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The main Wall Street indices kicked off the week on the front foot on Monday, boosted by news of numerous M&A deals and optimism around the development of a coronavirus vaccine.
Shortly after the opening bell in New York, the Dow Jones Industrial Average was up 0.66% at 27,848 while the S&P 500 climbed 0.99% to 3,374 and the Nasdaq rose 1.32% to 10,996.
Market optimism has been boosted by both the acquisition of ARM Holdings by Nvidia as well as Oracle beating out Microsoft to form a potential partnership with Chinese firm ByteDance, the owner of video sharing app TikTok.
News from Pfizer that the effectiveness of its coronavirus vaccine candidate could be confirmed by October has also likely driven positivity among traders.
Back in London, the FTSE 100 had yet to take any inspiration from the rally in New York, and was down 12 points at 6,019 at around 2.40pm.
London’s blue chips are floundering but their cousins across the Atlantic are poised to leap like salmon once Monday’s opening bell rings.
Futures markets are anticipating around a 1% rise for the Dow Jones index and the broader S&P 500.
Fuelled by the big M&A news earlier, the tech-powered Nasdaq Composite is expected to rise even higher, with Nvidia (NASDAQ:NVDA) set to be one of the leaders on the back of its agreed Arm deal.
There will be a weight around the index’s neck from a likely fall for US$1.5trn Microsoft (NASDAQ:MSFT).
But while this latest raft of M&A activity may have excited investors, it’s not the same as the frenzy as seen in previous months, says market analyst Craig Erlam at Oanda.
“That’s not to say these things aren’t important – and the TikTok deal most certainly is given the geopolitical ramifications – but the focus is just elsewhere at the minute.
“There are a number of major central bank meetings this week – including the Fed, BoJ and BoE – and the tech sell-off will likely continue to dominate. Early gains in Nasdaq futures are already being pared which could be problematic ahead of the open.”
The FTSE 100 is continuing to wallow just below the waterline as the pound strengthens on Monday.
Sterling has climbed 0.6% to US$1.2877, and is 0.4% higher versus the euro, which puts pressure on London’s blue chip exporters.
The currency’s rise comes as parliament prepares for a potentially fiery debtate around Boris Johnson’s proposed Internal Markets bill today, with former PMs David Cameron and Theresa May, along with ex attorney general Geoffrey Cox, among the many senior Tories coming out against the government’s plans.
Among the 20 biggest Footsie fallers were exporters Rolls-Royce (LON:RR.), Melrose (LON:MRO) and AB Foods (LON:ABF), plus a cabal of financial sector names, including Intermediate Capital (LON:ICP), M&G (LON:MNG), Aviva (LON:AV.) and Schroders (LON:SDR).
The FTSE 250 has been given a boost by more M&A activity as G4S’s (LON:GFS) Canadian suitor goes public with an offer than the UK security company’s management have tried to shrug off.
London stocks were flat by mid-morning as traders fret about Brexit and a brewing political storm in Westminster.
The FTSE 100 is now down nine points or 0.1% at 6,023.52, while the mid-caps also lost their initial momentum and were trading sideways.
Although the pound is keeping up appearances, it’s set to be a rocky road for the currency, said Joshua Mahony at IG, “as the government seeks to push through a bill which will break international law and threaten the prospect of negotiations with just over three-months left”.
With many MPs seeking to push back against the vote that is expected later today, the market analyst said “there is a risk that the proposal does little beyond hindering trust with the EU as we come into the final stretch of negotiations”.
As of Monday the UK has also brought in newer re-tightening of coronavirus regulations, limiting the size of social gatherings in a bid to slow down the rise of Covid.
“Despite previous fears of a second wave being centred around the US, we are now seeing a widespread surge in cases globally after easing of restrictions raised social contact in a bid to kick-start business activity,” Mahony said, noting Israel is the first country to enter a second nationwide lockdown.
“The underperformance seen in the FTSE 250 highlights the potential domestic risk as the government attempts to tackle to recent rise in UK cases.”
Shares in JD Wetherspoon (LON:JDW) were down 3% as 66 coronavirus cases were revealed among the pub company’s staff.
