(Alliance News) - Stock prices in London are seen opening lower on Monday after a sharp sell-off in Hong Kong, as investors look ahead to a week of interest rate decisions from major central banks.
In early company news, SSE rebuffed a weekend press report that said the Scottish energy firm is close to being split up, following activist investor pressure. Speciality chemicals company Victrex named its next chair. Czech digital-payments provider Eurowag confirmed plans to float its shares in London.
IG futures indicate the FTSE 100 index is to open 24.42 points lower at 6,919.60. The London index ended down 83.46 points, or 1.2%, at 6,944.02 on Friday.
SSE noted a weekend press report in the Telegraph which said the energy firm was close to being split into two separate blue-chip companies, following pressure from US activist investor Elliott Management Corp.
Elliott has been in talks with SSE's board to split the company's legacy wholesale networks business from its growing renewable energy operations for more than a year, according to the Telegraph, citing sources close to the situation.
In response, SSE said "there has been no decision to break up" the company. SSE remains fully focused on strategic choices which will "drive shareholder value from the wealth of net zero opportunities", it insisted.
SSE said its strategic focus was on renewables and regulated electricity networks, supported by "carefully chosen" businesses. SSE said its businesses have growth potential aligned with net zero targets and share common capabilities in the development, construction, financing, and operation of low-carbon electricity infrastructure.
"We have been making excellent progress with our clear net zero-aligned strategy, centred on electricity networks, renewables and other carefully chosen businesses that help provide the low-carbon electricity infrastructure that government and wider society requires. SSE is the UK's national low-carbon energy champion, delivering for both our shareholders and society and we look forward to updating investors on our plans to accelerate growth and create value in due course," said Chief Executive Officer Alistair Phillips-Davies.
Victrex said it has appointed Vivienne Cox as a non-executive director and the chair-designate of the board, to succeed the outgoing chair, Larry Pentz.
Pentz will step down from the board at the 2022 annual general meeting after nearly eight years as chair, Victrex explained.
Cox started her career at oil major BP where she became CEO of BP Alternative Energy, establishing and developing the company's renewable energy businesses.
Victrex added that Cox's appointment will be effective from December 1 as a non-executive director, as chair-designate from January 1, and as chair following the annual general meeting on February 11, 2022.
Eurowag confirmed its intention to proceed with an initial public offering on the Main Market of the London Stock Exchange.
Founded in the Czech Republic in 1995 by CEO Martin Vohanka, Eurowag processes toll and fuel payments for trucks around the continent.
Eurowag said the IPO will comprise both new shares, raising around EUR200 million gross for the company to support its growth strategy, and existing shares to be sold by current Eurowag shareholders.
Eurowag is targeting a free float of at least 25% of issued share capital and expects to be eligible for inclusion in FTSE UK indices.
Eurowag said the IPO is to be led by Citigroup and Morgan Stanley, together with Jefferies, Numis and UBS.
In Asia on Monday, the Hang Seng index in Hong Kong was down 3.4%. Financial markets in Japan were closed on Monday for the Respect for the Aged Day holiday, while in Shanghai, the stock market was closed for the Mid-Autumn Festival. The S&P/ASX 200 in Sydney ended down 2.0%.
The Hong Kong stock exchange tumbled Monday over fears of a contagion from the potential collapse of Chinese real estate firm Evergrande Property Services Group, as it struggles under a mountain of debt.
The firm, one of the country's biggest developers, warned it may not be able to repay loans and interest on its bonds - totalling more than USD300 billion - and could go under. With some payments due Monday and Thursday, investors are keeping a nervous eye on the crisis, which has fanned fears of a domestic and international contagion.
Evergrande shares were down 11% in Hong Kong.
"With Japan and mainland markets in China closed today, this morning's Asia session has been a negative one as concerns over the future of Chinese real estate company Evergrande increase further, sending the Hang Seng sharply lower. As a consequence today's European open looks set to be a negative one, with the FTSE 100 looking set to open at its lowest levels since July 22. The newly formatted DAX is also expected to open lower in a similar fashion," said CMC Markets analyst Michael Hewson.
In Germany, ten companies will join the DAX on Monday as the blue-chip stock market index undergoes its biggest facelift in its 33-year history.
At the opening of the market in Frankfurt at 0900 local time, the new entrants, amongst them European aerospace firm Airbus and online shopping company Zalando, will turn the DAX 30 into a DAX 40.
The pound was quoted at USD1.3705 early Monday, down from USD1.3752 at the London equities close Friday.
On the economic front, the average price tag on a UK house hit a new record high of GBP338,462 in September.
The new asking price peak across Britain is just GBP15 higher than a previous record set in July, Rightmove said. The average asking price for a home increased by 0.3%, or GBP1,091, month-on-month in September.
The euro was priced at USD1.1715, down from USD1.1734. Against the Japanese yen, the dollar was trading at JPY109.84, down from JPY109.92.
Brent oil was quoted at USD74.88 a barrel Monday morning, down from USD75.06 late Friday. Gold stood at USD1,750.40 an ounce, slightly lower from USD1,754.70.
Ahead this week, the economic calendar is headlined by interest rate decisions by the Bank of Japan and US Federal Reserve on Wednesday and by the Bank of England on Thursday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
