14th Mar 2016 08:06
LONDON (Alliance News) - Stocks in London opened slightly higher Monday ahead of a week likely to be dominated by monetary and fiscal policy.
Chancellor of the Exchequer George Osborne presents the UK Budget on Wednesday, while central bank policy statement are due from the Bank of Japan on Tuesday, the US Federal Reserve on Wednesday, and the Bank of England on Thursday.
The UK Financial Conduct Authority and HM Treasury published the recommendations from their Financial Advice Market Review, calling for a series of reforms to make financial advice and guidance better for consumers.
The review found a "clear need for intervention" both by the FCA, the City regulator, and the UK government in order to help consumers and the financial advisory industry benefit from more cost-effective methods of delivering financial advice.
The review calls on the UK government to launch a consultation on narrowing the definition of regulated advice so that it is limited to personal recommendation. The report said this would create a "single definition for regulated financial advice" and would remove barriers for some firms seeking to offer advisory services.
The review also called on the UK government to allow consumers to access a small part of their pension pot to redeem against the cost of pre-retirement advice. It also calls for the government to explore ways to improve the existing income tax and National Insurance exemption for employer-arranged pension advice.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 6,145.98
FTSE 250: up 0.3% at 16,637.76
AIM ALL-SHARE: up 0.1% at 703.25
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Hang Seng: up 1.2% at 20,435.34
Nikkei 225: closed up 1.7% at 17,233.75
DJIA: closed up 1.3% at 17,213.31
S&P 500: closed up 1.6% at 2,022.19
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GBP: flat at USD1.4370 (USD1.4391)
EUR: soft at USD1.1139 (USD1.1181)
GOLD: soft at USD1,255.10 per ounce (USD1,260.50)
OIL (Brent): flat at USD40.17 a barrel (USD40.47)
(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 GMT)
1000 EU Industrial Production
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UK Chancellor of the Exchequer George Osborne is finalising the details of a fresh wave of spending cuts that will see him wield the axe across a number of government departments. The Chancellor insisted "we need to act now so we don't pay later" as he paved the way for a further financial squeeze in the upcoming Budget on Wednesday. Savings equivalent to 50p in every GBP100 the Government spends needed to be found by 2020, the Chancellor said. But the cuts were "not a huge amount in the scheme of things", Osborne told BBC One's Andrew Marr Show.
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US President Barack Obama's intervention in the EU referendum debate is a "piece of outrageous and exorbitant hypocrisy", London Mayor Boris Johnson has claimed. The US president's warnings that Britain will lose influence on the world stage if it quits the 28-member bloc are also "wholly fallacious", according to the mayor. New York-born Johnson attacked the US for interfering in the debate, when it defends its own sovereignty with "hysterical vigilance". Downing Street has refused to comment on reports that the US president, who has previously made it clear that America wants its closest ally to remain part of the EU, is heading to the UK next month to make the case to voters.
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The Irish construction activity expanded at the fastest pace since records began in June 2000, survey data from Markit showed. The Ulster Bank Construction Purchasing Managers' Index rose to 68.8 in February from 63.6 in the previous month. This was the highest reading in the history of the survey, surpassing the previous peak set in November 2004.
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China can achieve its recently set economic growth targets for this year and until 2020 without further monetary stimulus, China's central banker said. "China will stick to a prudent monetary policy," Zhou Xiaochuan, governor of the People's Bank of China, told reporters on the sidelines of the annual parliament session in Beijing. Zhou said the focus should be on creating growth without employing extra monetary measures. The targets "can be realized through improving domestic demand, consumption and innovation, without major stimulus," he said.
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China will not relaunch the "circuit breaker" mechanism in its stock markets in the next several years, the chief of the country's securities regulator said. The China Securities Regulatory Commission was widely mocked for introducing the mechanism, which halted nationwide trading twice during one week in early January and sent shockwaves through world markets. It had "failed due to lack of acknowledgement of the makeup of investors, in which smaller investors are main players," Liu Shiyu told reporters. The head of the commission at the time, Xiao Gang, was forced to step down last month amid growing criticism about the regulator's actions during months of volatility in the country's main stock markets.
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China's industrial production grew at the slowest pace since the financial crisis and retail sales rose at a slower pace at the start of the year, adding pressure on policymakers to roll out new measures to kick start economic activity. Industrial production expanded 5.4% in January and February, which was slower than the 5.9% increase seen in December, data published by the National Bureau of Statistics showed over the weekend. This was the weakest growth since late 2008. Economists had forecast 5.6% growth for January to February. Retail sales growth for the first two months of 2016 came in at 10.2% compared to 11.1% growth registered in December. The increase was slower than the consensus estimate of 11% growth and was the slowest since May 2015.
