• FTSE 100 shed 10 points
  • Chancellor Rishi Sunak’s review widely-leaked
  • Melrose higher after trading update

9.50am: Footsie turns red

FTSE 100 turned red in mid-morning after software group Aveva (LON:AVV) 20% fall continued to weigh on the index, while traders await for Rishi Sunak’s announcement.

London’s leading index shed 10 points to 6,421 though sterling was also underwater, down 0.1% to US$1.3346.

United Utilities Group PLC (LON:UU.) and Melrose Industries PLC (LON:MRO) both rose 4% to 932.9p and 169.97p respectively after flagging defensive performance despite the pandemic.

The water company raised its interim dividend by 1% to 14.41p and forecast a full-year revenue of GBP1.75-1.8bn, down from GBP1.85bn recorded last year, reflecting a bill reduction and the impact of COVID-19 on both household and non-household consumption.

The impact on non-household revenue is expected to be broadly consistent with the first half, while household revenue will not benefit from the increased consumption of water due to the warm weather seen in the first half.

Meanwhile, manufacturer Melrose expects its aerospace division to break even after resorting to massive job cuts among other cost-saving measures.

The big cap is currently trading at the top end of the board’s expectations for 2020 and expects to cut net debt.

8.55am: Advance continues for Footsie

The FTSE 100 index made a solid if unspectacular start to proceedings on Wednesday after a record close on Wall Street, buoyed by vaccine hopes, had a positive impact on proceedings in London’s Square Mile.

The UK blue-chip index opened 29 points higher at 6,461.6.

That said, early volumes were subdued with traders on this side of the Atlantic keeping their powder dry ahead of chancellor Rishi Sunak’s widely-leaked spending review later Wednesday.

His Commons statement will include details on public sector pay, NHS funding and money for the devolved administrations in Northern Ireland, Scotland and Wales.

It is expected he will also provide a full, HD picture of the economic damage wrought by the coronavirus pandemic – including details on the huge rise in spending and borrowing associated with support plans such as the furlough scheme and Eat Out to Help Out.

“The chancellor is already on track to spend over GBP400bn this fiscal year alone in tackling the pandemic,” said Michael Hewson, analyst at CMC Markets. “Today he is expected to outline further measures to support the economy, spending GBP4.3bn on supporting the newly unemployed back to work.

“The primary focus is likely to be on infrastructure, particularly in the hardest hit areas with a focus on green initiatives like battery factories, wind farms. There has been talk of a pay freeze for public sector workers outside the care sector and emergency services, which has received some pushback, despite the widespread job losses in the private sector.”

Elsewhere, caution is being urged by over the Christmas ‘bubbles’ that will exist to allow families to enjoy the festivities with one government scientific adviser saying the relaxation of rules amounted to “throwing fuel on the Covid fire”.

On the market, the big faller was the software group Aveva (LON:AVV), which dropped 20% early on. The decline was purely technical following the admission of what’s called the nil paid rights to new, cheaper shares issued as part of the company’s cash call to fund the acquisition of OSIsoft Group.

Melrose (LON:MRO), the owner of aero-engineer GKN, belatedly joined the coronavirus bounce-back club with 4% jump following a trading update.

Proactive news headlines:

SourceBio International plc (LON:SBI) said it has renewed a key contract with Spire Healthcare PLC as it revealed its revenues and earnings have grown significantly as a result of the “considerable ramp-up” in coronavirus (COVID-19) testing. The lab services and products group also told investors that it was in a “very strong position” for Public Health England’s (PHE) Lot 4 round to provide clinical diagnostic services – and it has submitted an updated application “beyond the original target of 10,500 tests per day”.

OPG Ventures PLC (LON:OPG) said it has collected contractual claims payments from its customers under the power purchase agreements amounting to around GBP9.5mln (Rupees 0.9bn). The group said the contractual claims were accumulated over several periods and will be recognised as income in its full-year 2021 financial statements. It said the collection of these claims has strengthened the group’s financial position and liquidity during these uncertain times caused by the coronavirus (COVID-19) pandemic.

Ncondezi Energy Ltd (LON:NCCL) said it has raised GBP750,000 from an oversubscribed and premium-priced share placing. The group is issuing some 16.6mln new shares priced at 4.5p each, a premium price compared to the share’s 30-day weighted average price and the last equity raise in May 2020. The injection of funds is earmarked for general working capital purposes. Ncondezi said it will now have sufficient funds to cover corporate costs to complete the tariff negotiations with Electricidade de Mocambique and key agreements including the Power Purchase Agreement and Power Concession Agreement.

Sensyne Health PLC (LON:SENS) said it has signed a five-year non-exclusive Strategic Research Agreement (SRA) with Hampshire Hospitals NHS Foundation Trust which will enable the ethical application of clinical AI research to improve patient care and accelerate research into new medicines. The UK Clinical AI company noted that the Hampshire Hospitals dataset covers 500,000 unique patient records, with 200,000 annual hospital admissions from a patient population of approximately 570,000 people. The Hampshire Hospitals dataset includes oncology data that will enable Sensyne to build on its existing research into rare cancers. The new SRA with the Trust brings the combined total of anonymised data available for analysis by Sensyne to 6.1 million patients.

