LONDON BRIEFING: UK retail sales slump; CMA clears Severn Trent

(Alliance News) - Stocks in London are expected to add to their losses on Friday, amid gloomy retail sales data.

In July, UK retail sales saw a worse-than-expected decline on a yearly and monthly basis. Figures for June were also downwardly revised.

"The washout sales figures come amid the continuing squeeze on household incomes although there is growing evidence that we may now be moving past the worst. Inflation is falling fast which could start to translate into higher consumer spending as budget pressures recede," said Phil Monkhouse, head of sales at Ebury.

In early UK company news, the CMA said it wouldn't refer Severn Trent's acquisition of Andigestion to a phase 2 probe. Great Portland Estates bought acquired the freehold for properties in London's West End.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called down 31.3 points, at 0.4%, at 7,278.91

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Hang Seng: down 1.6% at 18,029.74

Nikkei 225: closed down 0.6% at 31,450.76

S&P/ASX 200: closed marginally higher at 7,148.10

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DJIA: closed down 290.91 points, 0.8%, at 34,474.83

S&P 500: closed down 0.8% at 4,370.36

Nasdaq Composite: closed down 1.2% at 13,316.93

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EUR: up at USD1.0884 (USD1.0872)

GBP: down at USD1.2743 (USD1.2746)

USD: down at JPY145.34 (JPY146.06)

Gold: flat at USD1,893.10 per ounce (USD1,893.44)

Oil (Brent): down at USD83.98 a barrel (USD84.68)

(changes since previous London equities close)

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ECONOMICS

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Friday's key economic events still to come:

US President Joe Biden hosts trilateral leaders summit with Japanese Prime Minister and South Korean president

11:00 CEST EU CPI

11:00 CEST EU construction output

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The Office for National Statistics said retail sales fell 3.2% annually in July, compared to a downwardly-revised 1.6% fall in June. The market had been expecting a 2.1% fall for July, according to FXStreet-cited consensus. June's annual decline was first estimated at 1.0%. From the previous month, sales fell 1.2% in July, compared to a downwardly-revised 0.6% rise in June. July's reading was worse than market consensus, which had forecast a 0.5% decline. June's rise was first reported as 0.7%. Excluding fuel, retail sales were down 3.4% annually in July, having fallen 1.6% in June. On a monthly basis, non-fuel sales were down 1.4% in July, after rising 0.7% in June.

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BROKER RATING CHANGES

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JPMorgan raises Hikma Pharmaceuticals price target to 2,350 (2,100) pence - 'overweight'

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COMPANIES - FTSE 100

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The UK Competition & Markets Authority said it would not refer Severn Trent's buy of Andigestion to a phase 2 investigation. In June, the CMA had said it was considering whether the merger would create any lessening of competition in any UK markets, and invited interested parties to comment. Water utility Severn Trent had announced its green power unit's acquisition of Andigestion in February. Andigestion which operates two food waste anaerobic digestion plants in southwest England. It disclosed no financial details.

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Glencore has a new rival in its bid to acquire Teck Resources' coal division, with Mumbai-based JSW Steel scoping out parties to form a consortium, Bloomberg reported. Citing people with knowledge of the matter, Bloomberg reported that JSW is on the hunt for partners for an offer to acquire 75% of Teck's coal arm. A deal will value the unit at more than USD8 billion, Bloomberg reported.

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COMPANIES - FTSE 250

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Great Portland Estates said it has acquired King Sloan Properties, which owns the freehold interests at 16/19 Soho Square, 29/43 Oxford Street and 7 Falconberg Mews, in London's West End. The consideration was based on a property value of GBP70 million, and was funded from GPE's exisiting undrawn facilities and cash. The mixed-use buildings are 57,456 square feet, and are currently multi-let at around GBP1.48 million annually. Vacant possession is expected by next March, it noted. "The redevelopment will provide a best-in-class HQ office building on Soho Square with flagship retail fronting Oxford Street, arranged over basement, lower ground, ground and eight upper floors, with multiple private terraces and a communal roof terrace," GPE said.

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OTHER COMPANIES

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On its way out of the London Stock Exchange, Kingspan reported interim results. The Kingscourt, Ireland-based building materials company said revenue slipped to EUR4.08 billion from EUR4.15 billion a year before, though pretax profit rose to EUR392.8 million from EUR387.6 million. It raised its interim dividend to 26.3 euro cents from 25.6 cents a year before. "As we look to the remainder of the year, we expect continuing strategic momentum supported by a strong development pipeline, an increasingly stable supply chain and pricing environment, and a global decarbonisation drive," Chief Executive Gene Murtagh said. Kingspan said the cancellation of its London listing has taken effect. Its shareholders voted to cancel its Main Market listing last month, given the "negligble" amount of its share dealings that occurred on the LSE. It had said it remains "committed" to its primary listing on the main market of the Euronext Dublin, where the majority of its share trading takes place. It also has American depositary receipts trading in New York.

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By Elizabeth Winter, Alliance News senior markets reporter

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