(Alliance News) - Stock prices in London are seen opening sharply lower on Monday due to fears over the spread of the coronavirus and diving oil prices.
IG futures indicate the FTSE 100 index is to open 422.45 points lower at 6,040.10. The blue chip index closed down 242.88 points, or 3.6%, at 6,462.55 on Friday.
Supermarket Tesco confirmed it is to sell its businesses in Thailand and Malaysia to CP Group for USD10.6 billion. The company expects the sale to complete in the second half of 2020.
The grocer said after the sale it intends to return GBP5.0 billion to shareholders via a special dividend with associated share consolidation.
"Following inbound interest and a detailed strategic review of all options, we are announcing today the proposed sale of Tesco Thailand and Tesco Malaysia. This sale releases material value and allows us to further simplify and focus the business, as well as to return significant value to shareholders. I would like to thank all of our Tesco Thailand and Tesco Malaysia colleagues for their dedication, professionalism and service to our customers, which has resulted in the creation of such a strong business. I am confident that the agreement we have reached with CP Group presents an exciting opportunity for their continued success," said Chief Executive Dave Lewis.
Insurer Phoenix Group said it delivered strong results for 2019 and that its ReAssure acquisition remained on track to complete by mid-2020.
For 2019, the company's reported net income came in at GBP29.16 billion compared to a net loss of GBP6.73 billion in 2018, while gross written premiums were up sharply to GBP4.04 billion from GBP2.65 billion.
Pretax profit was up to GBP351 million in 2019 from GBP259 million the year before and the company reported that cash generation was up to GBP707 million from GBP664 million.
The company said its five-year cash generation target increased by GBP0.1 billion to GBP3.9 billion for new business written during 2019. Its long-term cash generation guidance remains at GBP12 billion after 2019 cash remittance of GBP707 million.
Phoenix declared a final dividend of 23.4 pence, bringing the total dividend to 46.8p from 46.0p the year before.
FirstGroup shareholder Coast Capital said it intends to seek an extraordinary general meting to de-merge the transport company's North American operations.
The New York-based hedge fund, which holds a 10% stake in FirstGroup, wants to separate First Student and First Transit from the company's UK operations to create value for shareholders.
FirstGroup announced a strategic review of its operations three months ago, but since then "shareholders have heard nothing from the company or its board, and the share price has declined by 20%," Coast Capital said.
Coast Capital said: "Coast Capital believes that in the absence of a full divestment notably above book value, the company must pursue a listing of these businesses on a North American exchange and the LSE.
"This will allow UK investors to realize value from their investment in the company, and enable new North American investors, public or private, to buy into the North American operations. Furthermore, the management teams, employees, and clients of North American operations can only benefit from a reinvigorated investor base which will invest in and help grow the operations."
Cineworld said one of its shareholders Global City Theatres has agreed to sell 108 million shares in the company, representing a 7.9% stake for around GBP116 million. Following the sale, GCT will hold 275 million ordinary shares in Cineworld.
Shares in both GCT and its parent company Global City Holdings are held in trusts for the benefit of the children of Cineworld Chief Executive Moshe Greidinger and Deputy CEO Israel Greidinger.
Cineworld added that GCT remains a "committed long-term holder" of the company.
"As part of a refinancing of GCT's financial arrangements, the aggregate proceeds of the share sale will be used to restructure the margin loan facility provided to GCT by Barclays Bank and HSBC Bank into a new secured corporate loan facility, with no margining provisions or connection to the price of Cineworld ordinary shares," the company said.
The Japanese Nikkei 225 index closed down 5.1%. In China, the Shanghai Composite closed down 3.0%, while the Hang Seng index in Hong Kong is down 3.9%.
A swathe of northern Italy was sealed off as authorities struggled to contain the spread and impact of the deadly coronavirus.
An area home to a quarter of Italy's population was effectively shuttered - including Milan and Venice - mimicking a lockdown at the disease's epicentre in China.
Tens of millions of people are now in virtual quarantine worldwide, but there are fears that the disease will spread further and that disruptions could force several economies into recession.
Asian stock markets were gripped with fear as the trading week opened with some of the heaviest falls since the global financial crisis.
Oil was was quoted at USD33.28 a barrel Monday morning, collapsing from from USD46.00 late Friday. The North Sea benchmark sank to a low of USD31.26 overnight - its lowest level since January 2016.
Oil plunged after top exporter Saudi Arabia launched a price war in response to a failure by leading producers to strike a deal to support energy markets, Bloomberg News reported, after a failure by cartel OPEC and its allies to reach a deal to cut production.
A meeting of main producers was expected to agree to deeper cuts to counter the impact of the new coronavirus - but Russia refused to tighten supply.
In response, the Gulf powerhouse cut its price for April delivery by USD4 to USD6 a barrel to Asia and USD7 to the US, with Aramco selling its Arabian Light at an unprecedented USD10.25 a barrel less than Brent to Europe, Bloomberg reported.
Gold was quoted at USD1,668.42 an ounce Monday morning, up from USD1,665.00 late Friday.
The pound was quoted at USD1.3042 Monday morning, firm from USD1.3020 at the London close Friday. The euro was quoted at USD1.1394, up from USD1.1325 late Friday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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