Market report: Monday preview
Spreadbetters IG Index expect the FTSE 100 index to open about 31 points higher today at 6671.
The UK blue-chip index closed 61.6 points firmer on Friday at 6640.9, its highest close since September 2000.
Fiday on Wall Street, the Dow Jones closed 79.8 points higher at 13,556.5, its 24th record close this year, fuelled by another round of corporate takeovers involving big names such as General Electric and .
Meanwhile, the S&P 500 index ended 10.0 points firmer at 1522.8, less than 5 points away from its record close set, in March 2000. The Nasdaq composite index added 19.1 points to close at 2558.5.
Overnight in Asia, the Nikkei 225 index at midday was 97.6 points firmer at 17,497.2, tracking the gains on Wall Street Friday, with a softer yen supporting the shares of some exporters.
The Hang Seng index ended its morning session 85.6 points higher at 20,990.4, aided by hopes of an inflow of further liquidity into the Hong Kong equity market following China’s latest monetary policy moves.
In London, weekend press reports suggested plans from Swiss bank UBS to offer to buy out the pension schemes of leading FTSE 100 companies could open the floodgates to a fresh wave of blockbuster takeovers.
The Sunday Telegraph reported that UBS’ ‘Project Catfish’ venture with Dutch firm Aegon could remove the final obstacle to further blue-chip takeovers.
Among the deals mentioned in the press this weekend, talk that a private equity consortium, spearheaded by US group Providence Equity Partners, is considering a 7.5bn bid for , according to The Observer could re-ignite interest in the TMT sector.
Elsewhere, pubs operator is today expected to confirm plans to spin off up to 4bn of its property portfolio in a major concession to key activist investor Robert Tchenguiz, as a way to offset a possible hostile bid from the entrepreneur, the Sunday Telegraph reported.
In other long-running takeover moves, the RBS-led consortium is finally expected to table a 47bn bid for Dutch bank ABN Amro, according to The Observer.
The report said the consortium has held out an olive branch to ABN, which attempted to thwart the bidders with a deal to sell its US arm, LaSalle, to Bank of America, in order to seal an agreed offer from .
Bank of America is currently in the process of taking legal action to force ABN to complete the sell-off, however , which covets parts of LaSalle, believes it can come to an agreement with BoA to divide it up between them
shares should remain active after The Observer reported that , the French insurance giant, will consider launching a rival bid for the UK firm if JC Flowers, the US private equity company that is currently stalking it, launches a takeover offer.
However, the report also claimed that Axa has ruled out working with Flowers or making a move on its own otherwise.
Shares in could be upset a report in The Observer that the UK government has given its strongest indication yet that it would block an attempt by the Russian energy group Gazprom to take a significant stake in a UK energy company.
Away from M&A, no major corporate news is scheduled for release today, although insurer - recently linked to revive talk of a bid move by Finland’s Sampo - will host its AGM today.
Among the mid cap results due this morning, , the Tango and J20 drinks group, which last week bought the soft drinks and distribution business of for €249.2m eur, will report half-year figures.
For the six month period, analysts are looking for operating profits of about 22-25m, compared to a reported figure of 18.6m last year.
The improvement in trading conditions has recently revived takeover talk for Britvic with Permira, the private equity firm, which has built a 14% stake in the company, said to be considering a 1bn hostile offer after having a number of informal approaches rebuffed.
The Sunday Telegraph yesterday reported that Britvic is planning to extend its relationship with PepsiCo in an attempt to create a poison pill to any private equity takeover.
Elsewhere, full-year results from , the home emergency services company are expected to show pretax profit rising by around 40% to roughly 70m, on revenues of around 485m.
Storage firm is expected to update investors on its development pipeline when it announces its full-year results today.
The group, which was recently given the all clear for its conversion to a real estate , is expected to post full-year pre-tax earnings of 14m, compared to 12.2m last time out, according to Cazenove.
Glasgow-based telecoms services company Group is expected to have seen its losses narrow in the year to end-March 2007. is forecasting a pre-tax loss of about 19.2m, down from a deficit of 27.1m recorded in the previous year.
Small cap food and cooked meats supplier is likely to see its full year pre-tax profits come in at about 32m according to broker driven by strong organic, with its sausage, bacon and continental products showing the stronger performances.
MITIE Group, the engineering and support services group should report pre-tax profits of about 58m for the year to end-March, compared to 50.9m for the previous year.
Overnight, the house price survey was released showing UK house prices in May grew at their slowest monthly pace so far this year.
Rightmove said the average asking price for a UK home rose by 0.4% month-on-month in May, well below April’s rate of 3.6%, which was the fastest pace in five-years. This brought May’s year-on-year growth rate down to 13.1% from 15.0% in April.
A string of April mortgage lending numbers due later from the British Bankers’ Association, the Council of Mortgage Lenders and Building Societies Association may give greater light as to whether the UK housing market is starting to slow.
This morning’s other UK data is expected to show a small deficit in the Public Sector Net Borrowing for April of 1.5bn after March’s 8.5bn reading.
Other stories:
Halabi plots David Lloyd bid
Google hits Moneysupermarket hopes
M&S profits nudge 1bn
RBS plays ABN waiting game
Lenders to slash IVA firm fees
M&B’s 4bn land invite
MPs attack Tesco VAT loophole
Travelodge to double in 3.5bn push