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FTSE Rises, Pound Falls on Reports of Lockdown Exit Delay

06/14/2021 | 06:50am EDT
Markets News: 

Pound Falls on Reports of UK Lockdown Exit Delay

Sterling weakens following reports the U.K. government is set to announce that its plan to fully ease England's lockdown on June 21 will be delayed by four weeks. Prime Minister Boris Johnson is expected to confirm the delay at a news conference around 1700 GMT. "It is unlikely that the formal announcement of the delay will trigger any sharp currency movements, as it won't come as a shock," ActivTrades analyst Ricardo Evangelista says. "However, should Johnson surprise the markets by confirming the end of restriction on June 21, the pound would be likely to reverse this morning's losses." GBP/USD falls 0.2% to a one-month low of 1.4070, according to FactSet. EUR/GBP rises 0.2% to 0.8604.

Companies News: 

Draper Esprit to Raise GBP111 Mln to Accelerate Investment Strategy

Draper Esprit PLC said Monday that it plans to raise 111 million pounds ($156.6 million) via an equity issue, which will provide it with additional financial firepower to accelerate its investment strategy.


Gresham House Strategic Appoints Interim Chairwoman

Gresham House Strategic PLC said Monday that it has appointed Nonexecutive Director Helen Sinclair as its new chairwoman on an interim basis, with immediate effect.


Draper Esprit FY 2021 Profit Surged; To Move Listing to London's Main Market

Draper Esprit PLC said Monday that operating pretax profit for fiscal 2021 rose sharply as the value of its investments surged, and that it plans to move its listing to the main market of the London Stock Exchange.


JLEN Environmental Assets Buys Cramlington Renewable Energy -- Deal Digest

ACQUIRER: JLEN Environmental Assets Group Ltd., a London-listed environmental infrastructure fund.


Total Produce Completes Syndication of Financing Arrangements

Total Produce PLC said Monday that it has completed the syndication of its financing arrangements for the purpose of its combination with Dole Food Company Inc.


Silver Bullet Data Services to Float on London's AIM

Silver Bullet Data Services Group PLC said Monday that it plans to float on London's junior AIM, with trading expected to start later this month.


Scirocco Energy's 2020 Loss Widened; To Invest GBP1.2 Mln in Energy Acquisitions

Scirocco Energy PLC reported Monday a widened pretax loss for 2020 on higher costs and said it intends to invest in Energy Acquisitions Group Ltd., a specialist acquisition and operating vehicle in the sustainable energy sector.


EEnergy Appoints Crispin Goldsmith to Lead M&A Strategy

EEnergy Group PLC said Monday that it has appointed Crispin Goldsmith to lead its mergers and acquisitions strategy.


Sound Energy Agrees to Conditional Purchase of Schlumberger Silk Route Services

Sound Energy PLC said Monday that it has conditionally agreed to buy Schlumberger Silk Route Services Ltd. from Schlumberger Holdings II Ltd.


National Grid PLC Acquisition completion: Western Power Distribution


Market Talk: 

Era of Attractive Government Bond Returns Likely to Be Over

0958 GMT - After almost 40 years of declining rates that saw 10-year US Treasury yields hitting 0.50% in 2020, "it is probable that the era of attractive returns is over for government bonds," Pictet Wealth Management says. The wealth manager sees expected returns at the bottom of the historic average, it says while outlining its outlook for the next 10 years. Coupon payments in Europe and Japan won't compensate for the loss of value associated with the rise in yield, while U.S. and U.K. 10-year government bonds are likely to post low positive total returns, it says. "All in all, the protection that benchmark government bonds provide to portfolios will cost investors in terms of performance potential," Pictet WM says.


Saga's Higher Cash Reserves Are Positive Amid Mixed Trading Update

0955 GMT - Saga's small increase in cash reflects broking cash flow and positive working capital in cruise, offset by tours cash burn, capital expenditure and interest costs, Numis says. The U.K. provider of specialized products for consumers over 50 said its cash burn at its travel business from February to May was at the lower end of its guidance, but it also reported continued progress in other metrics that will improve its marketing effectiveness. Saga's available cash as of May 21 was GBP78 million, up slightly from GBP75 million as of Jan. 21, which Numis considers to be modestly ahead of its model. Numis has a buy recommendation on the stock. Shares are up 0.2% at 411.40 pence.


UK to Face 'Minor' Economic Hit if Pandemic Restrictions Extended

0950 GMT - U.K. Prime Minister Boris Johnson is expected to announce today whether the final stage of easing Covid-19 measures in England will go ahead on June 21. To provide more time to assess developments of the new Delta variant, and to make sure that all vulnerable groups have been offered both vaccine shots, a delay of four weeks looks likely, economists from Berenberg say. However, the economic impact of an extension of restrictions should be moderate, Berenberg says. "Unless serious restrictions had to be reimposed, the damage to the U.K. economy would likely be minor," it says.


