7th Sep 2015 07:12
LONDON (Alliance News) - Shares have opened higher Monday, after the Shanghai stock market re-opened after a holiday without losses as bad as feared. At the London open, the Shanghai Composite index was down 2.6%.
The blue-chip FTSE 100 index is out-performing, led by Glencore shares, up 12%. The miner and commodities trader early Monday outlined plans to improve its financial position, including a USD2.5 billion capital raising plan and multiple capital preservation and debt reduction measures it will take, worth up to a combined USD10.2 billion in cost savings.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: up 1.2% at 6,112.86
FTSE 250: up 0.7% at 16,918.38
AIM ALL-SHARE: up 0.2% at 734.29
----------
Hang Seng: down 0.3% at 20,778.43
Nikkei 225: closed up 0.4% at 17,860.47
DJIA: closed down 1.7% at 16,102.38
S&P 500: closed down 1.5% at 1,921.22
----------
GBP: up at USD1.5185
EUR: flat at USD1.1135
GOLD: up at USD1,122.86 per ounce
OIL (Brent): down at USD49.20 a barrel
(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
Monday's Key Economic Events still to come
(all times in BST)
US Labor Day
Canada Labour Day
09:30 EU Sentix Investor Confidence
----------
The meeting of the G20 finance ministers and central bank governors that concluded in Ankara on Saturday expressed concern that global growth falls short of their expectations. The participants pledged to take decisive action to keep the economic recovery on track. In a communiqué released at the end of the meeting, they said, "we are confident the global economic recovery will gain speed. We will continue to monitor developments, assess spillovers and address emerging risks as needed to foster confidence and financial stability." While avoiding a direct reference to China, the statement said the group would refrain from competitive devaluations, and resist all forms of protectionism.
----------
China's economy last year expanded less than the government previously announced, data published by the National Bureau of Statistics showed. Gross domestic product grew 7.3% in 2014 instead of 7.4%. GDP totaled CNY 63.6 trillion, which was down by CNY 32.4 billion from the initial estimate. The revision to the service sector was the major reason for downgrading overall growth. Annual growth in the service sector was trimmed to 7.8% from 8.1%.
----------
China will lift trading restrictions on shares worth around CNY116.3 billion next week, a report said Sunday. The amount is nearly double what was unlocked earlier this week, the official Xinhua news agency reported. China in July suspended trading of over half its entire stock market after stocks plunged by around 40% from a peak in mid-June. The announcement came as the central bank said the stock market rout is close to ending and financial markets are expected to become more stable.
----------
Japan's leading index declined as expected to a four-month low in July, preliminary data from the Cabinet Office showed. The leading index that measures the future economic activity fell to 104.9 in July, in line with expectations, from 106.5 in June. This was the lowest reading since March, when the score was 103.9.
----------
UK Prime Minister David Cameron will propose diverting funds from Britain's aid budget when he outlines his plans to address the European refugee crisis in a speech to parliament, Chancellor George Osborne said. The government will use Britain's international aid budget to support thousands more Syrian refugees that Cameron has promised to allow into the country under a "fundamental re-think" of Britain's aid policy, Osborne told the BBC. "We have got a GBP12 billion aid budget, we spend GBP250 million on those countries like Syria, Jordan and Turkey," he said. "We have got to have a fundamental re-think of how we are using this budget," Osborne said. Cameron will outline his government's plan to parliament on Monday.
----------
German Chancellor Angela Merkel's coalition has agreed to a multi-billion euro boost in aid to help address the surge of migrants coming into Germany as nearly 20,000 asylum seekers fleeing the war in Syria arrived in the country over the weekend. A EUR6 billion package agreed early Monday after late-night talks in Berlin includes EUR3 billion in the 2016 federal budget, and a further EUR3 billion are earmarked to help states and local governments accomodate the migrants. For the current year, EUR1 billion of federal money was to be made available for aid to the migrants. Germany and Austria agreed on Saturday to take in refugees that had been so far prevented by Hungary from travelling further west, citing EU rules that require asylum seekers to file applications in the first EU state they arrive in.