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Core machine orders in Japan surged 15.0% on month in January, the Cabinet Office said - coming in at JPY934.7 billion. The headline figure far exceeded forecasts for an increase of 1.9% following the downwardly revised 1.0% gain in December (originally 4.2%). On a yearly basis, core machine orders spiked 8.4% - also topped expectations for a decline of 3.8% following the 3.6% contraction in the previous month.
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German voters dealt a stinging rebuke to Chancellor Angela Merkel and her open-door refugee policy in three state elections Sunday, delivering historic gains for an upstart anti-immigrant party, according to reports. The reports indicated that the populist Alternative for Germany, which focused its campaign on opposition to Merkel's migrant policy, won nearly a quarter of the vote in the eastern state of Saxony-Anhalt. The result - several percentage points higher than recent polls had suggested - represents the party's best total in a regional election since its founding three years ago.
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At least 34 people were killed and 125 wounded in a car bombing late Sunday in the heart of the capital, Turkish Health Minister Mehmet Muezzinoglu said after a meeting of top government security officials. The blast took place in the central area of Kizilay Square at a bus stop. Most of the casualties were feared to be civilians, according to local media reports. Two suspected suicide attackers were among the dead.
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Several gunmen attacked three beach hotels in the historic town of Grand-Bassam, Ivory Coast, killing at least 22 people, police said. Four Westerners were among the dead, police spokesman Bredou M'Bia told dpa. The assailants have not yet been identified. A branch of the global terrorist network al-Qaeda claimed responsibility for the attack, according to a report by French broadcaster RFI. Authorities said that gunfire continued late Sunday in one of the hotels between at least one attacker and French and Ivorian security forces.
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The number of migrants at the overcrowded Idomeni camp on Greece's border with Macedonia will be significantly reduced in one week's time, Greek Deputy Defence Minister Dimitris Vitsas told TV network Skai. Some 12,000 migrants are stranded at the makeshift camp, blocked from moving out of Greece by neighbouring Macedonia and other countries further along the Balkan route to wealthier northern Europe. The government began handing out flyers on Saturday that informed migrants in Arabic, Farsi and Pashto that the border was closed and urged them to accept accommodation at shelters elsewhere in Greece.
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Several hundred thousand demonstrators called for the ouster of President Dilma Rousseff in rallies Sunday across Brazil, with her party embroiled in a widening corruption scandal. Rousseff has come under immense pressure since prosecutors filed money-laundering and other corruption charges against her predecessor and mentor, Luiz Inacio Lula da Silva. The opposition has accused Rousseff of being privy to the kickback payments, which she strongly denies. Some 100,000 protesters gathered in Brasilia to demand that Rousseff step down, the newspaper Folha de S Paulo reported. Her current term expires at the end of 2018.
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US Secretary of State John Kerry said missile tests carried out by Iran were a violation subject to fresh sanctions, hours after Israeli Prime Minister Benjamin Netanyahu called on world powers to act. "The missiles [tests] are a violation of the UN Security Council, because they are longer than the distance that is allowed," Kerry said in Paris. "Because of that they represent a potential threat to countries in the region and beyond." Two of the intermediate-range rockets were inscribed in Hebrew with the phrase "Israel should be wiped off the face of the Earth," Fars news agency reported Wednesday. The Foreign Ministry in Tehran had defended its actions, saying its missile tests did not infringe on international agreements.
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Tuesday is expected to be a crucial day in the state-by-state voting process leading up to the nominations of the US major-party presidential candidates. Voting will take place in five populous states - Illinois, Missouri, Ohio, Florida and North Carolina. Much of the attention will be on Ohio and Florida because they are rich in delegates and the winner will get to claim all of them on the Republican side. The delegates are crucial because they will vote to formally nominate a presidential candidate and a running mate at party conventions in July. Ohio and Florida are the home states of two of the four remaining candidates in the Republican field - Ohio Governor John Kasich and US Senator Marco Rubio of Florida - and they will come under great pressure to end their bids if they lose.
