Glencore and QIA to take chunk of Rosneft, Atkins to sell stake in M25
London open
The FTSE 100 is expected to open seven points higher on Monday, after closing up 0.33% at 6,954.21 on Friday.
Stocks to watch
Glencore and the Qatar Investment Authority announced on Monday that they had concluded various agreements providing for the establishment of a 50:50 consortium, to take a chunk of Russian state gas operation Rosneft. The consortium also entered into agreements in connection with the further privatisation of Rosneft, whereby the consortium will acquire from Rostneftegaz a 19.5% interest in the issued share capital of Rosneft for €10.2bn. Under the proposed arrangements, Glencore will commit €300m in equity and QIA will commit €2.5bn in equity to the consortium with the balance of the consideration for the acquisition of the shares to be provided by non-recourse bank financing, principally by Intesa Sanpaolo, with Russian banks also providing financing and credit support.
DFS Furniture’s chairman, Richard Baker, will step down in spring next year after just over six years in the role. The company said a “thorough” process to appoint a new chairman led by senior independent director Luke Mayhew will begin immediately and a further announcement will be made in due course.
Engineering firm Atkins has agreed to sell its minority investment in the M25 motorway to a consortium of institutional investors for £66.3m. The FTSE 250 company will sell its private finance initiative in the motorway to Edge Orbital Holdings, which is being advised by broker Macquarie, subject to third party consents and is expected to be completed by the end of 2016.
IP Group's stake in portfolio company Oxford Nanopore Technologies has gained in value after the DNA sequencing outfit raised £100m from IP, Woodford Investment Management and GT Healthcare. FTSE 250-listed IP's 19.7% stake, including the £19.5m it has invested this year, was valued at £246.3m representing an unrealised fair value gain to the Group of £32.5m.
Newspaper round-up
The world’s foreign exchange markets have shrunk for the first time on record in a downturn that poses a big challenge for the City, the global leader in the buying and selling of currencies. Daily foreign exchange trading volumes have shrunk by $300 billion in the past three years to $5.1 trillion, according to the Bank for International Settlements, prompting warnings that the currency markets are becoming more volatile and prone to events such as the sterling flash crash in October. - The Times
Britain's increasing reliance on "intermittent" renewable energy means that the country is facing an unprecedented supply crisis, a senior Ofgem executive has warned. Andrew Wright, a senior partner at Ofgem and former interim chief executive, warned that households could be forced to pay extra to keep their lights on while their neighbours “sit in the dark” because “not everyone will be able to use as much as electricity as they want”. - Telegraph
Theresa May has refused calls to force all shops to close on Boxing Day, saying it is not the Government’s job to tell businesses how they should run their shows. MPs will hold a Westminster Hall debate on a petition with more than 140,000 signatures calling for a ban on all retail premises opening the day after Christmas, on the basis that it exploits low paid workers. - Telegraph
Theresa May will back steep rises to council tax bills this week in an attempt to plug a gaping hole in social care funding. Warnings of an “absolute crisis” in the industry have prompted the prime minister to drop her opposition to the increases, as the government strives to prove that it is facing up to the ballooning costs of caring for Britain’s ageing population. - The Times
Asking prices for properties in the UK will rise by 2% in 2017, although sellers in inner London will be asking less as the bubble “continues to deflate”, property website Rightmove has predicted. Sellers entering the market over the past month have priced properties 2.1% lower than those putting homes up for sale the previous month, at an average of £299,159, but Rightmove said it expected next year to be a seventh consecutive year of rising prices. - Guardian
US close
Wall Street continued pushing higher ahead of the US central bank´s policy meeting the following week and a meeting of non-OPEC oil producers, on Saturday, to decide on a further reduction in global crude oil supplies.
The Dow Jones Industrial Average gained 0.72% or 142.04 points to close at 19,756.85, while the S&P 500 clocked in with a sixth consecutive session of gains, rising 0.59% or 13.34 points to end at 2,259.33, and the Nasdaq Composite tacked on 0.50% or 27.14 points to end the day at 5,444.50.
Some analysts indicated a correction could be on the cards for US stocks following recent highs.
Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: “US stocks extended gains to fresh historical highs.
The relative strength index hint at deepening overbought conditions in the US stock markets, suggesting that the time for a correction could be approaching.”
Shares ended in the black on Thursday after the European Central Bank announced the extension of its quantitative easing programme.
ECB chief Mario Draghi said the central bank would keep buying government bonds through next year, albeit at lower amounts each month from April.