----------
Germany's industrial production increased in July after falling in June, data from Destatis showed. Industrial production rose 0.7% month-on-month, reversing a revised 0.9% drop in June. Nonetheless, it was slower than the expected growth of 1.1%. Excluding energy and construction, industrial output was up by 0.3%. Energy production grew 1.9% in July, while construction output increased 3.2%.
----------
Hillary Clinton's quest for her party's US presidential nomination took a new turn Friday with a high-profile bid to defuse the controversy over her use of a private email server when she was secretary of state. In a long and rare interview with NBC news, Clinton, 67, went over well-travelled ground, defending the legality of her decision to use private email, which officials say sometimes was of a classified nature. But the headlines that greeted her performance told a different story: "Hillary Clinton refuses to apologize for email choices," wrote The Hill newspaper.
----------
BROKER RATING CHANGES
---------
UBS CUTS CENTRICA TO 'SELL' ('NEUTRAL') - TARGET 220 (275) PENCE
----------
BERNSTEIN RAISES CENTRICA TO 'OUTPERFORM' ('MARKET-PERFORM') - TARGET 280 PENCE
----------
BERNSTEIN RAISES UNITED UTILITIES TO 'OUTPERFORM' ('MARKET-PERFORM') - TARGET 1050 (1040) PENCE
----------
COMPANIES - FTSE 100
----------
Glencore outlined plans to improve its financial position, including a USD2.5 billion capital raising plan and multiple capital preservation and debt reduction measures it will take, worth up to a combined USD10.2 billion in cost savings. The multi-commodities miner and trading company said the USD2.5 billion fully-committed equity issue will be used to cut its debt pile and to increase its financial strength. It is 78% underwritten by Citigroup and Morgan Stanley an includes commitments from the group's chief executive, chief financial officer and several other board members, who will cover the remaining 22% of the issue.
----------
Tesco said it has struck a deal to sell its Homeplus business in South Korea to a consortium led by private equity group MBK Partners for GBP4.24 billion. The FTSE 100-listed retailer said it has sold the company to the MBK-led consortium, which also includes Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Temasek Holdings, following an auction process which has been running for the past few months and which attracted the attention of a number of prominent private equity suitors. Tesco said it will get a total of GBP4.0 billion in cash before tax and other transaction costs from the sale and said the deal will allow it to significantly reduce its GBP4.23 billion debt pile.
----------
Irish building materials company CRH said it has appointed Senan Murphy as its group finance director, effective from January 4, 2016. The FTSE 100 company said Murphy will take over from Maeve Carton, who will move to the role of group transformation director. Murphy joins from Bank of Ireland Group PLC, where is currently chief operating officer.
----------
Associated British Foods said its expectations remain unchanged for a decline in adjusted operating profit in its current financial year. The group, which owns discount fashion retailer Primark and British Sugar and which operates an agriculture and consumer goods arm, said that a rise in operating profit at constant currency in grocery, agriculture, ingredients and retail will be offset by a decline in the sugar business, which along with changes in foreign exchange rates will lead to an overall fall in adjusted operating profit for the full year.
----------
Starpharma announced it has signed a licensing agreement with AstraZeneca for development and commercialisation of compounds directed at a defined family of targets using its DEP drug delivery technology. AstraZeneca will fund all development and commercialisation costs under the agreement, including ongoing and future collaborative work conducted with Starpharma. Under the agreement, Starpharma will receive a signature payment of USD2 million and is also eligible to receive potential development, launch and sales milestones for the first AstraZeneca DEP product of USD124 million.
----------
Standard Chartered is considering cutting about a quarter of its senior banking positions as part of a plan by Chief Executive Bill Winters to reverse a two-year profit slide at the emerging-markets-focused lender, Bloomberg reported late Friday. Citing "people with knowledge in the matter", Bloomberg said the British lender plans to cut as many as 250 of about 1,000 managing directors. About 50 of those positions will be in the bank’s Middle East and North Africa operations.
