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(Alliance News) - Stocks in London are set to jump at the open on Tuesday ahead of a hearing with incoming US Treasury Secretary Janet Yellen, who is expected to push for aggressive stimulus measures.
In early UK company news, credit checker Experian saw a better-than-expected third quarter. Appliance sales platform AO World reported a record peak trading period, boosted by the online shift driven by the pandemic. Premier Foods - also helped by pandemic restrictions as more consumers eat meals at home - guided to full-year profit growth after an "exceptional" third quarter.
IG says futures indicate the FTSE 100 index of large-caps to open 28.85 points, or 0.4%, higher at 6,749.50 on Tuesday. The FTSE 100 closed down 15.06 points, or 0.2%, at 6,720.65 on Monday.
While US President-Elect Joe Biden's inauguration on Wednesday is the key event for the week, traders will be keeping a close watch on Yellen's hearing on Tuesday, where the former Federal Reserve chief is expected to tell lawmakers the world's top economy could suffer if they do not approve a big spending plan.
"Economists don't always agree, but I think there is a consensus now: without further action, we risk a longer, more painful recession now – and long-term scarring of the economy later," she was expected to say, the Wall Street Journal reported.
"Over the next few months, we are going to need more aid to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers on the job."
There are fears that Biden's USD1.9 trillion aid package, while welcomed by markets, could face stiff opposition from fiscal conservatives as it goes through Congress, watering down many of its elements.
"With Federal Reserve officials confirming their dovish bias last week, and incoming Treasury Secretary Yellen set to do the same today, Asian equity markets have jumped aboard the stimulus train this morning, sending most regional markets higher," said Jeffery Halley at Oanda.
He added: "With Yellen set to reinforce Biden's stimulus narrative at hearings today, equities should maintain a favourable tailwind in the absence of any other news."
In Asia on Tuesday, the Japanese Nikkei 225 index closed up 1.4%. Against the yen, the dollar was quoted at JPY104.05 versus JPY103.70.
In China, the Shanghai Composite ended down 0.8, while the Hang Seng index in Hong Kong rallied 2.2%. Â
The S&P/ASX 200 in Sydney closed up 1.2%.
In early UK company news, Experian reported a better-than-expected third quarter.
The FTSE 100 credit-checking firm delivered organic revenue growth of 7% for the three months to December 31 and total revenue growth of 10% at constant exchange rates.
By region, North America posted organic revenue growth of 9% and Latin America growth of 13%, while UK & Ireland saw revenue fall 2% and EMEA/Asia Pacific reported an 11% decline.
"Experian is performing very well, even in the exceptional circumstances created by the pandemic, and we expect to deliver a strong performance for this financial year. This again illustrates the resilience of our business. We remain highly focused on investing to sustain this performance and to take full advantage of the recovery when it comes," said Chief Executive Brian Cassin.
Experian expects organic revenue growth for the fourth quarter will be around 3% to 5%, with full-year benchmark earnings before interest and tax in a range of USD1.36 billion to USD1.38 billion.
British Land Co said it has hired Tesco's deputy chief financial officer to be its own finance head. Bhavesh Mistry will join British Land as CFO no later than August 1, and in the meantime David Walker will continue in his role as interim CFO.
British Land Chief Executive Simon Carter said: "I am delighted Bhavesh is joining British Land at this important time for our business. His deep expertise in finance and wealth of experience in business transformation in fast moving industries will be invaluable as we continue to move our business forward and deliver against our strategic priorities."
AO World said a pandemic-driven uplift in demand continued throughout its third quarter, resulting in its "strongest ever" peak trading period over the Black Friday shopping event and the run up to Christmas.
In the three months to December 31, the online electrical appliance retailer recorded UK revenue of GBP457.3 million, up 67% year-on-year, and German revenue of EUR73.6 million, up 77%.
"We look forward to the last quarter and the next financial year with confidence as the structural shift to online is cemented in consumers' minds by the outstanding service millions of new customers have received in 2020. This is compounded by the ongoing tailwinds we expect to be driven by working from home and associated usage and appreciation of electrical products so essential to our day to day lives," said AO World.
Premier Foods also said its third quarter was "exceptional", as pandemic restrictions saw more consumers eating at home.
Sales grew 9.0% in the 13 weeks to December 26 and were up 13% in the year-to-date, the food producer said.
"The vast majority of the group's Grocery brands continued to see substantial growth with more meals eaten at home by consumers, reflecting further pandemic lockdown restrictions in the UK. Sales of Sharwood's cooking sauces grew by 40% in Q3 due to strong commercial plans and new product launches while Bisto and Batchelors both reported healthy double digit sales growth," the firm said.
The Mr Kipling cake brand is track for another record year, Premier Foods noted.
The company said it now expects trading profit for its current financial year to be in the range of GBP145 million to GBP150 million. This compares to a trading profit of GBP132.6 million in the financial year ended March 2020 - meaning at the high end of guidance, Premier Foods could report 13% growth in profit for its current year.
"Looking to the remainder of the year, out of home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for our products," said Chief Executive Alex Whitehouse.
Gold miner Centamin said both its fourth quarter and full-year results were in line with revised guidance.
Gold production from the Sukari gold mine for the fourth quarter of 2020 was 67,996 ounces, in line with quarterly guidance of around 60,000 to 70,000 ounces though down 54% on a year ago. For the full-year, production amounted to 452,320 ounces, again in line with the guidance range of 445,000 to 455,000 ounces but down 6% on 2019.
Revenue for the fourth quarter was USD150 million, generated from gold sales of 79,535 ounces at an average realised gold price of USD1,887 per ounce sold. Revenue for the full-year was USD829 million.
Centamin said its guidance is unchanged, seeing 2021 gold production of 400,000 to 430,000 ounces.
"Today's Q4 and subsequent full year 2020 results were delivered in-line with the revised guidance we issued in October. This follows the capital markets event we hosted in December, where we presented the conclusions of the Phase 1 Life of Asset review and three-year outlook, detailing clear cost-saving, exploration and productivity initiatives, forming part of our plans to unlock Sukari's potential," said Chief Executive Martin Horgan.
Sterling was quoted at USD1.3591 early Tuesday, higher than USD1.3570 at the London equities close on Monday. The euro traded at USD1.2090 early Tuesday, up from USD1.2075 late Monday.
On the virus front, Chancellor Angela Merkel and leaders of Germany's 16 states are expected Tuesday to extend and tighten a partial lockdown beyond January.
Germany shuttered restaurants, leisure and sporting facilities in November, then expanded the shutdown in mid-December to include schools and most shops to halt runaway growth in new coronavirus infections. The measures ordered until the end of January have brought about a "flattening of the infections curve", said Merkel's spokesman Steffen Seibert, noting also that the number of patients in intensive care had also fallen slightly.
"But it only brings us to the point where we still have a long way to go before we can say we have the infections under control," he added.
In the UK, Prime Minister Boris Johnson has warned the country is still in a "pretty precarious" position as ministers prepare for the easing of lockdown restrictions from early March.
The prime minister said the process would be gradual, with no great "open sesame" moment when curbs on freedoms are suddenly lifted. He said decisions on loosening England's stay-home order will be made based on progress in the vaccination programme, which had been "very encouraging" despite concerns that some parts of the nation are falling behind.
Gold was quoted at USD1,839.18 an ounce early Tuesday, edging up from USD1,836.71 on Monday amid the broadly weaker dollar. Brent oil was trading at USD55.15 a barrel early Tuesday, firm on USD54.90.
The economic events calendar on Tuesday has eurozone construction output at 1000 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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