(Alliance News) - Stock prices in London are seen opening slightly higher on Monday on optimism that US lawmakers will eventually pass a new economic stimulus package.
In early company news, FTSE 100 software company Aveva Group said its full-year outlook remains unchanged. Blue-chip gambling firm GVC Holdings said it has been awarded licences in Germany. In the FTSE 250, transport company National Express and oilfield services firm Petrofac named new chief executives.
IG futures indicate the FTSE 100 index is to open 10.05 points higher at 6,026.70. The blue-chip index closed up 38.62 points, or 0.7%, at 6,016.65 on Friday.
Aveva said it has performed "creditably" in the first half of its financial year against a challenging backdrop and its outlook for the full year remains unchanged.
Aveva said it expects to report revenue of around GBP333 million for the first half of financial 2021. This would be down from GBP391.9 in the first half of financial 2020.
The software company said the order pipeline for the remainder of the financial year is strong, supported by a higher volume of contract renewals, including major Global Account contracts, as well as the contracts that slipped from the second quarter. As such, Aveva said it expects to see solid revenue growth in the second half and is confident in the full-year outlook. It added that its proposed acquisition of OSIsoft remains on track.
GVC Holdings said it was awarded four sports-betting licences in Germany by the country's regulator. Some of the terms include a wagering limit of EUR1,000 per month that can be increased to EUR10,000. There also will be deposit limits until customer verification processes are complete and a maximum annual bonus per customer of EUR100.
The gambling company said the licences have been issued with immediate effect, but the timing for implementation are yet to be formally agreed. GVC is working with the regulator on an implementation plan with terms expected to be in place in the early part of 2021.
Following implementation, GVC estimates that earnings before interest, tax, depreciation and amortisation will be reduced by up to GBP40 million on an annual basis. The company said this hit to earnings from the German licenses will be incremental to the GBP70 million negative impact of its new Tolerance Policy. GVC reported underlying EBITDA of GBP761.1 million for 2019.
National Express Group said it has appointed Jose Ignacio Garat as its new chief executive officer effective from November 1. He was previously senior vice president of Southern Europe, France & Benelux operations for courier FedEx.
Following Garat's appointment, Chris Davies will step down as interim CEO but will remain as finance director.
Chair John Armitt said: "I am delighted to welcome Ignacio to National Express Group. Ignacio has the extensive international operational and strategic experience to lead National Express Group through the challenges presented by the pandemic, as well as the significant future opportunities that exist."
Petrofac said CEO Ayman Asfari has decided to retire from the role at the end of the year to focus on his family, health and charitable interests.
The oilfield services firm said Sami Iskander will join as deputy CEO on November 1 and, following a short transition period, will assume the role of group CEO from January 1. Iskander was a vice president at Royal Dutch Shell's Upstream Joint Ventures business from 2016 to 2019.
Petrofac Chair Rene Medori said: "The board has been planning for his retirement for some time and I am delighted that we have been able to attract a candidate of Sami Iskander's calibre, who was identified following a comprehensive external and internal search process. He has an excellent industry pedigree both in international oilfield services and upstream E&P, a deep and local understanding of our markets and client landscape, and a proven track record in business transformation."
Stocks in London were seen higher on hopes of a US stimulus agreement. A new Covid-19 economic stimulus package for the US proposed by the White House could still be passed despite opposition from Democrats and some Republicans, US President Donald Trump's economic advisor said on Sunday.
Asked if the proposed deal was dead, Larry Kudlow said on CNN's 'State of the Union': "No, I don't think it's dead at all."
"We're asking for some targeted areas of assistance that would help this recovery. It is a V-shaped recovery, but there are key areas that could help."
Markets fell sharply at the start of last week following Trump's abrupt move to end stimulus talks, but he made an about-face in subsequent days that saw him calling for a deal.
On Friday, Trump raised his offer, proposing a USD1.8 trillion package which Treasury Secretary Steven Mnuchin presented to House Speaker Nancy Pelosi.
"Financial markets continue to rotate into risk-seeking positioning as hopes persist that a US fiscal stimulus package will appear. The wave of optimism boosted by the third position change in a week by the White House on the package. Having told officials to cease negotiations early last week, the president then tried to enact a piecemeal approach before reversing course and telling both parties to go big or go home effectively on Friday," commented Oanda Market analyst Jeffery Halley.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, S&P 500 up 0.9% and Nasdaq Composite up 1.4%.
The pound was quoted at USD1.3040 early Monday, firm from USD1.3010 at the London equities close Friday.
The euro was priced at USD1.1822, flat from USD1.1821. Against the yen, the dollar was quoted at JPY105.46, down from JPY105.68.
Brent oil was trading at USD42.45 a barrel Monday morning, down from USD43.32 late Friday in London. Gold was USD1,928.88 an ounce, up from USD1,924.20.
The Japanese Nikkei 225 index ended down 0.2% on Monday. In China, the Shanghai Composite is up 2.5%, while the Hang Seng index in Hong Kong is up 2.4%.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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