Circle Property PLC (LON:CRC) has highlighted “strong average rent collection” in its half-year results despite disruption from the coronavirus (COVID-19) pandemic. In the six months to September 30, 2020, the regional office owner said rental receipts have been running at an average of 92.5% of rents due for the March and June quarters, while operating profits before property revaluations rose to GBP2.7mln from GBP2.4mln last year alongside a 10% rise in rental income to GBP3.9mln.

IronRidge Resources Limited (LON:IRR) has shared what it describes as “very positive” metallurgical test results from the Ewoyaa Lithium Project in Ghana. Recovery improvements were achieved through re-crushing of an intermediate material called ‘middlings’ whilst maintaining concentrate grade. The overall plan was to improve lithium recoveries in coarse-grained type P1 and finer-grained type P2 pegmatites.

Crossword Cybersecurity PLC (LON:CCS) said its Rizikon Assurance platform has been selected by the IASME Consortium, the UK government’s national cybersecurity centre’s cyber essentials partner, as the core platform to support a new Internet of things (IoT) device security certification programme. The AIM-listed firm said the certification programme is a new scheme designed to give confidence to consumers and businesses that IoT devices have attained a minimum accepted level of security, and protect users from potential cyber-attacks, data loss and privacy invasion.

Mosman Oil and Gas Ltd (LON:MSMN) has told investors it is confident that it can grow production and create value as it posted its full-year results. The bullish comments come as the company advances a sequence of operations in Texas, which recently saw success with the Falcon well. Mosman has been focussed on well work-over operations at the Stanley project plus new wells across multiple sites in the Champion and broader Stanley project areas.

Keywords Studios PLC (LON:KWS) shares rose on Wednesday as it agreed to acquire g-Net Media Inc, a Los Angeles-based provider of marketing services to the video game and entertainment industries, in a deal worth up to US$32mln. The AIM-listed firm said under the terms of the deal it will pay an initial consideration of US$14.4mln in cash and the equivalent of US$3.6mln in new shares to the sellers on the first anniversary of the purchase. Deferred consideration of up to US$14mln will also be payable to the sellers in a mix of cash and shares based on performance targets being met by the first and second anniversaries of the acquisition.

AEX Gold Inc. (LON:AEXG) (CVE:AEX) has provided an update to its 2020 exploration drilling campaign at the Nalunaq property in South Greenland, saying the results are complementary to those reported in its news release of October 21, 2020. The London and Toronto-listed independent gold company with a portfolio of gold licences in Greenland said the drilling highlights of further results from the Valley Block infill drilling programme include 52.4 grams per ton (g/t ) gold over 0.55 meters (m) (AEX2008) and 5.9 g/t over 0.5m (AEX2009), with visible gold observed in AEX2009.

Galantas Gold Corp (LON:GAL) has reported a narrowed loss in the first nine months of its current financial year as it commenced shipments of concentrate from its Omagh project in Northern Ireland. In results for the nine months to September 30, 2020, the company reported a loss of C$102,733, narrowed from a C$186,818 loss in the previous year, while it ended the period with cash of C$638,433.

Falcon Oil & Gas Ltd (LON:FOG) (CVE:FO) said it and partner Origin Energy will conduct further well operations in order to deliver a flow test for the Kyalla 117 N2-1H ST2 well. A fracking programme got underway in early October and since late October the well has undergone ‘flowback’ operations to recover the frack fluid. Some gas shows have been observed, but a measurable gas breakthrough has yet to occur, the group added.

Critical Metals Plc (LON:CRTM), a mining investment company established to target opportunities in the overlooked and under-analysed mining sector, has announced the appointment of Strand Hanson Limited as financial adviser to the company. Russell Fryer, CEO of Critical Metals, commented: “With extensive experience in the natural resources sector, Strand Hanson’s team will be invaluable to Critical Metals in achieving its immediate and long term acquisition objectives and we are delighted to announce this key appointment.”

Naked Wines Plc (LON:WINE) announces on Tuesday that Nicholas Devlin, its chief executive officer, has bought the 3,358 ordinary shares of 7.5p each in the company at a price of 508.44p per share on November 24, 2020. Following the purchase, the group noted, Devlin’s beneficial interest in the company and that of persons closely associated with him will be 72,730 ordinary shares representing approximately 0.10% of the issued share capital.

Parity PLC (LON:PTY), the technology focussed professional services business, announced that it has awarded Michael Johns, its chief financial officer, options over 2,000,000 ordinary shares of 2p each in the company. The options were granted on November 24, 2020, and represent approximately 1.9% of the company’s current issued share capital. They each have an exercise price of 7.88p, being the closing mid-market price per ordinary share on November 23, 2020. The options will vest after 3 years and are subject to performance conditions.

Argo Blockchain PLC (LON:ARB), the leading cryptocurrency miner based in the UK said that further to its announcement on November 3, 2020, the High Court of England and Wales has confirmed the reduction of the company’s nominal share capital by way of cancellation of the share premium account. The company confirmed that, following the capital reduction, its issued share capital of comprises 293,750,000 ordinary shares of GBP0.001 each.

