London pre-open: Germany´s CC will not delay ESM decision

11th Sep 2012 07:26

City sources predict the FTSE 100 will open down 24 points from yesterday's close of 5,793. Dragging on markets, surely, is the uncertainty in Germany, where just last night the entire future of the Eurozone's bailout mechanism was thought to hang in the balance. The nation's Constitutional Court is to decide tomorrow on the legality of Germany contributing to the European Stability Mechanism (ESM), a necessary condition for the European Central Bank to be able to even contemplate wading into debt markets. A last minute interjection from a senior law-maker however had threatened to delay the Court´s decision, but the Contitutional Court has announced this morning that it will go ahead with its sentence - tomorrow - as planned. Meanwhile, the fate of Greece is still hanging in the balance after the country's Prime Minister Antonis Samaras failed to convince his coalition partners to sign up to the latest round of cuts demanded by lenders. British fashion house Burberry warned that trading conditions were becoming more challenging with like-for-like sales flat in the second quarter. The firm said that ahead of the key retail trading period in the second half, it expected pre-tax profits for the year to 31 March 2013 to be at the lower end of market expectations. The company, which has been riding on the crest of a retail wave driven by the popularity of its goods in the Far East, said retail sales growth at constant exchange rates was 6% in the 10 weeks to 8 September. Outsourcing firm Serco Group is part of a consortium chosen to provide and operate a new prison to be built at Wiri, South Auckland, New Zealand. The prison is set to open in mid-2015, and Serco will operate the prison for 25 years. Its partners in the consortium include Fletcher Construction, John Laing and Spotless. From date of opening, Serco's operating contract is anticipated to have revenues of around £15m a year with revenues in the pre-operational phase expected to total around £2m. Full year profit before tax at fund manager Ashmore took a small dip from the year before, but came in ahead of market expectations. Profit before tax of £243.2m for the year to the end of June was down 1% from the previous year's £245.9m, but ahead of the £229.40m the market had been expecting. Total net revenue was more or less in line with market forecasts at £333.3m; the market had been expecting an unchanged revenue figure of £333.8m.