19th Sep 2016 07:19
LONDON (Alliance News) - London share prices opened firm on Monday, in a week that will see monetary policy decisions from both the US Federal Reserve and Bank of Japan.
There is some prospect of change from the two Wednesday announcements, after both the European Central Bank and Bank of England kept their own policies intact at their September meetings.
Speaking of changes, the results of the latest FTSE index review are implemented on Monday. This means Russian miner Polymetal International moves into the FTSE 100 index, replacing housebuilder Berkeley Group Holdings which falls into the FTSE 250.
Gaming company GVC Holdings and oilfield services company Hunting are promoted to the mid-cap index, while biopharmaceutical company Circassia Pharmaceuticals and car dealer Pendragon drop out.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.9% at 6,773.65
FTSE 250: up 0.5% at 17,933.92
AIM ALL-SHARE: up 0.2% at 809.80
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Hang Seng: up 0.7% at 23,505.40
Nikkei 225: market closed for holiday
DJIA: closed down 0.5% at 18,123.80
S&P 500: closed down 0.4% at 2,139.16
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GBP: firm at USD1.3056 (USD1.3008)
EUR: flat at USD1.1165 (USD1.1162)
GOLD: firm at USD1,317.22 per ounce (USD1,310.00)
OIL (Brent): firm at USD46.49 a barrel (USD46.12)
(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 Japan Respect-for-the-Aged Day
09:00 EU current account
10:00 EU construction output
15:00 US NAHB housing market index
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A bombing injuring 29 people and the discovery of a second device blocks away in Manhattan, along with a blast in nearby New Jersey, prompted New York state officials to tighten security, just as the annual UN General Assembly debate ramps up this week. The blast Saturday night in the hip Chelsea neighbourhood destroyed a garbage bin. The site is 3 kilometres from United Nations headquarters on the East River. New York Mayor Bill de Blasio on Sunday vowed a "bigger than ever" police presence to protect the UN. US President Barack Obama was to meet Monday with Chinese Premier Li Keqiang and later Iraqi Prime Minister Haider al-Abadi at the Lotte New York Palace Hotel.
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The average asking price for a house in the UK was up 0.7% on month in September, property tracking website Rightmove said - coming in at GBP306,499. That follows the 1.2% contraction in August. On a yearly basis, house prices advanced 4.0% - slowing marginally from the 4.1% growth in the previous month. "The rising tide of prices is marooning more and more first-time buyers, out-stripping their ability to meet stricter lending criteria and afford the required deposits and monthly repayments," said Rightmove Director Miles Shipside.
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UK business confidence has fallen to a four-year low following the vote to leave the European Union, according to Lloyds Bank's Business in Britain report, the Independent reported. The report showed that expectations that sales, orders and profits will grow over the next six months slipped to 12% from 38% in January. More than a quarter of companies cited economic uncertainty as the main threat to growth, whilst 18% cited a danger from a drop in demand.
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City banks would lose their automatic right to conduct business in the European Union unless Britain accepts it cannot fully control immigration, Germany's top banker has warned. Bundesbank President Jens Weidmann said the UK would have to remain part of the European single market or at least the European Economic Area if its banks are to retain so-called "passporting rights" to provide services across the continent. EU leaders maintain that Britain cannot remain in the single market without accepting the free movement of people while the rules of the EEA bind its countries to free movement.
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EU leaders agreed on Friday to a six-month roadmap aimed at addressing popular fears over migration, terrorism and economic and social uncertainty, in talks that excluded their British counterpart following that country's decision to withdraw. "Although one country has decided to leave, the EU remains indispensable for the rest of us," the 27 leaders said according to a joint statement seen by dpa, adding that they are "determined to make a success" of the bloc. The roadmap outlines steps to tackle migration - with the aim of never allowing a return to the "uncontrolled flows of last year" - improve security and fight terrorism, strengthen EU defence cooperation and provide better youth opportunities.
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House prices in majority of the Chinese cities increased in August, figures from the National Bureau of Statistics showed. On a monthly basis, house prices climbed 64 cities out of 70 surveyed by the government. It fell in 4 cities and remained flat in 2 cities.
