16th Dec 2015 08:20
LONDON (Alliance News) - With a US interest rate decision by the Federal Reserve looming over proceedings Wednesday, shares are firm early in London. The Fed's two-day policy meeting ends Wednesday, with the announcement of whether or not it will raise rates for the first time in over 10 years due at 1900 GMT.
Ahead of that, UK unemployment data is due at 0930 GMT, together with a slew of PMI readings throughout the day.
Dixons Carphone provided a strong set of earnings and a positive trading update, saying: "a strong Black Friday was a great start to Christmas". The stock was up 2%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 6,044.82
FTSE 250: up 0.3% at 17,044.13
AIM ALL-SHARE: up 0.3% at 721.66
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Hang Seng: closed up 2.0% at 21,701.21
Nikkei 225: closed up 2.6% at 19,049.91
DJIA: closed up 0.9% at 17,524.91
S&P 500: closed up 1.1% at 2,043.41
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GBP: flat at USD1.5046 (USD1.5050)
EUR: flat at USD1.0935 (USD1.0926)
GOLD: up at USD1,064.60 per ounce (USD1,060.48)
OIL (Brent): down at USD38.21 a barrel (USD38.50)
(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)
08:30 Germany Markit Manufacturing, Services and Composite PMI Preliminary
09:00 EU Markit Manufacturing, Services and Composite PMI Preliminary
09:30 UK ILO Unemployment Rate, Average Earnings, Claimant Count
10:00 EU Trade Balance
10:00 EU Consumer Price Index
10:00 Switzerland ZEW Survey
12:00 US MBA Mortgage Applications
13:30 US Building Permits and Housing Starts
14:00 Switzerland SNB Quarterly Bulletin
14:15 US Industrial Production and Capacity Utilization
14:45 US Markit Manufacturing PMI Preliminary
15:30 US EIA Crude Oil Stocks
19:00 US Fed Interest Rate Decision and Economic Projections
19:30 US Fed Monetary Policy Statement and press conference
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The Greek Parliament voted in favour of reform measures that will pave the way for a EUR1 billion disbursement from its third bailout. The vote, which was referred to by Skai television as a "crash test" for the ruling leftist SYRIZA party and its right-wing coalition partner Independent Greeks, saw 153 lawmakers vote in favour, while 138 voted against and nine were absent. Among the reforms is the reorganization of a privatization fund selling state firms and overhauls in the banking sector that include a decision on how to treat bad loans.
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The EU should have the power to control its external borders if member states fail to do so, the bloc's executive proposed in a controversial bid to curb migration, while denying that it would forcibly intervene in countries. Border controls have usually been a jealously guarded national competence in the 28-country EU, but this year has seen some member states struggle to contain a flow of almost 1 million migrants and asylum seekers that have entered Europe. Greece, in particular, has come under fire for failing to secure its coastline and register all arrivals, effectively allowing people to pass through the country unchecked and on to wealthy countries such as Germany and Sweden.
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After nearly four years of debate, the European Commission agreed to new data protection rules that will give Europe's internet users more control over their personal data. Representatives from the EU-Commission, the European Parliament and from EU states agreed on a compromise to replace the 2-decade-old regulations currently in place. The new rules would go into effect in 2018. They include a clarified "right to be forgotten" that will allow for user's data to be deleted, provided there are no "legitimate grounds for retaining it," according to an EU statement. The decision also provides a right to data portability, allowing users to more easily transfer personal data between service providers. The age of consent for signing up to online networks that share data such as WhatsApp and Facebook was set at 16, though it allowed for individual countries to set the consent age at no younger that 13.
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The US and its partners are no longer seeking regime change in Syria, US Secretary of State John Kerry said Tuesday in Moscow after meeting with Russian President Vladimir Putin and Foreign Minister Sergei Lavrov. Speaking to reporters, Kerry quickly added that the US still does not believe that Bashar al-Assad has a future as the leader of the country. The US and the Western-backed opposition to al-Assad and their armed rebels had previously repeatedly said there would be no role for al-Assad in the future of Syria. But al-Assad's two close allies, Russia and Iran, have said his political fate should be up to Syrians to decide. With Kerry's statement Tuesday the US appeared to take a step toward the Russian position.
