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(Alliance News) - Stock prices in London are pointed lower at the open on Monday despite investors remaining hopeful of a strong global economic recovery after the surprisingly positive US jobs report on Friday.
In early company news, contract-for-difference provider Plus500 said it continues to see record customer trading. Dining chain operator Restaurant Group confirmed it is in talks for restructuring its leisure estate, and warehouse investor SEGRO bought a site in west London.
IG futures indicate the FTSE 100 index is to open 31.80 points lower at 6,452.50. The blue-chip index closed up 142.86 points, or 2.3%, at 6,484.30 on Friday.
Plus500 said it has continued to see record levels of customer activity as heightened levels of market volatility have persisted.
The online trading firm said it has added 100,574 new customers since the start of the second quarter, which is already ahead of its expectations for the entire quarter. It is also in excess of the 82,951 new customers added in the first quarter.
Plus500 said revenue from customer income remains at record levels, generating around USD249.0 million in the second quarter to date. Revenue from customer income means revenue from customer spreads and overnight charges.
The company added that total revenue for second quarter to date stands at USD102.5 million.
"We have consistently stated that customer trading performance is subject to significant market movements and is therefore likely to fluctuate. This is magnified during periods of heightened market volatility such as those we are currently experiencing and given the growing scale of the business. Nonetheless, we continue to expect this performance to revert to a medium-term historic level of near-zero and our outlook for the year remains unchanged," Interim Chief Executive Officer David Zruia said.
Restaurant Group confirmed press reports said it is in discussions with its landlords over potential restructuring options for the company's leisure estate, but its Wagamama, airport concessions and pub operations would not affected by these discussions.
The Frankie & Benny's, Chiquito and Wagamama chains owner highlighted the sector is "facing exceptional challenges" in an "unprecedented operating environment".
"The casual dining sector was already facing significant challenges prior to the onset of Covid-19, with overcapacity and significant cost pressures," Restaurant Group said.
Last week, it was reported that a "large number" of Frankie & Benny's outlets would remain closed after lockdown. The BBC said a staff email was sent to managers in the group's Leisure Division, which consists of more than 200 Frankie & Benny's restaurants saying many sites are "no longer viable to trade and will remain closed permanently".
In March, the company was forced to shut a majority of its Chiquito Mexican-style outlets as well as its Food & Fuel chain of pubs in London after falling into administration.
SEGRO said it has acquired Perivale Park, a 34-acre urban warehouse estate in Perivale, West London, from Federated Hermes for GBP202.5 million.
"Perivale Park is a perfect fit for SEGRO, sitting adjacent to the A40 and nestled between our core holdings in Greenford and Park Royal. It offers a rare opportunity to build further scale and drive value in an area where we already have considerable expertise and knowledge of the local market and customer base. It also offers medium-term development and redevelopment potential in one of London's prime, and most supply-constrained, industrial clusters," Alan Holland, business unit director for SEGRO's Greater London portfolio said.
In the US on Friday, Wall Street ended sharply higher, with the Dow Jones Industrial Average up 3.2%, S&P 500 up 2.6% and Nasdaq Composite up 2.1%, after a strong US jobs report for May.
On Friday, the Labor Department reported the US economy regained 2.5 million jobs in May and the unemployment rate dropped as pandemic shutdowns began to ease.
The Japanese Nikkei 225 index closed up 1.1% on Monday. In China, the Shanghai Composite is up 0.7%, while the Hang Seng index in Hong Kong is down 0.2%.
Japan's economy contracted at an annualised rate of 2.2% in the first quarter, revised from a preliminary reading of a 3.4% contraction, with business investment better than initially estimated, the government said on Monday.
The revised gross domestic product reading in the January-to-March period was almost in line with the 2.0% decline predicted by analysts surveyed by the Nikkei business daily and followed a 7.2% contraction in the last quarter of 2019.
The pound was quoted at USD1.2700 early Monday, marginally lower from USD1.2714 at the London equities close Friday.
The euro was quoted USD1.1284, down from USD1.1307 late Friday. Against the yen, the dollar was quoted at JPY109.44, soft from JPY109.75.
Brent oil was quoted at USD43.06 a barrel Monday morning, up from USD42.16 late Friday.
OPEC members, led by Saudi Arabia, and other key oil producers agreed on Saturday to extend historic output cuts through July, as oil prices tentatively recover and coronavirus lockdowns ease.
The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement. But Mexico, which had already made clear ahead of the talks that it "could not adjust...production further", announced that it would not be complying.
Gold was quoted at USD1,688.80 an ounce, up from USD1,677.02 late Friday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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