This highlights the fact that the sector is at risk of early restrictions if the government deems it necessary to take further action to limit the spread of the virus, Mahony added.
Like a big man who’s in bad shape, the Footsie has quickly run out of breath after its initial surge.
The FTSE’s gain has diminished to less than eight points or 0.1% to 6,039.60, with precious metals miners and housebuilders among the big fallers.
A rebound in the pound was putting pressure on London’s blue chips, with sterling up 0.4% versus the dollar to 1.2851.
A record one-day rise in coronavirus cases globally, reported by the World Health Organization (WHO) looks like a second wave, but not as we know it, said market analyst Neil Wilson at Markets.com.
“Even if cases are starting to rise in Britain and elsewhere, deaths are not picking up in the same way as before – younger, less vulnerable people are getting the virus this time it seems.”
“France recorded a record number of new infections – some 10k over the weekend. There is not the appetite for blanket shutdowns of the economy again – this is good, but the ongoing fear factor will keep a lid on animal spirits. And governments could be spooked into heavy-handed responses, even if they don’t want to kneecap the economy.”
Good news on the COVID-19 vaccine front came from AstraZeneca (LON:AZN) and Oxford University, which said they are resuming the trial of their vaccine candidate after it was paused a week ago.
The FTSE 100 opened firmly in positive territory on Monday with M&A activity providing the lift.
Three multi-billion-dollar deals supported market confidence, the most important of which was Oracle’s technical collaboration with TikTok’s Chinese owner, which effectively averts a Sino-American trade war. The computer giant beat off competition from Microsoft to land access to the US operations of the video streaming group. (Read more on the deal here.)
Japanese investor Softbank’s decision to sell ARM Holdings to chipmaker Nvidia for US$40bn provided further positive news in the tech sector, where investors have hit the reset button. However, there will likely be resistance from the UK government who will want assurances around jobs at ARM’s Cambridge headquarters, as well as from the rest of the chip industry.
In the drug sector, Gilead flexed its financial muscle as it unveiled plans to acquire cancer drug maker Immunomedics for US$21bn.
Stock in British Airways owner IAG (LON:IAG) was off 31% for purely technical reasons as it began trading “ex-rights” following its £2.5bn cash call. In layman’s terms, this simply means investors are no longer entitled to purchase more equity in the IAG rights issue.
Shares in Ocado (LON:OCDO) were well bid in the early exchanges and up almost 2% ahead of Tuesday’s investor update, the focus of which will be its alliance with Marks & Spencer (LON:MKS).
Shell (LON:RDSA) and BP (LON:BP.) found some support as they both opened around 1.4% higher. The latter was further bolstered by an upgrade to ‘outperform’ by Credit Suisse.
Among the tiddlers, Horizonte Minerals (LON:HZM) got off to a positive start after Peel Hunt initiated coverage with a ‘buy’ recommendation and a 14p price target – almost double the current price. The shares advanced 6%.
Symphony Environmental Technologies PLC (LON:SYM) has reported positive results from a test of its d2p anti-microbial technology masterbatch against a bovine form of coronavirus. The AIM-listed firm said the Institute of Biology at Unicamp University in Sao Paolo State, Brazil, had tested polyolefin films incorporating the d2p technology for reductions in the presence of the virus at one, two and 24 hour periods. The tests showed a 99.9% reduction in the virus on the film at one hour, which then rose to 99.99% at two hours and 99.999% at 24 hours. In a separate announcement reporting its first-half results, Symphony said it had returned to profitability. For the six months ended June 30, 2020, the company reported a pre-tax profit of £18,000 compared to a loss of £86,000 in the previous year, while revenues increased to £4.8mln from £4.1mln.
