said he does not intend to seek re-election at the company's next annual general meeting in 2020. In addition, Non-Executive Director Clare Salmon is to resign at a "suitable opportunity", Amigo said. Further, Amigo said Hamish Paton has resigned as CEO, subject to a 12 month notice period in order to ensure an orderly transition to a successor. Amigo said the sweeping board changes do not constitute a takeover offer.
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COMPANIES - INTERNATIONAL
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France's Sanofi has agreed to USD2.5 billion all-cash acquisition of Nasdaq-listed biotechnology firm Synthorx. Sanofi said the deal, worth USD68 per share and agreed by both boards, will expand its own immuno-oncology pipeline. Synthorx had a market capitalisation of just USD809.4 million at the New York market close on Friday. Synthorx's main asset is THOR-707, which is in clinical development for the treatment of a range of solid tumour types.
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Johnson & Johnson announced the USD750 million acquisition of a treatment for chronic skin diseases. Via subsidiary Jansenn Biotech, J&J is buying the rights to Bermekimab, an investigational antibody the blocks the action of a cytokine thought to cause inflammation associated with skin diseases such as acopic dermatitis. The drug is currently in stage two development and is being bought from XBiotech.
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Monday's Shareholder Meetings
Hadrian's Wall
Matomy Media Group
River & Mercantile
Scotgems (re amendments to investment policy)
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By Tom Waite; thomaslwaite@alliancenews.com
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