22nd Dec 2016 08:15
LONDON (Alliance News) - London share prices were narrowly mixed at the open Thursday, with third-quarter US GDP and the recapitalisation of tottering Italian bank Monte dei Paschi di Siena the main market risk events for the day ahead.
MPS is due to close its four-day recapitalisation bid on Thursday, and there were strong expectations that it is going to fall short of the EUR5 billion target, prompting the need for a top-up from the government. Italy's two houses of parliament on Wednesday approved a government request to increase the public debt by up to EUR20 billion to fund a rescue package for ailing banks, starting with MPS.
Highlighting UK company news, vehicle retailer and distributor Inchcape said it has agreed to pay GBP234.0 million in cash to acquire a Subaru and Hino Motors-focused distribution business in South America from subsidiaries and affiliates of Empresas Indumotora, a South America-focused vehicle distribution group.
Inchcape said the acquisition of the business will create a scale distribution platform for its operations in South America, adding Colombia and Argentina to its markets and boosting its presence in Chile and Peru.
The deal will mean Inchcape becomes the leading South American distribution partner for Subaru, the carmaking arm of Japanese transport conglomerate Fuji Heavy Industries, in addition to adding an attractive platform for Hino, another Japanese carmaker, in South America, it said.
Inchcape will fund the acquisition from its existing cash pile and debt facilities and said its balance sheet will remain strong after the deal.
The stock led FTSE 250 gainers early Thursday, up 4.5%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 7,023.52
FTSE 250: flat at 17,745.75
AIM ALL-SHARE: up 0.3% at 826.99
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Hang Seng: closed down 0.8% at 21,634.76
Nikkei 225: closed down 0.1% at 19,427.67
DJIA: closed down 0.2% at 19,941.96
S&P 500: closed down 0.3% at 2,265.18
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GBP: soft at USD1.2357 (USD1.2374)
EUR: flat at USD1.0440 (USD1.0430)
GOLD: soft at USD1,130.56 per ounce (USD1,131.16)
OIL (Brent): down at USD54.59 a barrel (USD55.01)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in GMT)
0900 Italy industrial orders and sales
0900 EU Economic Bulletin
1000 Italy retail sales
1100 Italy trade balance
1330 US gross domestic product
1330 US gross domestic product price index
1330 US durable goods orders
1330 US personal income and spending
1330 US personal consumption expenditures - price index
1330 US initial and continuing jobless claims
1330 US Chicago Fed national activity index
1330 Canada consumer price index
1330 Canada retail sales
1400 US housing price index
1500 US Conference Board leading indicator
1530 US EIA natural gas storage
1600 US Kansas Fed manufacturing activity
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German police are in a race against time to find a 24-year-old Tunisian considered to be dangerous and possibly armed and who is wanted in connection with Monday's deadly truck attack on a Berlin Christmas market. The authorities offered a reward of up to EUR100,000 for help in finding Anis Amri, who was already under surveillance in Germany for possibly planning a serious act of violence and is now the subject of a Europe-wide search. Amri, who has several aliases and was facing deportation, is believed to have fled the scene of the attack, which left 48 people injured and 12 people dead, including the truck's Polish driver, who was found shot, stabbed and bashed in the cabin.
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UK private sector growth picked up in the three months to the end of December, the Confederation of British Industry said, but the UK economy is expected to slow down slightly in the first quarter of 2017 as businesses look for clarity on Brexit negotiations. The CBI's Growth Indicator, a survey of 788 respondents across the manufacturing, distribution and service sectors in the UK showed a +17% reading, the highest since the +20% reading seen in December 2015. The CBI expects a "broadly similar growth" in private sector activity over the next three months, with predictions of "healthy growth" across most sectors. The CBI expects a reading of +15% in the three months to March 2017, representing a slowdown from the recent three months.
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Consumer confidence in the UK was marginally better in December, the latest survey from GfK showed, with an index score of -7. That beat forecasts for -8, which would have been unchanged from the previous month; however, the negative score shows that pessimists continue to outnumber optimists.
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Storm Barbara could cause Christmas chaos with strong winds expected to batter Britain during the festive season, the UK's Met Office warned. Scotland is predicted to be the worst hit by the weather, with gusts of up to 90mph forecast in places. Pockets of Northern Ireland, north Wales and the north of England are also due to feel the force of Barbara, which is due to roll in to the UK by Friday. The worst of any destruction is expected between Friday evening and Christmas Eve morning, but the potential for structural damage and disruption to some transport services means the storm's impact could be felt long after the winds have subsided.
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More than 4.5 million people will head abroad from the UK over Christmas and New Year, new figures from the Association of British Travel Agents showed. ABTA said Friday is expected to be the busiest day. Popular short haul destinations for winter sun include Tenerife, Lanzarote and Fuerteventura, while flights to Cape Verde, Jamaica, the Dominican Republic and Goa have seen strong demand by people taking long-haul sunshine breaks.
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Around 600,000 extra homes and businesses in broadband 'not-spots' in Britain are in line for superfast services, the UK Culture Secretary has announced. Some GBP440 million will be used to connect properties in the hardest-to-reach parts of the UK under the Broadband Delivery UK programme, Karen Bradley said.
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US president-elect Donald Trump, who has vowed to cancel or renegotiate multiple international trade agreements, will establish a new trade council inside the White House, his transition team said. The White House National Trade Council, which will mimic existing White House structures to advise and manage policies on national security, homeland security and the economy, will be headed by China hawk Peter Navarro, the transition office said. Navarro, co-author of the 2011 book "Death by China: Confronting the Dragon - A Global Call to Action," is an economics professor and past Democratic candidate for Congress from California.