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The Republican presidential candidates turned a spotlight on US national security, terrorism and the candidates' views on the war in Syria. In the first debate since the terrorist attacks in Paris and San Bernardino, California, the candidates were pressed on foreign policy positions and how they would handle the responsibility of being commander in chief of the US military. Nine of the 13 candidates seeking the Republican nomination took the stage in Las Vegas in a forum that lasted more than two hours. The first question went to real estate developer and reality TV star Donald Trump, who was asked about his proposal to temporarily ban Muslims who are not US citizens from entering the US. Trump defended the idea, saying it is not about isolation or religion, but about security. He said that if he becomes president any foreign Muslims who arrived in the country during the Obama administration "are leaving. They are going. They're gone."
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BROKER RATING CHANGES
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TRADERS: CREDIT SUISSE RAISES BHP BILLITON TO 'OUTPERFORM' ('NEUTRAL')
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SOCGEN CUTS ANGLO AMERICAN TO 'SELL' ('HOLD') - TARGET 250 (530) PENCE
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COMPANIES - FTSE 100
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Rolls-Royce Holdings said it will ditch its divisional structure in the new year and move to a model of five market-facing businesses, part of the wider restructuring programme the group is enacting.
The jet engine and power systems engineer, which has been hit by a slew of profit warnings caused by pressures on all of its business units, said from January 1, it will end its current divisional structure, by which it operates under the Aerospace and Land & Sea units. Instead, it will operate as five market-facing units, covering Civil Aerospace, Defence Aerospace, Marine, Nuclear and Power Systems. The presidents of those five units will then report directly to Warren East, Rolls-Royce's chief executive.
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AstraZeneca said it has struck a deal to acquire the core respiratory business of Japan's Takeda Pharmaceutical for USD575.0 million. The pharmaceutical giant said the deal will include an expansion to AstraZeneca's rights to roflumilast, the chronic obstructive pulmonary disease treatment. AstraZeneca has marketed the treatment, under the Daliresp name, in the US since the first quarter of 2015. The rights also includes Daxas, the brand name for roflumilast in other territories outside the US.
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Royal Bank of Scotland Group confirmed it is now planning a trade sale of the Williams & Glyn retail banking business it is carving out from the rest of its operations, although preparations for an exit by initial public offering are continuing. The decision to go with a trade sale follows a number of "informal approaches" for Williams & Glyn, according to RBS, which wants to sign a binding deal to sell the business by the end of 2016. The approaches had been reported by Bloomberg on Monday.
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Electricals and mobile phone retailer Dixons Carphone said its pretax profit rose in the first half thanks to higher revenue and solid like-for-like sales growth, as it added two notable names to its board. The electricals retailer, created by the merger of Dixons Retail and Carphone Warehouse last year, said its pro-forma headline pretax profit for the 26 weeks to the end of October was GBP121.0 million, up 23% year-on-year from the GBP98.0 million it made a year earlier. The headline result strips out costs from the merger. The company will pay an interim dividend of 3.25 pence per share, up 30% year-on-year. Dixons Carphone also said it has appointed Ian Livingston, the former chief executive of telecoms giant BT Group, as its deputy chairman with immediate effect. Livingston earlier had been chief financial officer of the former Dixons Group. The company also appointed Tony DeNunzio, the former chief executive of the Asda/Wal-Mart supermarket business in the UK, as senior independent director.
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Japanese brewer Asahi Group Holdings and investment firm KKR & Co are among the companies considering bids for SABMiller's European beer brands, Bloomberg reported, citing people familiar with the matter. The sale of the beer brands are part of SABMiller's merger deal with Belgian-American brewer Anheuser-Busch InBev and would include the Peroni and Grolsch brands. Spanish beermaker Mahou-San Miguel Group and Cinven are also said to be interested in SABMiller's European beer brands.
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Outsourcing and distribution group Bunzl said trading remains in line with its expectations as it announced a trio of new acquisitions. Bunzl said trading has been in line with trends seen in the third quarter in the final months of 2015, and it expects constant currency revenue to grow around 5.0% for the full year. The group also said it has made three new acquisitions, respectively in France, Chile and Spain. It has acquired Comatec in France, which distributes tableware to restaurants and hotels, Emilio Saray Y Compania in Chile, which distributes catering products, and Faru in Spain, which sells personal protection equipment.