DeepVerge plc (LON:DVR), the scientific research and AI-as-a-Service company, has announced that Gerry Brandon, its chief executive officer, will be presenting at an investor webinar being hosted jointly by Turner Pope Investments (TPI) Ltd and Vox Markets. Brandon, commented: “Deepverge is expanding, with organic revenue growth alone, despite COVID, guided at GBP4m for 2020, including an increase in revenues by 300% in H2 2020, up from GBP1m in H1 2020. Following the recent acquisition of Modern Water PLC, we will now have sales offices and laboratories for Labskin and Rinocloud AI services in the US, Ireland, UK, China and Japan. This global expansion provides access to a growing list of household name clients, that includes Unilever, L’Oreal, Estee Lauder, Walgreens Boots Alliance, Amway and L’Occitane, cross-selling products and services from each division and serving the environment, cosmetics and pharma sectors worldwide. The presentation will provide an update on sales, marketing, supply chain management of products and services under development in a post-COVID world with insight into what is expected to come in 2021 and 2022.” The event will be held on Tuesday, December 1, 2020, at 2pm.

6.50am: Firmer start predicted

The FTSE 100 is expected to open higher on Wednesday morning following a record session for US markets on Tuesday.

Spread-better IG expects the FTSE 100 to start around 25 points higher after ending Tuesday’s session up 98 points at 6,432.

Expectations of a positive start followed a record-breaking session for Wall Street overnight, with the Dow Jones Industrial Average rising 1.54% to close at a record high of 30,046. The S&P 500 also set a new record, closing 1.62% higher at 3,635, while the Nasdaq Composite climbed 1.31% to 12,036.

The optimism was bolstered by the official start of the presidential transition despite Donald Trump still refusing to officially concede. Meanwhile, traders will be eyeing US GDP and durable goods orders later today for more positive news.

Things were also looking upbeat in Asia this morning, with Japan’s Nikkei 225 ganing 0.54% while Hong Kong’s Hang Seng rose 0.4%.

On currency markets, the pound was slightly off against the dollar, down 0.11% at US$1.334, although sterling could see some movement catalysts as Chancellor of the Exchequer Rishi Sunak delivers his spending review to the House of Commons later today.

The review will outline the government’s spending plans for the year ahead of the UK looks to recover from the effects of the pandemic, while the Chancellor is also expected to reveal the latest public finance and economic forecasts from the Office for Budget Responsibility (OBR).

Around the markets:

  • Sterling: US$1.334, down 0.11%
  • Brent crude: US$48.19 a barrel, up 0.69%
  • Gold: US$1,804 an ounce, down 0.09%
  • Bitcoin: US$18,931, up 3.55%

6.45am: Early Markets – Asia/Australia

Asia-Pacific markets were mixed on Wednesday following a record session on Wall Street as coronavirus (COVID-19) vaccine hopes and reduced uncertainty in US politics boosted investor sentiment.

In Japan, the Nikkei 225 gained 0.50% while the Hang Seng index in Hong Kong advanced 0.16%.

However, South Korea’s Kospi dipped 0.62% and China’s Shanghai composite was down 1.02%.

Over in Australia, the S&P/ASX 200 lifted for a third day, with the index up more than 12% this month.


Proactive Australia news:

Emyria Limited (ASX:EMD) has launched its initial drug development program focused on mental health following deep analysis of its real-world evidence (RWE) generated from more than 3,000 patients.

Chalice Gold Mines Limited’s (ASX:CHN) (OTCMKTS:CGMLF) (FRA:C8U) successes of the past year have set a very strong platform for the company to continue growing on the back of its world-class multi-commodity discovery at Julimar, 70 kilometres northeast of Perth, Western Australia.

engage:BDR Ltd (ASX:EN1) has received firm commitments to raise around $2.37 million via the placement of 430,888,917 fully paid ordinary shares at 0.55 cents per share.

Brookside Energy Ltd (ASX:BRK) and Stonehorse Energy Ltd (ASX:SHE) have completed a successful workover of the Mitchell 12-1 Well which provides the Orion Joint Venture with another cashflow stream within the southern part of the SCOOP Play in Oklahoma’s Anadarko Basin.

White Rock Minerals Ltd (ASX:WRM) is encouraged by results to date from the maiden exploration program at Last Chance Gold Target in Alaska that are expected to result in an aggressive follow-up drill campaign in 2021.

Australian Vanadium Ltd (ASX:AVL) (OTCMKTS:ATVVF) (FRA:JT71) has signed a memorandum of understanding (MOU) with ATCO Australia for the supply of green hydrogen for AVL’s planned processing plant near Geraldton.

Anson Resources Ltd (ASX:ASN) (FRA:9MY) is powering ahead with the study and permitting process for its flagship Paradox Brine Project in the US while also assessing prospects in Western Australia.

Linius Technologies Ltd (ASX:LNU) has launched a new product in the video conferencing and enterprise collaboration markets called WHIZZARD, that is now integrated with Zoom, Webex Meetings and Microsoft Teams.

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