9th Nov 2015 08:22
LONDON (Alliance News) - Share prices were firm in London early Monday after a weak set of trade figures from China raised expectations of further economic stimulus by the country's central bank.
Asia-related stocks Standard Chartered, Aberdeen Asset Management and HSBC Holdings led FTSE 100 gainers, up 1.5%, 1.1% and 1.1%, respectively.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 6,363.23
FTSE 250: up 0.3% at 17,222.07
AIM ALL-SHARE: up 0.1% at 747.20
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Hang Seng: closed down 0.6% at 22,726.77
Nikkei 225: closed up 2.0% at 19,642.74
DJIA: closed up 0.3% at 17,910.33
S&P 500: closed flat at 2,099.20
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GBP: flat at USD1.5077 (USD1.5070)
EUR: up at USD1.0767(USD1.0746)
GOLD: up at USD1,093.16 per ounce (USD1,087.20)
OIL (Brent): firm at USD47.56 a barrel (USD47.42)
(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 EU Sentix Investor Confidence
10:30 EU OECD Economic Outlook
13:15 Canada Housing Starts
15:00 US Labor Market Conditions Index
17:00 US Fed Boston President Rosengren Speech
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China's exports fell for the fourth straight month in October providing little support to economic growth, while imports plunged on weak domestic demand. Exports decreased 6.9% year-on-year in October, bigger than a 3.7% fall seen in September, data published by the General Administration of Customs showed Sunday. Imports plunged 18.8% from last year. Economists had expected a decrease of 15.2% after an annual 20.4% decline in September. Consequently, the trade surplus widened to a record USD61.6 billion from USD60.3 billion in September. Nonetheless, it was slightly below the expected level of USD62 billion.
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Germany's exports and imports increased more than expected in September, data from Destatis revealed. Exports advanced 2.6% in September from a month ago, reversing a 5.2% drop in August. Economists had expected an increase of 2%. Likewise, imports climbed 3.6% after falling 3.2% in the previous month. The growth rate also exceeded a 1% rise forecast by economists. The trade surplus fell to a seasonally adjusted EUR 19.4 billion from about EUR 19.6 billion in August.
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Ireland's construction sector growth accelerated in October, as new orders continued to rise sharply, survey figures from Markit Economics showed. The Ulster Bank Construction Purchasing Managers' Index rose to 56.3 in October from 55.8 in September. Any reading above 50 indicates expansion in the sector. Moreover, construction output has now increased in each of the past twenty six months.
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US President Barack Obama rejected the Keystone XL pipeline on Friday, saying the project would have damaged the US ability to lead on efforts to tackle climate change ahead of Paris climate talks. "As long as I'm president of the US, America's going hold ourselves to the same high standards to which we hold the rest of the world," Obama said after meeting with Secretary of State John Kerry on the issue.
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Saudi Arabia is planning to continue pumping enough oil to maintain its share of the global market, despite the financial problems this is causing for the country's economy, the Financial Times reported. Officials told the FT the country, the world's largest oil exporter, will produce enough to meet customer demand, indicating the kingdom has no plans to change tact ahead of the upcoming Organisation of Petroleum Exporting Countries meeting on December 4.
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BROKER RATING CHANGES
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HSBC CUTS CENTRICA TO 'HOLD' ('BUY') - TARGET 250 (300) PENCE
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EXANE BNP CUTS SEVERN TRENT TO 'UNDERPERFORM' ('NEUTRAL')
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SOCGEN CUTS UNITED UTILITIES TO 'HOLD' ('BUY') - TARGET 940 PENCE
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COMPANIES - FTSE 100
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National Grid said it has filed a request with the Massachusetts Department of Public Utilities to update its electricity distribution rates. The company said it is the first time since 2009 that it has filed such a request, which if approved will affect all electricity companies operating in the state. In the filing, National Grid has requested a USD143.0 million per year rise in electricity delivery revenue to cover increased operating costs and investments that have been made into the electricity network.
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National Grid also is planning to find a buyer for its regional gas distribution business, Bloomberg reported, citing people familiar with the matter. The company, which runs the UK's power grid, is looking for suitors for the assets, which serve nearly 11 million customers and which could be worth up to GBP10.0 billion, the source said. The business may also be carved into parts or a minority stake may be sold in the whole gas distribution system, the sources added. The sale is expected to kick off early next year.
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Satellite communications company Inmarsat said it has confirmed a deal with Singapore Airlines for the carrier to deploy its GX Aviation high-speed connectivity service for its long-haul fleet. The first installation of the service is due to take place in the second half of 2016. No financial details on the deployment were disclosed.
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Following recent market speculation, InterContinental Hotels Group said that it was not considering a potential sale or merger of the company. On Friday, Bloomberg reported that IHG was exploring strategic options including a potential sale or merger after attracting interest amid a boom in lodging deals.
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Mining giant BHP Billiton said that its iron ore production guidance for the 2016 financial year is under review, following incident at the Samarco Mineração iron ore operation in Minas Gerais, Brazil on Thursday last week. Each of BHP Billiton and Vale holds a 50% interest in Samarco. BHP Billiton stated that its Chief Executive Officer, Andrew Mackenzie, will go to Brazil this week to understand first-hand the human, environmental and operational impacts of the incident.
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COMPANIES - FTSE 250
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Wells Fargo, one of the biggest banks in the US, is understood to be weighing up takeover in the fund management sector, the Sunday Times reported. The Sunday Times said that Henderson Group and Jupiter Fund Management are both thought to be on the shopping list. Wells Fargo declined to comment to the Sunday Times.
