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(Alliance News) - Stock prices in London were seen opening higher on Wednesday following upbeat trading in Asia, as investors await key US consumer price index data due to be released Thursday.
In early company news, housebuilder Barratt Developments raised its guidance on annual home completions after positive interim results. Drugmaker GlaxoSmithKline said it is on track to deliver the demerger of the GSK Consumer Healthcare business in mid-year. Anglo American started up its new Aquila metallurgical coal mine.
IG futures indicate the FTSE 100 index will open 60.83 points higher at 7,627.90. The index closed down 6.40 points, or 0.1%, at 7,567.07 Tuesday.
Barratt Developments said it delivered an excellent first half driven by a strong rebound in construction activity in the UK.
For the six months to December 31, revenue was GBP2.25 billion, up from GBP2.49 billion at the same time in 2020 and pretax profit edged higher to GBP432.6 million from GBP430.2 million.
Barratt declared an interim dividend of 11.2 pence, up from 7.5p.
Total completions were down to 8,067 homes from 9,077 - reflecting the "unusually high" completions in the prior period.
The UK's largest housebuilder by volume said it was on track to deliver total home completions of 18,000 to 18,250 in financial 2022, an increase of 250 homes on previous guidance and in excess of the total home completions delivered in financial 2019.
"Macro economic uncertainties remain, most notably around rising inflation and interest rates in the wider UK economy. As a business we also face higher taxation, the ongoing challenges around build cost inflation and the future withdrawal of Help to Buy, which will begin to impact reservations in Autumn 2022, as the scheme draws to a close in March 2023," said Chief Executive Officer David Thomas.
"The board believes, however that the overall strength of the housing market, our operational performance since the onset of the pandemic and our strong financial position provide us with the platform and flexibility to react to any challenges and opportunities in the remainder of FY22 and beyond," Thomas added.
GlaxoSmithKline said it generated stable revenue in 2021 and was on track to demerge a "new world-leading" Consumer Healthcare business by mid-2022.
For 2021, total sales were GBP34.11 billion, up slightly from GBP34.10 billion in 2020 and pretax profit was down to GBP5.44 billion from GBP6.97 billion. The revenue figure was in line with market forecasts.
Adjusted operating profit was GBP8.82 billion in 2021, down from GBP8.91 billion in 2020.
Looking ahead for 2022, new GSK expects sales to grow by between 5% to 7% at constant exchange rates and adjusted operating profit to grow by between 12% to 14% at constant currency as compared with 2021.
Assuming global economies and healthcare systems approach normality as the year progresses, Glaxo said it expect sales of Specialty Medicines to grow 10% at constant currency and sales of General Medicines to show a slight decrease. Glaxo said this was "primarily reflecting increased genericisation" of established Respiratory products. Vaccines sales are expected to grow at a low teens percentage at for the year as a whole.
"We have ended the year strongly, with another quarter of excellent performance driven by first-class commercial execution, and we enter 2022 with good momentum. This is going to be a landmark year for GSK, with a step-change in growth expected and multiple R&D catalysts, including milestones on up to 7 key late-stage pipeline assets. 2022 is also the year when we demerge our world-leading Consumer Healthcare business," Chief Executive Officer Emma Walmsley said.
"At our capital markets event later this month, we will set out the future growth ambitions and highly attractive financial profile of this business, and the outstanding opportunity it provides for shareholders," Walmsley added.
Anglo American said its new Aquila steelmaking metallurgical coal mine was on schedule and on budget, marking the project's final stages of construction and commissioning.
The mine, located near Middlemount in central Queensland in Australia, extends the life of Anglo American's existing Capcoal underground operations by seven years, after the company's nearby Grasstree mine reached its end of life in recent weeks.
Themba Mkhwanazi, CEO of Bulk Commodities, said: "We have delivered the Aquila project on time and within our budgeted attributable cost of USD226 million. This new mine will have a total average annual saleable production of around five million tonnes of premium quality hard coking coal and benefits from low capital intensity as we are using the existing infrastructure and systems from our adjacent operations. Aquila offers us highly attractive returns and margins at conservative long term consensus prices."
Calls for a higher open in London stem from strong performances in New York overnight and in Asia on Wednesday.
The Dow Jones Industrial Average closed up 1.1% on Tuesday, the S&P 500 up 0.8%, and the Nasdaq Composite up 1.3%.
In Asia on Wednesday, the Japanese Nikkei 225 index ended up 1.1%. In China, the Shanghai Composite closed up 0.8%, while the Hang Seng index in Hong Kong was up 1.9%. In Sydney, the S&P/ASX 200 closed up 1.0%.
"Ahead of today's open we look set to open higher largely due to Asia markets rallying strongly, as they picked up the baton from last night's positive US close," said CMC Markets analyst Michael Hewson.
"This week's focus continues to be on tomorrow's US CPI numbers for January, with most of the market risk being priced towards a reading that could well come at the higher end of expectations," Hewson added.
Signs of a possible easing of tensions on the Russia-Ukraine border also provided some comfort to investors.
European leaders on Tuesday pledged unity in their goal of averting war on the continent, as France's President Emmanuel Macron said he saw a path forward on easing tensions with Russia over Ukraine after an urgent round of shuttle diplomacy.
Arriving in Berlin after two days of talks in Kyiv and Moscow, Macron urged continued "firm dialogue" with Russia as the only way to defuse fears Russia could invade its ex-Soviet neighbour.
The French leader, who on Monday had a five-hour meeting with Vladimir Putin, said the Russian president had told him that Russia "would not be the source of an escalation", despite amassing more than 100,000 troops and military hardware on Ukraine's border.
Macron said he now saw the "possibility" for talks involving Moscow and Kyiv over the festering conflict in eastern Ukraine to move forward, and "concrete, practical solutions" to lower tensions between Russia and the West.
The pound was quoted at USD1.3550 early Wednesday, flat on USD1.3551 at the London equities close Tuesday.
The euro was priced at USD1.1415, unmoved from USD1.1413. Against the Japanese yen, the dollar was trading at JPY115.41, lower from JPY115.60 in London on Tuesday.
Brent oil was quoted at USD90.60 a barrel Wednesday morning, up from USD90.28 late Tuesday. Gold stood at USD1,826.48 an ounce, marginally higher against USD1,825.73.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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