27th Nov 2015 08:23
LONDON (Alliance News) - Shares opened flat Friday following weak Asian markets and ahead of a second reading of UK GDP in the third quarter.
Most early company news was from mid-cap companies, with water company Pennon and private equity firm SVG Capital leading FTSE 250 gainers following updates. The stocks were up 3.9% and 2.4%, respectively.
FTSE 250 investment company Alliance Trust said Karin Forseke, its chair since April 2012, will follow former chief executive Katherine Garrett-Cox in stepping down from the board. The stock has barely reacted, however, trading down 0.2%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.6% at 6,353.44
FTSE 250: down 0.4% at 17,153.15
AIM ALL-SHARE: flat at 730.08
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Hang Seng: down 1.9% at 22,068.32
Nikkei 225: closed down 0.3% at 19,883.94
DJIA and S&P 500: market closed for holiday.
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GBP: down at USD1.5092 (USD1.5118)
EUR: up at USD1.0628 (USD1.0612)
GOLD: down at USD1,068.40 per ounce (USD1,071.50)
OIL (Brent): down at USD45.07 a barrel (USD45.25)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in GMT)
09:00 Italy Consumer and Business Confidence
09:30 UK Gross Domestic Product, Business Investment, Index of Services
10:00 EU Economic Sentiment Indicator, Consumer and Industrial Confidence
11:00 Ireland Retail Sales
12:00 Germany Gfk Consumer Confidence Survey
13:30 Canada Industrial Product and Raw Material Price indices
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UK house price growth softened in November, data published by the Nationwide Building Society showed. House prices advanced at a pace of 3.7% year-on-year in November, following October's 3.9% increase. It was the weakest increase since August when prices climbed 3.2%. Likewise, monthly growth eased to 0.1% from 0.5% a month ago.
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A survey published by the Confederation of British Industry showed business volumes in the UK's services sector continued to improve in the three months to November, but at a slower pace than in the previous quarter. The CBI's Service Sector Survey found business volumes and values in consumer services, including hotels, bars, restaurants, travel and leisure companies, grew steadily, in line with recent quarters.
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UK consumer confidence weakened to a six-month low in November, survey conducted by GfK on behalf of the EU showed. The consumer sentiment index fell to 1 from 2 points in October. A similar low reading was last seen in May. The reading was expected to remain stable in November.
Three of the measures used to calculate the index saw decrease in November, while one increased and other remained unchanged. "Overall, despite the good news agenda of rock-bottom inflation, falling fuel prices and higher wage growth boosting spending power, confidence appears to be depressed by a combination of wider economic, political and social events," Joe Staton, head of Market Dynamics at GfK, said.
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Japan's core inflation continued to remain negative in October, weighed down by lower energy prices, raising concerns about the nation's ability to achieve the inflation target by the stipulated timeframe. Official data also showed that the unemployment rate dropped to a 20-year low, but household spending and income declined from the prior year. Core consumer prices excluding fresh food dropped 0.1% year-over-year in October, the same rate of decrease as seen in September, the Ministry of Internal Affairs and Communications reported. Overall consumer prices rose 0.3% year-over-year and that excluding food and energy advanced 0.7%. The headline inflation matched economists' expectations, while consumer prices, excluding food and energy, were slightly below the expected rate of 0.8%. Another report showed that the jobless rate slid to 3.1% in October from 3.4% in September. It was the lowest since 1995.
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Profits earned by Chinese industrial enterprises decreased for the fifth consecutive month in October, figures from the National Bureau of Statistics showed. Industrial profits fell notably by 4.6% year-over-year in October, much faster than the 0.1% slight decrease in September.
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Turkey does not owe Russia an apology for this week's downing of a Russian fighter jet, Turkish President Recep Tayyip Erdogan said in response to a demand from Russian President Vladimir Putin. Putin had earlier criticized Turkey for not apologizing for Turkish fighter jets shooting down the Russian Su-24 bomber as it returned from a mission in support of Syrian government forces. "We have not yet heard an apology from the highest political level of Turkey. Nor do we hear proposals to repair the damage or promises to punish the perpetrators for the crime committed," TASS news agency quoted Putin as saying. In in an interview with broadcaster CNN International, Erdogan said: "I think if there is a side that has to apologize, then we are not it. The ones who violated our airspace are the ones who need to apologize." And he stressed that the Turkish pilots who did the shooting were only doing their duty.