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BROKER RATING CHANGES
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TRADERS: HSBC CUTS ADMIRAL GROUP TO 'HOLD' ('BUY')
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TRADERS: MERRILL LYNCH CUTS ADMIRAL GROUP TO 'UNDERPERFORM' ('NEUTRAL')
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TRADERS: HSBC CUTS STAGECOACH TO 'REDUCE' ('HOLD')
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GOLDMAN CUTS HUNTING TO 'BUY' ('CONVICTION BUY') - TARGET 500.30 (369.70) PENCE
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COMPANIES - FTSE 100
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SSE said it has signed agreements to sell a 49.9% stake in the Clyde wind farm located in South Lancashire to Greencoat UK Wind and and GMPF & LPFA Infrastructure for a headline consideration of GBP355.0 million. The wind farm is operational and has a current capacity of 349.6 megawatts, but SSE said once the current 172.8 megawatt expansion at the wind farm is completed then the equity stake in the project that it sold will be diluted. Following the expansion of the farm, when it will have a capacity of 522.4 megawatts, SSE will hold a 70% stake and the stake held by Greencoat annd GMPF & LPFA will amount to 30%. That expansion is expected to be completed in June 2017.
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Severn Trent on Friday warned up to 3,700 customers not to use their water for any purpose, including to flush a toilet, due to an issue at one of its service reservoirs in Castle Donnington in Leicestershire. Up to 3,700 customers in the DE11, DE15, DE65, DE73 and LE65 postcodes, covering Derbeyshire and Leicestershire, were told not to use their water "as a precaution" by the company, which told them to use bottled water being supplied at a J Sainsbury PLC store in Swadlincote.
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COMPANIES - FTSE 250
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Spire Healthcare Group said Chief Executive Officer Rob Roger plans to leave the company to take up a role as chief executive of a large privately financed property business. Details of this new appointment will be announced shortly, Spire said. Roger will stay in his position until the end of June to manage the presentation of the company's full year results, due to be released Thursday, and to ensure an orderly handover. Spire noted its 2015 results are expected to be in line with market guidance.
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NMC Health gave a positive outlook for the year ahead, expecting strong growth from its enlarged network, as the private hospital group in the UAE reported a rise in pretax profit for 2015. NMC reported a pretax profit of USD85.4 million in 2015, up from 7.5 million in 2014, as a rise in revenue to 880.9 million from 643.9 million was partly offset by a rise in general and administrative expenses and by higher depreciation and and amortisation costs. NMC maintained its dividend for the year at 6.2 pence per share.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Irish housebuilder Cairn Homes announced the first set of asset transfers under the Project Clear loan portfolio it recently acquired from Ulster Bank. Cairn and an affiliate of Lone Star Funds paid about GBP360.0 million in cash for the portfolio in December, part of a wider restructuring by Ulster Bank owner RBS. On Monday, three development sites moved under Cairn's direct ownership, covering two sites in Dublin and one in Maynooth. Separately, Cairn has also agreed to acquire an additional site nearly the Maynooth site for EUR27.0 million from York Capital.
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Digital marketing company Be Heard Group said it has conditionally agreed a reverse takeover of website and application developer MMT Ltd for up to GBP20.5 million. As the acquisition will be subject to shareholder approval, Be Heard has requested its shares be suspended until it has published an admission document and circular convening a general meeting.
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Fevertree Drinks reported growth in profit in 2015, boosted by good sales growth in each of its operating regions and across all drinks categories. The premium mixers maker said its pretax profit in 2015 multiplied to GBP16.8 million from GBP2.5 million in 2014, as revenue grew to GBP59.3 million from GBP34.7 million, in its first year since listing on AIM. Fevertree will pay a total dividend of 3.08 pence per share, up from 0.30p in 2014, including a 2.30p final dividend.
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COMPANIES - INTERNATIONAL
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Blackstone Group agreed to sell Strategic Hotels & Resorts to China's Anbang Insurance Group for about USD6.5 billion, just three months after it purchased the US luxury-resort company, Bloomberg reported citing people familiar with the matter. The price is about USD450 million more than Blackstone paid for Strategic in December. The New York-based private equity firm had been planning to sell individual properties in the portfolio before Anbang made a pre-emptive offer for the entire company, the report said.
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General Motors said it will acquire Cruise Automation to add Cruise's deep software talent and rapid development capability to further accelerate GM's development of autonomous vehicle technology. Cruise will operate as an independent unit within GM's recently formed Autonomous Vehicle Development Team led by Doug Parks, GM vice president of autonomous technology and vehicle execution, and will continue to be based in San Francisco. Founded in 2013, Cruise has moved quickly to develop and test autonomous vehicle technology.
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Monday's Scheduled AGMs/EGMs
Blackrock Commodities
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By Tom Waite; [email protected]; @thomaslwaite
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