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Temporary power provider Aggreko said it has maintained its pretax profit guidance for the year despite the tough conditions which have hit the company in 2015 continuing in the third quarter. The company said it continues to expect its pretax profit for the full year to be GBP250.0 million to GBP270.0 million, down from GBP289.0 million in 2014. The group said its revenue for the third quarter to the end of September was down 6.0% on a year before and was down 7.0% on an underlying basis.
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Dignity said it is set to outperform market expectations for 2015 thanks to a higher number of deaths in the UK year-on-year, though the funeral services company said it remains cautious on its outlook for 2016 given the number of deaths could fall significantly. The company said its revenue for the 39 weeks to September 25 was GBP227.0 million, up from GBP196.4 million, as the number of deaths in the period rose 9.0% to 446,000, up from 409,000. For the third quarter, the number of deaths was flat year-on-year, slowing the growth rate down to 9.0% from the 13.0% seen in the first half of the year.
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Hiscox, the Bermuda-based specialist insurer, said premiums grew by 13% in the first nine months of 2015, driven by its insurance lines, particularly its US retail business and its London Market bigger-ticket business arm. Hiscox also that a lack of storms, floods and hurricanes has helped claims experience, as has as a "good risk selection". That said, it currently expects net claims of USD10 million from the explosion in the port of Tianjin in China in August.
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Outsourcer Serco Group said it has reached a deal with the Australian government to amend the terms of its existing contract providing in-service support for Armidale Class Patrol Boats, which will result in the group booking significantly smaller provisions against losses from the contract in the future. Serco said the amendments made to the contract mean the deal will now end in 2017 rather than in 2022. Serco will provide maintenance and remediation work on an agreed cost recovery basis, which will be subject to strict cost caps and audit processes, it said.
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Property developer Capital & Counties Properties confirmed it is conducting a strategic review which may result in the sale of its Venues business, following press speculation about the unit. "Following the successful transition of shows from the former Earls Court Exhibition Centres and a major refurbishment programme, Capco confirms that it is conducting a strategic review which may or may not lead to a sale of its Venues business," the company said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Platinum miner Lonmin launched a rights issue that will almost double its issued share capital and allow the company to amend its debt facilities as it tries to bolster its balance sheet and mitigate current low platinum prices. In the latter half of October, Lonmin announced plans to launch a USD400.0 million rights issue, which if approved by shareholders, would also allow the company to increase and amend its debt facilities. On Monday, Lonmin said the fully underwritten rights issue will now raise gross proceeds of USD407.0 million and net proceeds of USD369.0 million.
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Home shopping and education supplies business Findel said Sports Direct International has requisitioned a general meeting of the company in order to propose the appointment of a representative to the board. At the end of September, Sports Direct acquired a stake of 18.93% in Findel, which owns home shopping retailer Express Gifts, an education supplies company and the Kitbag sports retailing unit. It has now requisitioned a general meeting to appoint Benjamin Gardener to the board.
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COMPANIES - INTERNATIONAL
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Lufthansa flight attendants will broaden their two-city strike to Munich on Monday, grounding 929 flights and about 113,000 passengers, according to the German airline. The walkout, launched on Friday by the flight attendants union Ufo to try to secure retirement benefits, hit the Frankfurt and Dusseldorf airports during its first two days, cancelling 800 flights and affecting more than 95,000 travellers.
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Swiss banking giant Credit Suisse Group may need to cut bonuses by as much as 60% this year because of losses incurred from a writedown, according to Schweiz am Sonntag. Credit Suisse' Chief Executive Officer Tidjane Thiam wants to substantially write down assets following the acquisition of investment bank Donaldson, Lufkin & Jenrette in 2000. Impairment charges on 6.3 billion Swiss francs in legacy assets could lead to an annual loss of CHF2.6 billion to CHF2.8 billion, the Swiss newspaper reported.
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Italian banking giant UniCredit plans to cut up to 12,000 jobs, and propose asset sales including its Austrian retail operations as management seek to avoid a capital increase, the Financial Times reported citing people familiar with the matter. The plan, which will be presented alongside third-quarter results on Wednesday, is a radical attempt by chief executive Federico Ghizzoni to boost profits and capital at Italy's only systemically important financial institution amid mounting pressure from investors and regulators, the report said.
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Billionaire Warren Buffett's Berkshire Hathaway announced that third quarter net earnings attributable to its shareholders surged to USD9.43 billion from USD4.62 billion in the year-ago quarter. The company's 2015 third quarter profit includes after-tax non-cash holding gain of USD4.4 billion that was recognized on July 2, 2015, in connection with the merger of Kraft Foods and HJ Heinz.
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Japan's industrial conglomerate Toshiba said it has sued five former executives for damages over their alleged role in an accounting scandal. The move comes after an independent investigative panel concluded that three former presidents, including Hisao Tanaka, and two ex-chief financial officers, should be held responsible for one of Japan's worst corporate scandals in years. The scandal-hit company said it was demanding the five men pay a total of JPY300 million. In July, then-president Tanaka and other executives were forced to step down to take responsibility for the scandal. On Saturday, Toshiba posted an operating loss of JPY79.5 billion in the July-to-September period due mainly to slumping computer and television sectors, compared with an operating profit of JPY90.2 billion in the same period last year.
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Plans to build Australia's largest coal mine faced another legal challenge with conservationists arguing that the mega-project could speed up climate change and "irreversibly" damage the Great Barrier Reef. The Australian Conservation Foundation filed its challenge in the Federal Court Monday saying that although the coal would be taken to India, the Australian government needed to consider the global impact burning it would have on the climate and in particular on the famous coral reef. It was the first challenge of its kind in Australian courts, the group said. The planned Carmichael mine in Queensland, owned by Indian energy giant Adani, is worth some AUD16 billion and has already faced two legal challenges.
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Monday's Scheduled AGMs/EGMs
DX Group
TR European Growth Trust
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By Tom Waite; [email protected]; @thomaslwaite
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