14th Oct 2015 07:24
LONDON (Alliance News) - Shares have opened lower Wednesday, following another set of weak economic data from China. Miners Glencore and Anglo American are top losers at the open as a result.
Hargreaves Lansdown is the leading FTSE 100 gainer, up 4.1%, after reporting higher net new business inflows, client numbers and net revenue in its financial first quarter.
Intertek is up 1.1% after announcing a USD330 million US acquisition, and Sky is up 0.2% after being upgraded to Outperform by Credit Suisse.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.8% at 6,288.88
FTSE 250: down 0.4% at 16,825.69
AIM ALL-SHARE: down 0.1% at 733.66
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Hang Seng: down at 0.8% at 22,422.07
Nikkei 225: closed down 1.9% at 17,891.00
DJIA: closed down 0.3% at 17,081.89
S&P 500: closed down 0.7% at 2,003.69
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GBP: up at USD1.5278 (USD1.5242)
EUR: up at USD1.1418 (USD1.1376)
GOLD: up at USD1,173.66 per ounce (USD1,165.23)
OIL (Brent): down at USD49.07 a barrel (USD49.92)
(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 BST)
09:00 Italy Consumer Price Index
09:30 UK ILO Unemployment Rate and Average Earnings
10:00 EU Industrial Production
10:00 Switzerland ZEW Survey
12:00 US MBA Mortgage Applications
13:30 US Producer Price Index
13:30 US Retail Sales
15:00 US Business Inventories
19:00 US Fed's Beige Book
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China's inflation eased in September, reflecting a slowdown in food inflation, and producer prices extended their downward trend, adding to fears of deflationary pressure amid moderation in economic growth. Consumer price inflation slowed to 1.6% in September from a 12-month high of 2% seen in August. It was forecast to fall to 1.8%. Another report from NBS showed that producer prices fell at the weakest rate since late 2009, posting the 43rd consecutive month of decline. Producer prices dropped 5.9% annually in September, the same rate of decline as seen in August and matched expectations.
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The five contenders for the 2016 Democratic presidential nomination faced off in the campaign's first debate in Las Vegas on Tuesday, sparring over banking reform, the war in Syria and Edward Snowden. Former secretary of state Hillary Clinton, self-styled Democratic socialist Senator Bernie Sanders, centre-left former Maryland governor Martin O'Malley, centre-right former Virginia senator Jim Webb and former Rhode Island governor Lincoln Chafee vied for voters' attention ahead of state-by-state primaries which begin in January. In a lopsided race in which Chafee, Webb and O'Malley have failed to reach 1% in opinion polls, Clinton remains the clear front-runner in the race with support from 45% of likely Democratic voters in a Fox News poll issued Tuesday. But as the far-left Sanders has gained on her, polling second with 25%, Clinton has felt pressure from the left.
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BROKER RATING CHANGES
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GOLDMAN REMOVES ITV FROM 'CONVICTION BUY LIST' - 'BUY'
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CREDIT SUISSE RAISES SKY TO 'OUTPERFORM' ('UNDERPERFORM')- PRICE TARGET 1287 (630) PENCE
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TRADERS: MACQUARIE CUTS SOCO INTERNATIONAL TO 'NEUTRAL' ('OUTPERFORM')
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TRADERS: MACQUARIE CUTS TULLOW OIL TO 'NEUTRAL' ('OUTPERFORM')
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COMPANIES - FTSE 100
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Diageo said it has agreed to sell its US and UK wine operations to Melbourne, Australia-based Treasury Wine Estates Ltd for USD552 million in cash, as it offloads non-core assets. Diageo, which owns renowned spirits brands such as Johnnie Walker, Smirnoff, and Baileys, said the net proceeds of about GBP320 million, after tax and transaction costs, will be used to repay borrowings. Treasury Wines put the price tag at USD600 million when including the assumption of capitalised leases of USD48 million. The disposal will see the US-based Chateau and Estate Wines and the UK-based Percy Fox businesses transfer to Treasury Wine Estates.
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Xchanging recommended an offer from outsourcer Capita that values it at GBP412 million, although the business technology and services provider is still in talks with investment manager Apollo Global Management about a higher bid. In a statement, Xchanging said it was recommending Capita's 160 pence per share bid in the absence of a higher bid as it wants to give its shareholders the chance to ensure a "minimum certain outcome". The potential offer from Apollo values Xchanging at 170p per share. The stock was last quoted at 164.00p.
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Intertek Group said it has agreed to buy Professional Service Industries Inc for USD330 million in cash. US-based PSI provides testing and assurance services to commercial and civil construction markets. It was founded in 1961 and headquartered in Illinois, employing 2,400 people across the US. Intertek said it will finance the acquisition with debt facilities already in place.
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Fund supermarket Hargreaves Lansdown reported higher net new business inflows, client numbers and net revenue, though assets under administration were down 11% in a quarter hit by lower stock markets and weakness in investor confidence. Net new business inflows amounted to GBP1.43 billion in the quarter ended September 30, compared with about GBP970 million the corresponding quarter the prior year. Total active clients rose by 24,000 in the quarter against a 10,000 rise in the corresponding quarter the prior year. Assets under administration fell to GBP54.7 billion at the end of September from GBP55.2 billion at the end of June.
