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London pre-open: Stocks to rise on M&A boost

By Michele Maatouk

Date: Monday 14 Sep 2020

London pre-open: Stocks to rise on M&A boost

(Sharecast News) - London stock were set for a positive open on Monday, boosted by M&A news.
The FTSE 100 was called to open 18 points higher at 6,050.

CMC Markets analyst Michael Hewson said stocks look set to open higher again as we start a new week, driven largely by M&A activity over the weekend.

"These gains are taking place despite concerns over rising infection rates, both here in the UK, as well as in Europe with some restrictions being tightened again. While this is undoubtedly a cause for concern, the rise in infection rates also needs to be set in the context of how much more testing is being done now relative to in April and May when the R rate was much higher, and testing was lower.

"If you test more, you are going to find more cases, and what appears to be being overlooked is that for now hospitalisations, along with death rates, still remain very low and hopefully will continue to remain so. This is where people's attention should to be focused, given that for the most part infected people are only displaying mild symptoms."

Hewson said M&A appears to be the main focus as we start a new week with US pharma company Gilead Sciences buying cancer drug maker Immunomedics for $21bn, while Softbank appears to have finally agreed a price with US graphics chip maker NVidia for UK chip company ARM Holdings.

Japan's SoftBank said it had agreed to sell Arm Holdings to US chip company Nvidia for $40bn, just four years after buying the chipmaker.

SoftBank will become Nvidia's largest after its pays the Japanese group $21.5bn in common stock and $12bn in cash.

Elsewhere, CLS Holdings has agreed to buy three office properties in Greater London and South East England for £59.71m from Aviva Investors.

The sites in Richmond, Chelmsford and Leatherhead are 94% let and deliver £3.7m net rent a year with an initial yield of 5.9%.

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