(Alliance News) - Stocks in London were mixed Friday morning but the FTSE indices were enjoying a boost from housebuilders and Merlin's takeover offer from Lego.The G20 Summit kicked off Friday with investors eagerly awaiting the much anticipated meeting between US President Donald Trump and Chinese President Xi Jinping on Saturday.Trump and Xi are not expected to come out of the meeting in Osaka, Japan with a final trade deal, but investors will be looking for signs of progress toward kick-starting the stalled negotiations between the two economic superpowers. The pair are meeting for the first time in seven months.The FTSE 100 index was up 10.83 points, or 0.2%, at 7,412.43 early Friday. The FTSE 250 was up 106.87 points, or 0.6%, at 19,420.60, while the AIM All-Share was down 4.96 points, or 0.5%, at 918.65.The Cboe UK 100 index was up 0.1% at 12,572.80. The Cboe UK 250 was up 0.5% at 17,365.72, while the Cboe UK Small Companies was marginally higher at 11,385.46.In mainland Europe, the CAC 40 in Paris was marginally higher and the DAX 30 in Frankfurt was up 0.3% in morning trade."Investors are holding their breath as the G20 meeting starts in Osaka today. The most expected event of the summit is Trump - Xi meeting, scheduled for 1130 local time on Saturday. The ongoing tension between the US and China is certainly more than just a simple trade war. Therefore, it will probably take more than this week's meeting to agree on all aspects at stake," said London Capital's Ipek Ozkardeskaya. Ozkardeskaya added: "Although the chances of seeing a trade deal by the end of this weekend remain low, investors will be chasing any progress that could hint at an eventual resolution for the year-old trade dispute."As the Tory leadership race rumbled on, Boris Johnson has said it would be "absolutely folly" to rule out suspending Parliament to force through a no-deal Brexit against the will of MPs.The former foreign secretary said in a Tory leadership hustings on Thursday that the controversial measure should remain as "an essential tool of our negotiation".The MP has previously declined to rule it out, but the comments are his strongest signal yet that "proroguing" Parliament should remain an option.Meanwhile, his rival, Jeremy Hunt, conceded the winner of the contest could spend the shortest time as prime minister in history, and said he would resign if he failed to deliver Brexit. In London, luxury fashion designer Burberry was an early riser, adding 1.8% after US investment bank Goldman Sachs raised the stock to Neutral from Sell.Housebuilders Berkeley Group, Taylor Wimpey, Persimmon and Barratt Development also were among the early risers in the FTSE 100, adding 3.0%, 2.6%, 2.2% and 2.0%, respectively.Among the worst performers in the blue chip index was BT Group, shedding 1.7%, after Ofcom confirmed its new rules for business networks. The new rules will give broadband and mobile networks providers a greater access to Openreach's infrastructure. Openreach is wholly owned by BT Group but has its own board to ensure some independence.Last year, Ofcom required Openreach - which maintains the UK's main broadband network - to let rival companies use its telegraph poles and underground "ducts" to lay their own fibre networks.Until now, this rule has been available to companies focusing on residential and small-business customers. Friday's draft decision would extend it to firms serving large businesses, as well as companies laying high-speed lines that support mobile and broadband networks.Ofcom said that, in areas of the UK, where Openreach faces limited competition from other leased-line networks, it intends to regulate what it can charge providers to use these services, keeping prices flat. Ofcom also plans to impose strict requirements on Openreach for repairs and installations, to ensure high service standards are delivered.Merlin Entertainments was sitting atop London's midcap index in early trading, up 14% at 450.30 pence, after it agreed to a GBP4.77 billion takeover offer from a group comprising the investment vehicle of Lego's founding family, US private equity firm Blackstone and a Canadian pension fund.The deal values Merlin shares at 455p each in cash, representing a 15% premium compared to the attraction operator's closing price of 395p on Thursday. The deal values Merlin - which operates Legoland theme parks among a number of other attractions - at GBP4.77 billion on a fully diluted basis, and implies an enterprise value of GBP5.91 billion.The bid is from Berkeley Bidco, a newly-formed company owned by Kirkbi, Blackstone Core Equity Partners and the Canada Pension Plan Investment Board. Kirkbi and Blackstone jointly controlled Merlin in the eight years prior to its 2013 float in London. Woodford Patient Capital Trust was up 3.9%. The trust, run by embattled fund firm Woodford Investment Management, said that, after discussions with shareholders, it is "building on some of the immediate measures". The trust said it will reduce its gearing to below 10% within the next six months. Its gearing level is currently 16.8%. Woodford Patient also noted its share price discount to NAV has widened to 14%, as of May 31. The trust said it will undertake share repurchases. The trust reiterated to investors that its portfolio is independently valued, and is line with Financial Conduct Authority regulations. Woodford Patient said the pricing of its unquoted securities is "solely the responsibility" of the appointed alternative investment fund manager, Link Fund Solutions.At the other end of the FTSE 250, Paypoint was down 5.1% after saying its contract with Centrica-owned British Gas will come to an end in December. The pair were unable to agree renewal terms to their multi-year contract. PayPoint said the break down in negotiations will take GBP1.4 million off net revenue in the current year, financial 2020. For financial 2021, PayPoint guided for a GBP3.5 million reduction in revenue."Plans are underway to mitigate this, in part, through the positive revenue trends elsewhere in the Bill Payment business, including the robust performance of MultiPay, our omni-channel payments platform. The board remains confident that there will still be a progression in profit before tax before exceptional items for the year ending March 2020," PayPoint added. Costain was the London Main Market's worst performer in early trading, losing 32%, after the infrastructure firm said it has recently seen a number of delays to the timing of start dates for new contracts.As a result, the company said its revenue for financial 2019 will be lower than previously expected, with underlying operating profit guided for between GBP38.0 million and GBP42.0 million. In financial 2018, the company's underlying operating profit was GBP52.5 million.Costain said its trading in the first half, comprising the six months to June 30, were in line with expectations. "Despite delays to the timing of certain contract start dates and new awards, our markets are strong, as evidenced by the breadth of our new contract awards in the first half," Chief Executive Alex Vaughan added.Elsewhere, Airtel Africa said it was "delighted" with the response to its initial public offering in London, anticipating a market capitalisation of GBP3.1 billion on admission.Airtel set its offer price at 80 pence per share. Based on this, the company expects to have a market capitalisation of GBP3.1 billion on admission. This would place the firm safely in London's mid-cap FTSE 250 index.The offer comprises 744.0 million share news, equating to a total offer size of GBP595 million. Following completion of the offer, Airtel expects to be eligible for inclusion in FTSE indices.Airtel said the offer was oversubscribed with strong interest from a variety of global investors across the UK, US, Africa, Europe, Middle East and Asia.In Asia on Thursday, the Japanese Nikkei 225 index ended down 0.3%. In China, the Shanghai Composite ended down 0.7%, and the Hang Seng index in Hong Kong is 0.5% lower.Sterling was quoted at USD1.2673 early Friday, broadly flat compared to USD1.2674 at the London equities close on Thursday.The euro was quoted at USD1.1377 early Friday, higher than USD1.1365 at the European equities close on Thursday.The economic events calendar on Friday has UK GDP at 0930 BST, Eurozone CPI at 1000 BST, US core personal consumption expenditure at 1330 BST.
12 Sep 2016 15:05
