FTSE Rises, Covid-19 Strategy and Brexit Tensions Could Hit Pound

07/23/2021 | 06:42am

UK's Covid-19 Strategy and Brexit Tensions Could Hit Pound

1113 GMT - The U.K. government's coronavirus strategy of achieving herd immunity along with rising trade tensions between the U.K. and EU could weigh on the pound in the near term, MUFG Bank says. The consensus among epidemiologists seems to be that a possible plateau in infections will be reached later in August so evidence that the herd immunity strategy is working may not be available imminently, MUFG analyst Derek Halpenny says. "That could mean limited appetite for buying GBP over the short-term," he says. "The escalation of the U.K.-EU conflict over the Northern Ireland protocol is another reason to be cautious on the near-term outlook for GBP," he says. GBP/USD falls 0.2% to 1.3739 and EUR/GBP rises 0.2% to 0.8565.

 
Companies News: 

Alliance Trust Swung to 1H Pretax Profit; Plans to Review Dividend

Alliance Trust PLC said Friday that it swung to a pretax profit for the first half of 2021 as the value of its assets rose, and said it is launching a review of the level and funding of its dividend payments.

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Fusion Antibodies Gets First GBP150,000 Research Milestone Payment

Fusion Antibodies PLC said Friday that it has achieved its first research milestone payment of 150,000 pounds ($206,520) as part of a collaboration with an undisclosed major client.

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Gateley Buys Tozer Gallagher for Up to GBP825,000 -- Deal Digest

ACQUIRER: Gateley (Holdings) PLC, a U.K. legal and professional services group.

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U.K.'s CMA Won't Further Probe Lanxess-Emerald Kalama Deal

The U.K.'s Competition and Markets Authority said Friday it won't further probe the proposed acquisition by German chemicals company Lanxess AG of Emerald Kalama Chemical.

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Sealand Capital Signs New Distribution Contracts in East Asia

Sealand Capital Galaxy Ltd. said Friday that it has entered into exclusive, three-year product-specific distribution contracts with Heath London, The Gruff Stuff and Carter Beauty by Melissa Carter in Hong Kong, Macau and mainland China.

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Harworth Sees First Half Developing Nicely

Harworth Group PLC said on Friday that it expects EPRA [European Public Real Estate Association] Net Disposal Value as at June 30 to be materially ahead of current consensus for 2021, and that it remains well-capitalized and is managing cashflows sustainably. ---

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Prime People FY 2021 Pretax Loss Narrowed; Suspends Final Dividend

Prime People PLC said on Friday that its pretax loss for fiscal 2021 narrowed on lower costs, but that it isn't declaring a final dividend for the year.

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Vodafone 1Q Revenue Rebounds After Pandemic Hit -- Update

Vodafone Group PLC said Friday that revenue rebounded in the first quarter of fiscal 2022, recovering from the hit caused by the coronavirus pandemic last year, and said it is on track to meet its expectations for the full year.

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Bank of Cyprus Sees Higher 2021, 2022 Staff Costs

Bank of Cyprus Holdings PLC said Friday that it expects an increase in its staff costs for 2021 and 2022 after closing a new renewals agreement with a workers' union.

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Gambling.com IPO Prices at Bottom of Reduced Expected Range

Gambling.com Group Ltd. is set for its Nasdaq debut Friday after its initial public offering was priced at the bottom end of a reduced expected range.

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GYG Says Deadline for Harwood Capital's Bid Is Extended to Aug. 20

GYG PLC said Friday that the U.K. Takeover Panel has extended to Aug. 20 the deadline for its second-largest shareholder Harwood Capital to give a firm intention to make an offer.

 
Market Talk: 

Ultra Electronics Could See Cobham Come Back With a Lower Offer

1143 GMT - Ultra Electronics has received a non-binding proposal from Advent's Cobham of GBP35 per share, up from June's GBP28 per share, and an extension of the 'Put Up or Shut Up' deadline to Aug. 20, Citi says. Although the U.K. defense-equipment provider's board has indicated that it would be minded to recommend the offer--a 63% premium prior to the offer period--to shareholders, it still has to pass the U.K. government's security veto, the U.S. bank says. Citi says that it is possible that under certain circumstances Cobham could come back with a lower offer or that no offer could be made. Citi rates the stock neutral, with a 2,200 target price. Shares are up 33% at 3,284 pence.

