16th May 2016 07:20
LONDON (Alliance News) - Shares started the week lower in London Monday, with only about a dozen FTSE 100 stocks in positive territory, primarily miners.
Anglo American, Fresnillo and Antofagasta led blue-chip risers, while insurer Prudential was the biggest faller, down 1.5%.
Chinese economic data over the weekend came in weaker than expected, though Asia stock markets were trading higher Monday. German markets are closed for Whit Monday, but those in France remain open.
Meanwhile, interdealer broker ICAP has revealed the new name for the business that will remain after the sale of its voice-broking business to Tullett Prebon. ICAP said the name NEX Group "encompasses the spirit of an agile and innovative company that is robust, resilient and trusted."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.5% at 6,106.16
FTSE 250: down 0.2% at 16,614.57
AIM ALL-SHARE: down 0.1% at 723.71
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Hang Seng: up 0.7% at 19,854.03
Nikkei 225: closed up 0.3% at 16,466.40
DJIA: closed down 1.1% at 17,535.32
S&P 500: closed down 0.9% at 2,046.61
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GBP: firm at USD1.4373 (USD1.4353)
EUR: up at USD1.1324 (USD1.1283)
GOLD: up at USD1,282.09 per ounce (USD1,269.64)
OIL (Brent): up at USD48.51 a barrel (USD47.85)
(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 BST)
holiday Germany, Switzerland and France for Whit Monday
11:00 German Bundesbank monthly report
13:30 US NY Empire State manufacturing index
15:00 US NAHB housing market index
15:30 Bank of Canada review
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UK Prime Minister David Cameron warned that leaving the European Union would be a "national error" as he sought to reach out to Labour supporters in the referendum campaign. In an article for the Labour-supporting Daily Mirror, the Prime Minister said he was backing Remain for the sake of jobs, security and Britain's place in the world. "It's not every day you get a Tory Prime Minister writing in the Mirror. But then it's not every day we face a decision of this magnitude: whether to stay in the EU, or walk away," he said.
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Boris Johnson faced a furious political backlash after he compared EU efforts to build a federal super state to Hitler's plans to dominate the continent. While the former London mayor acknowledged the EU was using "different methods" to the Nazis, Remain campaigners said his incendiary comparison to the Third Reich showed he was unfit for high office. However pro-Brexit Tories said he was simply stating a "historical fact of life" about the failure of successive attempts over the centuries to establish a "greater Europe". The latest row erupted after Cameron was attacked last week by Leave campaigners for suggesting that British withdrawal from the EU could lead to the outbreak of the Third World War.
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The Confederation of British Industry downgraded its UK growth outlook as uncertainty ahead of the EU referendum weigh on investment plans. The business lobby lowered its growth outlook to 2% for both 2016 and 2017. The projection for 2016 was lowered from 2.3% and that for 2017 from 2.1%. There are signs that uncertainty over the outcome of the EU referendum is having a tangible impact on the spending plans of some firms, the CBI said.
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The average asking price for a house in the UK was up 0.4% on month in May, the latest survey from property tracking website Rightmove revealed - coming in at GBP308,151. The headline figure was in line with expectations following the 1.3% jump in April. On a yearly basis, house process advanced 7.8% - also matching forecasts and up from 7.3% in the previous month.
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China's industrial production and retail sales grew less-than-expected in April, damping hopes of stabilization in the economy. Industrial production rose 6% year-on-year, which was less than the 6.5% growth economists had forecast. In March, production increased 6.8%. The National Bureau of Statistics attributed the slower growth in production to weak external demand, poor performance in the mining industry, rising commodity prices and seasonal factors. A separate report from NBS showed that retail sales rose 10.1% year-on-year in April, which was also less than the 10.6% gain economists' had expected.
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Japanese Prime Minister Shinzo Abe is set to postpone a consumption tax hike scheduled for next April over fears that it would derail efforts to boost prices, the Nikkei business daily reported Saturday. Abe is likely to deliberate more on the matter and announce the decision only after the Group of Seven leaders' summit to be held in Japan later this month, the report said. It remains unclear as to the how long Abe wants the tax hike to be delayed.
