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(Alliance News) - Stocks in London were set to open higher on Monday, at the start of a busy week of central bank moves.
The US Federal Reserve will announce its next interest rate decision on Wednesday. Markets see a 74% chance of the central bank holding US interest rates steady, with the balance expecting another 25 basis point hike.
The European Central Bank announces its interest rate decision on Thursday, the day after the Fed, with markets widely expecting another 25 basis point lift from the Frankfurt-based central bank amid stubbornly high inflation in the eurozone.
The Bank of Japan will reveal its decision the same day as the ECB, though Japan's central bank is expected to keep its loose monetary policy unchanged.
"This week's central bank decisions could go a long way in determining how much further central banks are prepared to go before they can offer any insight into when they expect to stop raising rates," said Michael Hewson, chief market analyst at CMC Markets.
In UK company news early Monday, Sport Direct-owner Frasers has acquired a 19% stake in online appliance retailer AO World for GBP75 million. Indivior shares will begin trading on the Nasdaq exchange in New York on Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 36.84 points, or 0.5%, at 7,599.20
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Hang Seng: up 0.2% at 19,429.65
Nikkei 225: closed up 0.5% at 32,434.00
S&P/ASX 200: closed for King's birthday holiday
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DJIA: closed up 43.17 points, 0.1%, at 33,876.78
S&P 500: closed up 0.1% at 4,298.86
Nasdaq Composite: closed up 0.2% at 13,259.14
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EUR: flat at USD1.0753 (USD1.0750)
GBP: flat at USD1.2579 (USD1.2577)
USD: higher at JPY139.46 (JPY139.33)
Gold: lower at USD1,961.00 per ounce (USD1,961.75)
(Brent): lower at USD73.98 a barrel (USD76.12)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
Australia King's Birthday. Financial markets closed.
Switzerland international and domestic debt securities statistics
1500 BST UK BoE Monetary Policy Committee Member Catherine Mann speaks
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Strikes by security guards at Heathrow are unlikely to cause flight cancellations, the airport said. More than 2,000 members of the Unite union will walk out for 31 days from June 24 in a dispute over pay. For the first time, security officers based at Terminal 3 will join their colleagues from Terminal 5 and campus security who have already taken industrial action. British Airways cancelled around 5% of its schedule at Heathrow during strikes over the Easter holiday period, but no flights were grounded due to walkouts last month. Heathrow said it carried 6.7 million passengers last month, up 26% from a year before.
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BROKER RATING CHANGES
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Goldman Sachs cuts Segro to 'neutral' (buy) - price target 800 (900) pence
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Goldman Sachs cuts Great Portland to 'sell' (neutral) - price target 440 (470) pence
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Barclays cuts RWS price target to 465 (480) pence - 'overweight'
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COMPANIES - FTSE 100
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High street retailer Frasers said it acquired a 19% stake in online electricals retailer AO World on Friday. The Sports Direct-owner purchased 109.4 million shares in AO World at a price of 68 pence each, totalling an investment of GBP75 million. Frasers said the investment was the "culmination of productive talks over the last two years about establishing a strategic partnership". Chief Executive Michael Murray said: "Through this investment, Frasers will benefit from AO's valuable know-how in electricals and two-man delivery, helping us to drive growth in our bulk equipment and homeware ranges. In turn, AO will have the opportunity to benefit from Frasers' expertise and ecosystem."
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Glencore confirmed recent press reports that it submitted a takeover proposal for Teck Resources' steel-making coal business. The miner said it has made the proposal as it is expected to allow for a value accretive demerger of the combined coal and carbon steel materials business to its shareholders. If the acquisition were to materialise, Glencore would demerge its combined coal and carbon steel materials business once it has "sufficiently" de-levered. "Glencore is fully committed to ensuring that the proposed [Teck steelmaking coal business] acquisition would benefit Canada and is open to working with Teck to identify a comprehensive suite of commitments for the benefit of all relevant stakeholders which would, amongst others, maintain and, where feasible, enhance [Teck's steelmaking coal business]'s existing presence and capital investments in Canada," it said.
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COMPANIES - FTSE 250
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Indivior will begin trading on the Nasdaq Global Select Market at the US market open on Monday. The pharmaceutical company, which is based in the US state of Virginia, will retain its listing on the London Stock Exchange and will remain in the FTSE 250 index. "The additional US listing of Indivior shares is an important milestone. We believe it will bring additional exposure to both Indivior and the disease space in the US, which is our largest opportunity market. Over time, we expect it will facilitate increased ownership by additional US-based biopharma investors. We also are mindful of the significant unmet need for opioid use disorder treatment in the US, and are hopeful our US listing will help raise awareness of the opioid epidemic," Chief Executive Mark Crossley said.
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Network International announced that CVC Advisers and Francisco Partners Management no longer intend to make an offer for the company. This follows on from Network International's announcement on Friday that it has agreed to a takeover from entities backed by Toronto-based private equity firm Brookfield Asset Management. Brookfield will pay 400 pence per Network International share, a 64% premium to Network International's 243.6p share price at the close of play, the day before the Middle East and Africa-focused payments provider first received buyout interest. Under the proposal from CVC Advisers and Francisco Partners, Network International shareholders would have received 387p per share.
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OTHER COMPANIES
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Thungela Resources said it expects to deliver positive, but lower, earnings and cash generation for the six months ending June 30, on the basis of the first five months of 2023. This is notwithstanding a sharp decline in coal prices and the continued rail underperformance by Transnet Freight Rail, Thungela said. Interim earnings per share are expected between ZAR17.00 and ZAR23.00, down from ZAR67.23 the previous year. The coal producer added it is not currently affected by challenges relating to Eskom, South Africa's state-owned power utility, and its inability to provide a consistent supply of electricity. However, Thungela acknowledged that this would become an area of concern.
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Learning Technologies noted "moderate" business momentum in the first half of 2023, supported by a "healthy" sales pipeline and despite a challenging macro environment. It added that its strong balance sheet will allow it to make "select accretive" acquisitions in due course. "With a step-change in the scale of our business following the successful integration of GP Strategies, our broader offering provides a platform to capture a greater proportion of the circa USD100 billion, and growing, addressable market in digital learning and talent management," Chair Andrew Brode commented. Learning Technologies will issue a trading update on July 27.
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UBS is poised to complete on Monday its takeover of Credit Suisse, but integrating the former rival is a Herculean task that clients, employees and Swiss political leaders will closely watch. The coming months are likely to be "bumpy", warned UBS chief Sergio Ermotti on Friday, adding the integration will come with "waves" of difficult decisions, particularly regarding employment. The country's leading bank UBS was forced into a marriage to prevent its rival from going under, but it hasn't waited for Monday to start preparing to absorb Credit Suisse. But "from Monday onward, UBS can start to be proactive," Andreas Venditti, a financial analyst for Vontobel, told AFP, if the timetable stands.
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By Heather Rydings, Alliance News senior economics reporter
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