(Alliance News) - Meggitt on Monday noted that the UK government has referred its takeover by the US's Parker-Hannifin to the competition regulator on national security grounds.
The defence firm said the UK Competition & Markets Authority has to report to the secretary of state for Business, Energy & Industrial Strategy by midnight at the end of March 18. Meggitt said it looks forward to "engaging constructively" with the CMA and still expects the deal to complete in the third quarter of 2022.
The CMA on Tuesday also revealed it has got its eye on GCP Student Living's takeover. GCP agreed to the GBP969 million takeover back in July from a consortium which includes student accommodation provider Scape Living and also iQSA Holdco. Scape is funded by funds managed by APG, an investor in GCP, and iQSA by funds advised by Blackstone.
The regulator said it is mulling whether the deal will lessen competition, and has until December 13 to decide whether to progress the probe or not.
In a busy morning for the UK competition watchdog, the CMA also launched a probe into the music streaming market. It said this is part of its effort to increase competition in digital markets, which also has included investigations of Google's 'privacy sandbox', Facebook's use of ad data and Apple's AppStore.
Meggitt shares were down 0.3% early Tuesday and GCP Student Living's were down 0.2%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: marginally higher at 7,206.27
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Hang Seng: up 1.5% at 25,778.36
Nikkei 225: closed up 0.7% at 29,215.52
DJIA: closed down 36.15 points, or 0.1%, at 35,258.61
S&P 500: closed up 15.09 points, or 0.3%, at 4,486.46
Nasdaq Composite: closed up 124.47 points, or 0.8%, at 15,021.81
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EUR: up at USD1.1648 (USD1.1595)
GBP: up at USD1.3774 (USD1.3711)
USD: down at JPY114.04 (JPY114.28)
Gold: up at USD1,778.48 per ounce (USD1,768.25)
Oil (Brent): flat at USD84.91 a barrel (USD84.86)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
UK BoE Gov Andrew Bailey and Bank of Italy Gov Ignazio Visco speak at research conference
1100 CEST EU construction output
0830 EDT US housing starts
0855 EDT US Johnson Redbook retail sales index
1630 EDT US API weekly statistical bulletin
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Heathrow will be allowed to raise passenger charges by up to 56% under plans announced by the UK aviation regulator. The Civil Aviation Authority is consulting on increasing the cap on the west London airport's price per passenger from GBP22 last year to between GBP24.50 and GBP34.40. It is proposing that the exact figure will depend on factors such as passenger demand and commercial revenue, with prices higher if Heathrow continues to struggle in those areas. The range is planned to come in effect from summer 2022, with an interim cap of GBP30 being introduced at the beginning of the year. The charges are ultimately paid by passengers as airlines add the cost to the price of tickets.
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China's real estate and construction sectors contracted in the third quarter for the first time since the early stage of the pandemic, official data showed, as they face increasing pressure from a sprawling crackdown on the country's ailing property industry. The figures come a day after figures showed the world's second-biggest economy grew slower than forecast in the same period owing to the regulatory tightening as well as an energy crunch. Real estate output shrank 1.6% on-year, the National Bureau of Statistics said in a report breaking down changes in gross domestic product. The reading marks the first contraction since the first three months of 2020 – when China's Covid-19 outbreak was at its height – and a reverse from its 7.1% growth in April-June. At the same time, output from construction slipped 1.8%, the report said, also representing its first decline since the first quarter of last year.
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North Korea fired a suspected submarine-launched ballistic missile into the sea on Tuesday, the South's military said, the nuclear-armed country's latest advance in weapons technology and one that could give it a second-strike capability. The test came with both Koreas building up their weapons capabilities in what could become an arms race on the peninsula, and with the Washington-Pyongyang dialogue at a standstill.
