L&G buys annuities from Aegon, Mitie's marginal gains

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The FTSE 100 index is expected to rise 15 points on Monday morning, extending its gains from last week.

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Legal & General has acquired a £3bn annuity portfolio from Aegon as it eyes further deals in what it says is a potential £100bn UK market for back book annuity risk transfer deals. The transaction, which has been structured initially as a reinsurance contract, will decrease the level of L&G's surplus under the Solvency II regulations by around £50m and the Solvency II coverage ratio by circa 3.0 percentage points.

Outsourcing company Mitie Group reported a marginal rise in operating profits to £128.9m from £128.6m, and more than doubled earnings per share in the year to 31 March. The cash conversion rate was 75.2%, down from 126.%, with net debt broadly flat at £178.3m, with the board declaring a 3.4% rise in the dividend to 12.1p per share.

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Britain will be plunged into a year-long recession if it votes to leave the EU, according to a bleak analysis of the short-term economic shock of a Brexit vote published on Monday by the Treasury. The Treasury analysis suggests that growth could be 3.6% lower after two years if Britain votes to leave the EU, compared with the forecast for continued growth after a vote to remain - Financial Times

The US is on the verge of meeting most of the economic conditions the Federal Reserve has set to increase interest rates next month, according to a member of the rate-setting Federal Open Market Committee. Eric Rosengren, the president of the Federal Reserve Bank of Boston, told the Financial Times he was getting ready to back tighter monetary policy after financial and economic indicators swung in a positive direction after the Fed’s policy meeting in March. - Financial Times

The company that owns the Three mobile phone network has hit EE, its longterm network sharing partner, with an unexpected lawsuit to demand almost £160 million in lost profit. Hutchison 3G UK filed proceedings against EE, its larger rival now owned by BT Group, after accusing it of failing to install 3G equipment for Three to use as was agreed. - The Times

US close

Wall Street finished on a high on Friday as worries about a June rate-hike seemed to dim compared to the prior day.

The Dow Jones Industrial Average closed 0.4% higher at 17,500.94, but was down 0.2% for the week for a fourth straight week of losses. The S&P 500 Index was up 0.6% at 2,052.32, breaking its three-week losing streak, while the Nasdaq Composite climbed 1.2% to 4,769.56 reversing its four-week bad run.