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(Alliance News) - Stock prices in London are seen opening higher on Monday ahead of further talks between Russian and Ukrainian negotiators as Moscow's invading forces maintain their assault.
In early company news, Anglo-Australian miner Rio Tinto proposed to buy the 49% of Canada's Turquoise Hill it does not already own. Insurer Phoenix Group delivered a record annual performance. Thermal processing services provider Bodycote raised its dividend after robust results.
IG futures indicate the FTSE 100 index is to open 39.06 points higher at 7,194.70. The blue chip index closed up 56.55 points, or 0.8%, at 7,155.64 on Friday.
Rio Tinto said it has made a non-binding proposal to the Turquoise Hill Board to acquire the 49% of the issued and outstanding shares of Turquoise Hill that Rio Tinto does not currently own.
Rio said Turquoise Hill minority shareholders would receive CAD34 in cash per Turquoise Hill share, representing a premium of 32% to Turquoise Hill's last closing share price on the Toronto Stock Exchange. The offer would value the Turquoise Hill minority share capital at USD2.7 billion.
The offer follows the recent agreement reached between Rio Tinto, Turquoise Hill and the government of Mongolia to move the Oyu Tolgoi project forward, reset the relationship between the partners and approve commencement of underground operations.
Further, Rio said it would simplify the Oyu Tolgoi ownership structure, strengthen its copper portfolio, and reinforce its long-term commitment to Mongolia.
Chief Executive Jakob Stausholm said: "Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term. That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto's copper portfolio. We believe the terms of proposal are compelling for Turquoise Hill shareholders.
"The proposed transaction would enable Rio Tinto to work directly with the government of Mongolia to move the Oyu Tolgoi project forward with a simpler and more efficient ownership and governance structure. With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term commitment to Mongolia."
Phoenix Group Holdings said it delivered a a record set of financial results for 2021, its first ever organic dividend increase of 3% and a new dividend policy.
For 2021, Phoenix generated an operating profit of GBP1.23 billion, up from GBP1.20 billion in 2020, reflecting the contribution of a full year of profit from its ReAssure business and increased bulk purchase annuity new business in the period.
The London-based insurance services provider reported record cash generation of GBP1.72 billion in 2021, exceeding its GBP1.5 billion to GBP1.6 billion target range for the year and just ahead of the GBP1.71 billion generated in 2020.
Phoenix declared a final dividend of 24.8 pence, taking the total dividend to 48.9p, having paid a total dividend of 47.5p in 2020.
Phoenix unveiled a new dividend policy and now "intends to pay a dividend that is sustainable and grows over time", to better reflect that the company is now a "growing, sustainable business".
Chief Executive Officer Andy Briggs said: "It has been an outstanding year for Phoenix, with a record set of financial results and significant strategic progress made as we fully embraced our purpose. 2021 marked a pivotal moment for Phoenix, with GBP1.2 billion of new business from our Open business more than offsetting the run-off of our Heritage business for the first time.
"This demonstrates that Phoenix is a growing, sustainable business, and enabled the board to recommend our first ever organic dividend increase of 3%. Phoenix has also today announced a new dividend policy which sets out our intention to pay a dividend that is sustainable and grows over time."
Bodycote said it made good progress in 2021 as the thermal processing services provider benefited from a strong recovery in general industrial markets and completion of its restructuring programme.
For 2021, Bodycote swung to a pretax profit GBP77.5 million from a GBP1.5 million loss in 2020 on revenue of GBP615.8 million, up from GBP598.0 million.
Bodycote declared a final dividend 13.8 pence, bringing the total payout to 20.0p. This was up from 19.4p paid out in 2020.
The company said its 2020 restructuring programme completed, with permanent cost savings of GBP20 million delivered in 2021.
"As we moved into 2022, General Industrial continued to perform strongly, and Civil Aerospace growth has accelerated. Bodycote's Automotive business continued to be impacted by supply chain disruption for our customers, but signs of improvement are evident. And while we expect cost inflation to persist, we will continue to manage its impact on the business. In summary, the board expects further progress in 2022, but remains mindful of the current geo-political and macro-economic landscape," said CEO Stephen Harris.
Russia and Ukraine were set for a third round of talks Monday via videoconference, a Ukrainian presidential adviser and a Kremlin spokesman both said.
The discussions come as Russian troops edge closer to Kyiv and keep up their relentless bombardment of the besieged southern port city of Mariupol, where nearly 2,200 people have been killed in the onslaught, according to local officials.
According to Ukrainian negotiator David Arakhamia, the talks will begin at 0820 GMT.
"And our goal is that in this struggle, in this difficult negotiating work, Ukraine will get the necessary result... for peace and for security," President Volodymyr Zelensky said early Monday, adding that both sides speak every day.
He said the aim was "to do everything to ensure a meeting of presidents. A meeting that I am sure people are waiting for."
"We see significant progress," Leonid Slutsky, a senior member of Russia's negotiating team, told state-run television network RT Sunday.
Talks between Kyiv and Moscow have yet to yield a ceasefire and Russian forces have shown no sign of easing their onslaught.
"European and US futures higher this morning as reports on Sunday said that both Russia and Ukraine were seeing some sort of progress in talks," said analysts at Danske Bank.
In Asia on Monday, the Japanese Nikkei 225 index closed up 0.6%. In China, the Shanghai Composite ended down 2.2%, while the Hang Seng index in Hong Kong was down 4.9%. The S&P/ASX 200 in Sydney closed up 1.2%.
Hong Kong stocks fell sharply as technology firms were hit by concerns over China's crackdown on the sector and as the country's tech hub Shenzhen was put into lockdown.
Major Apple supplier Foxconn suspended its operations in Shenzhen, the company said Monday, as the lockdown bit hard into economic activity across the factory hub.
The pound was quoted at USD1.3032 early Monday, down from USD1.3075 at the London equities close Friday.
The euro was priced at USD1.0930, down from USD1.0955. Against the yen, the dollar was trading at JPY117.70, up from JPY117.05.
Brent oil was quoted at USD109.31 a barrel on Monday morning, down sharply from USD111.92 late Friday. Gold stood at USD1,973.58 an ounce, lower against USD1,982.75.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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