28th Oct 2015 08:25
LONDON (Alliance News) -BT shares led blue-chip gainers, up 3.5%, amid a flat early market Wednesday. The telecommunications firm was given provisional clearance for its takeover of mobile provider EE by the UK competition regulator without being required to make any remedies, such as selling off parts of the business.
At the other end of the FTSE 100, aerospace firm Meggitt issued a profit warning after saying that trading in the third quarter of 2015 had been below its expectations. The stock was down 20% early Wednesday and in danger of dropping out of the FTSE 100 at the next quarterly review.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 6,361.40
FTSE 250: down 0.2% at 17,015.18
AIM ALL-SHARE: flat at 742.79
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Hang Seng: closed down 0.8% at 22,956.57
Nikkei 225: closed up 0.7% at 18,903.02
DJIA: closed down 0.2% at 17,581.43
S&P 500: closed down 0.3% at 2,065.89
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GBP: down at USD1.5298 (USD1.5308)
EUR: flat at USD1.1044 (USD1.1040)
GOLD: up at USD1,170.40 per ounce (USD1,166.10)
OIL (Brent): flat at USD46.73 a barrel (USD46.70)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in GMT)
11:00 US MBA Mortgage Applications
11:00 Ireland Retail Sales
12:30 US Goods Trade Balance
14:30 US EIA Crude Oil Stocks
18:00 US Fed Interest Rate Decision
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China's consumer sentiment decreased markedly to a record low in October, results of a survey by MNI and Westpac showed. The Westpac-MNI consumer sentiment index fell to 109.7 in October from 118.2 in September, marking the weakest reading since the survey began in 2007. It was the first decline in five months. In August, the reading was at 116.5.
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Retail sales in Japan fell 0.2% on year in September, the Ministry of Economy, Trade and Industry said. That missed forecasts for an increase of 0.4% following the 0.8% gain in August. Sales from large retailers advanced an annual 1.7% - beating forecasts for a gain of 1.4% after rising 1.8% in the previous month.
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Confidence among Japan's small and medium-sized enterprises decreased unexpectedly in October to the weakest level in four months, survey figures released by the Shoko Chukin Bank showed. The small business confidence index fell to 48.7 in October from 49.0 in the previous month. Economists had expected the index to rise slightly to 49.2.
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German consumer confidence is set to weaken for a third straight month in November owing to deterioration in households' economic expectations and willingness to make big purchases, results of the monthly survey by the GfK showed. The forward-looking GfK consumer confidence index for November dropped to 9.4 from 9.6 in October. The score was in line with economists' expectations. The latest reading was the lowest since February.
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Beijing summoned the US ambassador to China to express its "strong discontent" after a US naval destroyer sailed close to islets occupied by China but claimed by the Philippines, state media reported. Beijing said the USS Lassen illegally entered Chinese territorial waters when it sailed early Tuesday near the disputed Spratly, or Nansha, group of islands.
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Darqad district in northern Afghanistan's Takhar province fell to the Taliban around 4 am local time, an official said, after a six-hour battle. "The Taliban attacked the district centre from several sides and were able to take the district," said Khalil Asif, a spokesman for Takhar provinical police.
He said there might be casualties from the attack.
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BROKER RATING CHANGES
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TRADERS: MERRILL LYNCH CUTS MORRISON TO 'NEUTRAL' ('BUY')
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SOCGEN RAISES LONDON STOCK EXCHANGE PRICE TARGET TO 2600 (2160) PENCE - 'HOLD'
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COMPANIES - FTSE 100
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BT Group said the UK Competition and Markets Authority has provisionally cleared its proposed GBP12.5 billion acquisition of mobile operator EE. The clearance from the UK antitrust regulator has been given without any remedies required to gain approval.
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Anheuser-Busch InBev and SABMiller said the deadline for the two to agree their mega-merger has been extended, following press reports that the process of agreeing the deal was taking longer than anticipated. Belgium-based AB InBev has offered 4,400 pence per share for Anglo-South African rival SABMiller, valuing the company at GBP71.28 billion. SABMiller said in a statement on Wednesday that the deadline for AB InBev to make an offer for the company has been extended to November 4, having been due to expire on Wednesday. The Financial Times reported on Wednesday that the pair are considering selling off assets in the US in order to secure regulatory approval for the merger, including SABMiller's stake in the MillerCoors joint venture with Molson Coors.
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Barclays confirmed previous reports that it has chosen Jes Staley to be its new chief executive, with plans for him to take up the role on December 1. Staley is a former executive at JPMorgan Chase & Co, where he headed its equities, private banking and assets management businesses during his 30 years at the US bank, before ultimately heading its investment bank.
