(Alliance News) - Stock prices in London are seen opening almost unchanged on Monday following a weak performance by Asian equity markets overnight, despite upbeat economic data from China at the weekend.
In early company news, JD Sports Fashion pugnaciously hit back at a weekend press report, as the retailer defended its governance. Fund manager abrdn confirmed a press report over a possible acquisition. Business park operator Sirius Real Estate launched a share placing to fund an acquisition.
IG futures indicate the FTSE 100 index is to open 0.06 of a point lower at 7,303.90. The blue-chip index closed up 24.05 points, or 0.3%, at 7,303.96 Friday.
JD Sports Fashion responded to a Sunday Times report, saying it "totally refuted" any breaches in corporate governance.
The newspaper said that JD Sports had launched an investigation into who had covertly filmed Chair & Chief Executive Peter Cowgill meeting his counterpart at footwear retailer Footasylum, Barry Bown, in a possible breach of competition rules.
Last week, the UK Competition & Markets Authority ordered JD Sports to sell Footasylum, which it had acquired in 2019.
JD highlighted that Cowgill has known Bown "on a business and personal basis for over 25 years". As a result, JD said it was not unusual, "or in any way suspicious or illegitimate, for the pair to meet from time to time", including in relation to the ongoing review by the CMA of JD's acquisition of Footasylum.
JD noted it has an obligation under the terms of the interim enforcement order from the CMA to encourage key staff of the Footasylum business - which includes Bown - to remain with the business.
"It is disappointing that the Sunday Times has not reported in a more balanced way on the highly irregular and potentially illegal covert surveillance undertaken by a third party for their own interests. JD hopes that a regulator, tasked with acting in the wider public interest, is able to more critically regard the actions of the third party for what they are," JD said.
"Any suggestions with regard to corporate governance breaches are totally refuted. JD's stakeholders are very aware that the chairman and the board treat governance matters extremely seriously and with the utmost transparency," the company added.
In addition, JD said its plan to split Cowgill's role of chair and chief executive before the next annual general meeting is progressing, while an additional non-executive director appointment is imminent.
abrdn confirmed it is in discussions with JC. Flowers & Co regarding a potential acquisition of fund supermarket interactive investor.
Over the weekend, the Financial Times reported the FTSE 100-listed asset manager is finalising a deal to buy ii for GBP1.5 billion, in a bid to deepen its direct-to-consumer business, citing people with direct knowledge of the matter.
However, abrdn said there can be no certainty that these discussions would result in a transaction.
BAE Systems said it was well positioned for growth over the medium term as the defence contractor reiterated annual guidance.
BAE said it continues to mitigate and manage supply chain pressures having avoided any material pressures to date. BAE said it was benefiting from long-term programme positions and incumbencies with stable forward visibility for long-lead items, allowing it actively manage supplier lead times against demand requirements.
Looking ahead, BAE said its 2021 guidance remains unchanged from the time of its interim results and is underpinned by continuing good operational performance.
BAE expects annual sales to rise by between 3% to 5% and underlying operating profit to increase by between 6% to 8%.
"We're evolving our business to be well positioned for growth over the medium term alongside a focus on longer-term value drivers as we ramp up investment in advanced technologies and progress our sustainability agenda. Our continued good operational performance underlines our confidence in the full year guidance for top line growth and margin expansion as well as our three-year cashflow target," Chief Executive Officer Charles Woodburn said.
"Demand for our capabilities remains high, and we have a strong pipeline of opportunities across our broad geographic portfolio that will enable our skilled, global workforce to deliver capabilities which will support our customers in responding to the evolving threat environment," Woodburn added.
Sirius Real Estate said it has agreed to buy Helix Investments for GBP245 million in cash and will raise GBP135 million to help fund the deal.
Sirius plans to raise GBP135 million from placing of up to 105.3 million shares from investors in the UK and South Africa. The price at which the shares are to be issued will be announced at the close of a bookbuild process. Sirius shares closed at 138.00p on Friday in London.
Sirius also said an improving economy and renewed market confidence was reflected in its interim performance.
For the half year to September 30, pretax profit was EUR78.2 million, up 26% from EUR62.2 million last year.
Sirius raised its interim dividend by 12% to 2.04 euro cents from 1.82 cents.
"As the vaccination roll-out continues across Germany and trading conditions improve further, Sirius is well-positioned to capitalise on the wider macro trends being felt in the market, with increased nearshoring and the localisation of supply chains driving demand for space within our asset class. We have made strong progress throughout the first half and, with the contribution from recently notarised properties that have not yet completed to come, we remain well placed to continue to perform in the second half of the financial year and beyond," said CEO Andrew Coombs.
In Asia on Monday, the Japanese Nikkei 225 index closed down 0.4%. In China, the Shanghai Composite ended down 0.8%, while the Hang Seng index in Hong Kong was down 0.6%. The S&P/ASX 200 in Sydney closed down 0.1%.
China's exports saw a better-than-expected performance in October, official data showed on Sunday, with demand strengthening in some key markets such as the US and Covid numbers easing overseas.
The trade data from the world's second-largest economy also suggested that Chinese factories had kept the goods flowing out despite power outages in recent months caused by emission reduction targets, the surging price of coal, and supply shortages.
Exports rose a better-than-expected 27% on-year in October, according to customs authorities, to USD300.2 billion. Imports came in slightly below analyst estimates, rising 21% in October.
In recent months, several Chinese factories were forced to halt operations due to power outages, raising concerns about global supply chains.
CMC Markets analyst Michael Hewson: "Asia markets have got the week off to a quiet start this week, with the latest China trade data for October giving a mixed insight into the world's second biggest economy. The last couple of months have proved to be fairly resilient ones for China trade, despite disruption at Chinese ports, and the various lockdown restrictions that had affected a lot of the country over the course of the third quarter. Recent weakness in retail sales numbers has shown that demand in the Chinese economy has been slowing in recent months, although exports growth has been robust.
"A lot of the improvements in the numbers have been as a direct consequence of the disruptions to global supply chains as retailers bring forward their pre-Christmas order spend in order to ensure delivery in time for the Thanksgiving, Black Friday, and Christmas periods."
The pound was quoted at USD1.3493 early Monday, firm from USD1.3482 at the London equities close Friday.
The euro was priced at USD1.1564, up from USD1.1550. Against the Japanese yen, the dollar was trading at JPY113.57, rising from JPY113.47.
Brent oil was quoted at USD83.50 a barrel Monday morning, up sharply from USD82.82 late Friday. Gold stood at USD1,817.30 an ounce, higher against USD1,810.85.
The economic events calendar on Monday has eurozone consumer confidence at 0930 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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