UK stock market morning note (January 13, 2014)
January 13, 2014, Monday, 08:55 GMT | 03:55 EST | 14:25 IST | 16:55 SGT
The FTSE 100 is called to open slightly higher this morning despite Friday's weaker than expected US non-farm payrolls report and subsequent lack of direction from America and Asia with Japan shut for a public holiday. There is also no major economic data due for release today. Commodity prices are range bound and on the foreign exchanges, the pound is up against both the dollar and the euro but within narrow trading bands.
Sports Direct Acquisition of a 4.63% stake in Debenhams. The company has announced it has acquired 56.8m shares representing 4.63% of the issued share capital of Debenhams. It noted that it wishes to explore 'options at an operational level to work together' and its intention to be a 'supportive shareholder'. Debenhams has responded by stating that it is 'open minded with regard to exploring operational opportunities'.
AMEC Possible Offer for Foster Wheeler. It has provisionally agreed the outline terms of a recommended cash and share offer equating to a possible value of GBP1.9bn for Foster Wheeler. The making of a firm offer remains subject to a number of pre-conditions and there is no certainty that a offer will be made or that the transaction will proceed. AMEC added that it has performed in line with its expectations for 2013 but the recent strengthening of sterling relative to North American currencies means forecast average exchange rates for 2014 are less favourable than 2013. This currently translates into an impact of GBP10m of EBITA yoy.
Greene King IMS reports that trading over the Christmas and New Year period has been strong with retail lfl sales up 5% in the last 6 weeks and 3.8% year to date with strong growth in brewing and brands; core own-brewed volume up 5.8%. It added that its expectations for profit, cashflow and Balance Sheet are unchanged.
Homeserve FCA Update. It advises receipt of a draft warning notice from the FCA relating to the historical regulatory issues at the company and a financial penalty of GBP34.5m (assuming an early settlement discount of 30%). It noted that this is higher than it had provisioned and has prudently increased its provision by GBP30m. It added that it will now engage with the FCA to finalise the notice and the business continues to trade in line with expectations.