LONDON MARKET PRE-OPEN: IAG loss narrows; Beazley reports growth

Fri, 05th Nov 2021 07:38

(Alliance News) - Stock prices in London are seen opening lower on Friday morning, after the Bank of England on Thursday kept interest rates on hold, as investors' focus turns to US non-farm payrolls report.

IG futures indicate the FTSE 100 index is to open 16.61 points lower at 7,263.30. The blue-chip index closed up 31.02 points, or 0.4%, at 7,279.91 on Thursday.

The BoE voted 7-2 to maintain Bank Rate at its record low 0.1% at its November meeting. Markets had been expecting a 15 basis point hike to 0.25%.

The two votes against the motion to hold, from Dave Ramsden and Michael Saunders, were to enact this 15 basis point hike. Governor Andrew Bailey voted to keep rates unchanged.

"They signalled that a rate hike will be appropriate in the coming months if data is broadly in line with expectations. We continue to expect three hikes next year," said Danske Bank senior analyst Bjorn Sillemann.

The pound was quoted at USD1.3505 early Friday, unchanged from the London equities close Thursday.

The euro was priced at USD1.1561, firm from USD1.1547. Against the yen, the dollar was trading at JPY113.68 in London, soft from JPY113.72.

In early UK company news, International Consolidated Airlines Group reported a narrowed loss in the third quarter of 2021 amid improved operating conditions.

The parent company of British Airways and Aer Lingus said passenger capacity in the three months to September 30 was 43% of 2019, up from 22% in the three moths to June 30. Current passenger capacity visibility for quarter to December 31 is for around 60% of 2019 capacity.

IAG said cargo carried in the third quarter was up 37% on 2020, reaching 73% of 2019 levels, despite a reduction in cargo-only flights as passenger capacity increased, with 657 cargo-only flights operated in the quarter compared with 1,371 in the second quarter.

Reported operating loss for the third quarter totalled EUR452 million, narrowed from EUR1.92 billion a year ago. For the first nine months of 2021, the company reported an operating loss of EUR2.49 billion, narrowed from EUR5.98 billion a year ago.

"There's a significant recovery underway and our teams across the group are working hard to capture every opportunity. We continue to capitalise on surges in bookings when travel restrictions are lifted," said Chief Executive Luis Gallego.

Prague, Czechia-based software company Avast said NortonLifeLock shareholders approved the London-listed firm's takeover on Thursday. In August, Avast agreed to be bought by Tempe, Arizona-based NortonLifeLock in a deal worth about USD8.6 billion. For each Avast share, the offer is USD2.37 in cash, plus 0.1937 of a NortonLifeLock share.

London-based insurer Beazley said momentum from the first half has persisted into the second half, with rate rises and premium growth that have exceeded its expectations.

Gross premiums written in the nine months to September 30 increased by 29% to USD3.27 billion from USD2.53 billion a year earlier. Premium rates on renewal business increased by 23%.

Beazley said its initial estimate of catastrophe losses for the third quarter is USD125 million net of reinsurance. This includes an early estimate of losses in respect of Hurricane Ida in the US of USD85 million and USD40 million for the European floods.

Elsewhere, the company said its investments returned 0.2% in the third quarter and 1.4% in the first nine months of 2021. Returns from Beazley's fixed income investments have been low, reflecting the low and rising yield environment, although the company's inflation-linked bond exposures have made a positive contribution, it said.

4imprint Group reported further "encouraging" progress against a backdrop of continuing uncertain and volatile market conditions.

The London-based direct marketer of promotional merchandise said weekly order totals have averaged 2% above 2019 levels in the second half of the year to the end of October.

"We remain very confident in the group's strategy, business model and competitive position. The demand numbers so far in the second half of 2021 show clearly that our offering continues to resonate with our target customers," the company said in its statement Friday.

However, 4imprint warned that pandemic-related global and local supply chain issues continue to cause inventory availability challenges, increased production times and product cost inflation in the second half of 2021.

Flavoured cordial Vimto producer Nichols said it expects to report 2021 profit ahead of current market expectations. The company said revenue for the first nine months of 2021 was ahead of expectations, increasing by 17% year-on-year to GBP107 million.

The Vimto brand has continued to deliver a strong performance across all of its markets, Nichols highlighted.

Going forward ,the company said it sees adjusted pretax profit for 2021 ahead of the current market consensus, which stands at GBP19.1 million. Nichols now anticipates that adjusted pretax profit for the year will be in the range of GBP21 million to GBP22 million. For 2020, the company posted adjusted pretax profit of GBP11.6 million.

In Tokyo on Friday, the Nikkei 225 index closed down 0.6%. In China, the Shanghai Composite closed down 1.0%, while the Hang Seng index in Hong Kong was down 1.7% in late trade. The S&P/ASX 200 in Sydney outperformed, closing up 0.4%.

Brent oil was quoted at USD80.57 a barrel Friday morning, down from USD82.05 late Thursday. Gold stood at USD1,797.88 an ounce, up from USD1,793.00.

Major oil producers agreed Thursday to continue modestly raising output despite pressure from the US and other big consumer nations to open up the taps much more decisively amid soaring prices.

The 13 members of the Organization of Petroleum Exporting Countries and their 10 allies reconfirmed a July decision to gradually step up production each month in a brief meeting via videoconference.

The powerful producers led by Saudi Arabia and Russia in the so-called OPEC+ will add 400,000 barrels per day in December, they said.

The decision aimed "to ensure a stable and a balanced oil market, the efficient and secure supply to consumers," the group said in a statement.

The economic events calendar on Friday has eurozone retail sales numbers at 1000 GMT and the US jobs report at 1230 GMT.

"Labour supply issues remains a key macro theme, and US labour market developments are particularly interesting to watch now that the Fed has started tapering and rate hikes are foreseen next year," noted Danske Bank's Sillemann.

By Evelina Grecenko; evelinagrecenko@alliancenews.com