Esken Would Benefit From Strategic Partnership for London Southend Airport

0930 GMT - It is disappointing that Esken has been unable to dispose of Stobart Air despite all its efforts, Canaccord Genuity says. Stobart Air will cease trading and the cash outflows associated with the aircraft leases and legacy commitments will increase by about GBP33 million in the 2022 to fiscal 2024 period, the Canadian investment bank says. Still, despite the remaining uncertainties and lack of visibility for the aviation and energy infrastructure group, a potential strategic partnership for London Southend Airport would release significant liquidity and underpin the airport's medium-term funding requirements. Shares are down 16% to 26.20 pence.


Ted Baker's Performance Plan Seen as Shot at Redemption

0921 GMT - Lifestyle brand Ted Baker's performance plan represents an opportunity to offset a string of negatives, according to Money.co.uk analyst James Andrews. "That performance plan is key. Ted Baker was hardly thriving before coronavirus, issuing four profit warnings in 2019, not to mention the GBP58 million accounting error, and [...] its share price collapse by more than 90% between 2015 and the start of the pandemic," the analyst says. The company has been accelerating its plan in the past 18 months, with a new partnership with Next, reduced costs where possible, and an enhanced online offering, Andrews says. "In order to restore faith and confidence in the company Ted Baker needs to keep going with its plans," he says.


Serco's Contract Win to Help Shore Up Shortfalls

0914 GMT - Outsourcing group Serco's joint venture has secured a contract win with the Defence Infrastructure Organisation worth a base value of GBP900 million, a significant positive which will go some way to filling the hole left by the Atomic Weapons Establishment, Barclays says. The contract will have little effect in 2021, but will start to ramp up next year, says the U.K. bank, which assumes a contribution of around GBP5 million in 2022. After taking into account upgrades, Serco's current share price looks like it undervalues a best-in-class outsourcer currently enjoying positive momentum, Barclays says. The bank reiterates its overweight rating, and raises its target price to 180 pence from 170 pence. Shares are up 4.4% at 141.6 pence.


Craneware's Takeover of Sentry Is Positive for Group's Long-Term Outlook

0913 GMT - Craneware's $400 million acquisition of Florida-based peer Sentry Data Systems Inc. will boost the healthcare-software provider's long-term growth, according to Peel Hunt. The acquisition will materially enhance Craneware's play on helping to improve admin efficacy of U.S. hospitals and pharmacy costs, the brokerage says. Taking over Sentry strengthens Craneware's ability to eventually unlock a significant analytics opportunity in U.S. healthcare administration, Peel Hunt says. The brokerage has a buy rating on the stock and a target price of 3,665 pence. Shares are up 0.2% at 2,155 pence.


UK-US Air Travel Reopening Seen Pushed to Later in the Summer

0857 GMT - Instead of an announcement that air travel between the U.K. and the U.S. would resume as expected by Citi, last week's G-7 meeting resulted in the creation of a task force designed to reopen borders between the two countries. "Our base case for border reopening has now been pushed to later in the summer versus a July unlocking we assumed previously," the bank says. An announcement regarding the reopening of the travel corridor could happen in July with a potential resumption of travel in August, and U.K.-based airline group IAG would benefit the most from the reopening, Citi says.

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

06-14-21 0649ET

Stocks mentioned in the article
ChangeLast1st jan.
BARCLAYS PLC -0.09% 183.8 Delayed Quote.25.27%
CANACCORD GENUITY GROUP INC. -1.18% 14.25 Delayed Quote.27.69%
DJ INDUSTRIAL 0.10% 34798 Delayed Quote.13.59%
DRAPER ESPRIT PLC -4.33% 1104 Delayed Quote.67.27%
GRESHAM HOUSE PLC 0.00% 910 Delayed Quote.15.56%
GRESHAM HOUSE STRATEGIC PLC 0.00% 1700 Delayed Quote.23.64%
LONDON STOCK EXCHANGE PLC -1.46% 7826 Delayed Quote.-13.12%
NATIONAL GRID PLC -1.66% 919.4 Delayed Quote.6.29%
SCHLUMBERGER LIMITED 0.45% 29.01 Delayed Quote.32.89%
SCIROCCO ENERGY PLC 5.41% 0.975 Delayed Quote.-4.88%
SILVER 0.26% 22.4707 Delayed Quote.-14.41%
SOUND ENERGY PLC 1.75% 1.45 Delayed Quote.1.40%
TED BAKER PLC -3.32% 157.3 Delayed Quote.35.49%
TOTAL PRODUCE PLC -9.81% 1.894 End-of-day quote.38.05%
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