LONDON MARKET PRE-OPEN: Pearson To Sell Penguin Holding, CEO To Retire

(Alliance News) - Stocks in London are set to open slightly lower on Wednesday following softness in Asia overnight, with stock markets taking a breath as further progress is awaited on a US-China trade deal.

In early UK company news, NMC Health hit back at "unfounded, baseless and misleading" claims made by short seller Muddy Waters. Pearson has agreed to sell its remaining stake in Penguin Random House and separately said its chief executive will be stepping down. Ferguson said preparations for the demerger of Wolseley UK are "well underway".

IG says futures indicate the FTSE 100 index of large-caps to open 11.88 points lower at 7,513.40 on Wednesday. The FTSE 100 index closed up 6.23 points, or 0.1%, at 7,525.28 on Tuesday.

"Asian stocks are mixed this morning after US equity markets reached new highs yesterday. Equity markets are hence taking a pause after edging higher on the back of the in-principle trade deal between the US and China last week," said Danske Bank.

"We are still waiting for further concrete signs that the two sides are indeed moving on to finalise the deal," Danske Bank said. "Yesterday, US trade representative Lighthizer said that the phase one deal is 'totally enforceable', but apart from that new information on negotiations has been scarce and we remain cautiously optimistic about the deal being finalised early January, seeing possible bumps on the road."

In the US on Tuesday, Wall Street ended marginally higher, with the Dow Jones Industrial Average up 0.1%, the S&P 500 flat and Nasdaq Composite up 0.1%.

An enraged US President Donald Trump said he was being subjected to an "attempted coup" and a witch trial as Democrats set a historic impeachment vote for Wednesday.

In a six-page letter, Trump on Tuesday told Nancy Pelosi, speaker of the Democratic-led House of Representatives, that "history will judge you harshly".

The letter came just minutes before Pelosi announced that the House would vote Wednesday to make Trump only the third US leader ever impeached and placed on trial in the Senate.

Trump is accused of attempting to force Ukraine into what would have been a damaging announcement of an unfounded probe into a main 2020 re-election rival, Joe Biden. He is also accused of obstructing Congress by refusing to cooperate with the impeachment investigation, barring staff from testifying and holding back documentary evidence.

In Asia on Wednesday, the Japanese Nikkei 225 index ended down 0.6%. In China, the Shanghai Composite closed down 0.2%, while the Hang Seng index in Hong Kong is down 0.1%.  

In early UK company news, NMC Health hit back at Muddy Waters's report in which it alleged "rot" at the UAE-focused healthcare firm.

NMC shares slumped 32% on Wednesday.

NMC "understands" its regulatory disclosure obligations and "has nothing to add to disclosures already made". The company added that it has already responded to many of the allegations made in the report over the past 12 months.

"NMC will review the assertions, insinuations and accusations made in the report, which appear principally unfounded, baseless and misleading, containing many errors of fact, and will respond in detail in due course," said NMC.

NMC reaffirmed its trading and operational guidance for both 2019 and 2020. The FTSE 100 constituent also on Wednesday said it will commence a share buyback of up to USD200 million, a move which was approved by shareholders earlier in December.

Finablr - which ended down 11% on Wednesday - noted "recent volatility" in its share price, and said there was "no financial or operational reason" for this.

Travelex owner Finablr was founded by Bavaguthu Raghuram Shetty, who also founded NMC. Shetty is joint chair of NMC Health and also co-chair of Finablr.

Finablr said it remains on track to achieve the guidance set out at its IPO, which was reaffirmed in November.

Educational publisher Pearson has agreed to sell its remaining stake in Penguin Random House, announced a share buyback, and said Chief Executive John Fallon intends to retire.

Pearson has agreed to sell its remaining 25% stake in book publisher Penguin Random House to partner Bertelsmann for USD675 million, or around GBP530 million.

Pearson said it will launch a GBP350 million share buyback in "early 2020", with the remainder of the proceeds to be used for general corporate purposes. The transaction is in line with Pearson's simplification strategy, the company added.

Separately, Pearson said Fallon intends to step down as CEO. He will retire in 2020 once a replacement has been appointed, with a succession process to consider both external and internal candidates.

"There's a lot still to do but we're making good progress in navigating Pearson through a period of huge change...We're now at the stage where it's time to transition to a new leader, who can bring a fresh perspective," said Fallon.

Plumbing and heating products distributor Ferguson said it has appointed Simon Oakland as interim chief executive officer of Wolseley UK.

Oakland - who is currently CEO of Ferguson's Canadian business and head of corporate development, and has also been project managing the Wolseley UK demerger process - replaces Mark Higson, who is stepping down to pursue an opportunity outside of the company.

Preparation for the demerger of Wolseley UK is "well underway", Ferguson said, and the company still expects to complete the transaction in 2020. Ferguson will provide an update on the progress and timing of the transaction in the first quarter of 2020.

IntegraFin Holdings said it was "very pleased" with its "solid" set of annual results.

Fee income for the financial year ended September 30 was GBP99.2 million, up from GBP91.2 million the year before, with pretax profit rising to GBP56.1 million from GBP46.2 million.

Funds under direction amounted to GBP37.8 billion, up from GBP33.1 million a year ago. Gross inflows of GBP5.70 billion were 4% lower than last year and net inflows were down 15%.

Separately, the company said Ian Taylor intends to step down as CEO. He will remain an executive director, while Alex Scott will become IntegraFin's new CEO. Scott is currently group director of the company and has been with IntegraFin since 2009.

In forex, sterling was quoted at USD1.3109 early Wednesday, lower than USD1.3137 at the London equities close on Tuesday, as the pound continued to slide on no-deal Brexit fears.

The euro was quoted at USD1.1135 early Wednesday, down slightly from USD1.1152 late Tuesday. Against the yen, the dollar was quoted at JPY109.45 versus JPY109.52.

In Japanese data, November exports fell declined 7.9% from a year earlier to JPY6.38 trillion, or USD58.3 billion, marking for the 12th straight month of decline amid slowing global growth.

Japan's imports dropped 16% to JPY6.46 trillion after a consumption tax hike on October 1, resulting in a trade deficit of JPY82.1 billion, the Finance Ministry said in a preliminary report.

Shipments to China, Japan's biggest trading partner, fell 5.4% year-on-year to JPY1.3 trillion, while imports plunged 16% to JPY1.6 trillion, the ministry said. Exports to the US were also down 13% to JPY1.2 trillion, while imports fell 10% to JPY688.4 billion.

In commodities, gold was quoted at USD1,477.46 early Wednesday, flat on USD1,476.00 at the London equities close on Tuesday. Brent was quoted at USD65.72 early Wednesday, soft compared to USD65.92 at the London equities close on Tuesday.

In the economic calendar on Wednesday, there is the German Ifo business climate index at 0900 GMT. In the UK, consumer price inflation is out at 0930 GMT and eurozone inflation due at 1000 GMT.

By Lucy Heming; lucyheming@alliancenews.com

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