Silence Therapeutics PLC (LON:SLN) (NASDAQ:SLN) has completed its search for a chief executive by appointing industry veteran Mark Rothera to the role. It means Iain Ross, who stepped in to take day-to-day control of the business last December, will return to his former role as non-executive chairman. Rothera, meanwhile, brings with him 30-years’ experience in the biopharmaceutical sector, latterly with Orchard Therapeutics where he secured US$600mln of financing and grew the business to a US$1.7bn market capitalisation at its peak. The appointment was announced alongside the gene silencing specialist’s interim results, which charted a period of significant progress. Key among the landmarks was a deal with AstraZeneca (LON:AZN) to develop as many as 10 small interfering RNA (siRNA) drug targets in the cardiovascular, renal, metabolic and respiratory diseases areas. It resulted in an upfront cash payment of US$60mln and a direct equity investment of US$20mln, which could be followed by potential milestones of US$400mln per target. As a result, Silence ended the six months to June 30 in rude financial health with just over US$64.1mln (£50mln) in the bank.
Seeing Machines Limited (LON:SEE) has said it is planning to launch a fully supported, integrated driver monitoring system (DMS) kit on an automotive development platform (ADP) made by technology corporation Qualcomm Inc (NASDAQ:QCOM). The AIM-listed firm said the DMS will support its full-stack DMS solution on Qualcomm’s Snapdragon ADP, targeting integration into either infotainment or centralised advanced driver assistant (ADAS) systems. The kit includes an optimised DMS reference camera, an ADP interface board and Seeing Machines software, and is expected to be available before the end of the current calendar year for use by tier one suppliers and original equipment manufacturers (OEMs).
Bango PLC (LON:BGO), the mobile payments group, is continuing its push into Asia and has signed partnership agreements with five mobile app specialists in different countries. The new partners will use the Bango Audiences customer acquisition tool to boost their app campaigns or revenues for app developer clients.
IQGeo Group Plc (LON:IQG) has reported sharply reduced losses in its first half as strong order bookings helped boost the firm’s recurring revenue by triple digits. For the six months ended June 30, 2020, the geospatial software group reported a pre-tax loss of £1.6mln, narrowed from £3.16mln in the previous year, while total revenues rose by over 50% to £3.6mln. Recurring revenues increased over 170% on the period to £1.6mln, while order bookings related to the firm’s products increased by over 120% to £5.5mln.
Xpediator PLC (LON:XPD), the freight forwarder and logistics group, said it is fully prepared for Brexit whatever the outcome as it posted an increase in first-half profits. Trading is almost back to pre-coronavirus (COVID-19) levels, the AIM-listed group said, helped by good performances in central Europe and a recovery in the UK following the COVID-19 disruption. Revenues dipped 3% to £99.6mln in the half-year to June 30, 2020, while profits rose by a third top £302,000 as the good performance in freight forwarding offset dips in affinity and warehousing, which were the arms most affected by COVID-19 restrictions.
IronRidge Resources Ltd (LON:IRR) said it has entered into a binding agreement with Australasian Gold Limited for the sale of the non-core May Queen gold project in South East Queensland, Australia. Australasian Gold is an unlisted company established in 2018, operated by an experienced geological team. It holds an additional prospective gold exploration license in the Ashburton region of Western Australia, within 30 kilometres of the Paulsens gold deposit held by Northern Star Resources Limited (ASX:NST). The sale will allow IronRidge to maintain focus across its core African portfolio. IronRidge will receive 4.5mln shares in Australasian Gold, representing 34.6 % of the enlarged share capital. Ironridge will also invest AUD$100,000 at A$0.10 per share to provide additional working capital, taking the total stake to 39.3%.
Union Jack Oil PLC (LON:UJO) told investors, in its interim results statement, that it is confident and optimistic as it remains on-track for first production from the Wressle field, located in North Lincolnshire before the end of this year. The onshore UK oiler ended the six months to June 30, 2020, with £4.6mln of cash, was debt-free and fully funded for its planned drilling, testing and development programmes. « We have seen significant progress at our three key project interests, namely West Newton, Wressle and Biscathorpe,” David Bramhill, Union Jack’s executive chairman said in the results statement.
Supermarket Income REIT (LON:SUPR) has made another addition to its growing portfolio of omnichannel sites with the acquisition of a Tesco outlet in Bracknell. The 7.3-acre site comprises a food store and a 400-space surface car park alongside several purpose-built online distribution docks that support Tesco’s online grocery business in the area. Supermarket Income REIT is acquiring the store from a client of CBRE Global Investors for £39.5mln, reflecting a net initial yield of 5.7%.
