- FTSE 100 index adds 8 points
- ARM Holdings gets $40bn takeover
- Gilead inks $21bn cancer deal
9.50am: FTSE runs out of breath
Like a big man who’s in bad shape, the Footsie has quickly run out of breath after its initial surge.
The FTSE’s gain has diminished to less than eight points or 0.1% to 6,039.60, with precious metals miners and housebuilders among the big fallers.
Fresnillio () and Polymetal () were among them, despite the gold price remaining strong.
A rebound in the pound was putting pressure on London’s blue chips, with sterling up 0.4% versus the dollar to 1.2851.
A record one-day rise in coronavirus cases globally, reported by the World Health Organization (WHO) looks like a second wave, but not as we know it, said market analyst Neil Wilson at Markets.com.
“Even if cases are starting to rise in Britain and elsewhere, deaths are not picking up in the same way as before – younger, less vulnerable people are getting the virus this time it seems.”
“France recorded a record number of new infections – some 10k over the weekend. There is not the appetite for blanket shutdowns of the economy again – this is good, but the ongoing fear factor will keep a lid on animal spirits. And governments could be spooked into heavy-handed responses, even if they don’t want to kneecap the economy.”
Good news on the COVID-19 vaccine front came from () and Oxford University, which said they are resuming the trial of their vaccine candidate after it was paused a week ago.
8.40am: Solid early gains
The FTSE 100 opened firmly in positive territory on Monday with M&A activity providing the lift.
In early trading, the UK blue-chip index was 43 points to the good at 6,075.01.
Three multi-billion-dollar deals supported market confidence, the most important of which was Oracle’s technical collaboration with TikTok’s Chinese owner, which effectively averts a Sino-American trade war. The computer giant beat off competition from Microsoft to land access to the US operations of the video streaming group. (Read more on the deal here.)
Japanese investor Softbank’s decision to sell ARM Holdings to chipmaker Nvidia for US$40bn provided further positive news in the tech sector, where investors have hit the reset button. However, there will likely be resistance from the UK government who will want assurances around jobs at ARM’s Cambridge headquarters, as well as from the rest of the chip industry.
In the drug sector, Gilead flexed its financial muscle as it unveiled plans to acquire cancer drug maker Immunomedics for US$21bn.
Stock in British Airways owner IAG () was off 31% for purely technical reasons as it began trading “ex-rights” following its £2.5bn cash call. In layman’s terms, this simply means investors are no longer entitled to purchase more equity in the IAG rights issue.
Shares in Ocado () were well bid in the early exchanges and up almost 2% ahead of Tuesday’s investor update, the focus of which will be its alliance with Marks & Spencer ().
Shell () and BP () found some support as they both opened around 1.4% higher. The latter was further bolstered by an upgrade to ‘outperform’ by .
Among the tiddlers, Horizonte Minerals () got off to a positive start after Peel Hunt initiated coverage with a ‘buy’ recommendation and a 14p price target – almost double the current price. The shares advanced 6%.
Proactive news headlines:
() has reported positive results from a test of its d2p anti-microbial technology masterbatch against a bovine form of coronavirus. The AIM-listed firm said the Institute of Biology at Unicamp University in Sao Paolo State, Brazil, had tested polyolefin films incorporating the d2p technology for reductions in the presence of the virus at one, two and 24 hour periods. The tests showed a 99.9% reduction in the virus on the film at one hour, which then rose to 99.99% at two hours and 99.999% at 24 hours. In a separate announcement reporting its first-half results, Symphony said it had returned to profitability. For the six months ended June 30, 2020, the company reported a pre-tax profit of £18,000 compared to a loss of £86,000 in the previous year, while revenues increased to £4.8mln from £4.1mln.
Silence Therapeutics PLC (LON:SLN) (NASDAQ:SLN) has completed its search for a chief executive by appointing industry veteran Mark Rothera to the role. It means Iain Ross, who stepped in to take day-to-day control of the business last December, will return to his former role as non-executive chairman. Rothera, meanwhile, brings with him 30-years’ experience in the biopharmaceutical sector, latterly with Orchard Therapeutics where he secured US$600mln of financing and grew the business to a US$1.7bn market capitalisation at its peak. The appointment was announced alongside the gene silencing specialist’s interim results, which charted a period of significant progress. Key among the landmarks was a deal with () to develop as many as 10 small interfering RNA (siRNA) drug targets in the cardiovascular, renal, metabolic and respiratory diseases areas. It resulted in an upfront cash payment of US$60mln and a direct equity investment of US$20mln, which could be followed by potential milestones of US$400mln per target. As a result, Silence ended the six months to June 30 in rude financial health with just over US$64.1mln (£50mln) in the bank.
Seeing Machines Limited () has said it is planning to launch a fully supported, integrated driver monitoring system (DMS) kit on an automotive development platform (ADP) made by technology corporation Qualcomm Inc (). The AIM-listed firm said the DMS will support its full-stack DMS solution on Qualcomm’s Snapdragon ADP, targeting integration into either infotainment or centralised advanced driver assistant (ADAS) systems. The kit includes an optimised DMS reference camera, an ADP interface board and Seeing Machines software, and is expected to be available before the end of the current calendar year for use by tier one suppliers and original equipment manufacturers (OEMs).
