FTSE 100 to claw back some losses after positive day on Wall Street

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  • FTSE 100 index gains 19 points
  • Small rally after hefty weekly falls
  • Business support plan mulled over

8.50am: Small rally after a bloody week

The FTSE 100 opened modestly higher on Friday with the blue-chip index expected to end the week in a far calmer place than it started.

The UK blue-chip index opened 19 points higher at 5,842.50.

After the London close Thursday, Wall Street nudged higher, while the bulk of Asia’s main markets followed suit.

Closer to home, the consequences of chancellor Rishi Sunak’s latest business support plan were slowly being worked through by London’s price setters.

“The moves were never going to be a panacea for the UK’s economic ills,” said Richard Hunter, head of markets at Interactive Investor.

“Fiscal support looks likely to wane over the next few months with a further wave of unemployment looking inevitable, as the latest lockdown restrictions begin to bite on several affected sectors.

“In another week dominated by difficulties in sectors such as hospitality and tourism, as well as some further pressure being piled on the banks as concerns of bad debts rise, obvious beneficiaries from the pandemic remain a relatively rare breed.”

Much of the price action early on Friday seemed to be among the second-liners, where the post-results buying of Imperial Leather maker PZ Cussons (LON:PZC) drove the shares up 11% early on.

There was a 7% bounce for Cineworld (LON:CINE) after the lockdown-related bloodletting earlier in the week.

On the flipside, profit-takers moved in at Pets at Home (LON:PETS) after its strong showing Thursday in the wake of better than expected figures from the retailer.

Proactive news headlines:

Bahamas Petroleum Company PLC (LON:BPC) has told investors that Stena Drilling’s Stena IceMAX vessel will be used to drill the Perseverance-1 exploration well. The company revealed that Stena has formally notified the group that it has nominated IceMAX for the well, which is consistent with the existing rig contract. Stena also indicated that the start of the contracted window – stated as December 15, 2020, – will be the approximate time for the arrival of the drill ship in the field. Bahamas Petroleum pointed out that IceMAX is one of the most advanced drillships in the world. That means a well spud date is likely to follow about 3 or 4 days later, Bahamas Petroleum noted, and the company specifically said that it expects the well will spud before Christmas.

Tiziana Life Sciences PLC (NASDAQ:TLSA) (LON:TILS), a biotechnology company focused on innovative therapeutics for oncology, inflammation and infectious diseases, has said an interview with its CEO, Dr Kunwar Shailubhai will air on The RedChip Money Report television program on Sunday, September 27, 2020, at 6.00pm. EST on Bloomberg International, available in 100+ million homes across Europe. In the exclusive interview, Dr Shailubhai discusses the company’s planned spinout of StemPrintER into a new company, Accustem Sciences, as well as its plan to initiate a clinical study with nasally administered Foralumab, a fully human anti-CD3 monoclonal antibody, in patients with coronavirus (COVID-19) in Brazil. The interview will also air in the US on the Action Channel on Sunday, September 27, 2020, at 11.00am ET and is available via live stream on American Business TV.

Anglo Pacific Group PLC (LON:APF) (TSX:APY) told investors it has kicked off a GBP5mln share buy-back programme. The natural resources royalty and streaming company said it sees the current share price as offering significant value, given the implied discount to underlying net asset value and other valuation metrics. The group said it has decided to implement a buy-back as a means to return value to shareholders in an accretive manner, and in a manner that does not jeopardise our ability to finance future royalty additions.

Sativa Group PLC (LON:SATI) said it has become a member of the Association for the Cannabinoid Industry (ACI) novel food consortium and its landmark toxicology study as part of what it said is its “ongoing commitment to continually deliver the highest level of regulatory compliance and substantiate ‘CBD you can trust'”. The cannabidiol (CBD) products group said the toxicology study will provide safety data required for novel food dossiers validated by the UK’s Food Standards Agency (FSA) to remain on the market after March 31, 2021. Sativa said its team of scientists and quality & compliance professionals in the UK and Poland have worked with the ACI to ensure its products meet quality management criteria.

Circle Property PLC (LON:CRC) has notched up the fourth successive year of growth in its net asset value (NAV). The regional offices specialist revealed that its NAV per share rose by 3% to 285p at the end of March 2020 from 277p a year earlier, in its full-year results statement. Rental income in the year rose to GBP7.50mln from GBP6.88mln the year before. Circle saw a 14.16% increase in contracted annual rental income to GBP8.71mln at the end of March from GBP7.61mln a year earlier.