Mosman Oil and Gas Ltd (LON:MSMN) told investors that the Stanley-4 well, in East Texas has been drilled successfully. The group said the well, which was drilled down to a target depth of 5,000 feet, showed several zones of interest during drilling and subsequent logging identified several potential pay zones in the Yegua formation, at depths between 4,600 and 4,900 feet. Stanley-4 will now undergo testing, and the company noted that flow rates will be reported when data is available.
Frontier IP Group PLC (LON:FIPP) said its portfolio company, Fieldwork Robotics has received a continuity grant from Innovate UK to accelerate the development of its agricultural robot technology during the coronavirus pandemic. The IP investment group said the £84,000 grant will be used to support Fieldwork’s plans to expand its team and develop facilities amid what it said is “growing interest in its technology from potential industry partners”. The grant follows a previous £547,250 award from Innovate UK’s Industrial Strategy Challenge Fund in April 2019, as well as £320,000 raised in an initial equity funding round in January this year. Frontier owns a 26.9% stake in Fieldwork.
Genel Energy PLC (LON:GENL) told investors it has today published its inaugural comprehensive sustainability report. It comes after the oil company, with operations in the Kurdistan region of northern Iraq, last week launched an effort to raise up to US$300mln in debt financing. The company noted that since 2006, it has invested almost US$60 million in social projects, it has programmes (including healthcare) which benefit local communities, has prioritised local hiring and engaged local contractors in contracts with an aggregate value of around US$36mln.
US Oil & Gas PLC (LON:USOP), the oil and gas exploration company with assets in Nevada, announced on Friday that it has placed with private investors 843,431 new ordinary shares of .0001 Euro each at a price of 0.32p per share to raise gross proceeds of circa $349,653. The group said the proceeds of the placing will be used to provide it with additional working capital, including the funding of drilling operations. Since no commissions are payable, the net proceeds to be received by the company are circa $349,653.
Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) is confident its Lake Way Project near Wiluna in Western Australia is on schedule to deliver first SOP production in the March quarter of 2021. The project is now 60% complete on an earned value basis with major vendor procurement packages over 90% committed with fixed costs.
Alien Metals Limited (LON:UFO), a minerals exploration and development company, announced that, following the receipt of warrant exercise notices, it has issued 63,333,333 new ordinary shares of no par value in the capital of the company at an issue price of 0.3p each and 29,479,167 new ordinary shares of no par value in the capital of the company at an issue price of 0.15p per share
Shield Therapeutics PLC (LON:STX), a commercial-stage, pharmaceutical company with a focus on addressing iron deficiency with its lead product Feraccru/Accrufer (ferric maltol), has said it will announce its interim results for the six months ended June 30, 2020, on Wednesday, September 16, 2020.
Ceres Power Holdings PLC (LON:CWR), a global leader in fuel cell and electrochemical technology has said it will publish its second set of interim results for the 12 months ended June 30, 2020, on Monday, September 28, 2020, following its change of year-end to December 31. Ceres also said it will be hosting a live webcast for analysts and investors at 9.30am on the day. Further details will be made available in the interim results announcement and on the company’s website: www.ceres.tech
Anglesey Mining PLC (LON:AYM) has said its annual general meeting of shareholders will be held on September 30, 2020, and a general meeting of Shareholders will be held on October 30, 2020. In light of current measures relating to coronavirus (COVID-19) and the UK Government advice on physical distancing measures, no shareholder, except those designated as attending for the purposes of making up a quorum, will be admitted to the meetings. Shareholders should submit a proxy vote in advance of each meeting. Shareholders who wish to ask any questions relating to the business of either of the meetings are welcome to do so by means of an email to [email protected] with AGM as its subject.
The FTSE 100 looks set to open the new trading week in positive territory, taking its cue from Asia’s main markets.
The spread betting firms expect the UK blue-chip index to kick-off 24 points to the good at 6,056.09.
