Last checked at 
(Alliance News) - Stock prices in London are seen opening higher on Monday, as investors digest election results from Germany while monitoring developments at the troubled Chinese property company Evergrande.
In early UK company news, jet engine maker Rolls-Royce Holdings has won a lucrative contract with the US Air Force. Water company United Utilities said trading is in line with expectations. Generic drugmaker Hikma Pharmaceuticals has made an acquisition in the US.
IG futures indicate the FTSE 100 index is to open 49.62 points higher at 7,101.10. The blue-chip index closed down 26.87 points, or 0.4%, at 7,051.48 Friday.
Rolls-Royce said its Rolls-Royce North America unit has been selected by the US Air Force to provide the powerplant for the Boeing B-52 Stratofortress under the Commercial Engine Replacement Program, in an award worth a potential USD2.6 billion.
The single award contract provides for 608 military derivative commercial engines, plus spare engines, associated support equipment and commercial engineering data, to include sustainment activities, to be used on the B-52H bomber fleet, the US Air Force said Sunday.
The Pentagon made the announcement after a multi-year competition, which saw Rolls-Royce beat out US rivals General Electric and Pratt & Whitney for the lucrative contract.
As part of the deal, Rolls-Royce will build and test the F130 engines at its Indianapolis, Indiana, facility following the recent completion of a USD600 million investment in the manufacturing campus. The B-52 CERP win creates demand for 650 engines to be produced at the site.
The B-52 has been in service with the US Air Force since 1955 and was built to carry nuclear weapons on Cold War-era deterrence missions.
Craig McVay, senior vice-president of Strategic Campaigns for Rolls-Royce Defence said: "This is a major win for Rolls-Royce. We've been planning and preparing for this outcome and are ready to hit the ground running to prove that we are the best choice for the Air Force and the B-52."
United Utilities said trading in the six months to September 30 is in line with company's expectations.
The water company said revenue for the first half is expected to be higher than the first half of last year, mainly reflecting higher consumption, only partially offset by regulatory revenue reduction. The company explained household consumption remains high, as many customers continue to work from home, and consumption from businesses has started to return to pre-Covid levels as restrictions are lifted.
United Utilities said the net increase in revenue in the first half of the year is expected to be around 4%. It posted interim revenue of GBP894.4 million last year.
In addition, United Utilities said underlying operating profit for the first half is expected to be higher than last year. This largely reflects higher revenue and targeted efficiencies, partly offset by higher underlying operating costs, largely as a result of inflationary increases in core costs, it noted.
Hikma Pharmaceuticals said it has agreed to acquire Carlsbad, California-based Custopharm from Water Street Healthcare Partners for USD375 million, with a further USD50 million upon achieving commercial milestones.
Custopharm is a generic sterile injectables company with a differentiated product portfolio and R&D pipeline, Hikma said. It currently markets its products in the US through its commercial arm Leucadia Pharmaceuticals.
Hikma said the acquisition complements its own injectable product portfolio and pipeline, adding 13 approved products and additional pipeline products. Further, Hikma expects the acquisition to generate annual revenue "in excess of" USD80 million and for the acquisition to be accretive to Hikma's Injectables operating margin. The deal also enhances its research & development capabilities, Hikma added.
Hikma Chief Executive Officer Siggi Olafsson commented: "This acquisition provides Hikma with an attractive opportunity to further strengthen our US injectables business, by adding an attractive and profitable portfolio of marketed products and an exciting pipeline of future opportunities. Custopharm is an accomplished operator in the US injectables market with a first-class scientific team and a strong regulatory track record. This acquisition is highly complementary to our existing business and adds high-quality and differentiated growth potential."
The Japanese Nikkei 225 index closed flat on Monday. In China, the Shanghai Composite was down 0.8%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney ended up 0.6%.
Market participants continue to keep tabs on the Evergrande situation and on election results in Germany.
Property developer Evergrande missed a key interest payment on Thursday last week, and another payment is due this week.
Germany headed into a period of unpredictability Monday after a tight election saw both main parties claim the right to lead Europe's biggest economy, leaving the question of who will succeed Angela Merkel wide open.
Preliminary results showed that the centre-left Social Democrats had won the largest share of the vote at 25.7%, while Merkel's CDU/CSU bloc fell to a record low of 24.1% after her many years in office.
The SPD's chancellor candidate, Finance Minister and Vice-Chancellor Olaf Scholz and Armin Laschet from Merkel's conservatives have each claimed a mandate to govern, setting off a scramble for potential coalition partners.
"What this means for German politics is that nothing much is likely to change in the short term, with investor attention likely to remain on events in China, and Asia more broadly, as well as the various supply crunches taking place across the world," said CMC Markets analyst Michael Hewson.
"We also need to be cognisant of the fact that we are coming up to the end of the month, as well as the end of the quarter, which could temper, or exacerbate market volatility. Asia markets have had a somewhat mixed session, with the Nikkei giving up some decent early gains, with markets here in Europe looking set to open higher."
The pound was quoted at USD1.3667 early Monday, unchanged from USD1.3670 at the London equities close Friday.
The euro was priced at USD1.1720, up from USD1.1710. Against the yen, the dollar was trading at JPY110.59, down from JPY110.73 late Friday.
Brent oil was quoted at USD79.22 a barrel Monday morning, up sharply from USD77.86 late Friday. Gold stood at USD1,758.12 an ounce, higher against USD1,751.33.
A quiet economic calendar on Monday has US durable goods orders at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
