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(Alliance News) - The FTSE 100 index is set to open lower on Thursday, as its big dollar-earning constituents suffer from a Brexit-deal inspired rally in the pound.
There was little in the way of UK company news early Thursday. Connells raised its offer for Countrywide, while FirstGroup sold some property owned by its Greyhound coach business in the US and Canada.
The London Stock Exchange will close for trading at 1230 GMT on Thursday for New Year's Eve. Paris also closes early on Thursday, while the Frankfurt equity market is shut entirely. Wall Street has a normal trading day for shares, though US bond markets close early.
IG says futures indicate the FTSE 100 index of large-caps to open down 44.02 points, or 0.7%, at 6,511.80 on Thursday. The FTSE 100 closed down 46.83 points, or 0.7%, at 6,555.82 on Wednesday.
Gold was quoted at USD1,889.40 an ounce early Thursday, higher than USD1,885.33 on Wednesday. Brent oil was trading at USD51.52 a barrel, up from USD51.30 late Wednesday.
Sterling was quoted at USD1.3644 early Thursday, higher than USD1.3593 at the London equities close on Wednesday.
The post-Brexit trade bill received royal assent from Queen Elizabeth II, Commons Speaker Lindsay Hoyle said in the early hours of Thursday, meaning it is now officially law in Britain.
The legislation, officially called the EU (Future Relationship) Act 2020, sets out the trade rules between Britain and the bloc from January 1.
On Wednesday, it was presented to the UK Parliament where elected lawmakers in the House of Commons voted 521 to 73 - a majority of 448 - in support of the deal.
It then received an unopposed third reading in the House of Lords after nearly eight hours of debate.
Shortly after the House of Lords result, the Queen gave it her official stamp of approval, officially turning the bill into British law.
The Brexit transition period ends at midnight Thursday.
The euro traded at USD1.2301 early Thursday, up slightly from USD1.2287 late Wednesday.
FirstGroup reported three property disposals in the US and Canada, for total gross proceeds of USD137 million, as part of its programme to rationalise Greyhound's property portfolio.
The largest is the sale of Greyhound's oversized legacy garage and customer terminal facility in the downtown arts district of Los Angeles, California, to a subsidiary of Prologis Inc. The agreement was finalised on Wednesday and FirstGroup said it will receive net USD88 million in cash and will lease back the facility from Prologis for two years. The Los Angeles site had a book value of USD11 million as at September 30.
The other two property disposals are of facilities in Denver, Colorado, to be sold for net proceeds of USD37 million, and in Ottawa, Ontario, for net proceeds of USD7 million.
In total, the three properties' book value was USD24 million as at September 30, resulting in a total profit on sale for all three transactions of USD100 million, net of leaseback, property tax and selling costs.
The cash proceeds from the transactions will be used for general corporate purposes, FirstGroup said.
Countrywide shareholders will be entitled to receive 395 pence in cash for each share, as the company reached agreement on a takeover by Connells. The new agreed price is up from 325p offered at the start of December, with that offer itself representing a 30% increase from an earlier offer from Connells. The price represents a 172% premium over Countryside's unaffected price.
Connells said it has received written confirmations of support for the acquisition from Countrywide shareholders in respect of, in aggregate, 16.8 million shares, representing 51% of Countrywide as at Thursday, being the last business day prior to the date of this takeover.
The acquisition will be implemented by way of a court-sanctioned scheme of arrangement between Countrywide and Countrywide shareholders and is expected to complete in the first quarter of 2021.
"Following a thorough evaluation of options and extensive consultation with the company's major shareholders, we have been encouraged by their recognition of the need to put in place a sustainable capital structure and a willingness to support the company, which is a great business that has been constrained by too much debt," said Countrywide Acting Non-Executive Chair David Watson.
Catalyst Media Group reported a widened loss in its most recently ended financial year amid lower income from associates.
The UK-based company, which licenses or exploits rights to television and cinema content, reported a pretax loss of GBP1.1 million for the year to the end of June compared to GBP589,492 loss a year earlier, despite revenue remaining stable at GBP25,000.
The loss came after share of profit of equity-accounted associates, net of tax, decreased to GBP125,294 from GBP3.8 million year-on-year.
Catalyst Media Group explained that its main asset continues to be the 21% shareholding in Sports Information Services (Holdings) Ltd. As a result of Covid-19 uncertainties, Sports Information Services has deferred any dividend this financial year but will consider a dividend next financial year.
Catalyst Media Group noted that it continues to be cash positive and operated at very low overhead levels.
Freight management services provider Xpediator said it has agreed to sell EshopWedrop Holdings, a wholly owned subsidiary, to Inert Logistics LLP, the controlling party of whom is Mircea Bandean the current managing director of EshopWedrop. The sale is expected to complete on Thursday.
The total consideration payable is GBP300,000 in cash, which will be paid in equal annual instalments over the next three years. Xpediator said the proceeds will be used to continue to grow the core business.
The book value of EshopWedrop assets - including capitalised IT expenditure, goodwill and working capital - is GBP700,000, which will result in a net loss on the sale of the business of GBP400,000.
"On completion of the sale, the group will benefit from annualised cost savings of GBP350,000," noted Chief Executive Robert Ross.
In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.2%, the S&P 500 up 0.1% and Nasdaq Composite closing 0.2% higher.
The US announced Wednesday that it will impose additional tariffs on French and German products as part of a long-running dispute over subsidies for aircraft manufacturers Airbus SE and Boeing Co.
The tariffs are on "aircraft manufacturing parts from France and Germany, certain non-sparkling wine from France and Germany, and certain cognac and other grape brandies from France and Germany," which will be added to the list of products taxed since 2019, according to a statement from the US Trade Representative.
It said the move was in retaliation to tariffs imposed by the EU which it considers unfair.
In the economic calendar on Thursday there are US unemployment insurance weekly claims report at 1330 GMT.
In Asia on Thursday, Tokyo was closed for New Year's Eve. Against the yen, the dollar was quoted at JPY103.11, down from JPY103.30 on Wednesday afternoon in London.
In China, the Shanghai Composite closed up 1.7%, while the Hang Seng index in Hong Kong closed up 0.3%. The S&P/ASX 200 in Sydney closed down 1.4%.
Factory activity in China slowed slightly in December, data showed Thursday, though it continued to grow as the world's second-largest economy stays on track to recover from the coronavirus crisis.
While the rest of the world has struggled to overcome the deadly virus, China has bounced back from a rare contraction in the first three months of the year and is expected to be the only major economy to avoid a recession this year.
The closely watched purchasing managers' index – a key gauge of manufacturing activity in China – dipped to 51.9 from 52.1 in November, the National Bureau of Statistics said. It was also slightly lower than the 52.0 forecast by analysts.
The dip came as demand for Chinese exports was hit by fresh lockdowns and strict containment measures in key markets including Europe and the US.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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