1st Sep 2016 07:21
LONDON (Alliance News) - The "march of the makers", using former UK chancellor George Osborne's phrase, takes centre stage Thursday, as manufacturing PMI readings for August are released around the world. So far they have shown a stagnant sector in China and a shrinking one in Japan, but a remarkably busy set of factories in Ireland.
The key European countries, plus the UK, report over the next hour and a half, with the US in the afternoon.
UK shares were higher in early trade, led by miners and banks. Oil prices remained weak overnight, while the pound gained.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 6,821.59
FTSE 250: up 0.2% at 17,774.04
AIM ALL-SHARE: up 0.1% at 792.09
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Hang Seng: up 0.8% at 23,153.54
Nikkei 225: closed up 0.2% at 16,926.84
DJIA: closed down 0.3% at 18,400.88
S&P 500: closed down 0.2% at 2,170.95
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GBP: up at USD1.3147 (USD1.3116)
EUR: flat at USD1.1150 (USD1.1145)
GOLD: flat at USD1,307.60 per ounce (USD1,307.40)
OIL (Brent): flat at USD47.40 a barrel (USD47.20)
(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 BST)
0845 Italy Markit manufacturing PMI
0850 France Markit manufacturing PMI
0855 Germany Markit manufacturing PMI
0900 EU Markit manufacturing PMI
0930 UK Markit manufacturing PMI
1200 Ireland consumer confidence
1230 US Challenger job cuts
1330 US initial and continuing jobless claims
1330 US unit labor costs and nonfarm productivity
1430 Canada RBC manufacturing PMI
1445 US Markit manufacturing PMI
1500 US ISM manufacturing PMI and prices paid
1500 US construction spending
1530 US EIA natural gas storage
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The financial sector is now more likely to "dampen shocks" in the world economy "rather than amplify them", Mark Carney has said in a letter to G20 leaders as they prepare to meet this weekend. Carney, the governor of the Bank of England, has written the letter in his role as chairman of the Financial Stability Board, an international body which monitors the global financial system. He advises the leaders of the world's largest economies that the financial sector is now well placed to deal with any turmoil thanks to reforms put in place in the wake of the last financial crisis. The G20 leaders summit will take place on Sunday and Monday in Hangzhou, China. UK Prime Minister Theresa May is due to attend.
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Ireland's manufacturing activity expanded at a faster pace in August as new orders returned to growth, survey figures from Markit Economics showed. The seasonally adjusted Investec Purchasing Managers' Index rose to 51.7 in August from 50.2 in the previous month.
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The manufacturing sector in China was stagnant in August, the latest survey from Caixin showed with a manufacturing PMI score of 50.0. That was beneath expectations for 50.1, and it was down from 50.6 in July. Individually, production and new orders both advanced at slower rates, while export sales continued to decline. Job shedding persisted.
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The manufacturing sector in Japan continued to contract in August, albeit at a slower pace, the latest survey from Nikkei revealed with a manufacturing PMI score of 49.5. That's up from 49.3 in July. Individually, output increased slightly for the first time in six months. New Orders declined at a weaker pace.
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Authorities resumed search-and-rescue operations in northern Japan on Thursday after a powerful typhoon battered the region, leaving 11 dead and five missing. In Iwaizumi Town, Iwate prefecture, where 10 people died and two were still unaccounted for, some communities were cut off after Typhoon Lionrock triggered mudslides and flooding in the area, broadcaster NHK reported. Police discovered the bodies of nine elderly people at a nursing home for people with dementia Wednesday. The town failed to issue an evacuation advisory to the area where the facility is located despite repeated warnings of record rainfall in the region from weather authorities.
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Brazil's Senate overwhelmingly voted Wednesday to remove President Dilma Rousseff from office on charges of breaking budget laws, in the final phase of her impeachment trial. The 61-20 vote in the upper house of Congress, well clear of the 54 votes needed for a two-thirds majority, brings to an end 13 years of rule by the leftist Workers' Party. Interim President Michel Temer, of the centre-right Brazilian Democratic Movement Party, now takes over the leadership of Latin America's largest country until its next presidential election in 2018. Rousseff, who came to power in 2011 and was the country's first female president, stood accused of manipulating state budgets as she ran for re-election in 2014 as well as improperly granting loans to the federal government from state-owned banks. She denies any wrongdoing and has called her trial a right-wing "coup".
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Donald Trump doubled down on his controversial hard-line policy proposals on illegal immigration and border security in a tough-talking speech unlikely to broaden his appeal to moderate voters. The Republican Party candidate for president laid out a 10-point plan in which he promised to deport 2 million people he described as "criminal aliens", increase border patrols and assign a new "deportation task force", as well as cancel executive orders signed by US President Barack Obama that currently protect some undocumented immigrants from deportation. The speech capped a day in which Trump travelled to Mexico for a a hastily arranged meeting with Mexican President Enrique Pena Nieto. At a joint press conference after their meeting, the two men appeared cordial and succinct, but stuck to their guns on policy.
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BROKER RATING CHANGES
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CITIGROUP STARTS RECKITT BENCKISER WITH 'BUY' - PRICE TARGET 8650 PENCE
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CITIGROUP RAISES UNILEVER PLC TO 'BUY' (NEUTRAL) - PRICE TARGET 4060 (3850) PENCE
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COMPANIES - FTSE 100
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AstraZeneca said it has completed its commercialisation agreement with Aspen Global, part of the Aspen Group, for rights to its global anaesthetics portfolio outside of the US. This covers seven established medicines: general anaesthesia Diprivan, topical anaesthetic EMLA, and five local anaesthetics. AstraZeneca said that, as it will retain a "significant ongoing interest" in this portfolio, an upfront payment will be recognised in its third quarter, and this along with all future milestone and royalty payments, will be reported as "externalisation revenue" in its financial statements.
