Saga studies sale of insurance unit, Balfour Beatty lands £1.2bn contract
London open
At 0718 GMT, futures were pointing to initial gains of 0.30% to 7,770.59 for the FTSE 100.
In the press
The UK's impending recession could be twice as bad as previously thought, according to leading economic forecasters at the business consultancy EY. Reduced government support, higher taxes and an overall worsening outlook have all led the firm’s analysts to conclude that the next three years could be worse than they anticipated three months ago. In October, EY’s Item Club had predicted a 0.3% contraction in gross domestic product (GDP) this year, followed by 2.4% growth next year and a 2.3% rise in 2025. But in an updated forecast released on Monday, it said GDP would drop 0.7% this year, followed by growth of 1.9% and 2.2% over the next two years. - Guardian
Saga is expected to confirm the sale of its underwriting business today as it seeks to raise between £80 million and £90 million to bring down its debt. The cruise and insurance company is exploring a sale of Acromas Insurance Company Limited, its in-house underwriter, to reduce its £721 million debt. Euan Sutherland, 53, Saga’s chief executive, is trying to offload the business as he pushes ahead with turnaround efforts that were launched in 2019. - The Times
Households will be paid to cut their electricity use for the first time on Monday between 5pm and 6pm, under plans being drawn up by the National Grid. As temperatures plummet to -2C today ramping up pressure on Britain’s supplies, the power network operator is planning to call on consumers to use less electricity to help it manage the system. Around a million people have signed up to the scheme which will see them paid as much as £10 a day to cut the amount of electricity they use at certain times as part of efforts to tackle the energy crisis. - Daily Telegraph
Stocks to watch
The specialist provider of products and services to those over 50 confirmed that it was in talks to potentially sell Acromas Insurance Company Limited with a view to reducing its debt pile. Its board has "concluded that a potential disposal of its Underwriting business is consistent with Group strategy and would crystalise value and enhance long-term returns for shareholders." Saga also said that it had reviewed the options available to optimise its operational and strategic position in the insurance space as it transitions to a capital-light business and looked to cut debt. "Discussions are ongoing and there can be no certainty that any transaction will occur," it added. "Any disposal of AICL would require regulatory and shareholder approvals. A further announcement will be made in due course."
Primary Health Properties has bought Irish property management business Axis Technical Services and signed a long-term agreement providing access to a strong pipeline of future primary care projects in Ireland, the company said on Monday. Axis manages a portfolio of more than 30 properties, including the majority of PHP's Irish portfolio, it added. No financial details were disclosed. "The acquisition gives the group a permanent presence on the ground, further strengthening its position in the country and relationship with the Health Service Executive, Ireland's national health service provider," PHP said.
Infrastructure group Balfour Beatty said it had been awarded a £1.2bn contract by Britain’s National Highways to deliver a package of works for the proposed Lower Thames Crossing. The company on Monday said it would be responsible for the design and delivery of more than 10 miles of new highway as part of the project to build a new tunnel under the River Thames aimed at easing traffic congestion in the south of England.
US close
Wall Street's main market gauges finished sharply higher last Friday, buoyed by remarks from Fed Governor Christopher Waller, who joined some of the other top central bank officials who had recently argued for a downshift in the pace of rate hieks to 25 basis points per meeting.
"Beyond that, we still have a considerable way to go toward our 2% inflation goal, and I expect to support continued tightening of monetary policy," Waller added in remarks to the Council on Foreign Relations in New York.
The Dow Jones Industrials added 1.0% to 33,375.49, alongside a 1.89% gain for the S&P 500 to 3,972.61 while the Nasdaq Composite jumped 2.66% to 11,140.43.
Nonetheless, both the Dow and the S&P 500 finished the week lower with the former seeing its worst week since early December.
"As we look ahead to a new week most of the attention is set to remain on the latest set of earnings reports, as investors look to decide whether the current strong run of gains can continue, and how much further central banks are prepared to go to get a handle on inflation," said Michael Hewson, chief market analyst at CMC Markets UK.