(Alliance News) - Stock prices in London are seen opening marginally higher on Friday as investors look cautiously ahead to US nonfarm payrolls data, which could have a bearing on the Federal Reserve's plans for tapering its monetary policy.
In early company news, housebuilder Berkeley Group said it expects annual pretax profit for the current financial year to be at least in line with last year's. Engineer Weir Group named a new chair-designate. Emerging markets-focused asset manager Ashmore pointed to progress at its annual results.
IG futures indicate the FTSE 100 index is to open 5.50 points higher at 7,169.40. The blue chip index closed up 14.06 points, or 0.2%, at 7,163.90 Thursday.
AvaTrade analyst Naeem Aslam said: "US and European stock futures are trading mildly higher as traders are going to take a very cautious approach ahead of this data. Generally speaking, there is a minimal volume in the markets ahead of this data as the action tends to happen only after the economic reading.
"Although it is generally expected that the upcoming US NFP number is likely to produce another set of strong readings. But at the same time, investors are also going to look closely at the impact of the Delta variant on the US economy."
In early UK company news, Berkeley Group Holdings said the first four months of its new financial year has seen a continuation of the resilient market conditions reported with its full-year results in June.
Berkeley said the gradual easing of lockdown restrictions has been accompanied by a gradual firming of the London housing market as anticipated. Outside London, the market has remained robust.
"While the sales market has been resilient, the operating environment remains challenging... We have continued to experience inflationary pressure in build costs during this period, principally through materials, and we are mindful of ongoing issues in the supply chain and labour market resulting from Brexit and the pandemic," the housebuilder said.
As such, Berkeley said it remains on track to meet its profit guidance and deliver a pretax profit for the year at or above the GBP518 million reported for the year ended April 30. Further, it anticipates profit to be weighted more to the first half of this financial year and forward sales to be around the year-end level of GBP1.7 billion at the half year.
In addition, Berkeley said it will complete the previously announced proposed B-share capital return of GBP451 million later this month. This comprises both the return of the first half of the previously identified surplus capital - GBP228 million - and the remaining GBP223 million of the regular shareholder return for the year to March 31, 2022.
Berkeley said the proposed B-share capital return will be accompanied by a share consolidation, following which the regular, annual GBP281 million shareholder returns will represent GBP2.50 per share, up from an initial GBP2 per share in 2016.
"Following the B-share payment, the next scheduled shareholder return is the GBP141 million in respect of the six months to September 30, 2022. Given the resilient performance since the year-end, Berkeley today announces its intention to make the return through either dividends or share buy-backs in the intervening period," the company added.
Weir Group said Charles Berry will retire as chair following the 2022 annual general meeting, having completed his full nine-year term with the board.
As such, Weir promoted Non-Executive Director Barbara Jeremiah to chair-designate, with immediate effect. Jeremiah will succeed Berry as chair at the conclusion of the company's AGM, currently scheduled for April 2022, it noted. She has been Weir's senior independent director since 2020, having joined the board in 2017.
Ashmore Group said it made significant progress against its strategic objectives over the past year and generated outperformance for its clients, as assets under management neared the USD100 billion mark.
For the financial year ended June 30, net revenue fell to GBP291.7 million from GBP330.5 million last year and pretax profit rose to GBP282.5 million from GBP221.5 million.
Assets under management rose 13% to USD94.4 billion as at June 30 from USD83.6 billion at the same time a year ago.
Ashmore declared a final dividend per share of 12.1 pence to give total dividends of 16.9p for the year.
Looking ahead, Ashmore said the recovery in economic performance is well-established across emerging markets, with superior GDP growth to the developed world and a widening of the growth premium expected over the next few years. Further, it highlighted vaccination rates in the developing world have accelerated and are expected to match the levels in developed countries by the end of 2021.
"Against this market backdrop, Ashmore's investment performance track records position the firm well for asset growth and the business model has successfully managed another market down cycle and is demonstrating the benefits of its consistent and conservative approach as conditions normalise. The past 18 months have had the specific challenges of remote working, but there is now the real prospect of a return to more normal working patterns over the course of the coming months. Therefore the firm looks to the current financial year and beyond with confidence," said Chief Executive Officer Mark Coombs.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.4%, S&P 500 up 0.3% and Nasdaq Composite up 0.1%. Both the S&P 500 and Nasdaq finished at all-time high closing records.
The Japanese Nikkei 225 index closed up 2.0%. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 in Sydney ended up 0.5%.
Japan's Prime Minister Yoshihide Suga said Friday he will not run for his ruling party's leadership, effectively ending his tenure and throwing wide open the race for the next premier.
The shock decision after just a year in office comes with Suga's approval ratings at an all-time low over his government's handling of the response to the pandemic.
Further, it suggests a possible return to political instability for Japan, which cycled through prime ministers regularly before the lengthy tenure of Suga's predecessor Shinzo Abe. Suga has been battered by his government's response to the pandemic, with Japan struggling through a record fifth wave of the virus after a slow start to its vaccine rollout.
On the economic front, the Japanese service sector witnessed a sharp contraction during August, figures from au Jibun Bank and IHS Markit showed.
The au Jibun Bank Japan composite purchasing managers' output index - which measures combined output in the manufacturing and service sectors - fell to 45.5 index points in August from 48.8 points in July. The continued contraction was led by the fastest fall in services output for 15 months, alongside a softer increase in manufacturing production.
Readings above 50.0 points signal an improvement in business activity on the previous month while readings below show deterioration.
Meanwhile, services companies in China signalled a renewed fall in business activity during August, as rising Covid-19 case numbers at home and abroad hurt operations and demand, Caixin and IHS Markit said.
The headline seasonally adjusted Business Activity Index fell to 46.7 points in August from 54.9 points in July.
The composite output index posted 47.2 points in August, down from 53.1 points in July, to signal a renewed fall in overall business activity across China. Though modest, it marked the first decline in output since April 2020.
The pound was quoted at USD1.3835 early Friday, flat from USD1.3836 at the London equities close Thursday.
The euro was priced at USD1.1880, up from USD1.1862. Against the yen, the dollar was trading at JPY110.02, firm from JPY109.98.
Brent oil was quoted at USD72.98 a barrel Friday morning, down from USD73.34 late Thursday. Gold was trading at USD1,811.15 an ounce, soft from USD1,812.03.
The latest US nonfarm payrolls report is due at 1330 BST on Friday. Ahead of the data, a host of services and composite PMI readings are printed, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Berkeley Group (BKG)
Weir Group (WEIR)
Ashmore (ASHM)