----------
COMPANIES - FTSE 250
----------
Dechra Pharmaceuticals said it is currently trading in line with its expectations, although it warned it is still exposed to exchange rate volatility, as it reported a rise in pretax profit for its recently ended financial year. For the year to end-June, the veterinary pharmaceutical business posted a pretax profit of GBP25.8 million, up from GBP21.4 million a year before, as a 5.1% rise in revenue to GBP203.5 million from GBP193.6 million was partly offset by an increase in selling, general and administrative expenses as Dechra continued to invest in its products and sales organisations. Dechra took its total dividend for the year to 16.94 pence, up from 15.40 pence a year before.
----------
Real estate investor Redefine International said it has reached a conditional deal to acquire the AUK Portfolio from Aegon UK Property Fund for GBP437.2 million. Redefine said it will acquire the portfolio through its Redefine AUK subsidiary. The portfolio includes 19 properties in the UK, mostly in London and the South East, valued at a total of GBP439.9 million, with six single-let and the rest multi-let. In addition, Redefine said it has struck a GBP52.5 million deal to acquire Banbury Cross Retail Park in Oxfordshire.
----------
Industrial property company SEGRO said it has appointed real estate adviser CBRE to explore a possible sale of its Bath Road office portfolio in Slough. The portfolio comprises 972,300 square foot of office properties leased to a variety of companies and generates around GBP21.6 million in annual rent. SEGRO said there is no certainty a sale will take place, nor on the nature of any such transaction.
----------
MITIE Group said it has been given preferred bidder status by Rolls-Royce Holdings for the facilities management of its UK and specific European properties. The outsourcing company said that if the contract goes ahead, it will be one of its largest pan-European agreements.
----------
COMPANIES - LONDON MAIN MARKET AND AIM
----------
Tritax Big Box REIT said it has exchanged contracts on a conditional deal to acquire the land and provide forward funding for the development of a new distribution warehouse for Howden Joinery Group, the kitchens and joinery products supplier. Tritax said the warehouse is located at Warth Park in Northamptonshire and will comprise a gross internal area of 655,000 square feet. Tritax said the deal is worth GBP67.0 million and said this reflects a net initial yield of 5.03%.
----------
Action Hotels said it is teaming up with Mercure, a brand owned by French hotel group Accor, for its new hotel in Riyadh, Saudi Arabia. Action Hotels, which owns three and four star hotels in the Middle East and Australia said that the Mercure Riyadh Olaya will have 130 rooms and is being converted from an existing office building in the Olaya district. It is expected to open in the fourth quarter of 2016.
----------
China's Jinjing Group said any offer it would make for EKF Diagnostics Holdings would be made solely in cash, although it provided no further financial details of the potential offer. Towards the end of August AIM-listed EKF Diagnostics said that it had received a "highly preliminary approach" to acquire the entire company from Jinjing, although it noted there could be certainty that any offer will be made. At that time, EKF had said that a USD110 million bid made for its point-of-care business had been withdrawn following a higher bid for the assets of between USD115 million to USD120 million.
----------
COMPANIES - INTERNATIONAL
----------
Japanese conglomerate Toshiba, which is trying to recover from the impact of an accounting scandal, reported a loss for fiscal 2014, reflecting impairment charges and other losses. The company also restated its earnings for period from the fiscal year ending March 2009 until the third quarter of fiscal 2014, resulting in writedowns totalling 155 billion yen. An independent investigation panel had earlier found that the executives of Toshiba had overstated the company's operating profit by a total of 151.8 billion yen or USD1.2 billion over seven years. Toshiba has acknowledged the accounting fraud practices that began in 2008.
----------
Canadian power company Emera on Friday said it has agreed to buy US electric and gas utility Teco Energy Inc for USD27.55 per share in cash as part of efforts to expand into Florida and New Mexico. The deal represents an aggregate purchase price of about USD10.4 billion, including nearly USD3.9 billion of debt.
----------
Monday's Scheduled AGMs/EGMs
Petroceltic
Creston
Sepura
----------
By Tom Waite; [email protected]; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
AHCG.LAstrazenecaTescoHowden JoineryCentricaMitieStandard CharteredDPH.LCRHSegroTritax Big BoxGlencoreRDI.LAB FoodsEkf DiagnosticsUnited UtilitiesPCI.LSEPU.LConduit Hldg