(Alliance News) - London Stock Exchange Group said Friday it has "commenced exploratory discussions" which could result in selling its interest in government bond exchange platform MTS or even the Borsa Italiana Group as a whole.
The news comes following the European Commission's Phase II review of the Refinitiv takeover.
"There can be no certainty that LSEG will decide to proceed with a transaction relating to either of these businesses," LSEG noted.
The company also said the US Department of Justice has closed its antitrust probe of the Refinitiv acquisition.
"We are making good progress on the proposed transaction with Refinitiv, securing a number of regulatory approvals and engaging constructively with authorities on remaining approvals," said Chief Executive David Schwimmer.
LSEG's first half results, also out on Friday, showed revenue rose 4% annually to GBP1.06 billion, with pretax profit edging lower to GBP362 million from GBP363 million.
LSEG shares were up 0.9% early Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 2.83 points at 5,992.82
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Hang Seng: down 0.2% at 24,674.15
Nikkei 225: closed down 2.8% at 21,710.00
DJIA: closed down 225.92 points, 0.9%, at 26,313.65
S&P 500: closed down 0.4% at 3,246.22
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GBP: up at USD1.3133 (USD1.3036)
EUR: up at USD1.1899 (USD1.1781)
Gold: up at USD1,973.11 per ounce (USD1,941.55)
Oil (Brent): up at USD43.31 a barrel (USD42.72)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1100 CEST EU flash estimate euro area inflation
1100 CEST EU preliminary estimate gross domestic product
1000 EDT US University of Michigan survey of consumers
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UK house prices returned to growth in July after a decline in June amid the easing of lockdown restrictions, Nationwide reported. House prices grew 1.5% in July on a year before, with prices up 1.7% month-on-month. In June, prices had slipped by 0.1% annually and had fallen 1.4% on a monthly basis. "The rebound in activity reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing," said Chief Economist Robert Gardner. "Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown," added Gardner. Nationwide said these trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.
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People from different households in Greater Manchester, parts of east Lancashire and West Yorkshire have been banned from meeting each other inside their homes or in gardens following a spike in virus cases. The new rules also ban members of two different households from mixing in pubs, restaurants and other hospitality venues, but these businesses will remain open for those visiting individually or from the same household. The UK government said it will give police forces and councils powers to enforce the new rules – adding that some exemptions will be put in place, including for the vulnerable. Health Secretary Matt Hancock said "households gathering and not abiding by the social-distancing rules" was a reason for the stricter rules, announced late on Thursday evening, and that the move was in order to "keep the country safe".
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French gross domestic product fell in the second quarter of 2020 amid the shutdown of "non-essential" activities, Insee said. French GDP in volume terms declined by 13.8%, after a 5.9% decrease in the first quarter of 2020. It is 19% lower than in the second quarter of 2019. The ending of restrictions led to a gradual recovery of economic activity in May and June, after the low point reached in April, Insee noted.
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BROKER RATING CHANGES
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GOLDMAN SACHS RAISES JOHN WOOD GROUP TO 'BUY' ('NEUTRAL')
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BERENBERG RAISES YOUGOV PRICE TARGET TO 920 (610) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Natwest, fresh from its name change from Royal Bank of Scotland Group, posted a first half operating loss of GBP770 million, swinging from a GBP2.69 million profit a year ago. Its loss attributable to shareholders came in at GBP705 million, swinging wildly from a GBP2.05 billion profit a year ago. "NatWest has thousands of small companies as customers, making the bank particularly vulnerable to souring loans as the coronavirus crisis continues," City Index's Cincotta commented. NatWest's impairment provision on June 30 totalled GBP6.1 billion, ratcheted up from GBP4.2 billion in March and GBP3.7 billion at the end of December. "Our performance in the first half of the year has been significantly impacted by the challenges and uncertainty our economy continues to face as a result of Covid-19," Chief Executive Alison Rose said.
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British Airways-parent International Consolidated Airlines Group swung to a hefty loss in the first half of 2020. In a stacked update, IAG also announced its chair succession plans, and confirmed a proposed EUR2.75 billion fundraise. Before exceptional items, IAG swung to a pretax loss of EUR4.21 billion during the six months to June 30, a period when Covid-19 emptied skies and killed demand for travel. Revenue dropped 61% annually to EUR4.15 billion. The BA-owner booked an exceptional charge of EUR2.14 billion during the half, related to "de-recognition of fuel", foreign currency hedges and a fleet impairment. Earlier in July, IAG had said it was considering a capital raise and on Friday it confirmed it plans to secure EUR2.75 billion from a pre-emptive subscription. Largest shareholder Qatar Airways, with a 25% stake, has backed IAG's plans to bolster its coffers. In January 2021, Chair Antonio Vazquez will make way for Javier Ferran, currently an independent director at IAG. Vazquez reached nine years in office last January.
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BT's first quarter revenue fell 7% to GBP5.26 billion, with pretax profit slumping 13% to GBP561 million. The revenue fall was "primarily due to the impact of Covid-19, including reduced BT Sport revenue and a reduction in business activity in our enterprise units," BT said. Covid-19 wreaked havoc on the sporting calendar, but in recent weeks and months, football both in the UK and elsewhere, has returned. The telecommunications firm also offered annual guidance, expecting adjusted revenue to fall between 5% and 6% in financial 2021 and for adjusted earnings before interest, tax, depreciation and amortisation to be between GBP7.2 billion and GBP7.5 billion. BT also said it has hired Rob Shuter, currently CEO of South Africa's MTN Group, as the new CEO of BT Enterprise, replacing Gerry McQuade.
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COMPANIES - GLOBAL
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Ford Motor said its second quarter was "better than anticipated". Net income grows sharply to USD1.1 billion from USD100 million a year before. Diluted earnings per share rose to USD0.28 from USD0.04. Revenue, however, dropped 50% year-on-year to USD19.4 billion from USD38.9 billion, as wholesale unit sales fall 53% to 645,000 from 1.4 million. "Ford made the most of its business in the midst of coronavirus, progress toward major new-vehicle launches in the near term, and strategic investments in the company's ambitious future during second-quarter," the car maker said. However, it said "three significant" launches are expected to be delayed due to the coronavirus shutdown in the second quarter. As a result, Ford expects to report a full-year loss before interest and tax.
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Friday's Shareholder Meetings
FBD Holdings
Pennon Group
Midatech Pharma
Montanaro UK Smaller Companies Investment Trust
JD Sports Fashion
Checkit
SDCL Energy Efficiency Income Trust
Sirius Real Estate
JPMorgan Global Core Real Assets
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By Tom Waite; thomaslwaite@alliancenews.com
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