LONDON (Alliance News) - Stocks in London are seen opening down on Friday, despite gains in the US overnight, as Brexit uncertainty continues to weigh on sentiment. In early UK corporate news, Smiths Group is to demerge and separately list its Medical unit, while Aviva's chair will depart after taking up the same role at Royal Mail. IG futures indicate the FTSE 100 index is to open 19.6 points lower at 7,335.71. The blue chip index closed up 64.30 points, or 0.9%, at 7,355.31 on Thursday. "US markets closed at a fresh five-month high in the wake of this week's unexpectedly dovish tilt from the US Federal Reserve, which removed the prospect of any more rate rises this year," commented CMC Markets UK's Michael Hewson."Asian stocks on the other hand slipped back weighed down by continued uncertainties over the next move in US-China trade talks, and this looks set to translate into a mixed European open this morning."In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average closing up 0.8%, the S&P 500 up 1.1%, and the Nasdaq Composite 1.4% higher.Wall Street was boosted by a successful first day for blue jeans originator Levi Strauss, whose shares rose 32% from its USD17.00 initial public offering price to USD22.41 at the New York close. The company, founded by German-born Levi Strauss, first went public in 1971, but was privatised again in the mid-1980s.After the New York market close, sports apparel firm Nike said third-quarter profit of USD1.10 billion or USD0.68 per share, compared with last year's loss of USD921 million or USD0.57 per share. Revenue for the quarter rose 7% to USD9.61 billion from USD8.98 billion last year. Analysts had a consensus revenue estimate of USD9.61 billion for the quarter.The Japanese Nikkei 225 index closed 0.1% higher on Friday. In China, the Shanghai Composite finished up 0.1%, while the Hang Seng index in Hong Kong is 0.2% lower in late trade. Sterling was quoted at USD1.3130 early Friday, recovering from USD1.3048 at the London equities close Thursday, after the pound had slumped amid increased Brexit uncertainty. Late on Wednesday, the pound had been up at USD1.3205. "The pound had a roller-coaster session on the currency markets yesterday, at one point dropping over 1% on the day against the US dollar as traders fretted about the prospect a week from now the UK could leave the EU without a deal," continued Hewson."With little sign of compromise on either side and the European Council meeting to try and open up options to grant the UK's wish for an extension to Article 50 looking rather limited, the pound also slid to a four-week low against the euro, before rebounding, in the wake of last night's events in Brussels."UK Prime Minister Theresa May is to make a last-ditch drive to persuade MPs to back her EU withdrawal plan after Brussels agreed to delay Brexit to May 22 if she can secure support from the Commons for the deal next week.If MPs reject the prime minister's Withdrawal Agreement for a third time, the UK will have until April 12 to set out its next steps, with a longer extension on offer only if Britain takes part in European Parliament elections in May.Leaders of the remaining 27 EU member states drew up the deal in a mammoth eight-hour meeting in Brussels, after turning down the PM's plea to postpone Brexit from March 29 to June 30.May spoke with European Council President Donald Tusk during and after the meeting, but aides declined to say whether she was able to feed into the discussions taking place in her absence.In a midnight press conference in Brussels, the prime minister said the "flextension" plan offered MPs a clear choice.On the London Stock Exchange, FTSE 100 engineer Smiths Group said it will demerge its Medical business and list it in the UK. Smiths expects the process will complete during the first half of 2020, as long as it gets shareholder approval. This will lead to "two stronger companies", Smith Chief Executive Andy Reynolds Smith said. Smiths is currently looking to hire a new Medical unit CEO. Smiths also posted interim results, showing revenue for the six months to January 31 rose 2% to GBP1.57 billion. Excluding the Medical arm, revenue was up 3%. Pretax profit, however, declined 13% to GBP174 million from the prior year. On an underlying basis, pretax profit fell 1% to GBP216 million year-on-year. Smiths increased its interim dividend by 2.2% to 14.1 pence per share. Smiths said it was a "good" first half performance, and it has reaffirmed full year expectations of underlying revenue growth of at least 2%. Aviva Chair Keith Williams is to retire from the board following its annual general meeting on May 23, having been promoted to chair of Royal Mail from May 22.Williams, who was already deputy chair of Royal Mail, will succeed outgoing Royal Mail Chair Les Owen. In the FTSE 250, hedge fund administrator Sanne Group posted strong revenue growth in 2018, while it is confident on another strong outturn in 2019. Revenue for 2018 rose 27% to GBP143.0 million, and on an organic basis by 12%.Sanne's pretax profit climbed 5.8% year-on-year to GBP23.7 million, and on an underlying basis the figure increased 12% to GBP42.6 million. Sanne is paying a final return to shareholders of 9.2 pence per share, taking the total for 2018 to 13.8p from 12.6p. "The group's future prospects remain very positive, underpinned by long-term, sticky contracts and driven by the strong structural growth of the addressable global alternatives market," said Sanne."We expect to continue to build on our success as a high growth sustainable business whilst benefiting from the investment we have made, and continue to make, in our people and infrastructure. Against this background, we expect to deliver a good performance in 2019 and remain confident in the medium and long-term prospects for the group."Components maker Senior has won a contract to supply components to Saab's Boeing T-X pilot training system for the US Air Force.Senior did not say how much the contract is worth, but noted the US Air Force believes the T-X programme will be "for much of this century". US firm Berry Global has confirmed its 793p per share, GBP3.34 billion bid for RPC Group is final and will not be increased, though it could be if a third party comes in. Berry said "good" progress is being made, and it expects the acquisition to close in the third quarter of 2019. Elsewhere on the LSE, construction firm Morgan Sindall has set up a joint venture with Brentwood Borough Council which could be worth up to GBP1 billion.The 50-50 joint venture, via its Morgan Sindall Investments arm, will see new homes, developments, public spaces, and commercial and leisure facilities be built on Council land. The partnership's concession period is for 30 years, Morgan Sindall said, and will be the most significant project ever undertaken by Brentwood Borough Council. Fellow constructor and property developer Henry Boot reported a decline in both 2018 revenue and profit, and said 2019 is set to be a challenging year following Brexit. Henry Boot's revenue fell to GBP397.1 million, down 2.8% year-on-year, while pretax profit slipped 12% to GBP48.6 million. Net asset value per share rose, however, by 12% to 227p. Henry Boot is paying a final dividend of 5.80p per share, taking the 2018 total to 9.00p from the 8.00p paid a year prior. The firm said the "successful" 2018 results came in a challenging environment, and despite a gloomy outlook for 2019, it has begun the year well with "strong" order book. Still to come in the economic calendar Friday are flash services and manufacturing PMI readings from France, Germany, the eurozone, and the US at 0815 GMT, 0830 GMT, 0900 GMT and 1345 GMT.
17 Jun 2016 08:30
