London pre-open: Stocks to rise as Brexit saga rumbles on
By Michele Maatouk
Date: Monday 18 Mar 2019
(Sharecast News) - London stocks were set to rise on Monday, with all eyes firmly on Brexit developments amid the possibility of a third meaningful vote this week.
The FTSE 100 was called to open 23 points higher at 7,251.
CMC Markets analyst Michael Hewson said: "It would appear that in the wake of last week's events at Westminster investors are starting to feed money back into UK equities in the hope that some form of soft Brexit will come about in the coming weeks, though that is by no means certain given last week's political pantomime at Westminster, where Theresa May's withdrawal agreement came a cropper for the second time.
"The Westminster pantomime looks set to continue this week, as expectations rise that the Prime Minister will try for a third time to get her deal passed, ahead of this week's EU Council meeting at the end of the week, when it is expected the Prime Minister will ask for an extension to article 50, with the only question being as to how long any extension is likely to be.
"These expectations of a third vote appear to have been tempered slightly by comments at the weekend by Chancellor of the Exchequer Philip Hammond, who suggested that any third attempt to push the bill through the Commons may well be delayed if there is a feeling that it might not get the necessary support from MPs."
Away from Brexit, investors will be digesting the latest Rightmove survey, which showed that house price growth slowed to 0.4% on the month in March from 0.7% in February. On the year, prices fell 0.8% compared to a 0.2% increase the month before.
The survey found that London continued to be the main drag, with prices in the capital down 1.1% on the previous month.
Rightmove director and housing market analyst Mile Shipside said: "Buying activity remains cooler than usual, with hesitation as some buyers await a more settled political climate. There's greater resilience the further away you get from the London market, and there's a sound bedrock of demand for the right property at the right price, reinforced by ongoing housing needs combined with cheap mortgage borrowing.
"London and some of its commuter belt are suffering from a post - boom hangover, with prices now having to be far more sober to attract buyer interest. In contrast, North East prices never had the opportunity to become intoxicated by the capital city's heady mix of high demand, low interest rates and higher salaries."
In corporate news JD Sports Fashion has agreed to buy smaller rival Footasylum for 82.5p per share in cash, around half the price at which it floated in late 2017.
JD said it sees a strategic opportunity from adding Footasylum's "strong reputation for lifestyle fashion" and "slightly older" customer base to its current offering.
Serco has signed a seven-year, AUD115m contract with the South Australian Government to operate and manage a remand centre for its department for correctional services.
As part of the contract with the Adelaide Remand Centre (ARC), which can be extended by up to five years, transition of the facility will begin immediately.
ARC currently accommodates up to 274 remand prisoners. The facility will be upgraded as part of the contract with an increase in total possible occupancy.
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