San Leon Energy PLC‘s (LON:SLE) interim results illustrate a company with a strong financial position and outlook. In 2020 to date, the company with investments in Nigerian oil assets received US$41.5mln in payments from operators, via loan note arrangements. Some US$88.7mln of future loan note payments remain. With US$35.6mln in cash at the end of the half-year – US$22.6mln by September 18, 2020, after US$6.8mln was put in escrow – the company said it is positioned to invest and grow further. In early September, new deals were announced which will see San Leon secure an interest in the Oza field, onshore Nigeria.

Genel Energy PLC (LON:GENL) has confirmed a flush of liquidity, receiving US$10.8mln from oil sales and completing a US$300mln bond issue. Pareto Securities was bookrunner and manager for the bond issue which sees Genel issuing senior unsecured bonds, carrying a 9.25% coupon and maturity set for October 2025. Genel also confirmed it will use US$223mln to repurpose existing unsecured bonds, due December 2022. A separate statement by Genel confirmed receipt of payment from the Kurdistan Regional Government for oil sales conducted this August. Some US$4.7mln was paid to the Taq Taq field partners, giving Genel a net share of US$2.6mln. Tawke field partners received US$33.8mln which means that Genel received US$8.2mln.

Red Rock Resources PLC (LON:RRR) said its Australian gold mining joint venture, Red Rock Australasia has appointed David Holden as exploration manager. Holden was involved in the initial discoveries at Nimary/Jundee, Brocks Creek, Mt Todd (Australia), Ngaka Coal Field (Tanzania), and Big Sandy lithium (USA), said Red Rock. Red Rock Australasia, a 50.1%-owned Australian joint venture with Power Metal Resources (49.9%) has applied for twelve exploration licences in the Central Victoria Gold Fields.

genedrive PLC (LON:GDR) said its coronavirus testing kit has been verified to work with the RNA extraction technology of its collaboration partner. Initial testing took place using Beckman Coulter Life Sciences’ chemistry on respiratory swabs in conjunction with gendrive’s 96 SARS-CoV-2 equipment. This indicated the Beckman product was suitable for use in the genedrive testing workflow.

Powerhouse Energy Group PLC (LON:PHE), the waste-plastic-to-energy firm, has said Cameron Davies is to hand over the chairman duties for the group to his deputy, Tim Yeo. Davies will remain on the board of Powerhouse as a non-executive director. “We are all pleased that we will still have the benefit of his wise counsel as he will continue as a non-executive director,” Yeo said in a statement.

[email protected] Capital PLC (LON:SYME) said it has been informed by its chief executive Alessandro Zamboni, for clarification purposes, that the purchase of a call option for consideration by Orchestra Group, announced on September 24, is an arms-length arrangement with a regulated institutional entity which is not a related party of Orchestra Group. The inventory monetisation group also said that following an update to its inventory funding and institutional investor relationships on September 10, 2020, and pursuant to the confidentiality agreements signed with its partners and client companies, that it “looks forward to updating shareholders further on its business operations and their related financial impacts in the coming days”.

World High Life PLC (LON:LIFE) has updated on the status of the deferred consideration for Love Hemp Ltd, which it agreed to acquire in October 2019. Under the initial terms of the acquisition, the company was required to pay GBP1.5mln in cash on the date falling six months and one day from the date of completion, provided that at the firm’s election it could alternatively pay to the sellers an amount equal to GBP2mln to be satisfied by the issue of ordinary shares of World High Life, while a further GBP1.5mln cash payment was due twelve months and one day from the date of completion. However, the company said on Friday that it has entered into a deed of variation to alter the initial terms so that the sellers will instead be paid with 22.2mln shares on September 25, 2020, in their relevant proportions at a price of 9p each. The group will also pay GBP1.5mln in cash to the sellers on January 15, 2021.

Alien Metals Limited (LON:UFO), a minerals exploration and development company, said that, following the receipt of exercise notices, it has issued 17,500,000 ordinary shares of no par value in the capital of the company at an issue price of 0.15p per share and 4,800,000 new ordinary shares of no par value in the capital of the company at an issue price of 0.25p per share.

Integumen PLC (LON:SKIN) – soon to be renamed DeepVerge PLC – has said that further to its announcement of a recommended all- equity offer for Modern Water PLC (LON:MWG) it has sought and obtained approval from the Panel on Takeovers and Mergers to extend the deadline for publication of the offer document which the group currently expects will be published by Friday, October 9, 2020.

Base Resources Limited (LON:BSE) (ASX:BSE) has said its 2020 Annual General Meeting will be held at 1.00pm Perth time on Friday, November 20, 2020, as a hybrid meeting at Kimberley Room, Katitjin Centre, Australian Institute of Management WA, 76 Birkdale Street, Floreat, Western Australia; and online via the Lumi software platform accessible at https://web.lumiagm.com

6.50am: Rally at week’s end

After US markets finally made their mind up to advance yesterday after a choppy session, UK equities look set to follow suit.