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BROKER RATING CHANGES
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CREDIT SUISSE CUTS SKY TO 'NEUTRAL' (OUTPERFORM) - PRICE TARGET 1075 (980) PENCE
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TRADERS: MACQUARIE RAISES ITV TO 'OUTPERFORM' ('NEUTRAL')
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COMPANIES - FTSE 100
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Legal & General Group said Jeff Davies will become its new chief financial officer in 2017. L&G said Davies will take up the role following in the insurer's preliminary results announcement for calendar year 2016, at some point in spring 2017. Mark Gregory, L&G's current CFO, will step down from the board at the same time but remain an employee until the end of August 2017 to aid in the handover. Davies is currently a senior partner of Ernst & Young LLP, leading its European Risk and Actuarial Services practice.
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The chief executive of German exchange operator Deutsche Boerse has pushed back at calls for the headquarters of the combined Deutsche Boerse-London Stock Exchange Group to be moved to Frankfurt from London, the Financial Times reported Wednesday. Carsten Kengeter, the CEO of Deutsche Boerse, said the terms of the deal mean the group's local regulator in Hesse will retain oversight of its Frankfurt index, meaning the location of the headquarters will have little practical consequence.
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COMPANIES - FTSE 250
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Electra Private Equity said it has accepted GBP92.4 million worth of shares for repurchase under its most recent tender offer. Electra said almost 2.0 million shares were tendered, with the offer's strike price at 4,650.00 pence. The company intends to cancel the shares, reducing its total share capital to 38.3 million shares from 40.3 million shares. Shares in Electra Private Equity closed at 4,558.00p on Wednesday and were up 1.3% at 4,616.88p early Thursday.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Tool and equipment hire firm HSS Hire Group said it has raised GBP13.0 million via a placing to strengthen its balance sheet as it continues restructuring. HSS said its outlook for the year to the end of December 2016 remains unchanged but noted its restructuring programme has been extended into the first quarter of 2017. HSS will issue 15.4 million shares at 83.875 pence per share to raise the GBP13.0 million, in a placing run by Numis Securities. Major investors in HSS, private equity house Exponent and hedge fund Toscafund, will subscribe for 7.7 million shares each. Exponent will have a stake of just over 50% in HSS after the placing, broadly the same as its current holding, while Toscafund's stake will rise to 25% from 23%.
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Collectibles and model train manufacturer Hornby said it has appointed Martin George as a non-executive director. George is currently chief commercial officer of the Post Office as well as chairman of sporting goods manufacturer Grays International.
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Tungsten Corp completed the GBP29.6 million sale of Tungsten Bank. E-invoicing company Tungsten said the sale of the banking arm to Wyelands Holdings completed on Wednesday, and the business now has been renamed Wyelands Bank PLC.
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COMPANIES - INTERNATIONAL
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Investment bank Goldman Sachs has been fined USD120 million for manipulating information that affected interest rate products globally, US regulators said. According to the US Commodity Futures Trading Commission, between 2007 and 2012, Goldman Sachs traders attempted "on many occasions to manipulate and made false reports concerning the US Dollar International Swaps & Derivatives Association Fix, a global benchmark for interest rate products." In May, Deutsche Bank paid a penalty of USD50 million for ISDAFIX manipulation.
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Spanish banks need to come up with billions in repayment after the European Court of Justice ruled that a key element of many mortgage contracts was unfair to consumers. At issue is the use of "floor clauses," which require loan takers to continue to pay interest at a certain rate, even if prevailing interest rates fall significantly lower. The court ruled that Spanish banks had not sufficiently explained the rules of the loans to consumers and demanded they make restitution.
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Donald Trump and the chief executive of Boeing discussed the costs of a new presidential plane after the incoming US president threatened to cancel the order due to rising costs. Dennis Muilenburg reassured Trump that "we're going to get it done for less than" the USD4 billion Trump claimed the project would cost. Boeing is focused on "making sure we get the best capability, make sure the president is secure and that we protect national security and that we do it affordably," he told reporters after the meeting at Trump's Mar-a-Lago resort in Florida.
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Honda R&D Co, the R&D subsidiary of Japanese automaker Honda Motor Co, said it is entering into discussions with Waymo, an independent company of Alphabet, to integrate its self-driving technology with Honda vehicles. If both parties agree to enter into a formal agreement, Honda R&D engineers based in Silicon Valley, California and Tochigi, Japan, would work closely with Waymo engineers based in Mountain View, California and Novi, Michigan.
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Finland's Nokia has filed a number of complaints against Apple in Germany and the US, alleging that the iPhone maker's products infringe a number of Nokia patents. Nokia in a statement said that despite agreeing to license some patents in 2011, Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple's products.
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Swedish furniture giant Ikea will pay a total of USD50 million to the families of three toddlers who were killed in the US when dressers sold by the company tipped over, the families' law firm said. The money, part of a lawsuit settlement, will be divided evenly among the three families, Philadelphia-based law firm Feldman Shepherd said in a statement. Four deaths were associated with the company's "MALM" dressers, according to a November notice posted on Ikea's website and the company recalled 29 million chests and dressers.
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James Gertie, a native of Chicago, has filed a law suit against burger giant McDonald's restaurants in two Illinois counties over the price of its cheeseburger "Extra Value Meals". According to plaintiff, McDonald's " Extra Value Meal" of two cheeseburgers, medium fries, and a soft drink that costs at USD5.90 is 41 cents more than it would if when ordered each item individually off the regular menu. Gertie says his lawsuit filed this month is about principle, not about money. He has filed suit for a consumer fraud and deceptive practices lawsuit against McDonald's operator Karis Management Co.
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Thursday's Shareholder Meetings
Uvenco UK
Reconstruction Capital II
Avocet Mining (re Tri-K issue and listing downgrade)
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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