London pre-open: FTSE to rise as UK outlook improves

9th Oct 2012 07:29

City sources predict the FTSE 100 will open up 15 points from yesterday's close of 5,842, despite news that the International Monetary Fund has slashed global growth forecasts. The UK was not immune to the downgrades: the economy is now expected to contract by 0.4% this year, down from the previous expectation of 0.2% growth; while the 2013 growth forecast has been cut from 1.4% to 1.1%.Losses were seen in the US last night - which came ahead of the start of the third-quarter earnings season as investors fretted about how a subdued global economy will affect corporate profits, while strong gains were seen on the Hang Seng in Asia . UK data out today includes the Balance of Trade, Industrial Production and Manufacturing Production. Industrial production for August is tipped to fall 0.5% afrer rising 2.9% in July. The year-on-year change, according to Charles Stanley's forecasts, will remain negative at -1.1%, versus -0.8% in July. In company news, banking giant Barclays is to acquire the deposits, mortgages and business assets of ING Direct UK from Dutch finance house ING. Barclays will acquire a deposit book with balances of £10.9bn and a mortgage book with outstanding balances of £5.6bn, as at August 31st 2012. The mortgage book had a loan to value ratio of 50% at the end of August and is being acquired at a discount of around 3%. The deposit book is being purchased at face value. Pennon, the FTSE 100 water services and waste management group, has acquired Pulp Friction, a paper collection and processing business based in Erith, Kent. The acquisition, made through Pennon's subsidiary Viridor, relates to the Pulp Friction business, assets and goodwill of a related business (SBS Paper) for a total consideration of £9.0m (£8.6m cash plus acquired net debt).Egypt-focused gold miner Centamin saw a solid year-on-year improvement in production in the third quarter, but volumes declined on the preceding three months due to mill works and an employee strike in July. Total gold production from its flagship Sukari Gold Mine was 60,922 ounces in the three months to September 30th, a 20% increase on the same period of 2011, but a 10% fall on the second quarter of this year. Quarterly throughput at the Sukari process plant was 5% higher year-on-year, but 21% down quarter-on-quarter.There was some relief among investors in Daisy Group that its trading update after the end of its half-year did not prompt the same share price fall as that of its rival Kcom on Friday, after its own update, Tempus writes today. It may just be that Daisy was better than Kcom at keeping the market up to date. The company made clear that free cash-flow had begun to improve in the first half to the end of September, even if debt had increased to reflect the last acquisition, in April. The company provides its own adjusted earnings figures, even if analysts tend to rely on free cash-flow. Their forecasts of earnings for this year would put the shares on about seven times earnings.