London pre-open: Stocks seen touch lower; quiet session expected

London stocks were set to open a little weaker on Friday with little in the way of corporate or macroeconomic news to drive markets and volumes likely to be low amid the summer lull.

The FTSE 100 was expected to open eight points lower than Thursday’s close at 6,861.

Atif Latif, director of trading at Guardian Stockbrokers, said: “We expect a period of consolidation in the coming sessions before a significant move lower and have seen downward protection being added.

“With the continual drop in the pound that is seeing no respite, the common theme for FTSE companies will now be M&A. Overseas cash rich funds and private equity houses will be looking at potential buyout targets on valuations that are now 20/30% cheaper.”

On the data front, UK public sector net borrowing figures are due at 0930 BST. Societe Generale expects the PSNB ex-banking will move from a deficit to a surplus of £2.4bn in July.

“This week’s data will be for July which is a key payment month for corporation and other taxes. As the OBR points out, this is the most forward-looking component of receipts and we think it could suffer from Brexit uncertainty.

“Moreover, the year-to-date performance of the budget deficit relative to the pace of improvement implied by the OBR’s full fiscal year forecast has been disappointing, a trend that we expect to continue.”

Corporate news was thin on the ground on Friday.

Hammerson said developments towards achieving a secondary listing on the Johannesburg Stock Exchange (JSE) are at an “advanced stage”

The listing is expected to take place on 1 September after receiving approval from the Financial Surveillance Department of the South African Reserve Bank. Hammerson is now awaiting formal approval from the JSE.

Elsewhere, Faroe Petroleum applied to the LSE for 1,033,949 new ordinary shares of 10p each in respect of the vesting of employee share awards under its corporate incentive plan.

Admission was expected to become effective on 23 August. Faroe held no shares in treasury, the company said in a statement.

Healthy and safety group PHSC has raised £350,000 before expenses through a share placement.

The company, which provides health, safety, hygiene and environmental consultancy services, said the placement was in response to investor demand. The group placed 1,590,909 new ordinary shares of 10p each with new investors at a price of 22p per share.

The placing shares represent 10.8% of the enlarged issued ordinary shares of the company. PHSC will use the funds for additional working capital, including for ongoing expenditure relating to recent acquisitions.