Sales underwhelming at Pearson, Ladbrokes and Coral to offload some shops

London open

The FTSE 100 is expected to open 23 points lower on Monday, after closing up 0.51% at 7,013.55 on Friday.

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Underlying sales remained underwhelming at Pearson in the third quarter but it reported improving trends since September and that the weakness in the pound is likely to provide a material lift to full year numbers. Sales were down 7% at the underlying level in the nine months to the end of September but were down 3% at headline terms due to the dollar-sterling exchange rate, which could push earnings per share 4.5p higher for the calendar year.

Bookmaker Ladbrokes announced on Monday that subsidiaries of both itself and merger partner Gala Coral Group have agreed to sell a total of 359 licensed betting offices to Done Brothers Cash Betting - trading as Betfred - and StanJames Abingdon - trading as Stan James. The FTSE 250 firm said Betfred will purchase 322 shops for a cash consideration of £55m, and Stan James will purchase 37 shops for a cash consideration of £0.5m. “The sale of these shops will clear the last significant hurdle to delivering on the merger with Coral and paves the way for our focus on completion and quickly delivering on the opportunities the merger offers,” said Ladbrokes chief executive Jim Mullen.

Scottish energy company SSE is to sell a stake in Scotia Gas Networks to subsidiaries of the Abu Dhabi Investment Authority for £621m. The FTSE 100 firm will sell 16.7% of its stake and retain 33.3% equity in SGN by the end of the October, with the proceeds used to return value for shareholders or invested, which will be announced on 9 November.

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Britain would continue to pay billions of pounds into the EU budget after Brexit to maintain cherished single-market access for the City of London and other sectors under plans being discussed by Theresa May’s cabinet. The prime minister’s demand that Britain controls its borders and throws off the jurisdiction of EU judges has led many in London and Brussels to conclude that British-based banks and insurers would inevitably lose the “passporting” rights that allows them to trade freely in Europe. - Financial Times

Britain has become a less desirable place for companies to invest because of uncertainty surrounding Brexit. The country has dropped from second to the seventh most favourable destination for mergers and acquisitions as investors delay deals while its future with mainland Europe remains unclear, a survey by EY has found. - The Times

Banks could start making decisions to move assets out of the UK as early as the end of 2017 if there is no deal in place to maintain their rights to sell services freely across the European Union, a leading thinktank has warned. Open Europe, which took a neutral stance on the referendum, said Britain could risk losing its status as a hub for financial services unless passporting rights are made the top priority in negotiations with the EU. - Guardian

The chancellor has angered Eurosceptic ministers by calling for a delay on migration curbs that would lead to a hard Brexit and dismay business. Philip Hammond suggested that members of the Brexit cabinet committee should continue examining options after Amber Rudd, the home secretary, put forward plans for a visa-entry scheme for skilled migrants that would close the door to low-skilled migrants from the EU. - The Times

The plunging value of sterling has provided a £2.5bn dividend boost to owners of London-listed shares, with the drop in the pound making global firms’ payments more valuable, according to new figures. Despite several industries including mining and retail cutting billions from their payments to shareholders this year, the boost from currency changes meant that overall dividends rose 1.6pc to £24.9bn in the third quarter of 2016, research from Capita Asset Services said. - Telegraph

US close

Wall Street finished slightly higher on Friday as Federal Reserve chair Janet Yellen said she sees some benefit to allowing inflation to run above the central bank’s 2% target..

The Dow Jones Industrial Average increased 0.22% to 18,138.38 points, the S&P 500 rose 0.02% to 2,132.98 points and the Nasdaq grew 0.02% to 5,214.16 points.

Nevertheless, the S&P 500 closed with its first back-to-back weekly loss since August and 2.6% below the peak it hit that month.

In contrast, oil prices fell as the dollar strengthened and data from Baker Hughes showed US drillers added four rigs in the week to 14 October.

West Texas Intermediate crude dropped 0.17 cents to $50.35 per barrel and Brent dipped 0.07% to $51.99 per barrel at 2141 BST.

The yield on the benchmark 10-year US Treasury finished six basis point higher at 1.80%.

The dollar rose 0.40% versus the pound, 0.75% against the euro and 0.43% against the yen. A stronger dollar makes oil more expensive for importers trading in other currencies.

In a speech at the Boston Fed conference, Yellen said it may be wise to run a “high pressure” economy with a tight labour market to reverse some of the negative effects of the Great Recession.

On the data front, US retail sales rose 0.6% in September, as expected by analysts, following a revised 0.2% fall in August, the Commerce Department revealed.