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Producer prices in Japan were down 0.3% on month in April, the Bank of Japan said. That missed forecasts for an increase of 0.2% following the 0.1% decline in March. On a yearly basis, prices dropped 4.2% versus expectations for a fall of 3.7% following the 3.8% contraction in the previous month.
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A suspicious item that forced the evacuation of Manchester United's Old Trafford stadium on Sunday was later identified as a training device left behind by a private company, police said. The Premier League match between United and Bournemouth was postponed after the item was discovered just prior to kick-off. After conducting a controlled explosion at the stadium, officials said the item was a training device that had accidentally been left by the private company following the training exercise. The season-ending match will now be played Tuesday, the Premier League said.
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Six Islamic State suicide attackers forced their way into a natural gas facility north of Baghdad on Sunday, triggering a gun battle that set three gas storage units ablaze, security forces said. The six militants entered the Taji plant in the early morning with an explosive-rigged car but were shot dead by guards, said General Saad Maan, spokesman of the Baghdad Operations Command. Other security officials and witnesses said that five people were killed and 14 injured in the attack.
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Police arrested dozens of people Saturday after an anti-coal protest that blocked operations at an open-cast mine in eastern Germany led to violent clashes between demonstrators and security personnel. Police said up to 1,000 environmental activists from countries across Europe occupied the Schwarze Pumpe - or "Black Pump" - Power Station near the city of Cottbus in Brandenburg state. Coal trains were blocked access to the plant as a result, according to reports from protest group Ende Gelaende and utility firm Vattenfall, which owns the facility.
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Venezuelan President Nicolas Maduro warned late Saturday authorities would seize any factories who stop production, and throw their owners in jail. Pro- and anti-government demonstrators took to the streets earlier Saturday, as the economic crisis grips the country, and food, fuel and medical supplies have been rationed since January. The opposition has gathered 1.8 million signatures on a petition to force a recall referendum, which could oust Maduro. But election authorities on Friday declined to verify the petition, the next required step in the process.
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Brazil's interim government said Friday it plans to radically cut public spending in a bid to lift the country out of its economic crisis, but that popular social programmes would be spared. Interim President Michel Temer sketched out the plans in his first cabinet meeting, a day after a contentious Senate vote suspended President Dilma Rousseff pending an impeachment trial and installed Temer, her former vice president, in her place. Brazil's newly minted economy minister, Henrique Meirelles, told media the government would take "tough measures" to tackle the economic crisis. He said it planned to tighten spending, target tax loopholes and go over public contracts with a "fine-toothed comb." He said the government would consider new taxes in a bid to balance budgets and reduce the "unsustainable" growth of debt, which he blamed for the country's economic crisis.
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A court in Argentina on Friday indicted former president Cristina Fernandez de Kirchner for "unfaithful administration" in an alleged currency manipulation scheme, according to the CIJ legal news agency. Judge Claudio Bonadio indicted Kirchner as well as her former economy minister Axel Kiciloff, former central bank director Alejandro Vanoli and 12 others on charges of irregularities in the operations of the country's central bank at the end of Kirchner's second term in 2015. According to the indictment, the central bank colluded with the government ahead of elections in November 2015, which Kirchner lost, to sell billions of dollars in currency futures at below-market rates. The scheme cost the country millions in losses, according to the charges.
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COMPANIES - FTSE 100
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British Land said its current committed development pipeline is "modest", but said there were significant opportunities across its portfolio, as it posted a slip in full-year pretax profit on lower valuation gains. The property developer reported a pretax profit of GBP1.33 billion for its financial year that ended March 31, down from GBP1.79 billion a year earlier, despite revenue rising to GBP590.0 million from GBP556.0 million. British Land said this was "primarily due to a reduced level of property valuation movement reflecting the slowdown in yield compression and the recent increase in stamp duty on commercial property". For the recently ended financial year, British Land's valuation movement was a positive GBP616.0 million, down from a positive GBP884.0 million the year earlier.
