(Alliance News) - London stocks were sluggish at the open on Monday as markets start to wind down for Christmas.
However, there were signs of life from NMC Health, whose shares sprang 12% on the decision to launch an independent investigation into accusations made by US short seller Muddy Waters.
The FTSE 100 index was down 10.96 points, or 0.1%, at 7,571.52 early Monday. The mid-cap FTSE 250 index was up 54.70 points, or 0.3%, at 21,729.00. The AIM All-Share index was down 0.1% at 940.20.
The Cboe UK 100 index was down 0.1% at 12,829.65. The Cboe 250 was up 0.2% at 19,596.19 and the Cboe Small Companies flat at 12,034.14.
In mainland Europe, the CAC 40 in Paris was down 0.1% and the DAX 30 in Frankfurt likewise 0.1% lower in opening trade.
In Asia on Monday, the Japanese Nikkei 225 index ended flat. In China, the Shanghai Composite ended down 1.4%, while the Hang Seng index in Hong Kong closed flat.
Stocks started lower in Europe despite news that Beijing will lower import tariffs on over 850 products including frozen pork from January next year.
China will lower import tariffs on food items such as pork, fish, cheese and nuts, as well as pharmaceuticals and a range of chemical products. From July 1 next year, it will further reduce some tariffs on some technology products, said the ministry in a statement on its website.
The move does not appear to be linked to the US-China trade war. Earlier this month, the two sides announced a mini-agreement to reduce some levies in a bruising trade war, which has dragged on global growth all year.
In London early Monday, NMC Health was up 12% after saying it will be commencing an independent, third-party investigation into claims made by short seller Muddy Waters.
Muddy Waters last week alleged "rot" at NMC, with the UAE-focused healthcare firm believing the claims led to an "unwarranted" share price reaction.
Despite Monday's rise, the stock is still down 45% in the past seven days.
The independent review will be overseen by a committee made up of a majority of independent non-executive directors.
"We are confident that this review, when complete, will be entirely confirmatory of the disclosures provided by the company to date. We will also be progressing relevant legal and regulatory options following the actions taken by third parties to mislead the market and manipulate the share price," said NMC.
The FTSE 100 constituent added that it believes its current share price is "not a fair reflection of the value of the company" which has a "consistent track record of strong growth and cash generation".
intu Properties was up 1.2% after selling the intu Puerto Venecia shopping centre in Spain for EUR475.3 million.
intu Puerto Venecia is a joint venture between intu and the Canada Pension Plan Investment Board, which was formed in 2015.
The transaction is part of the shopping centre owner's strategy of fixing its balance sheet, and the deal will deliver net proceeds of around EUR115 million after repaying asset-level debt, working capital adjustments and tax. intu will use the money to repay debt, with the transaction reducing loan to value by around 1%.
On AIM, Nichols said it was pleased with its performance in 2019, though expects a hit from sweetened drinks taxes in Saudi Arabia and the UAE in the year ahead.
The stock was down 20% in early trade.
Sales in 2019 are expected to be 4.0% ahead of the year before, a performance the soft drinks maker said it was "pleased" with given a slowdown in the UK market and a challenging consumer environment. Sales in both the UK and the International businesses are ahead of 2018.
Annual pretax profit is expected in line with market forecasts.
However, Nichols noted that Saudi Arabian and UAE tax authorities have recently implemented an excise tax of 50% to be levied on the retail price of non-carbonated sweetened drinks.
This tax will be applied to all non-carbonated drinks containing both natural and artificial sweeteners, including sales of Vimto products. This means that, unlike the UK soft drinks levy, product reformulation "is not an option".
"Whilst it is difficult to estimate the future effect on sales volumes of the Vimto brand in these regions, at this point in time, we have to assume the increased retail price will have a negative impact from 2020," said Nichols.
In order to mitigate the impact, Nichols said it is currently developing plans in collaboration with its long-term in-market partner which will require increased investment in the Vimto brand to maintain its market position.
While there is a "broad" range of possible outcomes, Nichols said pretax profit in 2020 could be "materially below" current expectations as a result.
Sterling was quoted at USD1.3029 early Monday, lower than USD1.3051 at the London equities close on Friday.
The euro was quoted at USD1.1083 early Monday, flat on USD1.1087 late Friday. Against the yen, the dollar was quoted flat at JPY109.35 versus JPY109.37.
In commodities, gold was quoted at USD1,484.69 early Monday, higher than USD1,478.61 at the London equities close on Friday. Brent oil was trading at USD65.87 early Monday, firm from USD65.80 at the London equities close on Friday.
The economic events calendar on Monday has US durable goods orders at 1330 GMT.
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
