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What to Watch: Oil rises, Poundland and British Steel deals, LSE outage

Edmund Heaphy
Finance and news reporter
An oil field in Texas. Crude oil prices rose on Friday after several days of declines. Photo: Nick Oxford/Reuters

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Oil rises ahead of OPEC report

Oil prices climbed on Friday ahead of the release of OPEC’s latest monthly report, as global recession fears receded.

Positive retail sales data in the US and the UK dampened concerns that the world’s major economies are heading for a downturn.

Crude oil futures (CL=F) were up 1.5% to $55 a barrel after two straight days of losses.

OPEC’s report, due to be released later on Friday, will detail the major issues affecting the oil market, such as supply and demand, and will provide an outlook for the coming months.

“People are really anxious about OPEC's monthly report, particularly about non-OPEC supply increasing and about 2020 global oil demand taking a hit,” Bob Yawger, director of energy futures at Mizuho in New York, said.

Markets have had a difficult week after a key investing metric — the yield curve — on Tuesday turned negative for both the UK and the US for the first time since before the 2008 financial crisis.

A negative yield curve is seen as a harbinger of recession, and oil prices dropped by as much as 3.3% on Wednesday.

Outage at the London Stock Exchange

The opening of key markets on the London Stock Exchange (LSE) was delayed by over an hour and a half on Friday after technical issues hit the capital markets operator.

Trading of FTSE 100 (^FTSE) and FTSE 250 (^FTMC) shares, the two biggest indexes, were delayed by “technical issues affecting some stock.

The London Stock Exchange’s markets usually open at 8am UK time but trading on the two key markets was delayed until 9.40am — its worst outage in eight years. The FTSE 100 opened up 0.8% at 7,124.03 and the FTSE 250 opened up 0.4% to 7,124.03.

Poundland could be sold off in £3.6bn deal

The parent company of Poundland could be sold off or floated in the coming months, according to multiple reports.

The Times reported on Friday that Pepkor Europe, the company that owns Poundland, has met with bankers to discuss a possible sale or initial public offering of the business. It follows a similar report from South Africa’s Business Day earlier this month.

Pepkor Europe is owned by Steinhoff (SNH.DE), a South African retail group that has been struggling to recover from a €6bn (£5.5bn) accounting scandal. The group is now under the control of its creditors and seeking to offload assets in a bid to pay off its debts.

Rescue deal for British Steel

The first stages of a rescue deal have been agreed for British Steel, with the Turkish military’s pension fund in line to take over Britain’s second largest steelmaker.

Ataer Holdings has made an “acceptable offer” for the whole firm and is now in exclusive takeover talks after being chosen as the preferred buyer, the UK government’s insolvency service said.

The insolvency service hopes to finalise the deal “in the coming weeks,” while Ataer, part of the Turkish fund Oyak, is expected to now carry out due diligence checks. Ataer owns part of major Turkish steel producer Erdemir.

European stocks mixed

European stocks got off to a positive start on Friday in a further sign recession fears have been tempered. After a late opening, the FTSE 100 (^FTSE) climbed by 0.39%. Germany’s DAX (^GDAXI) was up 0.96%, while France’s CAC 40 (^FCHI) was up by 1.1%.

This followed a similarly strong trading session in Asia. The Nikkei 225 (^N225) was up 0.06%, and the SSE Composite (000001.SS) was up by 0.29%. The Hang Seng (^HSI) was up by 0.94%.

Sterling continued its gains from Thursday when it rose above $1.21 for the first time in August. It was up 0.51% against the dollar (GBPUSD=X) on Friday, to around $1.214, and up 0.72% against the euro (GBPEUR=X), to around €1.096.

What to expect in the US

Futures are pointing to a higher opening for US stocks.

S&P 500 futures (ES=F) are up by 0.98% and Dow Jones Industrial Average futures (YM=F) are up by 0.95%. Nasdaq futures (NQ=F) are up by 1.24%.

Companies reporting later on Friday in the US include:

  • Nordic American Tanker (NAT)

  • Deere and Company (DE)