A technical deal that will effectively give Oracle control of TikTok’s US operation was the catalyst for the early positivity.
While not a full-blown takeover of the video app group, the agreement addresses national security concerns and therefore prevents further deterioration in Sino-American trade relations, analysts said.
It has been a weekend dominated by M&A activity with the US$40bn sale of UK group ARM Holdings by the Japanese investment firm Softbank to chipmaker Nvidia vying with TikTok for top billing on the business pages.
In the drugs sector, Gilead has unveiled plans to splash US$20bn on a cancer drug maker Immunomedics.
Looking ahead, this week we have corporate updates from Ocado (LON:OCDO) – where interest will focus on its tie-up with Marks & Spencer (LON:MKS) – builder Redrow (LON:RDW), retailer Games Workshop (LON:GAW) and tickets service Trainline (LON:TRN).
The week will also see central bankers in Washington and London provide their pandemic commentary, though there is little likelihood of changes to interest rates either side of the Atlantic.
“With the latest Federal Reserve rate meeting later this week, there is a risk that in outlining their plans for their new policy of average inflation targeting that the US dollar might well weaken further,” said Michael Hewson of CMC Markets.
Stocks in the Asia Pacific region were trading higher on Monday after Japanese conglomerate SoftBank Group Corp (TYO:9984) announced the sale of UK chip designer Arm to Nvidia in a $40 billion deal.
Mainland Chinese stocks were higher with the Shanghai composite up 0.15% while Hong Kong’s Hang Seng index added 0.60%.
Blackstone Minerals Ltd (ASX:BSX) has received firm commitments from sophisticated, professional and institutional investors to raise up to $17.8 million through a placement of 42,426,356 fully paid ordinary shares at an issue price of 42 cents per share.
Jindalee Resources Ltd (ASX:JRL) has received firm commitments from sophisticated and professional investors to raise $1.23 million as part of a $1.85 million capital raising to primarily accelerate exploration and development at McDermitt Lithium Project in the US.
Roots Sustainable Agricultural Technologies Ltd (ASX:ROO) has signed a letter of intent (LOI) with smart technology provider, Humboldt CCTV, to distribute the Root Zone heat exchange device kits in Northern California.
Kingston Resources Ltd (ASX:KSN) has received further strong results of up to 31 g/t gold within broader zones of mineralisation from recently completed reverse circulation (RC) drilling at Kingsley prospect within the Livingstone Gold Project in WA.
Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) is confident its Lake Way Project near Wiluna in Western Australia is on schedule to deliver first SOP production in the March quarter of 2021.
PolarX Ltd (ASX:PXX) has extended the known gold-copper mineralisation a further 320 metres along strike at the Zackly East prospect in Alaska during step-out diamond drilling.
SenSen Networks Ltd (ASX:SNS) (OTCQB:SNNSF) has been accepted to join the OTCQB Venture Market based in New York, USA, which is expected to enhance its push into the US market after customer wins in that market.
Kin Mining NL’s (ASX:KIN) new East Lynne aircore (AC) drilling results point to a large mineralised sulphide system over a 3.2-kilometre strike length within the Cardinia Gold Project (CGP) in WA.
Ironbark Zinc Limited (ASX:IBG) has declared a maiden JORC 2012-compliant ore reserve for the underground deposit of its flagship Citronen Zinc-Led Project in Greenland of 21.3 million tonnes at 6.3% zinc equivalent containing 1.3 million tonnes of zinc metal and 100,000 tonnes of lead metal.
Netlinkz Limited (ASX:NET) has recorded very strong revenue growth in the financial year 2020 after undergoing a major transformation, including setting up a solid platform that underpins continued growth and evolution into a leading virtual secure network (VSN) company for blue-chip corporations and government.
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Royal Road Minerals Limited’s (CVE:RYR) CEO Tim Coughlin talks to Proactive London’s Katie Pilbeam about their latest set of results from its Luna Roja gold project in Nicaragua.
Coughlin is confident that there is a potential for a new mineralized zone on the property and is hoping to put…
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Actu monde – AU – FTSE 100 wallows in the red; Wall Street jumps at opening bell