(Alliance News) - Stock prices in London were seen opening higher on Friday unfazed by the lower close in New York overnight, as investors come to terms with the prospect of multiple interest rate hikes by the US Federal Reserve this year.
In early company news, fund manager abrdn sold shares in Phoenix Group. Movie theatre operator Cineworld noted jilted acquisition target Cineplex has submitted a cross-appeal to a Canadian court. Wound dressings maker ConvaTec made a US acquisition.
IG futures indicate the FTSE 100 index is to open 15.49 points higher at 7,569.80. The index closed up 84.53 points, or 1.1%, at 7,554.31 on Thursday.
abrdn said it has sold 40 million shares in Phoenix Group to institutional investors, at a price of 660 pence per share raising gross proceeds of GBP264 million. Phoenix will not receive any proceeds from the placing, as it was of existing shares.
Following the disposal, abrdn will have around a 10% stake remaining in Phoenix Group, and abrdn will continue to appoint a director to Phoenix's board.
abrdn intends to return the net proceeds of the Phoenix share sale to abrdn shareholders, with the timing of the return to be announced after the company's results on March 1.
Cineworld noted Canada's Cineplex has submitted a cross-appeal to Cineworld's own appeal of the decision of the Ontario Superior Court of Justice to award damages to Cineplex from Cineworld over the cancelled acquisition of Cineplex by Cineworld.
Cineplex's cross-appeal said that it should be awarded alternative forms of damages if the Ontario Court of Appeal determines that the damages award of the Ontario Superior Court of Justice is incorrect.
In response, Cineworld reiterated that it disagreed with the decision of the Ontario Superior Court of Justice, and it also disagrees with the submissions of Cineplex in its cross-appeal. Cineworld said it will respond to the cross-appeal as part of the appeal process and does not expect damages to be payable while the appeal is ongoing.
ConvaTec said it has entered into an agreement to acquire Memphis, Tennessee-based Triad Life Sciences for an initial USD125 million, with a potential USD50 million more based on short-term milestones.
Triad Life Sciences is a US-focused medical device company that develops biologically-derived products to address unmet clinical needs in surgical wounds, chronic wounds and burns. The deal is expected to close during the first quarter.
ConvaTec said the deal provides entry into the large and rapidly growing wound biologics market, estimated to be worth USD1.8 billion per annum globally with a projected growth of high-single-digit percentage per annum.
"This is an exciting opportunity for ConvaTec, with powerful strategic logic, a strong contribution to future growth and an attractive financial profile. The transaction is expected to be immediately accretive to sales growth, and the return on invested capital is expected to exceed the group's cost of capital in year three. The consideration will be satisfied from existing cash balances and debt facilities," the company said.
Capita said it had agreed to sell IT services and solutions provider Trustmarque to One Equity Partners for GBP111 million.
The outsourcer said that the sale of Trustmarque was another "step towards materially reducing our debt" and that it met the goal of GBP700 million in total disposal proceeds ahead of its June 2022 target.
Chief Executive Officer Jon Lewis said: "We are pleased to have agreed the sale of Trustmarque to One Equity Partners following a competitive sale process. I am delighted that, once this sale is completed, we will have exceeded our disposals target and achieved this much earlier than originally planned.
"We are now focused on selling the remaining businesses in our Portfolio division, with the goal of disposing of the majority by the end of 2022."
On Wednesday, Chair Jerome Powell signalled the Fed plans to hike interest rates in March, telling reporters the recovery in the world's largest economy is strong enough that it can handle higher borrowing costs.
Powell's press conference contained no huge surprises, but several market watchers described it as more hawkish than expected.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down marginally, S&P 500 down 0.5%, and Nasdaq Composite down 1.4%.
Markets in Asia were mixed on Friday. The Japanese Nikkei 225 index closed up 2.1%. In China, the Shanghai Composite ended down 1.0%, while the Hang Seng index in Hong Kong was down 1.0%. The S&P/ASX 200 in Sydney closed up 2.2%.
"While markets in the US have been swinging wildly between positive and negative territory, as investors there try and make sense of the Federal Reserve's intentions, it's important to note that we haven't broken below the lows that we put in on Monday," said CMC Markets analyst Michael Hewson.
"Markets in Europe have found it difficult to decouple from the volatility being seen over in the US, however they are proving to be slightly more resilient, with the FTSE 100 outperforming, and managing to recover its losses for the week," Hewson added.
Meanwhile, the White House says US President Joe Biden warned Ukraine's president on Thursday there is a "distinct possibility" Russia could take military action against Ukraine in February.
The Kremlin sounded a similarly grim note, saying it saw "little ground for optimism" in resolving the crisis after the US this week again rejected Russia's main demands.
Russian officials said dialogue was still possible to end the crisis, but President Biden again offered a stark warning amid growing concerns that Russian President Vladimir Putin will give the go-ahead for a further invasion of Ukrainian territory in the not-so-distant future.
The White House said President Biden's comments to Ukraine's Volodymyr Zelenskyy in a phone call amplified concerns that administration officials have been making for some time.
The dollar was stronger against rivals. The pound was quoted at USD1.3385 early Friday, down from USD1.3393 at the London equities close Thursday.
The euro was priced at USD1.1130, down from USD1.1152. Against the yen, the dollar was trading at JPY115.66, up from JPY115.42.
Brent oil was quoted at USD89.77 a barrel on Friday morning, soft from USD89.88 late Thursday. Gold stood at USD1,796.80 an ounce, firm from USD1,794.49.
The international economic calendar has German gross domestic product at 0900 GMT and eurozone business climate at 1000 GMT, followed by US core personal consumption expenditures at 1330 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
