London pre-open: Stocks to slip as investors eye OPEC meeting
London stocks were set for a weaker open on Thursday following uninspiring sessions in the US and Asia, as investors turn their attention to the OPEC meeting in Vienna later in the day.
The FTSE 100 was expected to open 23 points lower at 7,370
CMC Markets analyst Michael Hewson said:" Today’s main event is expected to be the OPEC meeting in Vienna where it is expected that oil ministers will extend the output freeze by another nine months, until the end of 2018. That is certainly what a ministerial committee of oil producers recommended yesterday, however that didn’t stop oil prices continuing their recent slide lower ahead of today’s announcement.
"There appear to be some concerns that Russia might well throw a ratchet into the gears, particularly in the context of the length of the output extension. There has been some concern that an extended freeze could well leave the field open to US shale producers who are already pumping at record levels. Therefore the biggest question isn’t around an extension, it’s about how long the extension lasts for. We should know later today."
Brexit will remain in focus after Prime Minister Theresa May insisted the UK is still negotiating with the EU over a divorce payout following reports of a divorce bill of up to £50bn. May has until Monday to make a fresh offer on key divorce issues if the UK is to move ahead to the next step in Brexit talks.
Investors will also be digesting the latest survey from Nationwide, which showed UK house price growth was steady in November compared to October. House prices were up 2.5% from November last year, missing expectations for a 2.7% increase.
In corporate news, Aviva has upped its long-term earnings and dividend guidance and says it has £3bn of excess cash that will be used to pay down £0.9bn debt next year, as well as making bolt-on acquisitions and funding shareholder returns. The life insurer will target operating earnings per share growth of "higher than mid-single digit" percentages from 2019 and by 2020 has upped its dividend pay-out ratio target to 55-60% of operating EPS.
BAE Systems has agreed to pay more into its pension schemes to deal with a £2.1bn deficit by the year 2026.The defence company said it would increase payments into the schemes from about £205m a year to £220m from 2018 with payments rising in line with group dividends. The annual payments will be reduced by about £50m in 2022 and end in 2026.
GlaxoSmithKline announced that ViiV Healthcare, the global specialist HIV company it majority owns with Pfizer and Shionogi as shareholders, had confirmed the start of HPTN 084 - a phase III study to evaluate long-acting cabotegravir for the prevention of HIV infection in sexually active women.
The company said the study would evaluate injections of cabotegravir given every two months compared with daily oral pre-exposure prophylaxis (PrEP) with emtricitabine/tenofovir disoproxil fumarate.
TP ICAP announced it has acquired independent agency broker Coex Partners for an initial payment of £7.1m, with performance-related payments possible at various dates over the next four years.
The group company said Coex has offices in London, Paris and New York and has 55 brokers, being founded in 2014. It provides trade and execution services in listed derivatives and over-the-counter foreign exchange to hedge funds, assets managers and other clients.