Ashmore AUM drops in second quarter, Aggreko extends contracts with Argentina
London open
The FTSE 100 is expected to open up 22 points on Monday, having closed 0.62% higher at 7,337.81 on Friday.
Stocks to watch
Emerging markets focused fund manager Ashmore revealed that assets under management dropped in the second quarter of its financial year after £0.7bn of net outflows and the only period of negative market performance it has endured in 2016. AUM declined US$2.4bn in the three months to 31 December as the relatively minor outflows combined with $1.7bn of negative investment performance.
Power generation equipment supplier Aggreko announced on Monday that the Government of Argentina has extended its fixed site contracts, equivalent to 174MW, until 31 December 2017. The FTSE 250 company said the original contracts amounted to 180MW. Aggreko also confirmed that 56MW of the 270MW standby contracts with Argentina was off-hired in 2016, leaving the balance at 214MW, all of which which has now been extended until the end of either February or March.
Britain’s largest brick manufacturer Ibstock anticipates earnings to be in line with expectations as revenue rose due to growing house builder activity in the second half of the year, while brick imports declined. Revenue for the year ended 31 December increased 5%, compared to last year, while revenue from clay and concrete products in the UK, which represents about 80% of total revenue, was up 2%.
Newspaper round-up
Ministers are prepared to start a tax and trade war with Europe to ensure Britain’s economic prosperity, the chancellor said yesterday. Philip Hammond said that if the EU cut off the UK’s preferential access to the single market or tried to impose tariffs and trade restrictions, a “wounded” Britain would not lie down and accept the economic damage. - The Times
Donald Trump has pledged that America and Britain will agree a post-Brexit trade deal “very quickly” and said Brexit was a "great thing" for the UK. In an interview with Michael Gove for The Times, the US president-elect praised Britain for voting to leave the European Union, said Theresa May would visit him "right after" he is sworn in, and predicted that other countries would follow Britain’s lead in leaving the bloc. - The Times
The pound fell against the dollar, dropping below $1.20 for the first time since October’s flash crash, after reports said that Prime Minister Theresa May will signal plans to quit the European Union’s single market to regain control of Britain’s borders and laws. Sterling declined against all of its major peers after it was reported that May will prepare to withdraw from tariff-free trade with the region in return for the ability to curb immigration and strike commercial deals with other countries. - Telegraph
Theresa May will aim to strike a defiant tone in her upcoming Brexit speech on the risks to the rest of the EU of giving Britain a raw deal, echoing the combative approach taken by the chancellor. In a speech by the prime minister on Tuesday that will be watched closely in EU capitals, Downing Street is keen to impress that there are potentially lucrative economic opportunities elsewhere, weeks before the UK is expected to trigger article 50. - Guardian
Business activity across England and Wales hit an 18-month high at the end of last year in a further sign that the economy has so far shrugged off the effect of the Brexit vote. Lloyds Bank’s regional purchasing managers’ index for December showed “strong and accelerated growth”, the lender said, led by the east of England, the southwest and the west Midlands. - The Times
US close
US equity markets finished on a mixed note on Friday as earnings season kicked off amid strong quarterly results from banking heavyweights JP Morgan Chase and Bank of America.
The Dow Jones Industrial Average drifted 0.03% or 5.27 points lower to 19,885.73, the S&P 500 was 0.18% or 4.20 points firmer at 2,274.64, and the Nasdaq gained 0.48% or 26.63 points to 5,574.12.
For the week as a whole the S&P 500 slipped 0.1%
US markets would be closed on Monday in observance of Martin Luther King Jr. Day.
Meanwhile, oil prices were weaker amid doubts over whether planned production cuts will do enough to curb the supply glut.
West Texas Intermediate fell 68 cents to $52.37 per barrel.
Michael Hewson, chief market analyst at CMC Markets, said: “US markets shrugged off yesterday’s decline opening higher after a raft of US bank earnings came in broadly better than expected, and with a long weekend coming up US investors might be a little cautious about trying to buy this market too aggressively.
“Could these bank numbers be the catalyst to propel the Dow to 20k ahead of the US long weekend?”