London pre-open: Heavy losses expected on FTSE

23rd Jul 2012 07:31

City sources predict the FTSE 100 will open down 51 points from Friday's close of 5,652, pushed lower by concerns that the 100bn euro aid package granted to Spain's banking sector will not be enough to stop the troubled economy from requesting a full bailout package. The steep declines also come ahead of the Troika's - the EU, the International Monetary Fund (IMF) and the European Central Bank (ECB) - upcoming review of the Greek financial situation, which will this week decide whether or not release the next tranche of the debt-laden economy's bailout package. Significantly, Der Spiegel reported this past weekend that the Washington based lender may not disburse the next installment of aid to Greece.As well, somewhat contradictory reports surfaced over the weekend to the effect that at least two more Spanish regions, Catalonia and Murcia, may seek aid from their central government. All of the above has led to sharp losses in the euro, which is due to begin the week below the 1.21 dollar mark, while Spanish 2 and 10 year bonds are under pressure, with yields on the latter at euro-era record highs. Fund manager Aberdeen Asset Management saw assets under management (AuM) slip slightly in the third quarter, but says that this result was resilient amidst an uncertain environment. AuM in the three months to June 30th totalled £182.7bn, 1.0% lower than the £184.7bn recorded at March 31st. The company added gross new business of £8.8bn in the quarter, down from £10.9bn in the same quarter last year, bringing the total for first nine months of the year to £27bn, compared with £33.9bn previously.FTSE 100 water group Pennon has signed a 25-year Residual Waste Treatment Services Design, Build, Finance and Operate contract with Glasgow City Council, a key part of the group's growth strategy in Scotland, it said. The contract, signed through Pennon's subsidiary Viridor (Glasgow), will see the group recycle and treat Glasgow's residual municipal waste through the financing, construction and operation of a new Recycling and Renewable Energy Centre at the council's own site in the south of the city. Transport firm Stagecoach has completed its acquisition of Coach America, a bankrupt operator of bus and coach services in the US. Stagecoach bought nine businesses and related assets and liabilities for $134.2m, although $3.0m of the consideration is being held in escrow pending the finalisation of any working capital adjustment. The total amount will potentially be adjusted based on the working capital of the acquired businesses. In addition, the firm has purchased 12 coaches for a cash consideration of $2.9m from the company, which also retains the option to sell vehicles to Stagecoach for the balance of a potential cash consideration of up to the $22.7m.