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The ruling United Russia party has secured more than 50% of votes in Russia's parliamentary elections, with approximately 30% of the count completed early Monday. United Russia has secured 52.05% of the vote, according to the Interfax news agency, quoting the Central Elections Commission. The Liberal Democratic Party of Russia, which contrary to its name is actually composed of far-right nationalists, is second best with 14.67% of the vote, closely followed by the country's communist party with 14.57%. The A Just Russia party has so far secured 6.28% of the vote. Prime Minister Dmitry Medvedev described United Russia's performance as a "very good result" in televised comments after polls closed. "It's obvious that United Russia will have a majority in the Duma. Let's see how much of a majority," Medvedev said, standing next to President Vladimir Putin, who expressed his support for the future legislature.
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BROKER RATING CHANGES
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Investec Lifts RBS To Hold From Sell, Price Target 200p
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HSBC INITIATES WHITBREAD WITH 'BUY' - TARGET 4800 PENCE
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TRADERS: HSBC INITIATES INTERCONTINENTAL HOTELS WITH 'REDUCE'
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TRADERS: MORGAN STANLEY RAISES SKY TO 'OVERWEIGHT' (EQUAL-WEIGHT)
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JPMORGAN RAISES WEIR GROUP TO 'OVERWEIGHT' ('UNDERWEIGHT'); TARGET 1775 (1220) PENCE
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COMPANIES - FTSE 100
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Polymetal International said it has secured a maiden resource estimate for the Viksha project in Russia. The miner acquired the property back in 2012, and the asset has had 166 diamond drill holes completed since then, with a mining licence application being submitted in the third quarter of last year and awarded this past July. Vishka is a palladium, platinum, gold and copper deposit located in the Republic of Karelia. The JORC-compliant resource stands at 213.0 million tonnes of indicated and inferred ore averaging 0.98 grammes of precious metals per tonne and 0.1% copper. The total amount of precious metal thought to be lying within the asset is 6.6 million ounces - "making Viksha one of the largest open-pittable platinum group metal resources in the world", the company said.
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A Chinese consortium is said to have been put together to bid for a majority stake in the National Grid's GBP11 billion gas business, the Sunday Times reported. The group is believed to include state-owned China Gas and conglomerate Fosun International, the newspaper said. Goldman Sachs is said to be advising the consortium, according to the report. Bids for National Grid's gas business are due later this month.
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COMPANIES - FTSE 250
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Facilities management firm Mitie Group said it anticipates operating profit for the full year will be materially below its previous expectations due to ongoing challenges across the business. Mitie said it has taken a hit from lower economic growth rates in the UK, changes to labour legislation, notably the introduction of the National Living Wage, and further constraints on public sector spending. Mitie has attempted to counter this with cost-cutting moves, but it expects these issues will weigh heavily in trading in the year to the end of March 2017, most sharply in the first half of the year. Mitie said it expects revenue in the first half to the end of September will be "modestly lower" year-on-year, but said operating profit will be "very significantly lower".
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Dairy Crest Group said it expects profit in the first half of its financial year to be ahead of the prior year's first half, while its expectations for the full year to end March 2017 remain unchanged. The dairy products producer said combined volumes of its four key brands Cathedral City, Country Life, Clover and Frylight, will be ahead of the first half of the prior year, which is an improvement on the current year's first quarter, when they were in line year-on-year.
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Flexible office space provider Workspace Group said it has secured planning permission for the redevelopment of Stratford Office Village. The village is located close to the Queen Elizabeth Olympic Park in Stratford, east London, and currently consists of self-contained offices. Workspace has secured permission to replace the existing buildings on the site with a redevelopment including 101 residential units and 13,000 square feet of new commercial space.