Spread betting quotes suggest the FTSE 100 index will open around 43 points higher at 5,866 after shedding 76 points yesterday.

Last night, the Dow Jones Industrials Average closed in positive territory, up 52 points at 26,815, while the S&P 500 jumped 10 points to finish at 3,247.

In Asia this morning, Japan’s Nikkei 225 has picked up the baton but Hong Kong’s Hang Seng has fumbled the handover; the former is up 129 points at 23,217 while the latter is down 12 points at 23,299.

In London, traders will still be trying to work out the ramifications of the measures announced yesterday by the chancellor of the exchequer but there will also be UK public finance numbers to chew on, which, as CMC’s Michael Hewson observed, will be a “timely reminder as to how much the pandemic has already cost in terms of new borrowing”.

“Since April the government has already borrowed GBP147.2bn, and in August this is set to increase by another GBP39.5bn as the GBP522m cost of ‘eat out to help out’ gets added to the numbers. For now, financial markets don’t seem to care that much, and why should they when they look on the other side of the Channel when similar large amounts of money are also being pledged to offset the economic shocks in Europe,” Hewson said.

In terms of corporate news flow, it is looking like a very quiet day unless you are the sort of person who gets excited by an update from a utility company – and such a person is very unlikely to exist.

Water firm Pennon Group PLC (LON:PNN) os the only major firm expected to deliver an update.

The utility firm will be eyed to see how it has held up compared to its peer United Utilities Group PLC (LON:UU.), which on Thursday reported that its revenue and profit are expected to be lower than the first half of last year due to lower water consumption from businesses as a result of the coronavirus pandemic.

Another key area of focus will be the status of the dividend, with Pennon having lifted its payout in June and saying previously that it will grow it at 2% above inflation over the next five years, so the market will want to know whether the promise holds up.

Around the markets:

  • Sterling: US$1.2754, up 0.13 cents
  • 10-year gilt: 0.221%, up 0.04 basis points
  • Gold: US$1,874.90 an ounce, down US$2.00
  • Brent crude: US$42.66 a barrel, up 20 cents
  • Bitcoin: US$10,667, up US$31

6.45am: Early Markets – Asia/Australia

Stocks in the Asia-Pacific region were mostly higher on Friday with the Nikkei 225 in Japan gaining 0.56% and South Korea’s Kospi rising 0.48%.

China’s Shanghai Composite skipped the trend, however, falling 0.10%, while Hong Kong’s Hang Seng index was just 0.01% higher.

The Australian share market was the biggest gainer with the S&P/ASX 200 surging 1.26% led by the “big four banks” in the wake of the federal government’s intent to wind back responsible lending laws.


Proactive Australia news:

Auroch Minerals Ltd (ASX:AOU) has received firm commitments from professional and sophisticated investors in a heavily oversubscribed placement which will raise around $2.9 million.

Jindalee Resources Limited (ASX:JRL) has been up to 93% higher on acknowledging the commitment by Tesla Inc (NASDAQ:TSLA) at its recent Battery Day to invest in the ‘localisation’ of its cathode supply chain and production in the United States.

Red River Resources Ltd (ASX:RVR) has intersected broad intervals of gold-antimony mineralisation with results of up to 32.3 g/t gold and 6.9% antimony from maiden drilling targeting the Eleanora Lode at Hillgrove Gold Project in NSW.

Australian Vanadium Ltd (ASX:AVL) has received strong demand for a placement which has raised $5 million with funds to be used to advance the company’s vertically integrated battery metals strategy, including a bankable feasibility study at its namesake vanadium project.

Arrow Minerals Ltd (ASX:AMD) is encouraged by results returned from recently completed reverse circulation (RC) drilling that extends Dassa gold discovery within the Divole West project in western Burkina Faso.

Galileo Mining Ltd (ASX:GAL) has accelerated exploration across its Fraser Range Nickel Joint Venture Project in Western Australia in what is described as a ‘pivotal’ year for the base metals explorer.

Predictive Discovery Ltd (ASX:PDI) continues to enhance the potential of NE Bankan deposit within the Bankan Gold Project in Guinea with drilling returning results of up to 55 metres at 3.3 g/t gold from 4 metres.

Australian Potash Ltd (ASX:APC) is on schedule to make a final investment decision (FID) for the Lake Wells Sulphate of Potash Project (LSOP) in Western Australia in the first quarter of 2021 as work programs progress.

Arrow Minerals Ltd (ASX:AMD) is well placed to expand on its new discoveries and explore new opportunities after a short hiatus due to the COVID-19 related restrictions.

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