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COMPANIES - FTSE 250
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Interdealer broker ICAP announced plans to change its name to NEX Group, as profit and revenue for the year to the end of March declined. Having agreed to sell its hybrid voice broking and information arm to rival Tullett Prebon, a deal expected to complete later this year, ICAP said it will change its name to NEX Group after the deal completes. ICAP said the Tullett deal remains on track. The change of moniker came as ICAP said pretax profit for the year to the end of March fell to GBP89.0 million from GBP95.0 million the year prior. Revenue declined 6.0% to GBP1.20 billion from GBP1.28 billion amid what the FTSE 250 group called "challenging" market conditions.
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Crest Nicholson Holdings said it has seen signs that both sales prices and build costs are moderating in its first half, as it said it was continuing its strategy to grow its average selling price. The housebuilder said it is on track to reach its stated target of GBP1.00 billion revenue for the full year to October 31, after having seen a good performance in its first half to April 30.
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Specialty chemicals company Victrex said pretax profit and revenue dipped in the first half amid mixed trading in end markets, though it forecasts an improvement in the second half. The polymer products company, which makes pipes, films and coatings, said pretax profit for the half to the end of March was GBP47.5 million, down 12% from the GBP53.9 million made a year earlier. Revenue for the half fell 10% to GBP117.0 million from GBP130.3 million, and the group's gross margin declined 200 basis points to 62.9% from 64.9% year-on-year, mostly due to new plant costs. Victrex said it will pay a flat interim dividend of 11.73 pence.
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Technical products and services company Diploma said profit declined in the first half of its financial year despite a rise in revenue as currency effects and acquisition costs hit operating margin. The FTSE 250-listed firm said pretax profit for the six months to March 31 was GBP25.6 million, down 2.0% year-on-year from GBP26.0 million. Revenue grew 10% to GBP179.1 million from GBP163.2 million, but the group's adjusted operating margin shrunk to 17.2% from 18.1%. Diploma said it will pay a 6.2 pence interim dividend, up 7.0% year-on-year.
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Student accommodation provider Unite Group said it has exchanged contracts with Portsmouth City Council to acquire a new development site which will house around 480 students when it is delivered by 2018. Unite will acquire, subject to planning permissions, the Chaucer House site on Isambard Brunel road in Portsmouth, and the total cost of development including the purchase price is expected to be around GBP30.0 million, the company said.
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Security services and outsourcing company G4S is understood to be planning to capitalise on a retrenchment by traditional lenders by opening mobile or high street banking units in the UK and Europe, the Financial Times reported. G4S told the FT it was in talks with banks in the UK, Netherlands, Cyprus, Greece, Belgium and Ireland over the launch of high street branches. The idea behind the plans would be for G4S to provide cash handling and depositing services for customers of different lenders from the same outlet. G4S, using its fleet of armoured vehicles and its secured locations across the country, already transports and stores cash for central banks, high street lenders, retailers and public services bodies.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Lonmin said it remains on track to deliver its full-year guidance, after reporting a narrower loss in the first half thanks to a small rise in revenue and a fall in impairments and other items. The platinum miner operating in South Africa reported a pretax loss of USD21.0 million in the six months to the end of March, compared to the USD118.0 million loss booked a year earlier, after revenue experienced a slight lift and the level of impairments booked fell. Revenue in the period rose to USD515.0 million from USD508.0 million a year earlier.
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COMPANIES - INTERNATIONAL
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European antitrust authorities will impose a fine on Google in coming weeks for abusing its dominance of the online search market in the region, the UK's Telegraph newspaper reported. The European Commission is planning to fine the Internet search provider about EUR3 billion, the report said. That would surpass its toughest antitrust punishment to date, a EUR1.1 billion fine levied on Intel. The report indicated that the European authorities also will ban Google from continuing to manipulate search results to favour itself and harm rivals.
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Drugs giant Pfizer has introduced restrictions on its products to stop them being used for executions. The new rules mean there are no more approved sources for the drugs used in lethal injections, the most common method of execution in the US, the New York Times reported Friday. "We strongly object to the use of any of our products in the lethal injection process for capital punishment," the company said in a statement.
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Monday's Scheduled AGMs/EGMs
John Laing Infrastructure Fund
Gym Group
Pittards
Satellite Solutions Worldwide Group
Chesnara
RusPetro (re de-listing)
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By Tom Waite; [email protected]; @thomaslwaite
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