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Lloyds Banking Group reported higher third-quarter pretax profit, even as it booked a further GBP500 million in relation to compensating customers who were mis-sold insurance products in the past. Pretax profit rose to GBP958 million in the quarter to September 30, compared with GBP751 million in the corresponding three months the prior year. Underlying profit, which excludes charges taken on asset sales and provisions for payment protection insurance claims, slipped to GBP1.97 billion from GBP2.04 billion. The new GBP500 million charge for payment protection insurance means Lloyds has now set aside GBP13.9 billion over the scandal.
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Next reported a rise in sales in the third quarter of its financial year and raised the lower end of its pretax profit guidance for the full year. The fashion retailer said total full-price sales grew 6% in the quarter to October 24, growing 4.4% in the nine months to the same date. Of this, Retail sales increased 5.9% in the third quarter and 2.6% in the 9 months, while Next Directory grew sales by 6.2% in the third quarter and 7% in the nine months. Next said it now expects full-year pretax profit to be in the range of GBP810 million and GBP845 million, having previously set the guidance at GBP805 million to GBP845 million.
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Standard Life reported stable assets under administration at the end of the third quarter and net inflows of GBP2.4 billion. The investment and savings company said that group assets under administration amounted to GBP301.9 billion at the end of September, down from the GBP302.1 billion at the end of the first half. However, assets under administration were up from GBP296.6 billion at the end of 2014 and GBP290.0 billion at the end of the corresponding quarter the prior year.
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British American Tobacco reported a fall in sales in the first nine months of 2015 as it was hit by movements in foreign exchange rates, which it warned may harm operating profit in the full year. The tobacco company said revenue in the nine months ended September 30 declined 6.5%, although it would have risen 4.2% if foreign exchange rates had remained constant. Cigarette volume from subsidiaries decreased 1.8% to 487 billion in the period.
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Aerospace and defence components manufacturer Meggitt issued a profit warning after the group said trading in the third quarter of 2015 had been below its expectations, with little optimism for any relief in the fourth quarter. Meggitt said there was a "marked deterioration" in trading in September, with organic growth in its civil original equipment sales more than offset by weaker-than-anticipated trading in civil aftermarket, military and particularly energy markets, the latter hit hard by the downturn in spending from oil and gas customers.
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Antofagasta lowered its full-year production guidance, reported falls in copper, gold and molybdenum production and said its cash costs have risen throughout 2015 whilst commodity prices have plummeted. The Chilean-based copper miner produced 157,000 tonnes of copper in the third quarter, broadly flat from the previous quarter despite lower grades and lower recoveries at the Centinela mine. That has pushed year-to-date production to 460,400 tonnes, which is down 11% from a year earlier as production has fallen from both Centinela and Antofagasta's other main mine Los Pelambres. The company cut its full-year guidance to 635,000 tonnes of copper from its original guidance of 665,000 tonnes.
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HSBC Holdings's wholly-owned subsidiary HSBC Bank Bermuda said it has agreed to sell Bermuda Trust Co and its private banking investment management operations in Bermuda to the Bank of NT Butterfield & Son. Additionally, it has entered into an agreement to refer its existing private banking clients to Butterfield. As at the end of 2014 the trust and investment business had around USD24 billion of assets under administration, and USD1.5 billion of assets under management. The banking portfolio had around USD1.2 billion of assets under management.
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Royal Dutch Shell said it will not continue construction of the 80,000 barrel per day Carmon Creek thermal in situ project located in Alberta, Canada. Shell originally sanctioned the project in October 2013 and announced in March 2015 that the project would be re-phased to take advantage of the market downturn to optimise design and retender certain contracts. After review of the potential design options, updated costs, and the company's capital priorities, Shell said its view is that the project does not rank in its portfolio at this time. The decision reflected current uncertainties, including the lack of infrastructure to move Canadian crude oil to global commodity markets.
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COMPANIES - FTSE 250
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Bwin.Party Digital Entertainment reported a fall in revenue in the first nine months of 2015 as it said it faced a tough comparative period while being hit by VAT charges from the European Union. The online gaming company said total revenue in the nine months ended September 30 decreased 8% to EUR429.9 million from EUR465.8 million the year before, which it said reflected the absence of a major football tournament, the sale of non-core businesses and the impact of EU VAT.
