HICL proposes huge capital raise, Workspace to redevelop Stratford site

London open

The FTSE 100 is expected to open 61 points higher on Monday, after closing down 0.3% at 6,710.28 on Friday.

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HICL Infrastructure announced a proposal on Monday, to raise £76m through an issue of ordinary shares. The FTSE 250 firm said the net proceeds of the issue will be used for net funding requirements, which currently stands at £76m and is due to increase to £148m once the company’s conditional investment in the A63 motorway project is completed in the first quarter ot 2017. Depending on demand, the issue could be expanded to allow HICL to raise a maximum or around £145m, which the board said would allow it to consider further investments currently in the pipeline.

Workspace has been granted planning permission for the redevelopment of Stratford Office Village, which was valued at £14m in March. The company has secured mixed use planning consent to replace the existing buildings with a redevelopment comprising 101 residential units, including a mix of townhouses, private apartments and 25% affordable housing, and 13,000 sq. ft. of new commercial space.

FTSE 250 Property developer Segro sold its Heston and Airlinks industrial estate near Heathrow for £79.5m to Capital Industrial. In August, chief executive Phil Redding said the disposal reflected its “desire to focus our portfolio on more modern and less management-intensive assets, as well as the continuing, strong investor demand for multi-let warehouse assets in London”.

Newspaper round-up

The City would lose a key power that makes it a global financial hub under a “hard Brexit” scenario, the head of the German central bank has warned. Britain would be stripped of the right to authorise banks and other finance companies to operate across the remaining 27 European Union nations unless it remained in the European Economic Area, Jens Weidmann, president of the Bundesbank said. - The Times

Britain is in prime position to strike a new trade deal with the US outside the EU, former trade minister Lord Francis Maude believes. The UK is keen to do more deals post-Brexit, and the US is the country’s biggest national trading partner making a new treaty an attractive prospect. - Telegraph

Demand for emerging market exports has hit a new post-crisis low, with US imports from China dropping sharply in July in the latest sign that the engine of growth for the world’s developing economies is sputtering. The US has been one of the bright spots in an otherwise gloomy global economy and one of the few sources of growth for emerging market exporters, which last year saw exports of goods and services fall for the first time since the global financial crisis, according to figures from the UN. - Financial Times

Four managers in five believe that the Brexit vote will push Britain into recession in the next 18 months, while a separate survey has found business confidence hitting a four-year low. British executives think overwhelmingly that the decision to leave the European Union will have a negative impact on the economy, according to a poll by the Chartered Management Institute. - The Times

Business confidence has been dragged to a four-year low amid rising concerns over economic uncertainty and a slowdown in demand following the EU referendum result. Expectations that sales, orders and profits will grow over the next six months slipped to 12%, down from 38% in January, according to Lloyds Bank’s Business in Britain report. - Guardian

Banks are waking up to an imminent funding crisis as new rules designed to make money-market funds safer threaten to cause a dollar cash crunch among some of the world’s largest lenders. In a little over two months nearly $250 billion has been withdrawn from prime dollar money-market funds that provide short-term loans to banks. - The Times

US close

US stocks fell on Friday, with energy and financial shares particularly weak, as oil prices slumped and traders looked ahead to next week’s Federal Reserve policy decision.

The Dow Jones Industrial Average dropped 0.49% or 88.68 points to 18,123.80 points, the S&P 500 declined 0.38% or 8.10 points to 2,139.16 points and the Nasdaq slid 0.10% or 5.12 points to 5,244.57 points.

An 11% rally in shares of tech heavyweight Apple, after it bounced off its 50-day moving average, helped the S&P 500 to close 0.5% higher for the week.

At the same time oil, prices were under pressure on Friday on news of rising Iranian exports and returning supplies from Libya and Nigeria following interruptions. West Texas Intermediate crude lost 68 cents to $43.03 per barrel on NYMEX.

Meanwhile, US inflation rose more than expected in August as rising rents and health care costs offset a fall in gasoline prices.

The Labor Department said the consumer price index (CPI) increased 0.2% month-on-month in August after being unchanged in July, beating forecasts for 0.1% growth. On an annualised basis, CPI rose 1.1% in August, up from 0.8% in July and more than the 1.0% expected.