(Alliance News) - Stock prices in London are seen opening higher on Monday after Joe Biden was declared the winner of the US presidential election over the weekend.
In early UK company news, housebuilder Taylor Wimpey said it expects 2020 results at the upper end of its guidance range due to supportive conditions in the UK housing market. Distribution firm Bunzl has made an acquisition in Brazil. Canadian security firm GardaWorld extended its offer for peer G4S amid a bidding war for the UK outsourcer.
IG futures indicate the FTSE 100 index will open 75.48 points higher at 5,985.50. The blue-chip index closed up 3.84 points, or 0.1%, at 5,910.02 Friday.
Taylor Wimpey said its trading remains resilient, and the quick recovery of the UK housing market is "testament" to the underlying strength of demand and supportive lending backdrop.
The housebuilder noted that customers have benefited from the short-term extension to the current phase of the UK government's Help to Buy scheme and the Stamp Duty Land Tax holiday.
Taylor Wimpey said its order book stands at GBP3.0 billion, up 11% from GBP2.7 billion at the same time last year, with the private average selling price in the order book ahead of 2019 levels. The order book represents 11,530 homes as at November 1, up 10% from 10,486 homes last year.
Turning to shareholder returns, Taylor Wimpey reiterated that it expects to recommence ordinary dividend payments in 2021, starting with the payment of a 2020 final dividend. It will review a special dividend in 2021 for payment in 2022.
Looking ahead, Taylor Wimpey expects the UK housing market to support robust sales rates and for prices of new build homes also to remain supportive. It now expects 2021 completions to be between 85% to 90% of 2019 levels.
Assuming the market remains broadly stable, Taylor Wimpey currently expects to deliver operating profit in 2021 materially above the top end of the current consensus range. The current company compiled consensus expectation for 2021, is for operating profit in the range of GBP359 million to GBP626 million.
For 2020, the current company compiled consensus expectation is for operating profit in a range between GBP242 million to GBP292 million.
"We have made good progress in the second half of the year to date, maintaining a robust sales rate and building a strong forward order book. Looking ahead, we are on track to deliver full year 2020 results towards the upper end of market expectations and with strong operational momentum and positive forward indicators, our confidence in 2021 has increased. As a result, assuming the market remains broadly stable, we expect to deliver 2021 operating profit materially above the top end of the current consensus range," the company said.
Bunzl said it will acquire SP Equipamentos, a personal protection equipment distributor based in Sao Paulo, Brazil, for an undisclosed sum. Completion of the acquisition is expected to take place at the end of November.
In addition, Bunzl said it has completed the acquisition of ICM, a distributor of personal protection equipment to a variety of customers in Denmark.
"Growth through acquisitions continues to be an important part of the strategy of the group, and I am pleased that year to date our committed acquisition spend totals more than GBP400 million. Our acquisition pipeline remains promising with a number of discussions ongoing," said Chief Executive Frank van Zanten.
GardaWorld said it was extending its cash offer for G4S. It will now remain open for acceptance until the afternoon of November 28.
Last week, US-based Allied Universal fired what could be a starting shot in a bidding war for the UK security firm. Allied failed to convince the G4S board, however. The directors of G4S last Tuesday rejected a GBP3.25 billion bid, saying it "significantly undervalues" the business.
The "at least" 210p per share bid gives Allied Universal the edge over its Canadian rival suitor GardaWorld, which had a 190p bid rejected by G4S.
"We are extending our offer for G4S because, despite its past problems and uncertain future, we believe we can turn the business around. We can give G4S shareholders the certainty of cash today, not jam tomorrow. We believe G4S is misrepresenting its prospects under the current management team. It is time they tell shareholders and employees the truth," GardaWorld CEO Stephan Cretier said on Monday.
Global equity markets were given a boost as US President-Elect Biden took the first steps Sunday towards moving into the White House in 73 days, while Donald Trump again refused to admit defeat and tried to sow doubt about the election results.
The Japanese Nikkei 225 index closed up 2.1% on Monday. In China, the Shanghai Composite ended up 1.9%, while the Hang Seng index in Hong Kong is 1.0%. The Japanese benchmark index ended at its highest level since 1991.
With congratulations pouring in from world leaders and supporters nursing hangovers after a night of celebrations, Biden and Vice President-Elect Kamala Harris announced they would receive a joint briefing on Monday in Wilmington, Delaware from their transition Covid-19 advisory team.
Trump, who has no public events scheduled for Monday, plans to file a string of lawsuits in the coming week, according to his lawyer Rudy Giuliani, who said he had "a lot of evidence" of fraud.
Biden urged unity on Saturday and promised "a new day for America" in his first national address since he won the tense US election and ended the historically turbulent and divisive era of Trump. The victory speech followed a desperately bitter election conducted in the midst of the coronavirus pandemic.
"While President Trump still appears to be in denial about the loss of the presidency to the Democrats and Joe Biden and still refusing to concede, markets appear to be unconcerned about the prospect of a contested outcome, and now appear to have moved on to what might happen next," commented CMC Markets analyst Michael Hewson.
"This week looks set to see a positive start to the week in Europe after a similarly positive Asia session saw the Nikkei 225 hit its highest levels since 1991, while Chinese markets also rallied on the hope that trade tensions, between the US and China could well start to diminish in 2021," Hewson added.
China's imports grew 4.7% and exports rose by 11% year-on-year as its economy continued to recover from the coronavirus pandemic, according to October customs data released on Saturday. As a result, its October trade surplus widened to USD58.44 billion from September's USD37.00 billion.
China has largely managed to control the virus after a disastrous start to the year that saw Beijing lock down tens of millions of people and the economy contract 6.8% in the first quarter. The new figures from China's General Administration are the latest sign of China's economic recovery as consumption returns to normal levels.
The pound was quoted at USD1.3192 early Monday, flat from USD1.3172 at the London equities close Friday.
UK Prime Minister Boris Johnson will proceed with his controversial Brexit bill despite US president-elect Joe Biden having previously warned the UK over the draft legislation.
The prime minister told broadcasters, after congratulating Biden and vice president-elect Kamala Harris on their victory, that he intended to push ahead with the Internal Market Bill, with peers due to vote on it this week.
The bill would override clauses in the Withdrawal Agreement relating to Northern Ireland and the government has admitted it breaks international law.
Meanwhile, EU chief negotiator Michel Barnier is in London this week for talks with his UK counterpart Lord Frost as he seeks to "find an agreement that respects the interests and values of the EU and its 27 Member States".
Biden, who has Irish heritage, in September warned that the Good Friday Agreement cannot be "a casualty of Brexit" and said a UK-US trade deal would be dependent on the peace terms being upheld.
The euro was priced a USD1.1885, flat from USD1.1887. Against the yen, the dollar was quoted at JPY103.52, down from JPY103.71.
Brent oil was trading at USD40.37 a barrel Monday morning, up from USD39.66 on Friday evening. Gold was quoted at USD1,954.63 an ounce, higher than USD1,952.40.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
