Friday will have a ring of finality about it with the week, month and the UK’s membership of the EU all due to end.
Despite over three years of political and legal wrangling, the UK’s departure from the bloc is unlikely to cause much volatility in the markets, mostly because most of the trade arrangements between Britain and the EU will remain intact during the transition period, through which the two will attempt to thrash out a trade deal before the end of 2020.
There will, however, be a smattering of company news to keep traders busy as the clock counts down to 11pm (although there will be no ‘Big Ben Bong’ to mark the occasion).
SSE-ing into the future
Utility provider SSE PLC (LON:SSE) was one of the many firms that skirted the question of nationalisation after the Tory election win last month, however, instead of being targeted by Jeremy Corbyn, the ‘big six’ energy company, which had the £500mln sale of its retail arm confirmed by regulators in the election week, is now a possible target for a takeover.
Now repositioned for future growth in a climate-change world through disposals and a shift towards renewables and networks, Goldman Sachs said there was a distinct possibility of a new wave of consolidation in the sector.
Analysts said 2019 saw “a major step-up in public awareness” of climate change issues and more countries outlining net zero policies, including the UK's net zero target by 2050, which is “likely to provide 30 years of growth and regulatory stability in climate infrastructure, with most of the growth concentrated in renewable activities”.
“We believe that SSE stands out as a possible target were we to see M&A in the sector owing to a favourable combination of high earnings exposure to low-risk, infrastructure activities (RES, grids) and its relatively small market cap.”
Despite all this, Goldman reckons the nuts and bolts of the business are not very exciting and so downgraded the shares ahead of Friday’s third-quarter trading update.
Friday flow show for Hargreaves
Hargreaves Lansdown PLC (LON:HL.) will be putting out interim numbers on Friday, which will reveal whether the second quarter has picked up after a weak start to its financial year.
The FTSE 100-listed investment platform group flagged that new business was hit by “weak investor sentiment” in the three months to 30 September.
Boris Johnson’s election win should benefit the financial sector, said analysts at Peel Hunt, as rising asset prices help managers and improve confidence in new investment.
In particular, HL should see increased flows from clients, particularly in the run up to the tax year end, with little impact from foreign exchange movements as it is largely a domestic player.
Chief executive Chris Hill said in October’s update the firm would continue to invest at a “deliberately moderate” pace as it remains “mindful” of the wider market.
Significant announcements expected for Friday January 31:
Brexit Day
Trading announcements: SSE PLC (LON:SSE), Talktalk Telecom Group PLC (LON:TALK)
Interims: Hargreaves Lansdown PLC (LON:HL.)
Finals: Premier Veterinary Group PLC (LON:PVG)
Economic announcements: UK consumer confidence, US personal spending, US Chicago PMI