(Alliance News) - Stock prices in London are seen opening higher on Monday following last week's victory by the Conservative Party in the UK general election and after the US and China agreed a trade truce.
In early company news, Cineworld Group looked to expand its presence in the North American cinema market by acquiring Canadian peer Cineplex. Transport operator FirstGroup said it is exploring the possibility of selling its North America operations, and sportswear retailer Sports Direct International reported positive interim results.
IG futures indicate the FTSE 100 index is to open 39.56 points higher at 7,393.00. The blue chip index closed up 79.97 points, or 1.1% at 7,353.44 Friday.
Cineworld Group proposed the CAD2.8 billion, about USD2.1 billion, acquisition of Canadian cinema chain Cineplex for CAD34 per share in cash. Cineplex shares closed in Toronto on Friday at CAD24.01, giving it a market capitalisation of CAD1.52 billion.
Cineworld already has a strong presence across the pond following its acquisition of US cinema chain Regal Entertainment. It has a market cap of GBP2.83 billion.
Cineplex is the largest cinema operator in Canada with a 75% box office market share.
Cineworld said the acquisition is expected to be "double-digit accretive to earnings and free cash flow" in the first full year following completion, which it expects to complete by the end of the first half in 2020.
Sports Direct reported a sharp rise in interim earnings amid what it called a tough and challenging retail environment.
For the half year ended October 27, revenue rose 14% to GBP2.04 billion from GBP1.79 billion last year and pretax profit more than doubled to GBP193.4 million from GBP74.4 million. The company attributed the sharp rise in profit to the sale and leaseback of the Shirebrook distribution centre for GBP120 million.
The company did not declare an interim dividend.
Sports Direct said it was on track to complete its store elevation plan - intended to optimise its stores and online operations - by the end of the financial year.
"We are hoping that the political waters will be calmer in the coming months which will allow us to move out of this period of market unpredictability. This will enable us to plan appropriately for the future which is critically important. Despite ongoing challenges, we believe we are getting into a good place, building a solid foundation of elevation and efficiency which will lead to sustainable growth and a successful future," said Chair David Daly.
Public transport operator FirstGroup said it has been conducting a strategic review of its North American businesses First Student and First Transit and will "formally explore all options" including a potential sale.
Turning to the UK, FirstGroup said: "We are actively addressing the cost base of First Bus through a comprehensive efficiency programme, the results of which will be substantially more evident in the second half of the year and beyond. Therefore, the board determined that greater value will be achieved by delivering this margin enhancement prior to any launch of a formal sale process."
Oil and gas company Nostrum Oil & Gas said Chief Executive Officer Kai-Uwe Kessel has "mutually agreed" to step down with immediate effect and will be succeeded by Non-Executive Director Kaat Van Hecke.
The Japanese Nikkei 225 index closed down 0.3% on Monday. In China, the Shanghai Composite closed up 0.5%, while the Hang Seng index in Hong Kong is down 0.4%.
The US-China trade deal is "remarkable" in scope but it won't solve all the problems between the world's two biggest economies, the top US negotiator said Sunday.
"This is not just about agriculture and other purchases," US Trade Representative Robert Lighthizer said in an interview with CBS's 'Face the Nation'. "The way to think about this deal, is this is a first step in trying to integrate two very different systems to the benefit of both of us."
The so-called phase one agreement announced Friday includes elements dealing with intellectual property protections, technology, currency and financial services.
Lighthizer said the USD50 billion in additional purchases of American agricultural products by China is spelled out in writing in the agreement.
Though the agreement is still being translated and has yet to be signed, Lighthizer insisted, "This is totally done".
China enjoyed a better-than-expected pick-up in the key retail and industrial sectors in November, economic data showed Monday, providing a further boost to Beijing after finally agreeing the mini trade pact with the US.
Industrial production increased 6.2% on-year last month, up from 4.7% in October and the best reading in six months. There was also positive news for the country's shops, with retail sales up 8.0%, compared with a 7.2% rise the month before.
The pound was quoted at USD1.3393 early Monday, up from USD1.3346 late Friday.
UK Prime Minister Boris Johnson is to address his new intake of Tory MPs as they prepare to vote on his Brexit deal and he seeks to transform the nation after his landslide victory.
The prime minister will welcome the more than 100 newly-elected colleagues, many of them from former Labour areas across the north and Midlands, to the House of Commons on Monday.
Johnson will use his majority of 80 to get his Withdrawal Agreement Bill to implement Brexit approved so the UK can formally leave the EU by the end of January.
The euro was quoted at USD1.1138 early Monday, up from USD1.1123 late Friday. Against the yen, the dollar was trading at JPY109.38, flat against JPY109.35 at the London close Friday.
Gold was quoted at USD1,477.60 early Monday, firm against USD1,471.61 late Friday.
Brent oil was quoted at USD65.06 early Monday, up from USD64.58 late Friday.
The economic events calendar on Monday has manufacturing and services PMI readings from France, Germany, eurozone and the UK at 0815 GMT, 0830 GMT, 0900 GMT and 0930 GMT respectively.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Nostrum Oil&gas (NOG)
Firstgroup (FGP)