17th Jul 2020 08:03
(Alliance News) - The 27 leaders of the EU are to assemble in Brussels on Friday for the first time in months as they try for the second time to strike a deal on a colossal EUR750 billion shared economic recovery plan.
Last week, European Council President Charles Michel proposed a EUR500 billion share of loans to EUR250 billion share of grants, building on a previous suggestion by the European Commission.
He also slightly downsized the projected size of the EU's 2021-2027 spending plan from EUR1.100 trillion to EUR1.074 trillion euros.
This package suggestion will be at the centre of discussions to run Friday and Saturday. A deal is possible but far from guaranteed, according to EU sources and diplomats.
European Council officials may even go back to the drawing board during the summit and come up with a new proposal for EU leaders to consider, a senior EU source told dpa.
The 27 capitals may well need to hold another summit before the end of July, when the EU institutions wind down for their summer break.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 6,259.38
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Hang Seng: up 0.6% at 25,116.82
Nikkei 225: closed down 0.3% at 22,696.42
DJIA: closed down 135.39 points, 0.5%, at 26,734.71
S&P 500: closed down 0.3% at 3,215.57
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GBP: down at USD1.2549 (USD1.2607)
EUR: down at USD1.1382 (USD1.1429)
Gold: down at USD1,799.58 per ounce (USD1,805.00)
Oil (Brent): down at USD43.24 a barrel (USD43.72)
(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
Special EU Summit to discuss coronavirus recovery plan and long-term budget
1100 BST UK BoE Governor Bailey speaks at virtual Citizens' Panel Open Forum
1100 CEST EU harmonised consumer price index
1100 CEST EU construction output
0830 EDT US housing starts and building permits
1000 EDT US University of Michigan survey of consumers
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The NHS will get an extra GBP3 billion in funding to prepare for a possible second wave of the coronavirus pandemic, UK Prime Minister Boris Johnson is set to announce, PA reports. In the wake of a dire warning of the consequences of Covid-19 rebounding, Downing Street said the funding will allow extra hospital capacity while allowing routine treatments and procedures to continue. The prime minister will also use a Downing Street press conference on Friday to commit to a new target of reaching the capacity for 500,000 coronavirus tests a day by November.
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Britain, the US and Canada risked worsening fraught diplomatic ties with Russia by accusing Moscow-linked hackers of targeting labs in their countries conducting coronavirus vaccine research. The three governments pointed the finger at the Kremlin, saying that a hacking group called APT29 was "almost certainly" linked to Russian intelligence. In a separate claim, London said "Russian actors" sought to disrupt last year's UK general election by circulating leaked trade documents between Britain and the US. Both accusations came even before the publication in the coming days of a long-awaited British parliamentary report into alleged Russian interference in the 2016 Brexit vote. Russia quickly rejected the accusations as "groundless".
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BROKER RATING CHANGES
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DEUTSCHE BANK RAISES NATIONAL GRID TO 'BUY' (HOLD) - PRICE TARGET 940 (910) PENCE
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COMPANIES - FTSE 100
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Rio Tinto left its annual guidance unchanged after posting mixed second-quarter production figures. Bauxite and iron ore output grew in the three months to June 30, though there was a double-digit fall in titanium dioxide slag production, figures from the miner showed. Rio did edge its capex forecast higher. Capital expenditure for 2020 will be around USD6 billion, due to a weaker US dollar and a "reduced impact of Covid-19 on both sustaining and development expenditure". Rio had previously forecast annual capex between USD5 billion and USD6 billion. Capex forecasts for 2021 and 2022 have been nudged higher to USD7 billion from USD6.5 billion. "Production guidance remains unchanged across all commodities," Rio added.
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Irish support services firm DCC said trading in the first quarter ended June 30, was resilient and ahead of expectations, although behind the prior year due to the lockdown during April and May. DCC said operating profit in the DCC LPG unit was behind the prior year due to weakness in commercial and industrial volumes, particularly in Britain and Ireland. The DCC Retail & Oil division performed well in the quarter, driven by good performances from both the British and Danish businesses, it added. Operating profit in DCC Technology was behind the prior year, although trading improved steadily through the quarter, DCC said. The company added that DCC Healthcare performed strongly during the quarter, with operating profit well ahead of the prior year. Looking ahead, DCC said it has a diverse and resilient business model, leading market positions and an extremely strong balance sheet.
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Home emergency cover provider Homeserve said its Membership businesses, policy renewal and mid-term cancellation rates have continued in line with historic trends in a "traditionally quieter period" spanning April to mid-July. The home repairs and improvements company said it has felt no effects from the Covid-19 pandemic saying "customer satisfaction is at record highs", reflecting strong service levels during the pandemic. Further, M&A activity has restarted, it said, with a strong pipeline of targets and four profitable acquisitions completed in May and June, with the most significant of these bringing 38,000 new policy customers in Spain. Homeserve added that it continues to expect to deliver a solid performance in financial 2021.
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British Airways is retiring its entire Boeing 747 'Jumbo Jet' fleet, it said, following the huge hit to international air travel caused by the Covid-19 pandemic. "It is with great sadness that we can confirm we are proposing to retire our entire 747 fleet with immediate effect," the International Consolidated Airlines Group-owned carrier said in a statement to AFP. "It is unlikely our magnificent 'queen of the skies' will ever operate commercial services for British Airways again due to the downturn in travel caused by the Covid-19 global pandemic." The 400-passenger 747 was launched by Boeing in 1970, and dominated international air travel and cargo over the following decades. With 31 Jumbos in its fleet, BA currently flies more of the planes than any other airline, according to its statement. It added the last had been due to retire in 2024 as the carrier turns to more modern and fuel-efficient models like Boeing's 787 and the Airbus A350.
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COMPANIES - FTSE 250
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Essentra said its US subsidiary Essentra FZE has agreed to pay a USD666,543 fine to the US Department of Justice for a scheme to supply North Korea with tobacco products. The settlement resolves a 2018 investigation that found that two employees of Essentra FZE, who were subsequently dismissed by the company, knowingly agreed to participate in unauthorized transactions. "A very thorough and in-depth investigation has been carried out to fully understand the root cause of the issues we have seen. We have made a very significant investment of both time and money, which has now equipped us with enhanced protection against any potential future issues of this nature," said Essentra CEO Paul Forman.
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COMPANIES - MAIN MARKET AND AIM
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Ninety One posted a double-digit climb in assets under management during its first-quarter. Assets under management rose 14% to GBP118.0 billion at June 30, from GBP103.4 billion at the end of March. The second quarter of 2020, the first quarter of Ninety One's 2021 financial year, saw equities bounce as easing Covid-19 restrictions in some areas improved risk sentiment. Ninety One completed its demerger from Investec in mid-March.
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COMPANIES - GLOBAL
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Japan Bank for International Cooperation said it has signed a USD3 billion loan agreement to help Total finance the development of a liquefied natural gas project in Mozambique. JIBIC has signed the project financing, amounting up to USD3 billion, with Moz LNG1 Financing Co Ltd in Abu Dhabi. It is co-financed with the African Development Bank, the Export-Import Bank of the US, UK Export Finance, the Export-Import Bank of Thailand as well as 21 private financial institutions, bringing the total co-financing amount to USD14.4 billion. For the project, Mitsui & Co and Japan Oil, Gas & Metals National Corp, jointly with Total, Empresa Nacional de Hidrocarbonetos EP of Mozambique and others, will develop the Golfinho/Atum gas field in the north of Mozambique.
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Friday's Shareholder Meetings
Homeserve
K3 Capital Group
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By Tom Waite; [email protected]
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