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Russia and France will coordinate strikes against Islamic State forces and share intelligence in Syria, French President Francois Hollande said after talks in the Kremlin. Hollande was in Moscow drumming up support for the fight against Islamic State, which has intensified since November 13 attacks in Paris, claimed by Islamic State, left 130 dead. Russian President Vladimir Putin also expressed willingness to work with the rest of the US-led coalition and agreed to attempt to prevent attacks against armed groups that are fighting terror.
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The first US special forces have arrived in northern Syria to train Syrian moderate opposition and Kurdish fighters against the Islamic State, a monitoring group and a Kurdish source confirmed. The US troops arrived in Kobane and al-Hassakeh province to train the newly formed Arab-Kurd coalition, Rami Abdel Rahman, the head of the Syrian Observatory for Human Rights, told dpa. A Kurdish source inside Kobane also confirmed the arrival of the soldiers inside the city.
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A man jumped over the fence and onto the White House lawn on Thursday while US President Barack Obama and his family were at home for the Thanksgiving holiday, the Secret Service said. The Secret Service identified the man as Joseph Caputo. He scaled the complex's north fence at 2:45 pm (1945 GMT) and was immediately arrested, spokesman Robert Hoback said.
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BROKER RATING CHANGES
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TRADERS: INVESTEC RAISES SEVERN TRENT TO 'HOLD' ('SELL')
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HSBC CUTS BRITVIC TO 'HOLD' ('BUY') - TARGET 700 (860) PENCE
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TRADERS: LIBERUM RAISES PAYPOINT TO 'BUY' ('HOLD')
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TRADERS: INVESTEC RAISES GREENCORE TO 'BUY' ('ADD')
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EXANE BNP RAISES ZOOPLA TO 'NEUTRAL' ('UNDERPERFORM') - TARGET 220 (200) PENCE
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TRADERS: DEUTSCHE BANK RAISES BETFAIR TO 'BUY' ('HOLD')
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COMPANIES - FTSE 100
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Anglo-Australian miner Rio Tinto said it is planning to expand output from the Amrun project in Australia after it secured approval for the USD1.9 billion project. Amrun will involve the construction of a bauxite mine and associated processing and port facilities on the Cape York peninsula in north Queensland. The planned initial output from the mine is 22.8 million tonnes of bauxite per year, which will replace declining production from the depleting East Weipa mine.
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The Royal Bank of Scotland Group said late Thursday it will recognise a loss of around GBP265 million in its fourth quarter results in relation to a recent tender on some US dollar, sterling and euro debt securities, however it expects to see a saving of interest expense of around GBP455 million over the life of the debt securities. The bank said it had recently completed the tender on the debt securities, and the take-up rate of the tender was 56.5% with a total of GBP2.4 billion tendered.
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COMPANIES - FTSE 250
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Alliance Trust said Karin Forseke, its chair since April 2012, will follow former chief executive Katherine Garrett-Cox in stepping down from the board. Forseke will step down from the board on January 1 and leave the company, and the role of chair will be filled on an interim basis by Gregor Stewart, a non-executive director since December 2014, until a permanent successor is found.
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SVG Capital said there is a need for "discipline and caution" amid a tough macro environment. "The company's strong balance sheet positions us well to cover our liabilities, take advantage of any investment opportunities as they arise, as well to mitigate any short-term volatility," Chief Executive Lynn Fordham said in a statement. Fordham's comments came as the private equity investor said it has reaped the benefits of a strategy implemented in 2012, with investments made following that year showing a total return of 7% in the quarter and 10% over the nine months to October 31.