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Green Gilts to Have Equivalent BOE Eligibility to Existing Gilts

1123 GMT - Green gilts will have equivalent eligibility to existing gilts in the Bank of England's market operations, the Bank of England says. The U.K. plans to issue a minimum of GBP15 billion in inaugural green gilts during the 2021-22 financial year. Green gilts will be eligible for purchase in line with the existing Asset Purchase Facility operating procedures and consolidated market notice, for purchase as part of the Sterling Bond Portfolio; and as collateral in the central bank's market operations.

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Divergence Between UK and Eurozone PMIs Widens

1118 GMT - Global purchasing managers' indexes show an increasing divergence between countries amid a rise in Covid-19 cases, with U.K. data worse than expected and figures from Europe stronger, says Ben Laidler, global markets strategist at multi-asset investment platform eToro. The U.K. PMI came in at 57.7, as the number of infections climb while supply-chain disruptions persist, he says. By contrast, the eurozone PMI increased to 60.6, its highest reading since 2000, reinforcing eToro's view on strong GDP and a rebound in earnings ahead. "Whilst the continuing rise in cases is continuing to cause uncertainty globally, we see the current growth scare as overdone, and set to ease," Laidler says, noting that fiscal and monetary support remains significant, vaccination rates are rising and economies are gradually reopening.

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Moneysupermarket.com's 1H Margin Climbs on Impressive Progress, Says Jefferies

1111 GMT - Moneysupermarket.com's first-half results included a marketing margin that rose 3.8% on year to 61.2%, a return to pre-coronavirus levels in a very quick time, Jefferies says. The price-comparison website's new CEO only called out "efficient acquisition" as one of its three strategic pillars in May, but it has already made impressive progress, with its switch to a leading bidding platform accounting for two-thirds of the margin improvement, the U.S. bank says. Management resisted giving long-term margin guidance but are confident in the outlook, Jefferies says. "This bodes well for both earnings momentum and multiple expansion," the bank says. Jefferies retains its buy rating and 350.0 pence price target. Shares are down 0.2% at 261.0 pence.

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UK's Covid-19 Test Case Could Provide Guidance to Other Developed Economies

1035 GMT - U.K.'s strategy amid its latest wave of Covid-19 infections is a test case for what happens when a country with high vaccination rates eases restrictions even as cases rise, economists from Berenberg say. For now, vaccines seem to be working and economic data have largely decoupled from virus trends, while there are indications that the current wave may have already peaked, they say. "If the U.K. manages to ride out the Delta wave without overwhelming its hospitals or reintroducing economically damaging restrictions, that would provide a positive signal for other advanced economies that have also eased restrictions after reaching a similar level of vaccination but are a just a few weeks behind the U.K. in terms of new infections," Berenberg says.

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Brewin Dolphin 3Q Flows Rose; Rivals Still Appeal More

1010 GMT - Brewin Dolphin Holdings gains 1.6% after the FTSE 250 listed fund manager reported higher 3Q discretionary net flows and said gross discretionary fund inflows hit a record. Panmure Gordon says 3Q assets under management slightly exceeded its estimate after better-than-expected net flows and the company is better-placed than some more traditional wealth-management players, though it still prefers several rivals. "Despite the higher end point of AUM, revenues were in line with our expectations, suggesting a touch more revenue margin attrition than we had anticipated. Overall, our estimates move a little higher on the back of the AUM reported," Panmure analysts say, keeping their hold recommendation.

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UK Recovery Expected to Falter Amid Rising Covid-19 Cases

0959 GMT - The fall in July's composite PMI in the U.K. adds further signs that the economic recovery is stalling, at least temporarily, due to high Covid-19 infections, says Gabriella Dickens, senior U.K. economist at Pantheon Macroeconomics. The PMI remained well above expansion levels at 57.7, pointing to solid economic growth in July, but its downward direction is more important than its level, she says. Economic activity continued to be constrained by supply shortages, but some data from the PMI survey suggest that supply-chain disruptions and price pressures could have already peaked, Dickens say.

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

07-23-21 0842ET

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