(Alliance News) - Stock prices in London are seen opening higher on Monday, with the pound's post US nonfarm gains ebbing slightly, during what is expected to be a more muted session with markets in New York closed for Labor Day.
In early UK corporate updates on Monday, Dechra Pharmaceuticals posted a profit jump in a "Covid-19 pandemic affected financial year", HgCapital Trust said its net asset value surged in the first half of 2021, while Goldman Sachs-linked investment group Petershill Partners announced it is mulling a London float.
IG futures indicate the FTSE 100 index is to open 28.2 points higher, or 0.1%, at 7,176.75. The blue chip index ended down 25.55 points, or 0.4%, at 7,138.35 on Friday.
The pound faded against the dollar early Monday. Sterling fell to USD1.3850 from the USD1.3866 it fetched at the London equities close on Friday.
"GBPUSD fell just short of the 1.3900 area and could well slip back towards the 1.3820 area. As long as we hold 1.3820, we can see a move through 1.3900 towards 1.4000. Trend line support at 1.3770 needs to hold for the current rebound to continue, or risk a move back to the 1.3680 level," CMC Markets analyst Michael Hewson commented.
The euro slipped to USD1.1874 from USD1.1883, even as provisional figures from Destatis showed new manufacturing orders in Europe's largest economy surged in July.
New manufacturing orders in Germany climbed 3.4% monthly in July, building on June's 4.6% climb, and topping FXStreet-cited forecasts of a 1% decline.
Annually, new orders surged 24%, following June's upwardly revised 27% hike. July's yearly figure breezed past forecasts of a 14% rise.
Destatis said: "New orders reached the highest level since the beginning of the time series in 1991. The previous record high had been reached in December 2017 before the beginning of the corona crisis. The marked month-on-month increase was caused by major orders. Excluding major orders, there was a decline of 0.2% in July 2021."
Still to come on Monday, the latest UK construction PMI is released at 0930 BST. As the week progresses, central banks will be in focus. The European Central Bank reports its latest interest rate decision on Thursday, after the Bank of Canada on Wednesday and Reserve Bank of Australia on Tuesday.
CMC's Hewson commented: "The main focus now shifts towards the European Central Bank rate meeting on Thursday, with some questions being increasingly raised about the pace and sustainability of its bond buying programme, after CPI jumped to a ten-year high of 3% last week. This jump in CPI is causing quite a few governing council members to shift uncomfortably in their seats, particularly those in northern Europe.
"Nonetheless it's unlikely to mark a change in tone or stance by the ECB given the current fragile nature of the European recovery story, which is already starting to show signs of slowing, with concerns over a slowdown in China also likely to gain traction this week as well."
Against the yen, the dollar fell to JPY109.80 early Monday UK time, from JPY109.98 late Friday.
Equities in Asia started the week strongly. In China, the Shanghai Composite was 1.2% higher, and the Hang Seng in Hong Kong was up 0.9%. In Tokyo, the Nikkei 225 closed up 1.8%, having advanced 2.3% on Friday.
The Nikkei continued to advance after surging on Friday in the wake of Japan's Prime Minister Yoshihide Suga announcing he will not run for his ruling party's leadership, effectively ending his tenure and throwing wide open the race for the next premier.
Suga's departure lifts the prospect of stimulus measures, Oanda analyst Jeffrey Halley noted, with Fumio Kishida, a leading successor to Suga, promising an economic help scheme.
In London, FTSE 250-listed Dechra Pharmaceuticals said its annual performance outpaced a "robust" market.
For the year ended June 30, revenue climbed 18% to GBP608.0 million from GBP515.1 million. Pretax profit jumped 81% to GBP74.0 million from GBP40.9 million.
"Dechra has continued to outperform a robust market throughout the Covid-19 pandemic affected financial year. As we start the new financial year trading remains strong with the momentum and market penetration seen in the second half of the prior financial year continuing," Chief Executive Officer Ian Page said.
Dechra lifted its annual payout by 18% to 40.50 pence per share from 34.29p a year earlier.
Looking ahead, Dechra said: "Although Covid-19 related travel restrictions have limited acquisition activity, we have still been able to identify and progress numerous strategic opportunities to strengthen our product portfolio and development pipeline. We therefore remain confident in our ability to successfully execute our strategy and in our future prospects."
Investment firm HgCapital Trust reported an improved first-half, continuing to out-match the FTSE All-Share Index.
HgCapital's net asset value per share rose 20% to 373.4p per share on June 30, from 310.3p at the end of 2020.
The company, which provides access to investments managed by software and services investor Hg, posted an NAV total return of 21% during the period. This beat the FTSE All-Share's return of 11%.
"Despite the uniquely challenging circumstances we have all faced during the Covid-19 pandemic over the last 18 months, I am pleased to report to you that HGT and its underlying investments continued to perform very well in the first half of 2021," HgCapital Chair Jim Strang said.
It maintained its interim payout at 2.0p per share.
Elsewhere in London, Petershill Partners said it is "considering" an initial public offering on London's Main Market.
Petershill aims to boost its coffers by USD750 million to fund new investments.
"Petershill Partners today comprises minority investments in 19 high-quality partner-firms, previously held in private funds managed by Goldman Sachs Asset Management. The partner-firms have USD187 billion of aggregated assets under management," the company explained.
"Petershill Partners has an attractive financial profile underpinned by strong organic AuM growth momentum and a diversified revenue stream comprised substantially of contractually committed, high and stable management fees on long-dated assets."
Brent oil was quoted at USD71.68 a barrel early Monday in London, down from USD72.96 late Friday. Gold was trading at USD1,827.24 an ounce, down from USD1,831.95.
By Eric Cunha; ericcunha@alliancenews.com
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HgCapital Trust plc (HGT)