(Alliance News) - Stock prices in London are seen opening slightly higher on Friday as investors look ahead to US job data to be released later in the day.
In early company news, insurer Beazley swung to an annual loss and declared no dividend. Aviation services provider Signature Aviation moved a step closer to private ownership. Fashion retailer French Connection received takeover interest.
IG futures indicate the FTSE 100 index is to open just 4.98 points higher at 6,508.70. The blue-chip index closed 4.10 points, or 0.1%, to 6,503.72 Thursday.
Global Infrastructure Partners said Brown Bidco and Signature Aviation have reached agreement on a takeover proposal for the FTSE 250 aviation services provider.
Blackstone Infrastructure and Blackstone Core Equity, GIP and Cascade make up the consortium in relation to the acquisition.
Under the terms of the acquisition, each shareholder will be entitled to USD5.62 in cash, or 411 pence, valuing Signature at USD4.72 billion.
Signature directors intend to recommend unanimously that shareholders vote in favour of the resolutions relating to the acquisition.
"Bidco's investors believe that the development of the Signature Group will be best served as a private business, with access to capital and the benefit of a long-term investment approach. This will allow it to continue to deliver on its strategic objectives whilst enabling it to respond to structural changes in its industry in the medium and long term," GIP said.
Beazley swung to an annual loss and skipped paying any dividend for 2020, as the insurer felt the effects of the coronavirus pandemic.
Beazley posted a pretax loss of USD50.4 million for the year ended December 31, swinging from a USD267.7 million profit in 2019 on revenue of USD2.91 billion, up 10% from USD2.34 billion.
Beazley said 2020 gross premiums written were USD3.56 billion, up 19% from USD3.00 billion. But it reported a combined ratio of 109%, up from 100% in 2019. A combined ratio above 100% indicates an underwriting loss.
Bealey highlighted that after a series of years with material natural catastrophes, the Covid-19 pandemic brought a wave of event cancellation and business interruption claims that hit its contingency and property books.
"At Beazley we felt the impact of pandemic-related losses, reporting an estimated USD340 million in first-party claims net of reinsurance in 2020, largely driven by our exposure to cancelled events, and to have ultimately yielded a financial loss has been disappointing," said Chief Executive Officer Andrew Horton.
The insurer declared no dividend for 2020 having paid out 12.3p per share in 2019. However, the company said it was confident it could return to paying dividends during the course of 2021.
Looking ahead Horton said: "We anticipate the favourable rating environment will continue throughout 2021 and we will continue to pursue growth in areas where we can deliver consistent value for brokers and clients while managing our claims and expenses.
"Despite the harsh effects of the pandemic and a deep global recession, we are optimistic that the positive market change of the last 12 months and the resilience that we have demonstrated puts us on a strong financial and operational footing to support our clients and to grow profitably in 2021. We expect to deliver a low-90s combined ratio for 2021 assuming average claims experience."
French Connection Group said it received two separate takeover approaches for the struggling clothing retailer from Spotlight Brands and Go Global Retail. French Connection said discussions are at an early stage and there can be no certainty that an offer will be made.
In the US on Thursday, Wall Street ended sharply higher, with the Dow Jones Industrial Average up 1.1%, S&P 500 up 1.1% and Nasdaq Composite up 1.2%.
The Japanese Nikkei 225 index closed up 1.5%. In China, the Shanghai Composite ended down 0.2%, while the Hang Seng index in Hong Kong was up 0.9%. The S&P/ASX 200 in Sydney closed up 1.1%.
Axi's Stephen Innes commented: "Optimism over the colossal US stimulus deal fuses at a critical point when US Covid crisis management regimen turns the corner on a positive note providing market boosters with excess rocket fuel to burn.
"With central banks continuing to cover investors who are now pivoting to improving macro developments, When supported by oodles of monetary policy, risk can remain at lofty levels if the macro backdrop remains supported."
A quiet economic calendar on Friday is headlined by the US jobs report, due at 1330 GMT. Analysts predict that the economy created about 50,000 jobs in January, while the unemployment rate remained unchanged at 6.7%.
A nationwide drop in Covid-19 cases and improvements in economic indicators have raised hopes that the US labour market is on the upswing, and government data due could show how strong that recovery is.
US President Joe Biden has pressed for USD1.9 trillion in stimulus spending to support the economic recovery and the White House has said a one-month jobs gain will not alter the need for the aid.
"Hopes rose overnight that the Biden stimulus would pass through the US Senate relatively intact. The prospect of a juicy wave of government spending and borrowing sent longer yields higher, boosting the US dollar, but also lifted US equities, with Wall Street's rally resuming," said Oanda Markets analyst Jeffery Halley.
The pound was quoted at USD1.3684 Friday morning, up from USD1.3659 at the London equities close Thursday. But the euro was priced at USD1.1965, lower from USD1.1976. Against the yen, the dollar was trading at JPY105.52, higher versus JPY105.44.
Brent oil was quoted at USD59.21 a barrel Friday morning, sharply higher from USD58.55 at the London close Thursday. Gold was quoted at USD1,798.10 an ounce, up from USD1,788.70.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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