Two out of three for AstraZeneca, Electra to cash in on Premier Asset Management

London open

The FTSE 100 is expected to open 1 point lower on Tuesday morning, after closing up 1.22% at 6,983.52 on Monday.

Stocks to watch

It was two out of three for AstraZeneca on Tuesday as a disappointing drug trial was counterbalanced by a win with the NHS drug regulator for one of its big cancer drugs and a licence deal for a beta-blocker medicine. On the latter deal, Aralez will pay AstraZeneca $175m for the US rights to Toprol-XL tablets and will also pay up to $48m in milestone and sales-related payments, as well as mid-teen percentage royalties on sales, with AstraZeneca continuing to manufacture and supply Toprol-XL and the authorised generic medicine.

Electra Partners announced on Tuesday morning that, following the successful initial public offering of its portfolio company Premier Asset Management Group, it expects to partially realise FTSE 250 firm Electra Private Equity’s investment in the business. Based on the offer price, Electra's investment in Premier has a value of £46m - an uplift of £13m or 39% on the valuation at 31 March, implying an increase in net asset value per share of 26p. “On admission, Electra is expected to receive cash proceeds of £36m from the redemption of preference shares and sale of ordinary shares in Premier,” the statement read. “In addition Electra will hold approximately 8% of the issued ordinary share capital of Premier with a valuation at the offer price of £10m; these shares are subject to a six-month lock-up.”

FTSE 250 infrastructure company Carillion renewed its contract with Nationwide Building Society for a further seven years for £350m, to provide facility management services at its branches and corporate offices. The contract, which started on 1 October, built on an existing nine year partnership, and will provide facilities management services for the building society’s Swindon headquarters, 15 corporate offices, data centres and 700 branches across the UK.

Newspaper round-up

AstraZeneca has won a major victory in the UK after the country's drugs watchdog approved one of the most important cancer drugs in its oncology portfolio. The National Institute for Health and Care Excellence (Nice) announced on Tuesday that osimertinib, known under the brand name Tagrisso, will be made available to people with a certain type of lung cancer through the Cancer Drugs Fund (CDF). - Telegraph

A big financial institution suffers a rapid, destabilising share price fall; talk spreads through the market of ‘another Lehman moment’. Such a concern has been fanned by the poor performance of European banks with lenders in Italy and now Germany attracting hefty scrutiny from investors. Among the ranks of underperforming banks, Deutsche’s recent travails have electrified the conversation over systemic risk and whether the post-financial crisis reform of derivatives faces a serious test. - Financial Times

Almost 1.8m new rental homes are needed by 2025 to keep up with current demand, according to the Royal Institution of Chartered Surveyors (Rics). New figures reveal that 86pc of landlords have no plans to increase their rental portfolios this year. Rics has forecast that this trend will continue for the next five years, causing a shortfall in private rented sector homes. - Various

The US said on Monday it was suspending negotiations with Russia over a ceasefire agreement for Syria, a final recognition that the peace plan announced three weeks ago has collapsed. The state department said Russia was either “unwilling or unable” to get the Syrian regime to adhere to the deal and had instead decided to intensify military action against the opposition. - Financial Times

Bosses at Sky and TalkTalk have launched an 11th-hour bid to persuade the regulator to split up BT, as a key deadline for industry submissions over its future ends today. They want Ofcom to force Openreach, which looks after the cables and wires that make up the UK's telecoms network, to break away from parent company BT as they claim this will speed up investment in fibre cables and create greater competition. - Daily Mail

US close

US stocks finished lower on Monday on worries about Deutsche Bank and the implications of the UK’s exit from European Union.

The Dow Jones Industrial Average dropped 0.30% to 18,253.85 points, the S&P 500 fell 0.33% to 2,161.20 points and the Nasdaq shed 0.21% to 5,300.87 points.

At the same time oil prices rose on reports that Iranian President Hassan Rouhani stressed the importance of joining OPEC in trying to stabilise the market. West Texas Intermediate crude rose 0.82% to $48.64 per barrel and Brent jumped 1.2% to $50.80 per barrel.

Deutsche Bank’s US shares were under the cosh after surging on Friday following a report that it may be able to negotiate a lower settlement with the US Justice Department over its mis-selling of mortgage-backed securities.

On Monday, The Wall Street Journal reported that talks between the two were moving forward, but no deal has yet been presented to senior decision makers on either side. Deutsche Bank shares were not trading in Germany on Monday as markets there were closed for a public holiday.

Elsewhere, UK Prime Minister Theresa May said the formal Brexit negotiations will begin by March 2017, which would mean Britain’s exit from the European Union would happen by summer 2019.

On the data front, Markit’s final US manufacturing purchasing managers’ index fell to a three-month low of 51.5 in September from 52.0 in August. Still, this was a touch above the flash estimate of 51.4. A reading above 50 signals expansion.

Slower rates of output and new order growth were the main factors weighing on the headline index, which more than offset a stronger contribution from the staff hiring component.