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UK stock market morning note (September 10, 2012)

The FTSE 100 is called to open slightly lower this morning following on from a mixed session in Asia overnight which had seen the release of weaker than expected economic data. Chinese imports were shown to have fallen 2.6% in the month of August while exports grew 2.7%. Exports to the EU fell 12.7% when compared with the corresponding period the previous year with these weakened trade figures, which had previously enjoyed double digit growth, potentially highlighting that the economy has slowed more than expected. These figures may see the Chinese government implement steps to ensure the country achieves its growth target of 7.5% which is seen by some market commentators as being under pressure. In addition, Friday's announcement which indicated weaker growth in US employment may result in further QE from the Federal Reserve, although key economic data due out later this week may heavily influence any decision.

Today's Company announcements

Glencore Merger Update followed on from Friday's announcement that it would offer 3.05 shares for each of Xstrata's has been formally proposed to the independent board of Xstrata as required by the Takeover Panel. Glencore has indicated that this would be its final offer which would see Xstrata CEO Mick Davis remain as CEO of the merged entity. Following a 6 month period, Ivan Glasenberg will take over as CEO. In addition, management incentive arrangements would need to be agreed upon. Both parties have agreed to a make a decision on the merger on 24 September 2012.

Tullow Oil Mbawa-1 Drilling Update announced that the exploration well in the L8 license area, offshore Kenya, has encountered gas in the shallowest objective. The well has been drilled to a depth of 2,553 metres and has encountered approx. 52 metres of net gas pay in porous Cretaceous sandstones. Following this discovery the company said it would now drill to a total depth of 3,275 metres in order to target further objectives. Tullow Oil said that "this is the first hydrocarbon discovery offshore Kenya. The on-going drilling remains on course to test for any deeper oil potential within this gas prone region".

Associated British Foods Trading Statement saw the company announce that its adjusted operating profit for H2 will be "substantially ahead of last year and in line with expectations". It added that the income statement would include a non-cash charge of some GBP100m for the impairment of property, plant and equipment at the meat factory in Australia. Adjusted operating profit and adjusted earnings per share for FY 2012 is expected to be "substantially" ahead of last year whilst net debt is expected to be below GBP1.2bn when compared with the reported GBP1.3bn reported the previous year.