UK stocks started the week strongly after further signs of progress towards a coronavirus vaccine.

Pharma giant AstraZeneca (AZN) has resumed phase three of its vaccine trial, while investor sentiment was also boosted by comments from Pfizer chief executive Albert Bourla, who believes a vaccine could be ready for approval as soon as next month, and for distribution by the end of the year.

In early trading the UK’s benchmark FTSE 100 index gained 0.4% to 6,054.

It mirrors gains seen in Asian stock markets with Japan’s Nikkei 225 rising 0.65%, the Hang Seng in Hong Kong up 0.66% and China’s Shanghai Composite gaining 0.57%.

In commodities, gold gained 0.27% to $1,946 per ounce while Brent crude oil futures were up 0.53% to $40 per barrel.

While in company news, British Airways owner International Consolidated Airlines (IAG) plunged 27.9% to 140p, though this was due to a technical issue linked to the company’s rights issue as the shares trade ex-rights.

VODAFONE IN EGYPT SALE TALKS, WETHERSPOON HITS BACK AGAINST PRESS

Telecom group Vodafone (VOD) fell 0.29% to 109.9p as it revealed due diligence had been ‘substantively completed’ with regards to a potential sale of its 55% stake in Vodafone Egypt to Saudi Telecom.

Vodafone said it remained in talks with Saudi Telecom despite the expiry of a memorandum of understanding signed between the two companies, with a view to sealing the deal in the near future.

‘Vodafone now looks to Saudi Telecom and Telecom Egypt to find a suitable agreement to enable the transaction to close,’ it added.

Pub chain JD Wetherspoon (JDW) dropped 2.27% to 905.5p after it said sales over the weekend were 22.5% below the equivalent Saturday last year.

Wetherspoon chairman Tim Martin, citing the level of sales over the weekend, hit back against the press for what he claimed were ‘negative views’ about the risk pubs pose to exacerbating the spread of Covid-19.

The company also reported that it had 32 million customer visits in the 10 weeks since 4 July, during which it said 66 of its 41,564 staff had tested positive for coronavirus.

FOCUSRITE RALLIES ON SALES JUMP

Music and audio products group Focusrite (TUNE) rallied 8.7% to 798.8p, having guided for annual operating earnings ahead of expectations amid a 52% jump in sales.

Revenue for the year through August was seen ahead of market expectations at £129 million, up from £84.7 million on-year.

‘Gross margins have improved from the prior year and as a result earnings before interest, tax, depreciation and amortisation is also expected to be ahead of market expectations,’ the company said.

Revenue had been boosted by Adam Audio, acquired in July 2019, and Martin Audio, acquired in December 2019. Sales were also underpinned by around 23% growth in the company's core audio engineering business.

Specialist recruitment company SThree (STEM) climbed 2.6% to 253p, despite its net fee revenue slumping 14% in the third quarter to £75.7 million, owing to the coronavirus crisis.

The company did add however that there had been an improving underlying sequential performance since the half year and that it has brought some staff back from furlough.

ABCAM DITCHES FINAL DIVIDEND

Life science research tools supplier Abcam (ABC) fell 1.53% to £13.53 as it ditched its final dividend after reporting a slump in annual profit on higher costs.

For the 12 months ended 30 June 2020, pre-tax profit fell £8.4 million from £56.4 million the previous year as revenue was flat at £260 million.

Profit was hurt by a rise in research and development costs and other expenses including selling, general, and administrative costs.

Investment company City of London (CLIG) also cut its dividend, after reporting a fall in profit on unrealised investment losses related to the impact of the pandemic.

For the year ended 30 June, pre-tax profit fell to £9.4 million from £11.4 million on-year, while revenue rose to £33.3 million from £31.9 million. The company said the dislocation from the coronavirus pandemic had a marked impact on its results for the final quarter of the year.

Funds under management stood at US$5.5 billion, a 2% increase on-year. A final dividend of 20p per share was recommended, making a total for the year of 30p, down from 40.5p last year.

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Issue Date: 14 Sep 2020