London pre-open: London likes idea of Chinese cavalry

13th Sep 2011 07:30

After Wall Street's dramatic late recovery yesterday, London is expected to open firmer today, with City sources predicting the FTSE 100 will open up 75 points from yesterday's close of 5,130 on hopes that the Chinese government will ride to the rescue of the Eurozone.Wall Street's rally was prompted by reports that Italy's government is negotiating with the Chinese government in the hope that Beijing will help rescue it from financial crisis by making "significant" purchases of Italian bonds and investments in strategic companies. According to Italian officials, Lou Jiwei, chairman of China Investment Corp, one of the world's largest sovereign wealth funds, led a delegation to Rome last week for talks with Giulio Tremonti, finance minister, and Italy's Cassa Depositi e Prestiti, a state-controlled entity that has established an Italian Strategic Fund open to foreign investors.The independent directors of pubs group Mitchells & Butlers (M&B) have rejected a bid approach from the company's biggest shareholder. Bahamas-based billionaire Joe Lewis's Piedmont investment vehicle said last night that it had approached M&B with a 224p-a-share offer proposal some weeks ago, but that the bid failed to win the backing of the board. Piedmont is now considering whether it will make a further offer proposal at 230p per M&B share, but the independent directors of M&B have already indicated that a bid at this level will not be recommended by them. Cairn Energy has plugged and abandoned the Gamma-1 exploration well in the Eqqua Block, in the West Disko area off the coast of Greenland. Drilling is now taking place on the Delta-1 well on the Napariaq block in the same area. Light commercial vehicle hire firm Northgate continues to trade in line with expectations, despite tough economic conditions in the UK and Spain. In the UK, vehicle utilisation in the four months to 31 August 2011 has averaged 90%, with the month of August averaging 91%, a steady improvement from 89% in the month of April 2011. In Spain, utilisation rates averaged over 91% in the four months to 31 August 2011, a 1% improvement on the same period last year. Asset manager Ashmore saw assets under management rise to $65.8bn at the end of June from $35.3bn the year before, with the gain comprising net subscriptions of $15.5bn, investment performance of $5.1bn and $9.9bn through the acquisition of EMM. Profit before tax for the year ended 30 June rose 13% from last year to £245.9m. --jh