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FTSE Russell late Wednesday confirmed the changes that will take effect to its UK indices from the market open on Monday, September 19, following completion of its quarterly review. Russian miner Polymetal International will be added to the FTSE 100, replacing housebuilder Berkeley Group Holdings. Gaming company GVC Holdings and oilfield services company Hunting will be added to the FTSE 250, while car dealer Pendragon and biopharmaceutical company Circassia Pharmaceuticals will be deleted from the mid-cap index.
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COMPANIES - FTSE 250
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Guardian Media Group and a group of entities indirectly owned by Apax Europe VII sold a total of 80 million shares in Ascential for a total of GBP200 million, according to a stock exchange filing. The shares were sold at a price of 250 pence each, in a placing conducted by Bank of America Merrill Lynch. Shares in Ascential, a business to business media company, closed at 265 pence Wednesday. Following the completion of the placing, the Apax entities will hold an around 25% stake in Ascential, down from their previous stake of around 37%. Guardian Media's stake will be reduced to around 59.6 million shares, or a 14.9% stake, from its previous stake of around 22%.
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Recruitment company Hays reported growth in profit and net fees in its recently completed financial year, despite a Brexit-related slowdown in the UK jobs market, and promised to consider paying a special dividend as it returned to a cash-positive position. The FTSE-250 headhunter reported a pretax profit of GBP173.0 million for the full year ended June 30, up 11% year-on-year from GBP156.1 million. Hays declared a 2.90 pence full-year dividend, a 5% increase on the previous year's 2.76p. The company said that, once it achieved a net cash position of around GBP50 million, and assuming a positive outlook, it would return excess cash to shareholders "via special dividends or other appropriate methods".
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Self-storage provider Safestore Holdings said it expects its full-year adjusted earnings to be slightly ahead of current market expectations on the back of positive current trading. Safestore posted revenue of GBP28.6 million for the three months ended July 31, up 7.1% from GBP26.7 million a year earlier. Safestore said the rise in the third quarter was thanks to a particularly strong performance in the UK, where like-for-like revenue grew 7.5%, whereas like-for-like revenue growth was 2.3% in Paris.
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International Public Partnerships said the outlook for the UK and global infrastructure sector continues to be buoyant, after its net asset value rose in its first half. The infrastructure project investor said its net asset value rose to GBP1.37 billion at the end of June, up 6.3% from the GBP1.29 billion at the end of December.
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Inmarsat said it had successfully placed USD650 million convertible bonds due 2023, which is USD50 million more than its planned bond placing due to "considerable demand". The net proceeds of the issue of the new bonds will be used primarily to fund the around USD390 million repurchase of Inmarsat's outstanding 1.75% USD287.7 million convertible bonds due 2017 and their related accrued interest. The remainder of the proceeds will be used to "further strengthen" the satellite company's financial position, and support its investment strategy, Inmarsat said.
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COMPANIES - INTERNATIONAL
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Deutsche Bank and Commerzbank executives held talks about a potential merger earlier in August but decided against pursuing a transaction as the companies focus on restructuring their own businesses first, according to media reports citing people familiar with the matter. The reports noted that a combination would see Germany's top two banks combining their consumer businesses, with the opportunity to cut costs, and create a bigger European lender that would be able to compete more effectively. Both banks decided to focus on their internal reorganizations before revisiting a potential deal.
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Amazon.com and Wells Fargo terminated their partnership to offer college students a discount on private student loans. The program was announced just six weeks ago. Amazon.com and the US's third-largest bank by assets represented Amazon's first foray into the competitive market of lending to college students. For Wells Fargo, which has aggressively tried to build up its student loan business, the partnership was meant to help the bank reach millions of potential customers who shop on Amazon and might be enticed by the bank's half-percentage point discount on its higher-education loans.
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Tesla Motors disclosed in a regulatory filing that it has to pay USD422 million to its bondholders in the third quarter, and that it will raise additional money by the end of the year. The purpose of the additional capital, among other things, is to support its proposed merger with home-solar company SolarCity. Elon Musk is the chairman of both companies. The filing also revealed that in recent weeks, 15 institutional investors passed on either acquiring SolarCity or injecting equity into it. The company is having difficulty tapping the public markets amid the proposed merger and is facing a liquidity squeeze, the filing indicated. SolarCity's cash declined to USD146 million on June 30, from USD421 million a year earlier, the company has reported.
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L'Oréal announced that it has finalized the acquisition of IT Cosmetics. Founded in 2008 by Jamie Kern Lima and Paulo Lima, IT Cosmetics was developed with plastic surgeons to provide women with skincare and makeup products.
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The first commercial passenger flight between the US and Cuba in more than 50 years landed in the Cuban city of Santa Clara on Wednesday. The scheduled flight from the carrier Jet Blue left Fort Lauderdale in Florida at 9:50 am (1350 GMT) landed in Cuba just over an hour later.
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Thursday's Shareholder Meetings
Falkland Islands Holdings
Duke Royalty
Carclo
Sierra Rutile (re merge with Iluka Investments)
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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