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(Alliance News) - Dealmaking and new listings continued in earnest in London as the new month got underway Monday.
BP took another step in its plan to divest USD25 billion in assets by 2025, selling a 20% interest in oil development block in Oman.
Two acquisitions were announced in the retail sector, one flagged last week, the other new. ASOS confirmed agreement to buy four brands from failed retail group Arcadia, while JD Sports Fashion announced another acquisition in the US.
Also announcing acquisitions or completions Monday morning were Ferguson and Euromoney Institutional Investor. Ferguson completed the disposal of plumbing supplies firm Wolseley UK, while Euromoney has bought commodities price reporting agency The Jacobsen for USD12.25 million.
The IPO market also remained active in London early in 2021. Consumer goods firm Supreme started trading on AIM on Monday.
Announcing plans for new London IPOs were cannabis company MGC Pharma, Digital 9 Infrastructure, Auction Technology Group, and NextEnergy Renewables.
ASOS was up 2.7% early Monday, JD Sports up 7.0%, Ferguson up 1.4%, and Euromoney up 0.5%. BP was down 0.1%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 6,452.30
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Hang Seng: closed up 2.2% at 28,892.86
Nikkei 225: closed up 1.6% at 28,091.05
DJIA: closed down 620.74 points, or 2.0%, to 29,982.62
S&P 500: closed down 73.14 points, or 1.9%, at 3,714.24
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GBP: firm at USD1.3735 (USD1.3712)
EUR: unchanged at USD1.2135
Gold: up at USD1,863.70 per ounce (USD1,857.20)
Oil (Brent): down at USD55.45 a barrel (USD56.00)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
0930 GMT UK money and credit
0930 GMT UK CIPS-Markit manufacturing purchasing managers' index
0955 CET Germany manufacturing PMI
1000 CET EU manufacturing PMI
1100 CET EU unemployment
0945 EST US manufacturing PMI
1000 EST US ISM manufacturing PMI
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Manufacturing activity in Ireland slowed to a three-month low in January, as new lockdown measures and trading arrangements in the UK led to a sharp fall in outputs and new orders, survey results from IHS Markit showed Monday. The AIB Ireland manufacturing purchasing managers index was 51.8 points in January, compared to 57.2 in December, the lowest figure since October 2020, when the PMI was 50.3. However, any index score above 50 still indicates growth.
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There have been more than 1,000 Covid-19-linked deaths and more than 100,000 cases of the virus in Ireland in January. Chief Medical Officer Tony Holohan said although there has been a decrease in case numbers recently, he warned about the remaining level of infection. Saturday saw a further 79 deaths and 1,414 cases of the virus. Of the most recent cases, 608 were in Dublin, 105 in Cork, 96 in Galway, 65 in Meath, 59 in Donegal and the remaining 481 cases are spread across the other counties. Hospitals remained under pressure with 1,492 Covid-positive inpatients, of whom 211 are in ICU.
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A group of 10 Republican senators have written US President Joe Biden to propose an alternative to his massive Covid-19 relief plan, arguing that their approach - worth USD600 billion, according to reports - could garner the bipartisan support he has said he seeks. Senator Susan Collins, a moderate Republican from Maine, said on Twitter that she had joined the group, which asked the president in a letter Friday for a meeting to discuss their plan. She said the group would release details of their plan on Monday. "We've received the letter and we certainly will be reviewing it," Brian Deese, director of the president's National Economic Council, told CNN's State of the Union on Sunday. He said Biden was "open to ideas" but that action was needed immediately. The president's USD1.9 trillion plan, Deese added, had been "calibrated to the economic crisis that we face". The Republicans' alternative plan, according to reports, would be far smaller than that – around USD600 billion – likely much too small for many Democrats to accept.
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The Japanese manufacturing sector began 2021 by slipping into contraction levels due to a fall in output, data from au Jibun Bank and IHS Markit showed. The headline au Jibun Bank Japan manufacturing purchasing managers index dropped to 49.8 in January from 50.0 in December, marking a renewed decline in the sector.
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BROKER RATING CHANGES
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HSBC RAISES DIAGEO PRICE TARGET TO 3550 (3450) PENCE - 'BUY'
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CREDIT SUISSE RAISES HISCOX PRICE TARGET TO 1145 (1125) PENCE - 'OUTPERFORM'
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COMPANIES - FTSE 100
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Hargreaves Lansdown reported a rise in interim earnings and pointed to a younger demographic within its client base. For the half year ended December 31, net new business rose 40% to GBP3.2 billion from GBP2.31 billion at the same time in 2019. Pretax profit was up 10% to GBP188.4 million from GBP171.1 million. Total assets under administration as at December 31 was GBP120.6 million, up 15% from GBP105.2 billion at the same time in 2019. The stockbroker said it added 1.5 million active clients, which was an increase of 84,000 since June 30. Hargreaves declared an interim dividend of 11.9 pence per share, up 6% from 11.2p. "As our client numbers continue to grow, we are finding that younger people are taking a greater interest in investing for the future, with the average age of our clients continuing to fall. COVID-19 has underpinned the importance of financial resilience and Hargreaves Lansdown is well placed to support clients with their saving and investment needs across their lifetimes," said Chief Executive Officer Chris Hill.