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COMPANIES - FTSE 250
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Fashion retailer SuperGroup said its pretax profit dipped in the first half due to the group booking exceptional costs which offset robust revenue growth. The company, which owns the Superdry clothing brands, said its pretax profit for the 26 weeks to October 24 was GBP11.5 million, down from GBP17.2 million, as it booked costs on the restructuring of its business in North America. Stripping out the exceptionals, the company said its pretax profit for the half rose to GBP19.3 million from GBP12.5 million. Supergroup has proposed paying a 6.2 pence interim dividend, having not paid an interim nor final dividend in the previous financial year.
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Transport operator National Express Group confirmed it has been selected as the operator of the Nuremberg S-Bahn contract in Germany. National Express said the decision to award it the contract came after it started operations on the Rhine Munster Express line in the country over the weekend. The group added it is seeing good trading in the run-up to Christmas, with its UK Coach, c2c and ALSA businesses all performing well.
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Property, residential, construction and services company Kier Group said it has secured around GBP300.0 million in new contract awards across its services and construction arms. These include securing two extensions to its existing contracts with Highways England, providing management and maintenance for the network, worth around GBP90.0 million.
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John Wood Group said it has landed a USD400.0 million contract from multi-national Statoil to provide services to its Norwegian assets, and said it has completed its recently announced acquisition of The Infinity Group. The main contractor framework agreement signed with Statoil is for an initial six years with an optional four-year extension and will see John Wood's Mustang division in Norway provide support for Statoil's Snorre A&B, Grane and Visund facilities, creating 250 new jobs.
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Domino's Pizza Group late Tuesday said it has formed a joint venture to acquire Joey's Pizza, the largest pizza delivery operator in Germany, for up to EUR79.0 million. The London-listed pizza deliver company said the venture was formed with Domino's Pizza Enterprises to make the acquisition. Domino's Pizza Group will own one-third of the venture, while Domino's Pizza Enterprises will own the majority. The pair will initially invest a total of EUR58.0 million in the venture to part-fund its planned acquisitions and costs. The London-listed group's share of that investment is EUR19.0 million. Domino's Pizza Group has the rights to own, operate and franchise Domino's Pizza stores in the UK, Ireland, Germany and Switzerland, while Domino's Pizza Enterprises holds the rights in Australia, New Zealand, France, Belgium the Netherlands, Monaco and Japan. The Domino's brand is owned by Domino's Pizza Inc, a listed US company.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Shares in Watchstone Group, formerly known as Quindell, were suspended from trading on AIM Wednesday morning pending an announcement. The company said the suspension was requested ahead of the court decision on the company's planned return of capital to shareholders and capital reduction. The group is planning to return 90.00 pence per share, or GBP414.0 million in total, from the sale of its professional services arm to Australian law firm Slater & Gordon.
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Elegant Hotels said its pretax profit fell in the last financial year, mainly because of the costs associated with its initial public offering earlier in 2015, as the company announced a 3.5 pence dividend for the full year. The company, which operates five hotels and a beach-front restaurant on the island of Barbados, said revenue in the financial year ended September 30 rose over 4% to USD60.1 million from USD57.6 million a year earlier, as it improved its average revenue per room, pushed up its daily rates and benefited from growth in tourist levels during the year.
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COMPANIES - INTERNATIONAL
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Yahoo Japan agreed to acquire travel website Ikyu for as much as JPY100.2 billion. Yahoo Japan is owned 35.5% by Yahoo Inc and 36.4% by SoftBank Group. Yahoo Japan said it is offering JPY3,433 per share, or 42% more than Tuesday's closing price.
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Ford Motor said it secured California autonomous vehicle driving permit to begin testing fully autonomous Ford Fusion Hybrid on public roads next year. Ford's Research and Innovation Center in Palo Alto is expanding autonomous vehicle research, including developing camera-based object recognition using high-performance graphics processing units for real-time image processing.
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Adidas Chairman Herbert Hainer does not rule out an end to the company's sponsorship of FIFA if football's world governing body does not reform itself. Hainer told the Handelsblatt newspaper in its Wednesday edition that FIFA was "on the right course" to reforms. Adidas, which has agreement with FIFA until 2030, would continue its partnership if reforms were accomplished. If not "we would consider what the alternatives are," he said.
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Wednesday's Scheduled AGMs/EGMs
Johnson Matthey (re special dividend, share consolidation)
NCC Group (re acquisition of Fox-IT)
Filtronic (re share issue)
Twentyfour Income Fund (re amendment of articles)
BowLeven
Epistem Holdings
Standard Life Equity Income Trust
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By Tom Waite; [email protected]; @thomaslwaite
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