Old Mutual to float asset management business, UBM gobbles up Allworld
London open
The FTSE 100 is expected to open 12 points higher on Tuesday, after closing down 0.92% at 6,890.42 on Monday.
Stocks to watch
Old Mutual’s asset management business is to float on the London Stock Exchange with an offering of 13 million shares, it announced on Tuesday, and the equity raised will be used for “general corporate purposes”. On Monday, the asset management business also agreed to repurchase 6 million shares from Old Mutual Group.
In a short trading statement, infrastructure construction group Balfour Beatty said it expected to finish the year with a positive cash balance as it completes the first phase of chief executive Leo Quinn's two-year turnaround process. By year end, the FTSE 250 group said it would complete the target of bringing £200m cash in and taking £100m of costs out, while managing the process of unprofitable legacy contracts was "proceeding to timetable".
UBM has agreed to buy privately-owned Asian exhibitions company Allworld Exhibitions for a cash consideration that values the business at $485m on a debt and cash free basis. In the 12 months to the end of June, Allworld – which operates 51 tradeshows in 11 countries across nine sectors – generated revenues of $97.2m and earnings before interest, taxes, depreciation and amortisation of $37.6m.
Georgia-focused investment company BGEO Group announced on Tuesday that its banking subsidiary, JSC Bank of Georgia, has agreed to acquire a micro and small business portfolio from JSC ProCredit Bank Georgia for cash. The FTSE 250 firm said ProCredit Bank is currently the third largest bank in Georgia by total assets and market share of gross loans. It said the transaction will add around 2,400 micro and small business clients and a net value of GEL 120m to BOG's retail banking loan portfolio.
Newspaper round-up
Philip Hammond has conceded that there is likely to be a transition period after formally leaving the European Union in 2019 to ease Britain’s exit. The chancellor said that a temporary arrangement following the two years of Article 50 negotiations was in both the UK and the EU’s interest to protect businesses from a sudden, damaging rupture in trade relations. - The Times
BP needs to spend $170m on improvements, according to an internal investigation into safety monitoring. Despite tough new safety procedures introduced in the wake of the Gulf of Mexico oil spill, the oil colossus has twice come close to further potentially lethal accidents. - Financial Times
Rio Tinto was faced with a fresh complication in its corruption row in Guinea yesterday after a rival said that it planned to sue for damages. BSG Resources, the company controlled by Beny Steinmetz, the Israeli diamond tycoon, fired the opening shots in a legal action against Rio over BSGR’s loss of part of the Simandou concession, a iron ore deposit that is believed to be the world’s largest untapped source. - The Times
The European Commission has joined the US authorities in confirming it will scrutinise Glencore’s shock deal to buy a stake in Russian oil giant Rosneft. The FTSE 100 company, led by Ivan Glasenberg, stunned the City last week with a €10.2bn (£8.6bn) deal to take a 19.5pc stake in Rosneft alongside the Qatari Investment Authority (QIA). - Telegraph
US close
US equity markets ended mostly lower on Monday, but the Dow Jones Industrial Average notched up its sixth consecutive record close, as oil prices rose and investors looked ahead to the Federal Reserve policy meeting later this week.
The Dow closed up 0.2%, the S&P 500 fell 0.1% and the Nasdaq declined 0.6%.
Meanwhile, oil prices settled in the black but off highs after non-OPEC countries agreed to cut production by 558,000 barrels per day at the weekend, with the majority of the cuts pledged by Russia.
Comments from Saudi Arabia’s energy minister Khalid al-Falih also helped to underpin oil prices, as he said the country will “cut substantially to be below” the target agreed in November by the cartel.
West Texas Intermediate was up 1.5% to $52.29 a barrel and Brent crude was up 1.6% at $55.24.
With little in the way of macroeconomic news to drive markets, investors were looking ahead to the Fed’s two-day meeting which kicks off on Tuesday, with a 25 basis point rate hike largely priced in.
CMC Markets’ Michael Hewson said: "Some of today’s caution could well be predicated on some caution that the recent sharp rise in the US dollar might well prompt some Fed policymakers to soft pedal and go with a dovish hike.”