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(Alliance News) - Stock prices in London are seen opening higher on Tuesday following a strong close in the US on Monday, as investors look ahead to the resumption of talks between Beijing and Washington later this month.
In company news, plumbing and heating products supplier Ferguson raised its dividend after positive annual results, advertising firm WPP appointed a new chief financial officer, and the UK Competition & Markets Authority referred JD Sports Fashion's Footasylum acquisition for a Phase 2 investigation.
IG futures indicate the FTSE 100 index will open up 16.39 points at 7,424.60. The London blue-chip index closed down 18.00 points, or 0.2%, at 7,408.21 on Monday.
Ferguson reported what it called strong annual results for financial 2019 and said it is well placed for further progress in financial 2020.
For the financial year that ended July 31, revenue rose 6.1% to USD22.01 billion from USD20.75 billion the year before, and pretax profit grew 11% to USD1.32 billion from USD1.19 billion last year. In the US, revenue rose 10% to USD18.36 billion from USD16.67 billion last year, while in the UK revenue decline 6.0% to USD2.22 billion from USD2.47 billion.
Ferguson raised its total dividend by 10% to 208.2 US cents from 189.3 cents the year before.
"The board expects to make further good progress in the year ahead. Whilst US market growth is currently broadly flat, consistent with the second half of 2019, we expect to continue to outperform. Our order books support continued modest growth in the months ahead and our business is performing well. We remain focused on maximising our organic revenue growth rate, gross margin expansion, tight cost control and strong cash generation," said outgoing Chief Executive John Martin.
Last month, Ferguson said it was planning to demerge its Wolseley UK operations and consider a new listing structure for its businesses following a review.
"We recently proposed the demerger of our UK operations and work on this is progressing well. We have also announced that as part of our orderly succession plans [US chief] Kevin Murphy will succeed me as group chief executive in November. We are assessing the most appropriate listing structure for the group going forward, and we will continue to consult with shareholders," said Martin.
The UK Competition & Markets Authority has referred sportswear retailer JD Sports Fashion's acquisition of smaller peer Footasylum for a Phase 2 investigation.
JD Sports said it had informed the CMA that it does not consider there to be any appropriate remedies for competition concerns that the CMA had raised, triggering the CMA's referral to a Phase 2 probe.
JD said it would continue to co-operate fully with the CMA in a effort to find a solution but insisted it sees no evidence the acquisition would result in a substantial lessening of competition in the clothing and footwear retail markets in which the two companies operate.
"The CMA has referred their review of this acquisition to Phase 2 on the basis that it could be bad for competition and may have an impact on price. I strongly disagree with this. This transaction will not result in any price increases or a reduction in product ranges or service quality. The focus of all of our group businesses is to ensure we deliver a best in class, multichannel experience to our consumers by offering a compelling product proposition," said JD Chair Peter Cowgill.
FTSE 100 ad agency WPP said it has appointed John Rogers as its new chief financial officer, and he will join in early 2020. Rogers will succeed Finance Director Paul Richardson, who is retiring.
Rogers joins WPP from supermarket chain J Sainsbury, where he is CEO of its catalogue retail business Argos. He will depart Sainsbury's on October 31.
Bakery chain Greggs reported positive third-quarter trading results and highlighted that it saw very strong sales growth during the period.
For the 13 weeks to September 28, total sales were up 12% and company-managed shop like-for-like sales were up 7.4%.
Greggs said sales growth moderated in the third quarter as expected but is still strong.
"Operational cost control has been good, and we are progressing selective investments in the strategic initiatives that we expect to deliver an even stronger customer proposition and further growth in the years ahead. We continue to expect that year-on-year sales growth in the balance of the year will reflect the strengthening comparatives seen in 2018, and our expectations for the full year outturn remain unchanged," the company said.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.4%, S&P 500 up 0.5% and Nasdaq Composite up 0.8%.
US stocks had fallen on Friday following reports the White House was weighing a plan to delist Chinese companies from US stock markets.
However, investor sentiment got a boost from comments from the Trump administration on Monday denying the likelihood of potential new US restrictions on Chinese investment.
"Global equities are better bid after the US officially rejected the latest news about leaving the Chinese stocks out of the American exchanges," noted London Capital Group's Ipek Ozkardeskaya.
The pound was quoted at USD1.2290 early Tuesday, flat against USD1.2297 at the London equities close Monday.
Britain is to present the EU with a Brexit plan within days as moves to find a breakthrough on the issue of the Northern Ireland border backstop intensify.
The UK will offer Brussels a revised Brexit deal by the end of the week as Prime Minister Boris Johnson ramps up efforts to strike an agreement.
It is understood the legal text of a Brexit plan will be sent to Brussels after the Tory conference concludes on Wednesday.
The move comes as Irish broadcaster RTE reported the UK had put forward the idea of custom clearance centres being set up five to ten miles either side of the Irish border.
However, UK government sources distanced themselves from parts of the reports.
The Japanese Nikkei 225 index is up 0.7%. Financial markets in Hong Kong and China were closed for the National Day holiday. The Shanghai market will be closed over the next week to commemorate 'Golden Week', but the Hong Kong market will reopen on Wednesday.
The economic events calendar on Tuesday has manufacturing PMI readings from Italy, France, Germany, eurozone and UK at 0845 BST, 0850 BST, 0855 BST, 0900 BST and 0930 BST respectively.
Already out, Irish manufacturing remained in contraction in September, for the fourth month running, as a "solid" decline in new orders saw output fall.
The seasonally adjusted purchasing managers index increased slightly in September but remained below 50.0. Any reading below 50 represents contraction as opposed to expansion in the sector.
The AIB manufacturing PMI read 48.7 in September, up marginally from 48.6 in August. AIB noted September's readout marks the fourth monthly deterioration in businesses conditions in the Irish manufacturing sector.
Japan's manufacturing sector remained "under pressure" in September, with firms cutting production due to "weak demand" at home and abroad.
The headline Jibun Bank Japan manufacturing purchasing managers index fell to 48.9 in September from 49.3 in August. September's reading is the lowest mark since February.
Any reading below 50 represents contraction as opposed to expansion in the sector.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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