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LONDON MARKET PRE-OPEN: Lloyds CEO Horta-Osorio To Step Down In 2021

Mon, 06th Jul 2020 07:41

(Alliance News) - Stock prices in London are seen opening higher on Monday amid hopes of a swift economic recovery from the coronavirus pandemic.

In company news, lender Lloyds Banking Group said it has appointed a new chair and current chief executive Antonio Horta-Osorio will step down from the role next year. Housebuilder Barratt Developments said it is in a resilient position with all its operational sites reopened as lockdown measures ease. Insurer Aviva named a new CEO after the sudden resignation of Maurice Tulloch.

IG futures indicate the FTSE 100 index is to open 88.38 points higher at 6,233.20. The blue-chip index closed down 95.54 points, or 1.5%, at 6,144.82 on Friday.

The easing of lockdowns is providing hope the global economy will bounce back from an expected recession this year, with Britain's pubs reopening at the weekend and tourist attractions around Europe either now open or planning to. In addition, better-than-forecast data on US jobs creation and factory activity have also provided a boost to confidence, as are hopes for a vaccine, which analysts say is key to kickstarting any major recovery.

The Japanese Nikkei 225 index ended up 1.8%. In China, the Shanghai Composite is up 7.3%, while the Hang Seng index in Hong Kong is up 2.8%.

"With some clear upward momentum to equities as the week starts, only an ugly headline bomb could ruin the party. That sentiment is likely to continue through Asia today and into Europe and the US, with no economic data of note that could upset the applecart," said OANDA analyst Jeffery Halley.

Barratt Developments said since the UK government's restrictions on housing market activity were lifted in mid-May there has been a welcome recovery in internet activity, site visitors and net reservations across both the industry and its business.

However, Barratt warned the prospects for the wider UK economy and the medium-term impact on the new homes market remains uncertain and will only become clearer over the coming months.

"To help ensure the UK's housing recovery is sustained, capacity in the industry is maintained and to ensure that customers who planned to use the current Help to Buy scheme still can, given the unprecedented backdrop, we believe it would be sensible for government to extend the existing scheme beyond March 2021," the company said.

Barratt said following the reopening of its sales centres, the company has seen an increase in lead volumes, which are running at levels in excess of those achieved in the same period in 2019. In the six weeks since reopening it achieved a sales rate of 0.63, marginally lower from 0.69 net private reservations per active outlet per average week, with no "discernible change in pricing levels".

The housebuilder said its forward sales position is strong, with total forward sales as at June 30, at a value of GBP3.2 billion, up from GBP2.6 billion at the same time last year, equating to 14,326 homes, up from 11,419 homes.

"Whilst the economic outlook remains unclear, the group is in a strong position. We have a well-capitalised balance sheet, robust liquidity, a healthy forward sales position, a continued focus on the delivery of operational performance improvements across our business and an ongoing commitment to deliver high-quality homes across the country," Barratt added.

Lloyds Banking said it has appointed Robin Budenberg as its new chair, replacing Norman Blackwell. Budenberg will join the company's board on October 1 and will assume the role in early 2021, when Blackwell steps down.

The lender also said that Chief Executive Officer Horta-Osorio has informed the board of his intention to step down from the role in 2021, after having delivered three strategic plans and will have completed a 10-year stint in the role next year.

Lloyds said that Horta-Osorio agreed to time his stepping down as CEO to support a smooth transition, with a target date at the end of June next year, at which point he will retire from Lloyds. Until then he will continue to be completely focused with the executive team on delivering the remainder of the current strategic plan, it added.

"It is of course with mixed emotions that I announce my intention to step down as chief executive of Lloyds Banking Group by June next year. I am lucky to have had the support of a superb Board and executive team on whom I will continue to rely as we complete our current strategic plan, transforming the Group into the bank of the future," said Horta-Osorio.

"I have been honoured to play my part in the transformation of large parts of our business. I know that when I leave the group next year, it has the strategic, operational and management strength to build further on its leading market position," he added.

Aviva said it has appointed Amanda Blanc as its new CEO with immediate effect after Tulloch stepped down as CEO and retired from his position due to family health reasons. Tulloch had been CEO for just over a year. Blanc has been a non-executive director at Aviva since January and will now step down from all her non-executive commitments, Aviva added.

The pound was quoted at USD1.2494 early Monday, up from USD1.2465 at the London equities close Friday.

The UK's separation talks with the EU resume Monday with few signs of compromise on a new trade agreement and time running out to avoid a messy split. London will host EU negotiator Michel Barnier after a round of face-to-face talks ended a day early last week in Brussels because of deep divides in the sides' approach.

Barnier said after ending the negotiations last Thursday that "serious divergences remain". His UK counterpart David Frost said there were "significant differences" that meant the sides were still searching for basic "principles underlying an agreement".

The euro was quoted at USD1.1287, up from USD1.1242. Against the yen, the dollar was quoted at JPY107.70, up from JPY107.52.

Brent oil was quoted at USD42.63 a barrel Monday morning, flat from USD42.66 late Friday. Gold was quoted at USD1,773.60 an ounce, marginally lower from USD1,775.00.

Financial markets in the US will reopen on Monday after being closed on Friday for a holiday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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