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HarbourVest Partners said late Friday it has received valid acceptances in respect of 41.5 million shares in SVG Capital, representing 26.6% of SVG's shared capital. HarbourVest now either owns or has valid acceptances in respect of 35.1% of SVG's share capital. In addition, it has received letters of intent from SVG's shareholders to accept the offer in respect of 16.1% of SVG's shares. This came after HarbourVest earlier urged shareholders in private equity investor SVG to accept its offer for the company, after SVG said earlier in the day that it had received approaches from several parties following HarbourVest's bid, and reported double-digit net asset value growth in the first half of 2016.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Wealth manager and corporate broker WH Ireland Group confirmed Kuwaiti European Holdings Group is attempting to acquire a stake in the company. WH Ireland said it was responding to press speculation. Sky News reported on Monday that Kuwaiti European Holdings, a Kuwait-based investment vehicle, was seeking a buy a 30% stake in the UK-listed broker. WH Ireland did not provide any further details other than confirming it was aware Kuwaiti European Holdings was trying to buy a stake and would make further announcements as required.
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Petra Diamonds said it expects to reach its production target one year earlier than planned, adding its profit dipped in its recently completed financial year after a rise in revenue and a fall in expenditure was offset by a large rise in finance costs. The diamond miner said production is expected to rise to 4.4 to 4.6 million carats in the financial year to end in June 2017, followed by another lift to 5.0 million carats in the year to the end of June 2018 - one year earlier than originally expected. Production in the year to the end of June 2016 amounted to 3.7 million carats, ahead of guidance and 16% higher than the previous year.
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Insurance technology firm Watchstone Group confirmed an earlier announcement that a claim will be made against the company by Australian law firm Slater & Gordon. Slater & Gordon said it will bring claims against Watchstone over its GBP637.0 million deal in March 2015 to acquire the professional services arm of Quindell, the controversial firm which morphed into Watchstone in late 2015. Not long after that deal was done, Quindell, was placed under investigation by the UK's Serious Fraud Office over its past accounting practices. Slater & Gordon also said GBP50.0 million of the price for the acquisition of the professional services arm is being held in escrow and is due to be released on November 29. Part or all of this money may be retained subject to the claim, it said.
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The owner of price comparison site Compare the Market has finalised the line-up of banks for its upcoming float in London, the Financial Times reported. BGL, the owner of the firm, is intending on floating Compare the Market in the first half of 2017 and has hired Bank of America Merrill Lynch, UBS and RBC Capital Markets to work alongside global co-ordinators Morgan Stanley and JPMorgan Chase on the listing.
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COMPANIES - INTERNATIONAL
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Samsung Electronics said it has sold shares in computer-drive maker Seagate Technology, chip maker Rambus, Dutch semiconductor-equipment maker ASML Holding and Japanese electronics maker Sharp. The divestment come as Samsung said this month it will recall 2.5 million Galaxy Note 7 smartphones globally after reports of the phones catching fire. Samsung didn't disclose how much it would raise from the share sales. But any cash generated from the sale would help it pay down costs from the recall. The South Korea-based tech giant said it sold its entire 4.2% stake in Seagate Technology and its whole 4.5% stake in Rambus. Samsung also confirmed the previously reported sales of half of its 2.9% stake in ASML Holding and its full 0.7% stake in Sharp.
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Novartis announced its Phase III EXPAND study showed that oral once-daily BAF312 (siponimod) significantly reduced the risk of disability progression compared with placebo in people with secondary progressive multiple sclerosis. BAF312 was generally safe and well tolerated, with a profile comparable to other drugs in the same class. Novartis said it will complete full analyses of the EXPAND data and evaluate next steps in consultation with health authorities.
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Sanofi announced it filed a patent infringement suit against Merck Sharp & Dohme on Friday in the US District Court for the District of Delaware. In its suit Sanofi alleges infringement of ten patents. The company noted that the suit was triggered by a notification received from Merck in early August, in which Merck stated that it had filed an New Drug Application or NDA with FDA for an insulin glargine drug product. Merck also stated that its NDA included a paragraph IV certification challenging all of the ten Sanofi patents listed in the FDA Orange Book for Sanofi's Lantus and Lantus SoloStar products.
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Monday's Shareholder Meetings
SacOil Holdings
Mercia Technologies
Norman Broadbent (re share subscription)
Pinewood Group (re recommended cash offer by Picture Holdco)
McColl's Retail Group (re acquisition of 298 convenience stores from Co-operative Group)
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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