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Fresnillo said gold and silver production both rose in the first nine months of 2015 after the Herradura site became operational, and it experienced higher grades and processing volumes, leading it to reiterate its full-year guidance. The miner, the second largest gold producer in Mexico, said gold production in the third quarter of 2015 rose 16% year-on-year to 182,000 ounces due to an increase in gold recovery at Herradura, increased ore deposited at Noche Buena and a higher volume processed at Saucito.
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COMPANIES - FTSE 250
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Al Noor Hospitals Group said it has reached an agreement on the terms of a possible merger with South Africa's Mediclinic International. The combination will result in Mediclinic shareholders owning 84% to 93% of the enlarged group. On completion, Al Noor will be renamed Mediclinic International. Mediclinic Chief Executive Danie Meintjes will assume the same role of the enlarged group, while Mediclinic Chief Financial Officer Craig Tingle will remain in his position. Last Friday, Al Noor confirmed it had received a competing approach from London-listed peer NMC Health regarding a possible takeover offer. Al Noor made no mention of the NMC approach on Wednesday.
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Just Retirement Group said 34.5% of the shares made available under an open offer were applied for by shareholders, meaning the majority of shares were taken up in the associated placing which saw private equity firm Permira push its stake to over 48%. In September, Just Retirement, a pensions provider, and smaller rival Partnership Assurance both announced share placings in relation to the all-share merger between the two companies to form JRP Group PLC.
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Derwent London said it has secured an additional GBP5.2 million of rent per annum since mid-August on 93,600 square feet. Overall, the property investor said, lettings in 2015 to date total 488,200 square feet at a rent of GBP25.5 million per annum, 10.2% above the December 2014 estimated rental value. For the second half of the year, including lettings previously announced, Derwent London has let 165,600 square feet at GBP9.1 million per annum. That equates to, on average, 12.5% above June 2015 estimated rental value, the company said.
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Electronic and software technology company Ultra Electronics Holdings said it has acquired Furnace Parts LLC for a total cash consideration of USD12.0 million from Takoda Group. Furnace Parts is a developer and supplier of thermocouple-based temperature sensors for high performance and demanding applications in the nuclear and process control sectors. The acquisition of Furnace Parts will be financed using Ultra's existing credit facilities and it is expected to become earnings enhancing during 2016.
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COMPANIES - INTERNATIONAL
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Banking giant JPMorgan Chase reported a drop in revenue but higher net income in the latest quarter. Revenue was off 6.4% to USD23.5 billion in the third quarter from the year-ago period for the biggest US bank. The company attributed the decline to weaker performance from mortgage banking and other units. Net income was up 22%, reaching USD6.8 billion compared to a year ago. Chief executive Jamie Dimon attributed the revenue drop to "the impact of a challenging global environment and continued low rates reflected in the wholesale businesses' results."
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The US Securities and Exchange Commission announced that UBS has agreed to pay USD19.5 million to settle charges involving structured notes linked to a proprietary foreign exchange trading strategy. The SEC found that the Swiss financial services giant UBS acted negligently by misleading investors through material misstatements or omissions in the offering documents. The SEC noted that UBS did not disclose that it took unjustified markups on hedging trades, engaged in hedging trades with non-systemic spreads, and traded in advance of certain hedging transactions.
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Intel Corp, the world's biggest chipmaker, reported a drop in profit for the third quarter, as personal computer sales continue to decline. Intel generates a chunk of its revenues by selling chips for computers, however, the company has been negatively impacted by slowing demand for PCs and notebooks as tablets and smartphones continue to gain popularity. Santa Clara, California-based Intel's third-quarter profit dropped to USD3.11 billion or USD0.64 per share from USD3.32 billion or USD0.66 per share last year. On average, 41 analysts polled by Thomson Reuters estimated earnings of USD0.59 per share for the quarter.
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SanDisk is reportedly working with financial advisors to prepare for a possible sale of the company.
According to Bloomberg, citing people with knowledge of the matter, the chipmaker has hired an investment banker to look into its options. The news service added that SanDisk has received interest from two rivals, Micron Technology Inc and Western Digital Corp.
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A federal jury ruled Apple infringed on a University of Wisconsin patent when developing processors for some recent iPhones and iPads, according to reports. The jury hasn't yet ruled on damages. The university sought as much as USD862.4 million.
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Vonovia, Germany's leading private sector residential real estate company, said it intends to extend an offer to all Deutsche Wohnen shareholders to acquire all outstanding shares in the company.The aggregate transaction value amounts to around EUR14 billion. The offer aims to integrate the two companies' portfolios, with Deutsche Wohnen's 140,000 properties complementing Vonovia's portfolio of 370,000 residential units.
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Wednesday's Scheduled AGMs/EGMs
Imperial Innovations
Diverse Income Trust
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
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