26th Oct 2015 08:25
LONDON (Alliance News) - Shares in London have started Monday slightly soft, with the focus for the week on the US Federal Reserve's two-day policy meeting starting Tuesday.
Aberdeen Asset Management, up 4.0%, leads FTSE 100 gainers, on a Financial Times report that the emerging markets specialist investor has started sounding out potential buyers.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 6,423.08
FTSE 250: down 0.2% at 17,207.51
FTSE AIM All-Share: up 0.1% at 748.14
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Hang Seng: closed down 0.2% at 23,116.25
Nikkei 225: closed up 0.7% at 18,947.12
DJIA: closed up 0.9% at 17,646.70
S&P 500: closed up 1.1% at 2,075.15
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GBP: flat at USD1.5336 (USD1.5334)
EUR: up at USD1.1052 (USD1.1023)
GOLD: up at USD1,163.60 per ounce (USD1,161.40)
OIL (Brent): up at USD47.95 a barrel (USD47.67)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in GMT)
09:30 UK BBA Mortgage Approvals
11:00 UK CBI Industrial Trends Survey
14:00 US New Home Sales
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Hurricane Patricia left little damage in Mexico and authorities praised early warning systems for keeping residents safe as the storm that had been the strongest ever recorded in the Americas weakened Saturday to a tropical depression. No deaths or injuries had been reported, authorities said. Heavy rain was expected to continue over central and north-eastern Mexico and into the US state of Texas with winds of up to 80 kilometres per hour, the US National Hurricane Centre said. Flooding and landslides were possible. A day earlier over the Pacific Ocean as a powerful category 5 storm, Patricia had produced winds of up to 400 kilometres per hour, but the storm weakened considerably after reaching Mexico's mountains.
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Questions lingered about key aspects of a draft agreement on the world's climate, as the final scheduled round of negotiations ended Friday before a the crucial summit, which opens next month in Paris. Countries are trying to find common ground to hammer out a global agreement that would limit world temperature increases caused by greenhouse gas emissions to 2 degrees Celsius for the foreseeable future. A 20-page draft agreement drawn up this month was the basis for the talks, which began Monday in Bonn, Germany. But some of the articles in the draft became sticking points, giving an indication of what could become major issues during the summit, which starts on November 30.
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Russia has called for elections in Syria as part of a political solution to the conflict, and the top diplomats from Moscow and Washington on Saturday discussed the organization of a political process in the war-torn country. Russian Foreign Minister Sergei Lavrov told state television Rossiya 1 that "foreign players" can't decide anything for the Syrian people. "We have to make them choose their own process for how their country should live on ... this work should be done in preparation for elections, both parliamentary and presidential," Lavrov said in the interview broadcast a day after he met with US Secretary of State John Kerry in Vienna to discuss the Syrian conflict.
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Ukrainians across the country headed to the polls on Sunday for regional elections expected to test the pro-Western federal government's grip on power. The think tank Carnegie Europe said last week that "the elections are likely to reinforce the distance between local and regional politics, on the one hand, and national politics, on the other, making it harder for the broad ruling coalition in Kiev to govern." "Ukrainians are deeply alienated from national politics and frustrated by a lack of tangible progress on reforms," the think tank said, adding that 75% of Ukrainians said they were likely to vote.
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Eleven leaders from the EU and the Balkans promised Sunday to limit the uncontrolled tide of migrants and asylum seekers flowing through their territories, amid fears that the quickly approaching winter will start claiming casualties. Europe is contending with its largest population movement since World War II, with almost 700,000 migrants and asylum seekers arriving by sea this year - many of them from war-torn Syria.
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BROKER RATING CHANGES
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TRADERS: INVESTEC CUTS CAIRN ENERGY TO 'SELL' ('HOLD')
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TRADERS: INVESTEC RAISES SENIOR PLC TO 'BUY' ('HOLD')
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COMPANIES - FTSE 100
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Aberdeen Asset Management has started sounding out potential buyers for the company as the fund manager attempts to stem a recent slump in profitability, its share price and its assets under management, the Financial Times reported. People familiar with the process said Martin Gilbert, the chief executive of the company, had made informal approaches to a number of rivals in recent months. Gilbert, who also founded the business, declined to comment to the FT. Aberdeen has been hit hard in recent months by the turmoil in emerging markets, where a large proportion of its investment portfolio is focused.
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WPP reported a rise in revenue for the third quarter of 2015, and said that whilst it is still in the process of reviewing its forecasts, early indications are that its revenue and net sales in the fourth quarter will be ahead of the first nine months. The media-buying giant said in the quarter to end-September that its total revenue rose 5.9% to GBP2.93 billion from GBP2.76 billion a year before, and was up 7.9% at constant exchange rates. WPP said that in constant currency it saw revenue growth in all regions and business sectors.
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Prominent City fund manager Neil Woodford is pushing for a break-up of pharmaceuticals giant GlaxoSmithKline, Sky News reported. Sky, citing insiders, said Woodford has held private talks with Philip Hampton, Glaxo's chairman, as part of a push for the drugs group to formally explore separating its ViiV Healthcare HIV business, its consumer healthcare arm and its dermatology division, Stiefel, from its core medicines and vaccines unit.
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AstraZeneca said an advisory committee of the US Food and Drug Administration voted by a majority in favour of its lesinurad drug, in combination with a xanthine oxidase inhibitor, to be approved for the treatment of hyperuricemia associated with gout. The US FDA's Arthritis Advisory Committee voted in favour by a count of 10 to 4. The FDA is not bound by this vote, but will take it into consideration whilst reviewing the application for the drug.
