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(Alliance News) - Stock prices in London are seen opening slightly higher on Friday following a positive US close overnight, as investors look ahead to a raft of PMI readings.
In early company news, waste disposal firm Biffa acquired assets from Viridor. Anglo-South African lender Investec raised its annual dividend. Merchant bank Close Brothers reported a positive third quarter.
IG futures indicate the FTSE 100 index is to open 10.81 points higher at 7,030.60. The blue-chip index closed up 69.59 points, or 1.0%, at 7,019.79 Thursday.
Biffa said it has entered into an agreement to acquire the Collections business and some Recycling assets from Viridor Waste Management for GBP126 million. Completion is expected no earlier than August, the company added.
"When combined with the other investments we have made over the past year across waste reduction, recycling and energy recovery, we have positioned the group as a leading enabler of the UK circular economy, ready to tackle the UK's waste challenge. We look forward to welcoming our new colleagues from Viridor to Biffa in due course," Chief Executive Officer Michael Topham said.
Viridor was sold by water utility Pennon Group in July last year to funds advised by Kohlberg Kravis Roberts & Co.
Close Brothers Group said it continued to perform strongly in its financial third quarter to April 30, in line with the trends reported in the first half of the year.
The merchant bank said the third quarter saw high new business volumes in the lending business, solid net inflows in Asset Management, and a strong trading performance by stockbroker Winterflood.
Close Brothers said it capital position remained strong, with a Common Equity Tier 1 capital ratio of 15.5%, which it said was significantly above the applicable minimum regulatory requirement.
In the Banking unit, the loan book increased by 3.2% in the quarter and 7.7% year-to-date to GBP8.2 billion, up from GBP8.0 billion at the end of the previous quarter.
Looking ahead Close Brothers said: "We continue to respond well to the challenges and opportunities arising from the current environment. Although there has been some improvement in the broader economic outlook, the impact of Covid-19 on customers remains uncertain. Our proven and resilient model and strong balance sheet, combined with our deep experience in navigating a wide range of economic conditions, leave us well placed to continue supporting our colleagues, customers and clients over the long term."
Investec raised its dividend following a rise in annual earnings in a mixed year for the Anglo-South African asset manager.
For the year ended March 31, pretax profit from continuing operations was GBP331.6 million, up 6.8% from GBP310.5 million last year.
Investec reported funds under management of GBP58.4 billion, up 30% from 45.0 billion.
Investec reported basic earnings per shares of 25.2 pence, up 44% from 17.5p and headline EPS of 26.6p, up 24% from 21.5p.
The bank declared a final dividend 7.5p, giving a 13.0p full-year payout, up 18% from 11.0p last year.
Looking ahead, Investec expects revenue momentum from the second half to continue assuming economic growth remains intact.
"The 2021 financial year was a tale of two halves. First half performance was characterised by difficult and volatile market and economic conditions attributable primarily to COVID-19. The second half showed strong earnings recovery, supported by our resilient client base, a rebound in economic activity and a greater sense of optimism spurred on by global vaccination campaigns. We carry this momentum into the 2022 financial year, focused on actively servicing our clients and delivering long-term value," said Chief Executive Officer Fani Titi.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, S&P 500 up 1.1% and Nasdaq Composite up 1.8%.
Wall Street shrugged off three straight down sessions to end solidly higher following data showing a drop in US jobless claims.
"European markets saw a decent rebound yesterday, helped in no small part by a similarly resilient performance from US markets, with the Nasdaq hitting a two-week high, as stocks in the US broke a three-day losing streak," said CMC Markets analyst Michael Hewson.
"Today's European open looks set to be a cautious but positive one, and somewhat characteristic of this week where we've seen sharp moves higher and lower, as investors wrestle with indecision about the direction of the next move, caught between optimism over the economic reopening, and concern over central banks acting too late to address an inflationary surge."
The Japanese Nikkei 225 index closed up 0.7% on Friday. In China, the Shanghai Composite was down 0.3%, while the Hang Seng index in Hong Kong was flat. The S&P/ASX 200 in Sydney ended up 0.1%.
The Japanese private sector saw a renewed decline in May, survey results from IHS Markit and au Jibun Bank showed.
The au Jibun Bank flash Japan composite purchasing managers' index stood at 48.1 points in May versus 51.0 in April. A figure above 50 implies expansion in business, while a figure below that mark means contraction.
At 52.5 points, the headline au Jibun Bank Japan manufacturing PMI dipped from 53.6 in April to signal a less vigorous improvement in factory operating conditions. The au Jibun Bank flash Japan services business activity index fell to 45.7 points in May from 49.5 in April, indicating a sharper deterioration in the service sector, and one that was the most marked since August 2020.
The pound was quoted at USD1.4188 Friday morning, up from USD1.4163 at the London equities close on Thursday.
The euro was priced at USD1.2230, higher from USD1.2210. Against the yen, the dollar was trading at JPY108.70, down from JPY108.84.
Brent oil was quoted at USD65.20 a barrel Friday morning, down from USD66.20 late Thursday. Gold was trading at USD1,875.22 an ounce, lower against USD1,878.30.
A busy international economics events calendar on Friday has a slew of flash PMI readings for May, 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.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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