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JD Sports Fashion said it has entered into a deal to acquire Maryland, US-based DTLR Villa for USD495 million. DTLR Villa is a footwear and apparel retailer which operates from 247 stores across 19 states, principally in the north and east of the US. JD Sports said the acquisition of DTLR will enhance its presence in the north and east region of the US and complements its existing JD and Finish Line brands alongside the recent acquisition of Shoe Palace based on the west coast. "This is another exciting milestone in the group's development in the United States. Like Shoe Palace, DTLR pride themselves on the deep connection they have with their consumers and the active role they play in the communities that they serve. As such, we intend to retain the DTLR Villa fascia and its proposition,"said Chair Peter Cowgill.
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BP said it will sell its 20% interest in Block 61, Oman to PTT Exploration & Production for GBP2.6 billion. PTT Exploration is Thailand's national petroleum exploration and production company. BP owned a 60% stake in Block 61, while Makarim Gas Development has 30% stake and Petronas unit PC Oman Ventures Ltd owns 10%. Following completion of the sale - which is expected to occur in 2021 - BP will remain operator of the block, with a 40% stake. The consideration for the sale comprises USD2.45 billion payable on completion and USD140 million payable dependent on pre-agreed future conditions.‎
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AstraZeneca will increase its coronavirus vaccine deliveries to the EU by 30%, European Commission Chief Ursula von der Leyen said Sunday as the bloc sought to claw back time lost rolling out the jabs. AstraZeneca had announced last week that it could deliver only a quarter of the doses originally promised to the bloc for the first quarter of the year because of problems at one of its European factories. But AstraZeneca, whose vaccine was authorised for use in the EU on Friday, has now agreed to send nine million additional doses and "will start deliveries one week earlier than scheduled", Von der Leyen said in a tweet. An EU source told AFP the first deliveries would start in the second week of February. AstraZeneca would also extend its production capacity in Europe, Von der Leyen added. The EU leader was tweeting after talks Sunday with the leaders of the drugs companies that have signed vaccine contracts with the EU.
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COMPANIES - MAIN MARKET AND AIM
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ASOS has acquired the assets of Topshop, Topman, Miss Selfridge and HIIT from Arcadia, the fallen retail empire of Philip Green, for GBP265 million. This is fully funded from existing cash reserves, ASOS said. HIIT was a sub-brand of menswear retailer Burton, which ASOS has chosen not to acquire. The online fashion retailer said acquisition represents a "compelling strategic opportunity" to become "the number one destination for fashion loving 20-somethings worldwide". ASOS said they are strong brands that would resonate with its key customer base, with brand equity strongest in the UK and an established presence in both the US and Germany, two of the company's key markets.
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Ryanair Holdings posted a sharp third-quarter swing to loss on Monday and the airline again hit out at "unlawful state aid" of European flag carriers as the aviation industry remains mostly grounded by Covid-19. The budget carrier's traffic around the Christmas and New Year period was "severely impacted" by travel restrictions as many governments in Europe imposed curbs on UK arrivals to stem the spread of a more contagious variant of Covid-19. In its financial third quarter ended December 31, Ryanair's revenue plunged 82% year-on-year to EUR341.2 million from EUR1.91 billion. The carrier swung to a EUR362.5 million pretax loss, from a EUR81.6 million profit a year earlier. It also posted a EUR306 million third-quarter net loss, swinging from a EUR88 million profit. The restrictions and flight bans saw third-quarter traffic plunge by 78% to just 8.1 million passengers from 35.9 million a year earlier. In December alone, traffic was down 83%. Ryanair said it expected traffic for the financial year ending in March of between 26 million and 30 million, reduced from its previous guidance of "below 35 million".
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COMPANIES - GLOBAL
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Exxon Mobil and Chevron executives discussed the possibility of a merger last year as the two oil giants were battered by the pandemic, the Wall Street Journal reported Sunday. Chevron Chief Executive Mike Wirth and his Exxon counterpart Darren Woods discussed merging as demand for oil & gas plummeted due to restrictions to stem the spread of the coronavirus, the paper said, citing sources close to the issue. The sources added that the "preliminary" discussions are no longer taking place but could resume in the future. The combined market value of the two companies would exceed USD350 billion, according to the Journal, with ExxonMobil worth USD190 million.
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Monday's Shareholder Meetings
JPMorgan China Growth & Income PLC - AGM
Polar Capital Global Financials Trust PLC - GM to disapply pre-emption rights on treasury shares
San Leon Energy PLC - EGM re replacement of CREST with Euroclear
TP ICAP PLC - GM re completion of redomiciliation
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By Tom Waite; thomaslwaite@alliancenews.com
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