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Testing, inspection and certification services company Intertek Group said it has struck a deal to acquire New York-based MT Group and Materials Testing Lab for an undisclosed amount. The company said MT provides materials testing and inspection services to building companies in the New York metro area and will provide it with more presence in the North American construction market.
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Randgold Resources said it has repaid USD448.0 million in loans owed to its shareholders, moving the company into a "dividend-paying position". Chief Executive Mark Bristow called the repayment a "significant achievement, particularly in the context of a global gold-mining industry currently characterised by capital write-downs and impairments." The shareholder loans funded the majority of Randgold's USD580.0 million capital investment in its Tongon project in the Ivory Coast.
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Anglo American is understood to have commenced the process of trying to find buyers for its GBP1 billion Brazil-based niobium and phosphates business, The Sunday Times reported. Mark Cutifani, Anglo's chief executive, is thought to have started sounding out advisers about selling the business, though any sale is not expected to kick off for a couple of months, the paper said. It would follow a string of sales by Cutifani has he attempts to cut Anglo's debt pile.
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British lender Standard Chartered plans to exit its equity derivatives and convertible bonds businesses, according to media reports on Sunday. The impact of the move will likely be felt in Hong Kong, as the business has mainly been run from there. The move is part of the Asia-focused lender's efforts to cut costs and use capital more efficiently, under its new chief executive Bill Winters. In January, the bank said it will close its international cash equities, equity research and equity capital markets.
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The Royal Bank of Scotland Group has become the first bank in the world to adopt Facebook for Work, the corporate version of the social networking service, the Financial Times reported. The state-controlled lender is to deploy an in-house business version of Facebook for all of its 100,000 employees, allowing the workers to communicate with each other and swap information. RBS is also understood to be considering options for offering banking services through the social network.
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COMPANIES - FTSE 250
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TalkTalk Telecom Group reported some progress was made on its cyber attack over the weekend, with significantly fewer customers hit than originally anticipated, as it hired defence contractor BAE Systems to investigate the incident, though it is understood to be facing rising calls for compensation related to the incident. TalkTalk late Thursday confirmed that a criminal investigation has been launched by the Metropolitan Police's Cyber Crime Unit following a "significant and sustained" cyber attack on the company's website on Wednesday. The company then confirmed that it had received a ransom demand from a person claiming to be responsible for the hack.
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Investment vehicle Caledonia Investments said it has struck a deal to acquire the Gala Coral Bingo chain for GBP241.0 million. The bingo halls business at Gala Coral was the only unit not part of the agreed merger between Gala Coral Group and bookmaker Ladbrokes PLC in July. The merger between the pair will include the Coral Retail, Eurobet Retail and Coral online business, but the bingo arm was not part of the deal.
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Bank of Georgia Holdings's healthcare subsidiary Georgia Healthcare Group announced the expected price range of its upcoming initial public offering, giving it an expected market capitalisation of between USD397 million and USD535 million. Georgia Healthcare gave a price range of between 215 pence and 315 pence for its initial public offering. The final pricing will be announced on or around November 6, and it expects to be admitted to trading on or around November 11.
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Private equity investor Electra Private Equity said its net asset value per share produced a 25% total return for its investors in the year to the end of September. The company said its net asset value per share rose to 3,914.0 pence per share in the year, equating to a total return for its shareholders of 25%. Electra said it will pay a final dividend of 78.0p per share, taking its total dividend for the year to 116.0p. Electra is currently involved in a battle with activist shareholder Edward Bramson, the head of Sherborne Investors, who is calling for changes at the company which he claims will improve returns for shareholders. Electra on Monday reiterated its opposition to the Sherborne propositions, which will be the subject of a general meeting on November 5.
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Alent said the "slightly slower than anticipated" trading in the electronic and automotive industries experienced in the first half of 2015 has continued into the third quarter. The global supplier of speciality chemicals and engineered materials also said Platform Speciality, which made a takeover bid for the company back in July, has indicated it plans to make the payment for the deal in early December.
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COMPANIES - LONDON MAIN MARKET AND AIM
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APR Energy said it has reached a deal with a consortium of companies whereby it will be taken over in a GBP165.0 million deal. The agreement follows on from the company and consortium opening talks about a potential takeover of APR Energy in early October. The transaction is being conducted through Apple Bidco, owned by Fairfax Financial Holdings, ACON Investments and Albright Capital Management. Under the deal, APR Energy shareholders will be paid 175.0 pence per share in cash, which is a 88% premium to its closing price of 93.0p on October 2.
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Veterinary services provider CVS Group said it has acquired Bristol-based Highcroft Pet Care for GBP7.4 million. CVS said the deal will give it its first significant presence in the Bristol area. Highcroft operates an integrated services and already has out-of-hours and referrals services in place to which CVS will direct business from its other practices.
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COMPANIES - INTERNATIONAL
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Koninklijke Philips Electronics reported its third-quarter net income amounted to EUR324 million, compared to a net loss of EUR103 million a year ago. Sales for the quarter increased to EUR5.84 billion from EUR5.19 billion last year. Comparable sales growth was 2%, driven by North America, Asia Pacific and Central & Eastern Europe.
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A small London hedge-fund firm and a lapse in bank risk controls caused a panic inside Citigroup in July, after its executives discovered a series of trades they estimated could cost the bank as much as USD400 million, The Wall Street Journal reported. The concerns made a brief appearance in the bank's second-quarter earnings released on July 16 in which Citigroup said it had reserved USD175 million stemming from "valuation adjustments related to certain financing transactions," but the details have otherwise remained a mystery.
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Microsoft said it is opening its first flagship store in the heart of Manhattan at Fifth Ave. and 53rd St on Monday. It is the company's largest store to date.
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Monday's Scheduled AGMs/EGMs
Trinity Capital
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By Tom Waite; [email protected]; @thomaslwaite
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