Rolls-Royce agrees Spanish acquisition, CLS buys more of Dusseldorf

London open

The FTSE 100 is expected to open 24 points higher on Monday morning, after it closed up 0.87% at 6,590.64 on Friday.

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Rolls-Royce has agreed to pay €720m to complete the full takeover of Spanish aero engine component manufacturer Industria de Turbo Propulsores (ITP). The FTSE 100 company, which currently owns a large minority stake in the profitable Bilbao-based business, will purchase the outstanding 53.1% shareholding in ITP from SENER Grupo de Ingeniería in eight instalments over a two-year period.

CLS Holdings said it has exchanged contracts to buy two properties, one in Düsseldorf and one in Hamburg, for a total of €49.5m. The Düsseldorf property is to be bought for €43.6m including costs, and generates net rental income of €3.1m, reflecting a net initial yield of 7.1%. The property benefits from a high occupancy rate and presents significant scope for future rental uplifts and other asset management opportunities, CLS said. Harburger Ring 35, Hamburg, comprises 36,028 sq ft office space and will be bought for €5.9m including costs, and generates net rental income of €0.4m, reflecting a net initial yield of 6.4%.

Plastic products design and engineering company RPC Group updated the market on its first quarter trading on Monday - a quarter in which it continued integrating GCS and made an offer for BPI. The FTSE 250 firm said revenues in the three months to 30 June were significantly higher than the same period last year, due to underlying growth and the contribution of acquisitions. Adjusted operating profit at constant currencies was also significantly ahead of both 2015, and management expectations. “The group's overall performance in the quarter was encouraging with GCS performing ahead of expectations,” said RPC chief executive Pim Vervaat.

Newspaper round-up

A former Bank of England economist has called for an overhaul of the central bank’s approach to decision making and for the power of the governor to be curtailed, as the first interest rate cut since 2009 is considered in response to the economic turbulence that has followed the Brexit vote. Richard Barwell, now a senior economist at BNP Paribas, warned that too little challenge was being provided to Mark Carney and that there was evidence of “group think” at the Bank. - The Times

The UK economy is already showing early signs of stress in the wake of the Brexit vote with a consumer spending and productivity slipping to multi-year lows last month. Business activity in the second quarter of the year fell to three-year lows, according to Lloyds Bank’s tracker for manufacturing and services, with London emerging as a key casualty of the political and economic uncertainty caused by the referendum. - Telegraph

Theresa May will promise to ensure that workers are represented on company boards and that shareholders get a binding vote on corporate pay as the favourite in the UK prime ministerial race launches her national campaign to become Conservative leader. The home secretary will say that the rules on pay and board membership need to change because big business is too unaccountable. - Guardian

The UK’s decision to leave the EU will not have a “significant credit impact” for the ratings of states across Asia Pacific, according to Moody’s Investors Service. The relatively limited direct trade countries across the region have with the UK shields them from any British economic downturn, the ratings agency said, with Cambodia judged as being the most exposed. - Financial Times

US close

Markets in the US added more than 1% on Friday to more than recover from their post-Brexit losses, after an unexpectedly large June reading for nonfarm payrolls.

The Dow Jones Industrial Average managed a 1.4% gain to 18,146.74, the S&P 500 closed up 1.53% to 2,129.90, and the Nasdaq jumped 1.64% to 4,956.76.

Nonfarm payrolls came in at 287,000 new jobs in June, against consensus expectations for 175,000.

The unemployment rate edged higher to 4.9% from 4.8%, though this reflected a higher number of people entering the labour market by looking for jobs.