FTSE 100 in newspaper
The FTSE 100 index opens 9 points higher at 7,581.81 / Image source: Adobe

London’s FTSE 100 opened up a tad higher on Monday, kicking off a busy week in a muted fashion.

Investors will have inflation reports from the UK and US to mull over this week, as well as a steady flow of corporate earnings.

It was a largely quiet start to the week for the corporate diary, though there was some impetus from property sector M&A.

The FTSE 100 index opened up 9.23 points, 0.1%, at 7,581.81. The FTSE 250 was up 134.97 points, 0.7%, at 19,197.29, and the AIM All-Share added 1.85 points, 0.3%, at 749.26.

The Cboe UK 100 rose 0.2% to 758.30, the Cboe UK 250 climbed 0.9% to 16,613.87, and the Cboe Small Companies was a touch higher at 14,535.93.

The CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was 0.3% higher.

In Sydney, the S&P/ASX 200 ended down 0.4%. Financial markets in Shanghai and Tokyo are closed for the Chinese New Year and National Day holidays, respectively.

In New York on Friday, the Dow Jones Industrial Average closed down 0.1%, but the S&P 500 added 0.6%, hitting a new closing high in the process, while the Nasdaq Composite shot up 1.3%.

‘CPI reports in the US and the UK will be in focus this week. We see a greater risk for a lower-than-expected number in the US even though our estimates match consensus, while UK services inflation and wage growth should remain sticky,’ analysts at Dutch bank ING commented.

The US inflation data is reported at 1330 GMT on Tuesday.

It is also a key week for UK data. Unemployment, inflation and economic growth readings will be closely eyed by the Bank of England, with the next interest rate decision from Threadneedle Street around five weeks away.

The pound was quoted at $1.2634 early Monday, largely unmoved from $1.2632 late on Friday. The euro stood at $1.0781, flat from $1.0783. Against the yen, the dollar was trading at JP¥149.04, down from JP¥149.31.

This week’s corporate calendar has annual results from London-listed lender NatWest and property firm Segro to come. In Europe, focus will be on earnings from carmakers Renault and Stellantis, while in New York, beverage company Coca-Cola is among those reporting.

Tritax Big Box REIT said UK Commercial Property REIT has agreed to an all-share takeover offer to create the UK’s fourth-largest real estate investment trust by market capitalisation, at nearly £4 billion.

Tritax Big Box shares fell 1.8%, while UKCM added 5.4%.

UKCM investors stand to receive 0.444 of a new Tritax Big Box share for every UKCM share they own.

Based on Tritax Big Box’s closing share price on Friday, the deal would value each UKCM share at 71.1 pence and the full company’s equity at £924 million.

The announcement by the two FTSE 250 index constituents represents the latest in a series of mergers of London-listed property companies since the year began.

Early last month, LondonMetric Property and LXi REIT also agreed an all-share merger, which at the time they said would make the company the UK’s fourth largest REIT, citing £4.1 billion in EPRA net tangible assets.

Later in January, Custodian Property Income REIT and abrdn Property Income Trust agreed an all-share merger to create a REIT with combined assets of £1.0 billion.

Frasers Group rose 2.6%. The Sports Direct owner plans to repurchase no more than £80.0 million from a share buyback programme, which kicks off on Monday and concludes on April 28. The total number of shares that may be repurchased in the programme will be 10.0 million.

Galliford Try has landed a place in a £3.2 billion affordable homes framework in the UK.

The construction firm said it has won a place on lot 2 of an eight-year Communities & Housing Investment Consortium framework worth £2.5 billion, and lot 3, which is worth £650 million. Lot 2 includes new build projects and Lot 3 regeneration work.

Galliford shares rose 2.9%.

Elsewhere, graphene nanoplatelets based products supplier Directa Plus said it has seen ‘increasing traction’ and predicted annual results which would top market expectations. Shares surged 10%.

The firm predicted its adjusted loss before interest, tax, depreciation and amortisation slimmed in 2023, from £3.2 million in 2022. It expects its adjusted Ebitda outcome to beat market expectations of a £2.5 million loss.

‘In 2024, Directa Plus is seeing increasing traction, including the €1.9 million contract renewal with Ford Otosan in Romania and the first Textiles order with the group’s distributor in Turkey to commence industrial production of G+ textile technologies in the Turkish textile industry. The group is encouraged by a renewed interest for Grafysorber in Middle East and Southeast Asia, and by an increased demand in the defence sector, for both personnel protection and comfort, which is leading to the creation of a dedicated business unit,’ it added.

Brent oil was quoted at $81.60 a barrel early Monday in London, down from $82.03 late Friday. Gold fetched $2,025.63 an ounce, rising slightly from $2,021.73.

‘This week, Opec and IEA will release their monthly report on Tuesday and Thursday, respectively. Attention will be paid to how they will revise their demand outlook in reaction to the global developments. In one hand, the strong US economy and Chinese stimulus measures are positive for the demand dynamics and should support oil prices beyond the geopolitical tensions. On the other hand, the significant retreat in global interest rate cut expectations weighs on global demand outlook. One thing is sure, Opec will keep fighting to maintain oil prices sustained until the last drop. The problem is, Biden’s US is pumping a record amount of oil to counterweigh the price increases that Opec needs so badly,’ Swissquote analyst Ipek Ozkardeskaya commented.

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Issue Date: 12 Feb 2024