(), the mobile payments group, is continuing its push into Asia and has signed partnership agreements with five mobile app specialists in different countries. The new partners will use the Bango Audiences customer acquisition tool to boost their app campaigns or revenues for app developer clients.
() has reported sharply reduced losses in its first half as strong order bookings helped boost the firm’s recurring revenue by triple digits. For the six months ended June 30, 2020, the geospatial software group reported a pre-tax loss of £1.6mln, narrowed from £3.16mln in the previous year, while total revenues rose by over 50% to £3.6mln. Recurring revenues increased over 170% on the period to £1.6mln, while order bookings related to the firm’s products increased by over 120% to £5.5mln.
(), the freight forwarder and logistics group, said it is fully prepared for Brexit whatever the outcome as it posted an increase in first-half profits. Trading is almost back to pre-coronavirus (COVID-19) levels, the AIM-listed group said, helped by good performances in central Europe and a recovery in the UK following the COVID-19 disruption. Revenues dipped 3% to £99.6mln in the half-year to June 30, 2020, while profits rose by a third top £302,000 as the good performance in freight forwarding offset dips in affinity and warehousing, which were the arms most affected by COVID-19 restrictions.
() said it has entered into a binding agreement with Australasian Gold Limited for the sale of the non-core May Queen gold project in South East Queensland, Australia. Australasian Gold is an unlisted company established in 2018, operated by an experienced geological team. It holds an additional prospective gold exploration license in the Ashburton region of Western Australia, within 30 kilometres of the Paulsens gold deposit held by Northern Star Resources Limited (). The sale will allow IronRidge to maintain focus across its core African portfolio. IronRidge will receive 4.5mln shares in Australasian Gold, representing 34.6 % of the enlarged share capital. Ironridge will also invest AUD$100,000 at A$0.10 per share to provide additional working capital, taking the total stake to 39.3%.
() told investors, in its interim results statement, that it is confident and optimistic as it remains on-track for first production from the Wressle field, located in North Lincolnshire before the end of this year. The onshore UK oiler ended the six months to June 30, 2020, with £4.6mln of cash, was debt-free and fully funded for its planned drilling, testing and development programmes. “We have seen significant progress at our three key project interests, namely West Newton, Wressle and Biscathorpe,” David Bramhill, Union Jack’s executive chairman said in the results statement.
Supermarket Income REIT () has made another addition to its growing portfolio of omnichannel sites with the acquisition of a Tesco outlet in Bracknell. The 7.3-acre site comprises a food store and a 400-space surface car park alongside several purpose-built online distribution docks that support Tesco’s online grocery business in the area. Supermarket Income REIT is acquiring the store from a client of CBRE Global Investors for £39.5mln, reflecting a net initial yield of 5.7%.
() told investors that the Stanley-4 well, in East Texas has been drilled successfully. The group said the well, which was drilled down to a target depth of 5,000 feet, showed several zones of interest during drilling and subsequent logging identified several potential pay zones in the Yegua formation, at depths between 4,600 and 4,900 feet. Stanley-4 will now undergo testing, and the company noted that flow rates will be reported when data is available.
() said its portfolio company, Fieldwork Robotics has received a continuity grant from Innovate UK to accelerate the development of its agricultural robot technology during the coronavirus pandemic. The IP investment group said the £84,000 grant will be used to support Fieldwork’s plans to expand its team and develop facilities amid what it said is “growing interest in its technology from potential industry partners”. The grant follows a previous £547,250 award from Innovate UK’s Industrial Strategy Challenge Fund in April 2019, as well as £320,000 raised in an initial equity funding round in January this year. Frontier owns a 26.9% stake in Fieldwork.
() told investors it has today published its inaugural comprehensive sustainability report. It comes after the oil company, with operations in the Kurdistan region of northern Iraq, last week launched an effort to raise up to US$300mln in debt financing. The company noted that since 2006, it has invested almost US$60 million in social projects, it has programmes (including healthcare) which benefit local communities, has prioritised local hiring and engaged local contractors in contracts with an aggregate value of around US$36mln.
US Oil & Gas PLC (LON:USOP), the oil and gas exploration company with assets in Nevada, announced on Friday that it has placed with private investors 843,431 new ordinary shares of .0001 Euro each at a price of 0.32p per share to raise gross proceeds of circa $349,653. The group said the proceeds of the placing will be used to provide it with additional working capital, including the funding of drilling operations. Since no commissions are payable, the net proceeds to be received by the company are circa $349,653.
() () is confident its Lake Way Project near Wiluna in Western Australia is on schedule to deliver first SOP production in the March quarter of 2021. The project is now 60% complete on an earned value basis with major vendor procurement packages over 90% committed with fixed costs.