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Petra Diamonds said production reached record levels in the first quarter of the financial year and said the weakening of the South African rand is mitigating the steep fall in diamond prices. The diamond miner produced a "record" 842,796 carats in the first quarter ended September 30, compared to 833,744 carats a year earlier. That figure means the company is running ahead of its guidance for the first half of the year to produce 1.5 million carats.
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Kennedy Wilson Europe Real Estate said it has agreed to acquire a portfolio of nine offices in Italy currently fully let to the Italian government. The property company said it is acquiring the portfolio for EUR185.5 million from InvestiRE SGR, the management company of the closed-end mutual property investment fund Fondo Immobili Pubblici. The portfolio includes nine office buildings production EUR12.1 million in annual rent. The net initial yield on the purchase is 6.3%.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Trinity Mirror said it has proposed a deal to acquire the stake in regional newspaper publisher Local World is does not already own for GBP220.0 million and will launch a share placing to back the deal. Trinity Mirror will acquire the 80% of the company it does not already own from Daily Mail & General Trust and from all other shareholders in the company, including the Iliffe Family. The deal will make Trinity Mirror the UK's largest regional news publisher. As part of the acquisition, Trinity will launch a share placing to raise around GBP35.4 million to back the deal. It will issue 22.4 million shares at 158.00 pence per share. Shares in Trinity Mirror closed at 160.5 pence on Tuesday and was quoted early Wednesday at 171.00p, up 6.5%.
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COMPANIES - INTERNATIONAL
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Apple raked in USD11.1 billion in net profit in the fourth quarter, the company said, thanks to the world's continuing appetite for the iPhone. The company sold 48 million iPhones worldwide in the fourth quarter, a 22% increase on sales in the same quarter in 2014. The quarter reflects initial sales of the iPhone 6s and 6s Plus, the new model that the Cupertino, California-based company introduced in September. The iPhone makes up more than 60% of Apple's profits, by far the most important slice of Apple's earnings pie. In a conference call to discuss earnings, chief executive Tim Cook said demand for the quarter had exceeded supply.
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Twitter's third quarter financial results beat expectations, but its stock price tumbled anyway, as stagnant user growth and a weak forecast showed the microblog's new chief executive may not have a magic bullet for the company's woes. The company posted a net loss for the quarter of USD131.6 million, Twitter said in a statement, compared with a net loss of USD175.5 million for the same quarter a year ago. Third-quarter revenue grew to USD569.2 million from USD361.2 million the year before, beating expectations. But user growth, seen by many as a key indicator of Twitter's long-term viability, has stalled. The company's reported 320 million monthly active users were just 4 million more than the previous quarter, an increase of just 1.8%.
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International Business Machines is nearing a deal to acquire the digital and data assets of Weather Co, owner of the Weather Channel, according to media reports citing people familiar with the matter. The deal, which would be valued at more than USD2 billion, could be announced as early as Wednesday.
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US federal regulators want to restrict JPMorgan Chase's ability to raise funds for clients, in an effort to impose a broader range of consequences on financial firms accused of breaking the rules, the Wall Street Journal reported citing people familiar with the matter. JP Morgan has already agreed to pay more than USD200 million to resolve allegations by the Securities and Exchange Commission and other regulators that it didn't make proper disclosures when touting its own investment products to clients over those offered by its competitors. But the settlement has been held up for several weeks by the SEC's demands that JP Morgan also accept limits on its ability to sell stock or bonds via private placements for several years, the report said.
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Australian lender National Australia Bank reported a 20% increase in profit for the fiscal 2015 and said it has agreed to sell 80% of its life insurance business to Japan's Nippon Life Insurance for AUD2.4 billion. NAB will retain the remaining 20% stake. As part of the partnership, NAB will enter into a 20-year distribution agreement to provide life insurance products through its owned and aligned distribution networks. NAB also said it plans to divest its unprofitable UK operations, Clydesdale PLC, through a demerger and initial public offering in early February 2016.
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Italian oil and gas company Eni said that it executed a sale and purchase agreement, by which it will sell a stake in Saipem consisting of 55.18 million ordinary shares, representing approximately 12.5% plus one share of Saipem share capital to Fondo Strategico Italiano.
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Norwegian energy firm Statoil reported its third-quarter net loss, on IFRS basis, was NOK2.8 billion narrower than last year's loss of NOK4.8 billion. The loss mainly reflected net impairment charges and provisions.
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Wednesday's Scheduled AGMs/EGMs
Haynes Publishing Group
Progility
Murray Income Trust
Rosslyn Data Technology
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By Tom Waite; [email protected]; @thomaslwaite
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