London pre-open: Stocks seen lower as Johnson set to outline lockdown exit plan

Pre-open Market Report
06:40, 22nd February 2021

(Sharecast News) - London stocks were set to fall at the open on Monday, with Prime Minister Boris Johnson due to outline the government's lockdown exit strategy later in the day.
The FTSE 100 was called to open 26 points lower at 6,598.

CMC Markets analyst Michael Hewson said: "With almost a third of the UK population having received their first vaccine, and all over 50s to be offered one by mid-April, the UK is streets ahead of the rest of Europe, who appear to be more concerned with playing politics than inoculating their populations.

"This optimism has also given rise to a sharp rise in UK gilt yields, which have gone from lows near 0.17% at the beginning of the year to be trading at 0.7%, last week, with the result that UK banks are now likely to see their profitability improve having seen their lending margins eviscerated by the flat yield curve.

"Since the beginning of the year, it's been notable that bond markets, both in the UK and in the US are starting to price the risk of higher inflation pressures, as long-term yields move to the upside on both sides of the Atlantic."

In corporate news, pub group Mitchells & Butlers said it had been burning up to £35m in cash a month since the start of the year as it launched a £351m placing to bolster its balance sheet from the coronavirus pandemic.

The company said sales had slumped to 70% below 2020 levels in the period from September 27 to January 16. It added that agreement has been reached with pension trustees to delay monthly contributions from January to March 2021, inclusive, with these becoming due in April 2021.

Anglo American updated the market on the strategy of its platinum operations on Monday, targeting a mining EBITDA of between 35% and 40% by 2030.

The company said Anglo American Platinum wanted all of its operations to be "fully modernised and mechanised" by the same year, with a through-the-cycle return on capital employed of at least 25%. It also said it was aiming for a net reduction in carbon dioxide emissions of 30% by 2030, and to be 'carbon neutral' by 2040.

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