(Alliance News) - Stock prices in London are seen opening higher on Monday despite mixed trading in Asia, as investors prepare for a busy week ahead of corporate news, as well as two central bank meetings.
In early company news, online trading platform Plus500 expressed confidence in its outlook despite a decline in third-quarter earnings. Coal, gas, solar and wind power plants operator CountourGlobal posted a rise in third-quarter earnings and maintained guidance.
IG futures indicate the FTSE 100 index is to open 26.35 points higher at 7,230.90. The blue-chip index closed up 14.25 points, or 0.2%, at 7,204.55 on Friday.
Asian markets were mixed following last week's gains, with investors keeping a worried eye on a fresh Covid outbreak in China that could drag on the already stuttering economy.
China reported 39 new domestic infections on Monday, in an outbreak spread by a travelling group of tourists in the latest test of the country's zero-tolerance approach with just over 100 days until the start of the Winter Olympics.
The latest spike has forced authorities to reimpose strict containment measures, but there are fears of a wider lockdown that would weigh on economic growth. Recent outbreaks this year played a role in the below-par expansion seen in the third quarter.
In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was up 0.1%. In Japan, the Nikkei 225 index closed down 0.7%. The S&P/ASX 200 in Sydney ended up 0.3%.
Plus500 said that it maintained strong operational momentum in the third quarter and that it was well positioned to access significant growth opportunities.
For the three months to September 30, revenue was USD211.4 million, down 2.3% from USD216.4 million in the third quarter last year.
Third quarter earnings before interest, tax, depreciation and amortisation was USD128.6 million, down 4.2% from USD134.2 million the year before.
During the period, Plus500 added 26,169 new customers to its platform, down 43% from 46,238 last year. Average revenue per user was USD1,517, down 26% from USD2,061, while average user acquisition cost rose 33% to USD1,416 from USD1,066.
The company said its new share dealing platform, 'Plus500 Invest', is now operational in a number of countries in Europe
Going forward, Plus500 said it is making substantial investments to build its position in the US retail trading market in futures and options on futures and to support launches of Plus500 Invest in more European countries over the coming quarters.
Looking ahead, Plus500 said annual 2021 revenue and Ebitda to be ahead of current compiled analysts' consensus forecasts.
"The board's confidence about the outlook for Plus500 is further bolstered by the significant strategic and operational investments now being made by the company, enabled by the group's strong financial position and cash generative and scalable business model. While these investments will moderately impact Ebitda margin over the coming quarters, they will enable the group to deliver sustainable growth over the medium to long term," Plus500 said.
ContourGlobal reported a rise in earnings for the first nine months of the year and reiterated its annual guidance.
In the nine months to September 30, revenue rose 46% to USD1.48 billion from USD1.02 billion a year before. Adjusted Ebitda was USD622 million, up 14% from USD543 million.
ContourGlobal declared a 4.465 US cents dividend for quarter to September 30, saying this met its target of 10% annual growth.
Looking ahead, ContourGlobal maintained its 2021 adjusted Ebitda guidance of USD780 million to USD810 million.
The Co-operative Bank confirmed a weekend press report which said the lender was exploring the potential purchase of TSB Banking from Spain's Banco de Sabadell.
On Sunday, Sky News reported that Co-operative Bank contacted Sabadell earlier this month over a potential deal. According to Sky, Co-op would be willing to pay in excess of GBP1 billion for TSB.
Co-operative Bank on Monday acknowledged that a letter was sent but said that no discussions about the idea are currently taking place with Sabadell.
Chief Executive Officer Nick Slape said: 'Our unique brand, underpinned by co-operative values and ethics and the significant progress we have made in returning our bank to profitability is a testament to the hard work of our colleagues and the loyalty of our customers - which we continue to place at the heart of all our decisions.'
Earlier Monday, HSBC Holdings reported a sharp rise in profit in the third quarter, with Chief Executive Noel Quinn declaring the lender's Covid troubles are behind, prompting the lender to embark on a USD2 billion share buyback.
In the three months to September 30, the bank reported pretax profit of USD5.40 billion, up sharply from USD3.07 billion the year before.
Net interest income improved to USD6.61 billion from USD6.45 billion, while net fee income rose to USD3.32 billion from USD2.98 billion. Net insurance premium income slipped to USD2.72 billion from USD2.78 billion. As a result, total revenue increased by 0.7% to USD12.01 billion from USD11.93 billion.
Net interest margin worsened slightly to 1.19% from 1.20%.
Due to "confidence" in the outlook, HSBC expects to start USD2 billion share buyback "shortly".
HSBC shares were up 0.4% in Hong Kong.
The pound was quoted at USD1.3770 early Monday, soft from USD1.3773 at the London equities close Friday.
The euro was priced at USD1.165, up from USD1.1650. Against the Japanese yen, the dollar was trading at JPY113.64, down slightly from JPY113.68.
Brent oil was trading at USD86.10 a barrel on Monday morning, up from USD84.77 late Friday. Gold stood at USD1,797.41 an ounce, down from USD1,809.80.
The economic events calendar on Monday has Germany Ifo business climate index readings at 0900 BST.
In the UK corporate calendar later this week, there are interim results from hospitality firm Whitbread on Tuesday and third-quarter results from drugmaker GlaxoSmithKline on Wednesday. On Thursday, there are third-quarter earnings from lender Lloyds and oil major Royal Dutch Shell, while bank NatWest posts third-quarter numbers on Friday.
In the US, Facebook will deliver its earnings after the New York close on Monday, while tech rivals Microsoft, Google-owner Alphabet and Apple report later in the week.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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