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Pennon Group said its profit and earnings both improved in the first half thanks to energy recovery facilities in its Viridor waste-management business and a better-than-expected contribution from recently-acquired Bournemouth Water.The water company said its pretax profit for the six months to the end of September was GBP106.8 million, up from GBP100.0 million a year earlier. Pennon said it will pay an interim dividend of 10.46 pence, up from 9.98p a year earlier, and said it remains on track to meet its expectations for the year to the end of March 2016.
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Construction and support services company Balfour Beatty said it has won a GBP104.0 million contract to complete work on the Norwich Northern Distributor Road in Norfolk. Balfour will contract a new 19.6 kilometre dual carriageway for the project, including nine new roundabouts, seven new bridges, an underpass and a two-level junction. Work on the project will start in this winter and is due to complete in late 2017, Balfour said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Patisserie Holdings expressed confidence for "another successful year ahead" and proposed a maiden final dividend, as it reported a rise in pretax profit in its recently ended financial year. The company, which owns the Patisserie Valerie brand of cafés, proposed a maiden final dividend of 1.67 pence per share. Patisserie Holdings reported a pretax profit of GBP14.6 million for the year to end-September, up from GBP10.4 million a year before, as revenue rose to GBP91.9 million from GBP76.6 million.
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Energy services company Lamprell said it is on track to deliver results for 2015 in line with its expectations following a continued strong operational performance in the business in the second half. Lamprell said all the projects it is working on are progressing well and said it has won further contracts from Petrofac, a larger London-listed oil services business, which has nearly doubled the number of pre-assembled racks it will manufacture. In addition, Lamprell said it is currently working on seven concurrent jack-up rigs, a record number for the group, driven by the recent yard optimisation measures it put in place under its Project Evolution operational strategy.
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Home shopping and education supplies business Findel said it will hold an extraordinary general meeting requisitioned by Sports Direct International on December 21. Sports Direct requisitioned the meeting earlier this month after it acquired an 18.93% stake in Findel, which owns home shopping retailer Express Gifts, an education supplies company and the Kitbag sports retailing unit. It is seeking to have Benjamin Gardner appointed to Findel's board.
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Origin Enterprises said its new financial year has started slower than a year earlier and expects its earnings to be heavily weighted to the second half. The Irish agri-services business said trading in the three months to the end of October, its first quarter, took a hit from delayed new season activity in farming during August and September due to weather interrupting the 2015 harvest. This affected the timing of service and input application for the winter crop planting programmes this year. In total, revenue for the first quarter to the end of October fell, down to EUR300.4 million from EUR318.0 million, offset in part by currency translation benefits from the weak euro, as underlying revenue fell 9.0%.
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The National Australia Bank said it has formally decided to proceed with a demerger and initial public offering of the Clydesdale and Yorkshire banks. "The proposed demerger and IPO remain subject to a range of matters, including various court and regulatory approvals and NAB shareholder approval," NAB said in a statement. According to NAB's results statement on October 28, the CYBG PLC entity will have a primary listing on the London Stock Exchange and a CHESS Depositary Interest listing on the Australian Securities Exchange.
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COMPANIES - INTERNATIONAL
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German drug maker Merck is considering a sale of its allergy business, known as Allergopharma, as it seeks to reduce debt following the USD17 billion takeover of Sigma-Aldrich Corp, Bloomberg reported, citing people with knowledge of the matter. The process is at an early stage and Merck could still decide against a sale, the report said. The report specified that the business may fetch about EUR600 million and could attract interest from drug companies and private-equity firms.
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Apple confirmed that it has bought face animation software firm Faceshift, although it was tight lipped about how it intends to use the new addition. The move is speculated as a bid to expand into virtual reality. Zurich-based Faceshift's users can create realistic and emotional animated avatars that can precisely mimic a person's facial expressions. Cameras track the movements of a person's face in real time and can then transport the expressions onto an animated character.
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Friday's Scheduled AGMs/EGMs
Pan African Resources
Quadrise Fuels International
Harvest Minerals
James Halstead
Coal of Africa
Filtronic
Draganfly Investments
Range Resources
Origin Enterprises
Berkeley Energy
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
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