Centrica launches Spirit Energy joint venture, Investec reassures investors over Steinhoff concerns
London open
The FTSE 100 is expected to open 24 points higher on Monday, having closed up 1% at 7.393.96 on Friday.
Stocks to watch
Spirit Energy, the exploration and production joint venture which combines Centrica’s E&P business with Bayerngas Norge, has begun trading as an independent oil and gas operator, it announced on Monday. Completion of the transaction - which was announced on 17 July - followed receipt of all the required regulatory approvals, and Spirit Energy was now a “leading independent European exploration and production company”, according to Centrica. Centrica owns 69% of Spirit Energy, with Bayerngas Norge's former shareholders - led by Stadtwerke München Group - owning 31%.
Investec reassured investors that it has "immaterial exposure" to embattled South African retail giant Steinhoff International, which caused alarm for its lenders after its shares fell 80% last week. Investec explained that it does have credit exposures to the Steinhoff Group but that this is mostly to Steinhoff Africa and represents less than 3.0% of South Africa subsidiary Investec Bank's total tier-one capital and so less than 1.5% of the Investec Plc's capital.
Global thread maker Coats said it had bought US specialist yarn manufacturer Patrick Yarn Mill for $21m with a further $4m on the table subject to performance targets.
Newspaper round-up
Theresa May will insist that “nothing is agreed until everything is agreed” on the terms of Brexit after the Irish government claimed that last week's preliminary deal is binding. The Prime Minister will say in the House of Commons on Monday that although she is optimistic that a deep and special future deal can be agreed, last week's agreement is contingent on such an outcome. - Telegraph
Theresa May’s delicate Brexit compromise on Ireland was in danger of unravelling last night after the government’s commitment to a deal was questioned in Dublin and Brussels. After David Davis described the deal as a “statement of intent” that was not legally enforceable, a senior Brussels source said that detailed negotiations on a future EU-UK relationship would only start once the withdrawal treaty, together with the financial settlement, had been completed. - The Times
Government officials have admitted the plan to put a cap on standard energy prices could scupper growing competition in the energy market, unless the regulator keeps bills high enough to make it worthwhile for consumers to switch. Ministers have argued that the first intervention in energy pricing since privatisation is necessary after Ofgem’s previous attempts to break up the “two-tier energy market” failed and its recent efforts will take too long to come into effect. - Telegraph
US close
The Dow Jones Industrials and S&P 500 finished the week at record highs with commodity stocks pacing gains on the back of strong Chinese trade data for the month of November, even as the latest monthly jobs report revealed wage growth fell short of forecasts once again.
At the closing bell, the Dow Jones Industrial Average was up by 0.49% or 117.68 points to 24,329.16, alongside gains of 0.55% or 14.52 points to 2,651.50 for the S&P 500 and a rise of 0.40% or 27.24 points to 6,840.08 on the Nasdaq Composite.
From a sector standpoint, the biggest gains were recorded in the following market groups: Coal (6.37%), Iron & Steel (2.48%), Drug Retailers (2.33%) and Industrial metals (2.02%).
Stoking gains in the above segments, overnight China's Customs Administration reported much stronger than expected readings on the country's exports and imports for November, including an acceleration in the pace of commodity import volumes from a 0.9% year-on-year clip in October to 6.1% last month.
In parallel, the yield on the benchmark 10-year US Treasury note was up by one basis point to 2.38%, with the US dollar spot index up by 0.11% to 93.901 but gold down by 0.21% to $1,250.50/oz. on COMEX - a near four-and-a-half month low.