Alien Metals Limited (), a minerals exploration and development company, announced that, following the receipt of warrant exercise notices, it has issued 63,333,333 new ordinary shares of no par value in the capital of the company at an issue price of 0.3p each and 29,479,167 new ordinary shares of no par value in the capital of the company at an issue price of 0.15p per share
(), a commercial-stage, pharmaceutical company with a focus on addressing iron deficiency with its lead product Feraccru/Accrufer (ferric maltol), has said it will announce its interim results for the six months ended June 30, 2020, on Wednesday, September 16, 2020.
(), a global leader in fuel cell and electrochemical technology has said it will publish its second set of interim results for the 12 months ended June 30, 2020, on Monday, September 28, 2020, following its change of year-end to December 31. Ceres also said it will be hosting a live webcast for analysts and investors at 9.30am on the day. Further details will be made available in the interim results announcement and on the company’s website: www.ceres.tech
() has said its annual general meeting of shareholders will be held on September 30, 2020, and a general meeting of Shareholders will be held on October 30, 2020. In light of current measures relating to coronavirus (COVID-19) and the UK Government advice on physical distancing measures, no shareholder, except those designated as attending for the purposes of making up a quorum, will be admitted to the meetings. Shareholders should submit a proxy vote in advance of each meeting. Shareholders who wish to ask any questions relating to the business of either of the meetings are welcome to do so by means of an email to [email protected]k with AGM as its subject.
6.50am: Positive start predicted
The FTSE 100 looks set to open the new trading week in positive territory, taking its cue from Asia’s main markets.
The spread betting firms expect the UK blue-chip index to kick-off 24 points to the good at 6,056.09.
A technical deal that will effectively give Oracle control of TikTok’s US operation was the catalyst for the early positivity.
While not a full-blown takeover of the video app group, the agreement addresses national security concerns and therefore prevents further deterioration in Sino-American trade relations, analysts said.
It has been a weekend dominated by M&A activity with the US$40bn sale of UK group ARM Holdings by the Japanese investment firm Softbank to chipmaker Nvidia vying with TikTok for top billing on the business pages.
In the drugs sector, Gilead has unveiled plans to splash US$20bn on a cancer drug maker Immunomedics.
Looking ahead, this week we have corporate updates from Ocado () – where interest will focus on its tie-up with Marks & Spencer () – builder Redrow (), retailer Games Workshop () and tickets service ().
The week will also see central bankers in Washington and London provide their pandemic commentary, though there is little likelihood of changes to interest rates either side of the Atlantic.
“With the latest Federal Reserve rate meeting later this week, there is a risk that in outlining their plans for their new policy of average inflation targeting that the US dollar might well weaken further,” said Michael Hewson of CMC Markets.
Around the markets:
- Pound worth US$1.2819 (up 0.18%)
- Gold US$1,947.56 an ounce (up 0.36%)
- Brent crude US$39.92 a barrel (up 0.23%)
6.45 am: Early Markets – Asia Australia
Stocks in the Asia Pacific region were trading higher on Monday after Japanese conglomerate SoftBank Group Corp (TYO:9984) announced the sale of UK chip designer Arm to Nvidia in a $40 billion deal.
South Korea’s Kospi jumped 1.19% and in Japan, the Nikkei 225 rose 0.61%.
Mainland Chinese stocks were higher with the Shanghai composite up 0.15% while Hong Kong’s Hang Seng index added 0.60%.
Australia’s S&P/ASX 200 gained about 0.52% thanks to gains for miners Rio Tinto and BHP.
Proactive Australia news:
() has received firm commitments from sophisticated, professional and institutional investors to raise up to $17.8 million through a placement of 42,426,356 fully paid ordinary shares at an issue price of 42 cents per share.
() has received firm commitments from sophisticated and professional investors to raise $1.23 million as part of a $1.85 million capital raising to primarily accelerate exploration and development at McDermitt Lithium Project in the US.
() has signed a letter of intent (LOI) with smart technology provider, Humboldt CCTV, to distribute the Root Zone heat exchange device kits in Northern California.
() has received further strong results of up to 31 g/t gold within broader zones of mineralisation from recently completed reverse circulation (RC) drilling at Kingsley prospect within the Livingstone Gold Project in WA.
() () is confident its Lake Way Project near Wiluna in Western Australia is on schedule to deliver first SOP production in the March quarter of 2021.
() has extended the known gold-copper mineralisation a further 320 metres along strike at the Zackly East prospect in Alaska during step-out diamond drilling.
() (OTCQB:SNNSF) has been accepted to join the OTCQB Venture Market based in New York, USA, which is expected to enhance its push into the US market after customer wins in that market.
’s () new East Lynne aircore (AC) drilling results point to a large mineralised sulphide system over a 3.2-kilometre strike length within the Cardinia Gold Project (CGP) in WA.
Ironbark Zinc Limited () has declared a maiden JORC 2012-compliant ore reserve for the underground deposit of its flagship Citronen Zinc-Led Project in Greenland of 21.3 million tonnes at 6.3% zinc equivalent containing 1.3 million tonnes of zinc metal and 100,000 tonnes of lead metal.
Netlinkz Limited () has recorded very strong revenue growth in the financial year 2020 after undergoing a major transformation, including setting up a solid platform that underpins continued growth and evolution into a leading virtual secure network (VSN) company for blue-chip corporations and government.