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BROKER RATING CHANGES
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BERENBERG CUTS IAG TO 'HOLD' (BUY) - PRICE TARGET 200 (230) PENCE
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BERENBERG RAISES EASYJET TO 'BUY' (HOLD) - PRICE TARGET 800 (720) PENCE
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BERENBERG CUTS WIZZ AIR TO 'HOLD' (BUY) - PRICE TARGET 5200 (5500) PENCE
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JEFFERIES REINITIATES ASTON MARTIN WITH 'HOLD' - PRICE TARGET 2,000 PENCE
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PANMURE INITIATES JD WETHERSPOON WITH 'BUY' - TARGET 1,220 PENCE
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COMPANIES - FTSE 100
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BHP left its full-year guidance unchanged despite seeing a fall in production in the first quarter of its financial year. The Melbourne-based miner saw petroleum production in the three months to the end of September rise 3.0% year-on-year to 27.5 million barrels of oil equivalent from last year's 26.7 million. Copper production fell 8.9% to 376,500 tonnes in the quarter from 413,200 tonnes last year, while iron ore slipped 4.1% to 63.3 million tonnes from 66.0 million tonnes. "BHP's operations delivered reliably during the first quarter, and we completed planned major maintenance activities across a number of our assets. We continue to skilfully navigate the ongoing challenges of Covid-19," asserted BHP Chief Executive Mike Henry. BHP kept both its production and unit cost guidance for financial 2022.
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Tesco is launching its first checkout-free high street store where shoppers can pick up their groceries and leave without the need for a till. It is the latest large retailer to open a store where checkouts are replaced by high-tech cameras designed to track the items shoppers place in their baskets. The firm's high street store trial, which it has called GetGo, launches in High Holborn in London on Tuesday. Amazon launched its first Amazon Go grocery shop in the UK in February, before expanding to five more sites, while Aldi opened its own till-free shop last month.
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COMPANIES - FTSE 250
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RHI Magnesita warned on full-year profit as it flagged higher costs. The refractory products supplier also unveiled the acquisition of an 85% stake in SORMAS Sogut Refrakter Malzemeleri Anonim Sirketi, a producer of refractories for the cement, steel, glass and other industries in Turkey, for EUR38.8 million in cash. Turning to trade, RHI Magnesita said demand has continued to be strong for both the Steel and Industrial businesses, but profit has been constrained by further cost rises. Profitability in the third quarter of 2021 was in line with the first half, it said. "The supply chain position remains challenging in all territories with the group seeing further increases in the cost of sea freight and demurrage, together with rising energy and consumables costs," RHI Magnesita warned. It would now take a "strong" fourth quarter performance to hit its full-year earnings before interest, tax and amortisation guidance of EUR310 million. Given further price increases are currently being negotiated with customers, RHI Magnesita expects full-year earnings between EUR280 million and EUR310 million.
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Housebuilder Bellway saw profit double in its recent financial year and revenue back near pre-pandemic levels. Revenue for the financial year that ended July 31 jumped 20% to GBP3.12 billion from GBP2.23 billion the year before. Bellway noted that this sales figure was only 2.8% below the record level achieved in the 2019 financial year. The revenue rally led pretax profit to double to GBP479.0 million from GBP236.7 million. The home builder boosted its dividend to 117.5 pence from 50.0p. Looking ahead, Bellway was confident as it highlighted a "substantial" order book and strengthened land bank, along with strong industry fundamentals. It expects to increase output by around 10% to over 11,100 new homes in the financial year ahead, after registering housing completions of 10,138, up 35%, in the recently ended year.
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COMPANIES - GLOBAL
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China's Alibaba has cemented its use of in-house hardware, the Financial Times reported, as it unveiled a new server chip based on Arm's infrastructure. Alibaba noted the chip, named Yitian 710, uses "advanced [5 nanometre] process technology", a generic term for the most modern generation of computer chips in production. It will be deployed in Alibaba's in-house servers at its data centres. The chip, the FT reported, was built using infrastructure provided by UK semiconductor and software designer Arm.
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Tuesday's Shareholder Meetings
McBride PLC - AGM
Iconic Labs PLC - GM re funding proposals
Wm Morrison Supermarkets PLC - GM re CD&R takeover offer
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
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