LONDON MARKET PRE-OPEN: Astra's Lynparza Approved; Rio Restarts RBM

(Alliance News) - Stocks in London are set for a broadly flat open on Monday as sabre rattling by North Korea loomed as a source of concern between the Christmas and New Year holidays.

In early UK company news, Rio Tinto said it has started a phased resumption of operations at Richards Bay Minerals in South Africa, while AstraZeneca and Merck & Co's pancreatic cancer drug Lynparza has been approved in the US.

IG says futures indicate the FTSE 100 index of London large-caps to open 10.00 points lower at 7,634.90 on Monday. The FTSE 100 index closed up 12.66 points, or 0.2%, at 7,644.90 on Friday. It is up 14% in 2019 as the year draws to a close.

Sterling was quoted at USD1.3121 early Monday, higher than USD1.3092 at the London equities close on Friday.

The euro was quoted at USD1.1203 early Monday, up from USD1.1175 late Friday. Against the yen, the dollar was quoted slightly lower, at JPY109.11, versus JPY109.47.

In the US on Friday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.1%, the S&P 500 flat and Nasdaq Composite down 0.2%.

In Asia on Monday, the Japanese Nikkei 225 index ended down 0.8%. In China, the Shanghai Composite closed up 1.2%, while the Hang Seng index in Hong Kong is 0.4% higher in late trade.

North Korean leader Kim Jong Un called for his military and diplomats to prepare unspecified "offensive measures" to protect the country's security and sovereignty, the North's state media said.

The call came before his end-of-year deadline for the Trump administration in the US to make major concessions to salvage a fragile nuclear diplomacy.

At a ruling Workers' Party meeting on Sunday, Kim also "comprehensively and anatomically analysed" problems arising in efforts to rebuild the North's moribund economy and presented tasks for "urgently correcting the grave situation of the major industrial sectors," the Korean Central News Agency said.

The plenary meeting of the party's Central Committee, which began on Saturday, is being closely watched amid concerns Kim could suspend his deadlocked nuclear negotiations with the US and take a more confrontational approach by lifting a self-imposed moratorium on nuclear and long-range missile tests.

Back on LSE, Anglo-Australian miner Rio Tinto said it is resuming operations at Richards Bay Minerals, following discussions, led by the premier of KwaZulu-Natal, Sihle Zikalala, addressing the issues in the community.

Rio Tinto had halted operations at the start of January, saying it feared for the safety of employees due to "violence in the communities surrounding the operations" in South Africa.

The company said one employee had been shot, and seriously injured, leading to the suspension of activity at the site, which produces minerals such as ilmenite, one of the main ores of titanium.

On Monday, Rio said a phased restart is now in progress, with RBM expected to return to full operations in early January, leading to regular production in early 2020.

"The safety and security of our people is always our first priority, and we are pleased that we will now be able to get back to work creating value for our people, our communities, South Africa and RBM's shareholders," said Bold Baatar, chief executive of Rio Tinto's Energy & Minerals unit.

Drugmakers AstraZeneca and Merck & Co reported that Lynparza has been approved in the US for the maintenance treatment of adult patients with deleterious or suspected pancreatic cancer.

The approval follows the recommendation from the US FDA Oncologic Drugs Advisory Committee for Lynparza, which was based on results from the pivotal phase III POLO trial. It showed an improvement in progression-free survival, where Lynparza nearly doubled the time patients with pancreatic cancer lived without disease progression or death.

"Patients with advanced pancreatic cancer historically have faced poor outcomes due to the aggressive nature of the disease and limited treatment advances over the last few decades. Lynparza is now the only approved targeted medicine in biomarker-selected patients with advanced pancreatic cancer," said Dave Fredrickson, executive vice president of Oncology division at AstraZeneca.

Up to 10,000 jobs at HSBC Holdings are at risk, as the lender's interim boss plans an overhaul which could also see parts of its US division axed, the Daily Mail reported on Sunday.

Retail banking operations in France also could be closed, according to the newspaper.

In the US, the firm is mulling the sale of branches in US cities such as Los Angeles, Seattle and San Francisco.

Interim Chief Executive Noel Quinn is set to unveil plans for the shake-up in the company's annual results on February 18, as he looks to seal the job on a permanent basis, the Daily Mail said.

Andy Smith is likely step down as chief executive of Smiths Group PLC next year, after the spin-off of the FTSE 100 engineer's medical business is completed, the Sunday Times reported.

Smith, who has been chief executive of Smiths since 2015, has been under fire since the company was forced to abandon a merger of the medical unit with American firm ICU Medical Inc, the Times reported.

In September 2018, Smiths confirmed that talks with ICU for a deal fell through. According to the Times, the Smiths board was unhappy with the terms of the deal.

Elsewhere on the London Main Market, BigDish, which operates a yield management platform, reported a widened pretax loss of GBP1.1 million for the six months to the end of September compared to GBP388,244 loss a year earlier, amid higher administrative expenses, which grew to GBP735,077 from GBP235,423.

In addition, BigDish recorded a GBP396,277 impairment loss associated with Looloo and fees on fundraising.

Revenue for the year remained insignificant, at GBP11,766 versus GBP2,448 a year ago.

Looking ahead, Chief Executive Tom Sumner said: "We have sufficient funding runway in order to increase the pace of restaurant acquisition which is the key performance indicator for the year ahead."

He added: "It is my expectation that 2020 will be a turnaround story for BigDish and our shareholders."

In commodities, gold was quoted at USD1,513.46 early Monday, slightly lower than USD1,514.27 at the London equities close on Friday. Brent oil was trading at USD68.29 early Monday, firm from USD68.14 at the London equities close on Friday.

The economic events calendar on Monday has US goods trade balance at 1330 GMT.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.