London pre-open: Stocks seen higher ahead of data slew

Mon 11 Feb 2019

LONDON (SHARECAST) - (Sharecast News) - London stocks were set to kick the week off on the front foot on Monday as investors eyed a slew of key UK data, trade relations between the US and China and any Brexit-related headlines.
The FTSE 100 was called to open 26 points higher at 7,097.

Sino-US relations will be in focus as discussions between the two nations are due to continue this week, with US Treasury Secretary Steve Mnuchin and US Trade Representative Robert Lighthizer off to Beijing for the next stage of talks.

On home turf, gross domestic product, manufacturing and industrial production and the trade balance are all due at 0930 GMT.

CMC Markets analyst Michael Hewson said: "In a week that is once again likely to have Brexit as a dominant theme, with the probability that a second parliamentary vote on the current withdrawal agreement could well be deferred this week, the UK economy is once again set to take centre stage with the release of a raft of economic indicators. These will tell us a lot about how things were at the end of last year, but precious little as to how the economy is doing right now.

"It was always inevitable that after the strength seen in the middle of last year the UK economy would soften somewhat heading into the final quarter. A lot of the strength seen in Q2 and Q3 was a consequence of a weak Q1 as a result of the so called 'Beast from the East' which paralysed most of the country into March."

GDP for the fourth quarter is expected to come in at around 0.3%, down from 0.6% in the third quarter. Meanwhile, manufacturing production for December is expected to come in at 0.2%, while industrial production is seen at 0.1% on the month.

In corporate news, Polymetal International expects to improve the quantity of gold it extracts from its mines and its environmental credentials as directors gave the green light to immediately begin construction of a second pressure oxidation plant in Russia.

The POX-2 project, which will be constructed next door to the current POX facility in the city of Amursk, was approved on the basis of the recently completed feasibility study and a $431m capital expenditure funded entirely from operating cash flows.

Tritax Big Box REIT said its open offer to raise 250m was oversubscribed as investors piled in to support the company's purchase of an 87% stake in db Symmetry.

Tritax partner Godfrey Palmer said the acquisition provided Tritax with access to a large portfolio of "attractive and high quality development opportunities over the longer term that we...believe can be delivered at a yield on cost significantly higher than is currently available in the investment market from acquisitions of built and let or pre-let forward funded assets".

Tritax in January agreed to buy the stake through a payment of 202.4m in cash, equalling 69.1% of DB's equity value, and 52.6m in shares, equalling 17.9% of the value.

Acacia Mining released its results for 2018, reporting revenue of $664m - a 12% fall from 2017, with a higher average realised gold price offset by a lower sales base.

The company said its EBITDA also fell 12% in the 2018 calendar year to $226m, which it put down to the lower revenue, partly offset by a $45m gain on the sale of a non-core royalty, with adjusted EBITDA standing at $183m - 41% lower than 2017, excluding the sale of the non-core royalty.
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