(Alliance News) -Â Stock prices in London are set to ease back on Thursday after rallying in the previous session, with market focus on the latest policy decision from the European Central Bank, due at midday.
In early UK company news, International Consolidated Airlines said it plans to raise EUR2.74 billion as it cut its flying capacity forecasts. WM Morrison Supermarkets' interim profit was hit by Covid-19 costs. Dixons Carphone unveiled plans for a minority listing of its Nordics unit.
IG says futures indicate the FTSE 100 index of large-caps to open 7.04 points lower at 6,005.8 on Thursday. The FTSE 100 closed up 82.54 points, or 1.4%, at 6,012.84 on Wednesday.
The ECB will release its latest interest rate decision at 1245 BST, followed by a press conference with ECB President Christine Lagarde at 1330 BST.
"Markets will be looking for possible signs of displeasure over the rise of the euro and the outlook for recovery. Any downward pressure on the euro caused by the ECB is likely to be transitory though; this is a weak US dollar story, not a strong euro one," said Jeffery Halley at Oanda.
The euro traded at USD1.1829 on Thursday ahead of the ECB announcement, firm on USD1.1812 late Wednesday. Against the yen, the dollar was quoted at JPY106.15, soft from JPY106.23.
In early UK company news, International Consolidated Airlines said it plans to raise EUR2.74 billion to strengthen its balance sheet.
The British Airways parent will issue 2.98 billion shares at a subscription price of EUR0.92, representing a 36% discount to the theoretical ex-rights price based on Wednesday's closing price.
IAG's biggest shareholder, Qatar Airways, will subscribe for its pro-rata entitlement.
The funds will be used to strengthen IAG's balance sheet by reducing leverage and boosting liquidity.
"IAG believes the capital increase, together with its quick response to the crisis, should enable the group to emerge from the current pandemic in a strong position, with more resilience, greater flexibility and the ability to make the right operational and strategic decisions for the long term benefit of all its stakeholders," the company said.
Turning to trading, IAG said it saw a "significant increase" in bookings in June, to around 30% of prior year levels by the end of the month. Since July, however, IAG has experienced an "overall levelling off" of bookings.
"Short-haul bookings have fallen slightly following the re-implementation of quarantine requirements by the UK and other European governments for travellers returning from specific countries including Spain," IAG noted.
As a result, available seat kilometres are expected to decline 63% in 2020, from a forecast of minus 59% originally. Third-quarter capacity is expected to fall 78% and fourth quarter capacity by 60%.
"Despite a lower capacity in 4Q 2020 than under the previous planning scenario, the group continues to expect that it would reach breakeven in terms of net cash flows from operating activities during 4Q 2020. This is as a result of mitigating actions taken to reduce operating expenses further and enhance working capital," said IAG.
WM Morrison Supermarkets posted a fall in interim profit as it incurred costs related to Covid-19, though it expects to see this offset by business rates savings in the second half.
For the half-year to August 2, revenue was down 1.1% to GBP8.73 billion, hit by "very low demand" for fuel during and after lockdown, though which is now recovering. Excluding fuel, revenue was up 8.8% to GBP7.55 billion.
Like-for-like sales - excluding VAT and fuel - in the half-year were up 8.7%, and rose 12% in the second quarter alone.
Pretax profit fell to GBP145 million from GBP202 million a year ago, as the grocer noted a net Covid-19 cost of GBP62 million in the half.
"In May we estimated that the costs relating directly to Covid-19 during 2020/21 would be broadly offset by the in-year business rates cost saving. This remains our expectation: we anticipate that the GBP62m first-half net cost will be offset by a similar second-half net benefit, with extra Covid-19 specific costs at around half the level of the first half and a full six months of rates relief of c.GBP137m," WM Morrison said.
The supermarket chain added that it is confident of continued strong momentum into the second half.
WM Morrison declared an interim dividend of 2.04p, up 5.7% on a year ago.
It added: "While we have a good understanding of how Covid-19 is currently affecting our business and visibility of future cash flows, our decision regarding the second half 2019-20 special dividend remains deferred."
British Land Co said Chris Grigg intends to depart after more than 11 years as chief executive.
He will step down as CEO after the company's interim results in November, and leave the board and the company at the end of 2020.
He will be succeeded by Chief Financial Officer Simon Carter. Carter has been CFO since May 2018.
Mobile phone and electronics retailer Dixons Carphone hailed an "outstanding" online performance as it said it is exploring listing a minority stake in its Nordics business.
UK & Ireland Electrics like-for-like revenue was up 12% in the 17 weeks to August 29. Online sales more than tripled year-on-year while stores were closed, Dixons said, and have continued "at more than double" last year's sales since stores reopened.
UK & Ireland Mobile total revenue was down 56%, while like-for-like sales in its International operations were up 16%.
The Nordics business - part of the retailer's International operations - has performed "strongly" over the last decade, Dixons said.
"Against the backdrop of strong performance and liquidity across the group, the board is considering the best way to deliver value for all stakeholders from our Nordics business. As a result, the board has decided to explore the option of a partial IPO in 2021. A minority listing could further strengthen the capital structure whilst retaining the full benefits of Nordics staying firmly as part of the Dixons Carphone group," the firm said.
The retailer added that, despite strong current trading, the economic outlook for this year remains uncertain and it expects to provide an update on guidance at its interim results.
Sterling was quoted at USD1.3026 early Thursday, higher than USD1.2999 at the London equities close on Wednesday.
Hastily arranged Brexit talks will take place on Thursday after the EU reacted strongly to UK Prime Minister Boris Johnson's move to override key parts of the Withdrawal Agreement break with Brussels.
An "extraordinary meeting" of the Joint Committee between the UK and EU is being held in London after Johnson unveiled proposed legislation to alter key elements of the Brexit deal with Brussels regarding Northern Ireland.
Chancellor of the Duchy of Lancaster Michael Gove will meet senior EU official Maros Sefcovic to discuss the situation, as talks between the UK's chief Brexit negotiator David Frost and his Brussels counterpart Michel Barnier continue.
The meeting between Gove and Sefcovic comes as the speaker of the US House of Representatives, Nancy Pelosi, insisted there was "absolutely no chance" of Congress passing an American trade deal with the UK if the Northern Ireland peace process was "imperilled".
In the US on Wednesday, Wall Street ended in the green, with the Dow Jones Industrial Average ending up 1.6% and S&P 500 up 2.0%. The tech-heavy Nasdaq Composite, more battered of late than the other two indices, closed 2.7% higher.
In Asia on Thursday, the Japanese Nikkei 225 index ended up 0.9%. In China, the Shanghai Composite down 0.1%, while the Hang Seng index in Hong Kong is up 0.2%.
The US has revoked visas of more than 1,000 Chinese students and researchers under an order by US President Donald Trump that accused some of them of espionage, the State Department said Wednesday.
Trump, in a May 29 proclamation as tensions rose with Beijing on multiple fronts, declared that some Chinese nationals officially in the US for study have stolen intellectual property and helped modernise China's military.
The State Department, offering its first figures on the effects of Trump's order, said that more than 1,000 visas have been revoked since it began implementing the proclamation on June 1.
Gold was quoted at USD1,943.97 an ounce early Thursday, down on USD1,945.72 on Wednesday. Brent oil was trading at USD40.74 a barrel, higher than USD40.32 late Wednesday.
In addition to the ECB decision, the economic events calendar on Thursday has US producer prices and the latest initial jobless claims figures at 1330 BST.
By Lucy Heming;Â lucyheming@alliancenews.com
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