24th Sep 2014 10:35
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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The UK Competition and Markets Authority said it has finalised measures it expects to result in increased competition in the car insurance market and reduced premium costs for drivers, but motoring organisation AA PLC, which also acts as a car insurance broker, questioned whether the findings and remedies justified the scale of the enquiry. The CMA's measures include a ban on agreements between price comparison websites and insurers which stop insurers from making their products available more cheaply on other online platforms. Other measures include providing better information for consumers on the costs and benefits of no-claims bonus protection. It also wants the Financial Conduct Authority to look into how insurers inform consumers about other products sold as add-ons to car insurance policies.
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Commercial bank holding company Citizens Financial Group, owned by British lender Royal Bank of Scotland Group, priced its initial public offering of 140 million shares at USD21.50 per share, raising gross proceeds of about USD3 billion. The pricing was below the company's estimated range of USD23 to USD25 per share. The IPO immediately values Citizens Financial at about USD12 billion.
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United Utilities Group said it is currently trading in line with internal expectations for the six months ending September 30, while it remains confident of delivering its 2010-15 regulatory outperformance targets. In a trading statement, United Utilities said underlying operating profit for the first half 2014/15 is expected to be similar to the first half of 2013/14. "This principally reflects an allowed regulated price rise offset by the impact of the previously announced special customer discount and the expected increase in depreciation and other cost pressures, including bad debt," the company said.
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Media buying giant WPP said it has launched a new joint venture company in China that will offer services to the country's booming e-commerce sector. In a statement, the company said the new Polestar Co Ltd joint venture will be led by its main investors, both entrepreneurs with experience of the sector, including with Alibaba. Founder Figo Yang will serve as chief executive and Allen Liu will be chief operating officer. WPP will have a minority stake in the venture.
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The UK Serious Fraud Office is understood to be closely following events at Tesco to consider whether any deliberate manipulation was involved in the GBP250 million overstatement of the supermarket's profits unveiled this week, The Times reported on Wednesday. Insiders at the SFO said the agency was "following developments at Tesco with interest" after the company this week suspended four senior executives and warned that around a quarter of its interim profits had been overstated, the paper said.
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Kennedy Wilson Europe Real Estate said it has completed a GBP184 million asset financing secured against some assets in the Jupiter real estate portfolio it acquired in June, and expects to draw down the facility in full. The facility was arranged with Royal Bank of Scotland Group PLC and has a five-year term. Once the facility is drawn down, Kennedy Wilson's loan-to-value ratio will rise to about 34%, with approximately GBP506 million of debt financing in place at the asset level and a weighted average maturity of approximately 4.6 years, it said.
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Metals miner Kazakhmys said it has awarded the contract to build a sulphide concentrator at Aktogay, the company's second major copper growth project, to Non Ferrous China, allowing it to firm up the expected total capital cost of the project. The sulphide concentrator contract is the largest item in the capital expenditure budget for Aktogay, and Kazakhmys said that it is now able to confirm that the total capital cost for the project is expected to be in the region of USD2.3 billion. Kazakhmys is hoping to produce the first copper from sulphide at Aktogay in 2017.
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MARKETS
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UK indices continue to trade lower amid risk aversion due to the start of US air strikes in Syria. The FTSE 100 is being led by Fresnillo after brokerage UBS added the miner to its Most Preferred List.
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FTSE 100: down 0.2% at 6,660.74
FTSE 250: down 0.3% at 15,492.04
AIM ALL-SHARE: down 0.4% at 753.10
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The euro trades flat against the dollar after data revealed German business confidence declined for the fifth straight month in September.
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GBP-USD: up at USD1.6402
EUR-USD: flat at USD1.2847
GOLD: up at USD1224.64 per ounce
OIL (Brent): down at USD96.57 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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German business confidence weakened for the fifth straight month in September, reports said citing survey results from Ifo institute. The Ifo business climate index fell to 104.7 in September. Economists had forecast the indicator to drop to 105.8 from 106.3 in August. The current situation index came in at 110.5, down from 111.1 a month ago. The expected score for September was 110.2.
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Warplanes flying from Turkey have bombarded Islamic State targets in northern Syria, a monitoring group said, a day after a US-led coalition launched its first airstrikes against the radical group. The Syrian Observatory for Human Rights, citing local residents and activists, said the jets had struck supply routes used by Islamic State operatives near the Kurdish town of Kabone in the northern Syrian province of Aleppo. The Britain-based Observatory said that despite the strikes, Islamic State fighters and Kurdish militiamen were still engaged in heavy clashes around 10 kilometres outside of Kabone. The al-Qaeda splinter group has seized dozens of mostly Kurdish villages near Kabone in the past week, prompting a massive exodus into Turkey.
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The US told United Nations Secretary General Ban Ki-moon in a letter that its airstrikes into Syria were requested by Iraq for its own protection. The letter, in keeping with the dictates of the UN charter, explains that Islamic State and other terrorist groups are a threat not only to Iraq but also to the US and its partners in the region.
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Ed Miliband, leader of the UK opposition Labour party, has threatened to fund new investment in the National Health Service by cracking down on tax loopholes used by hedge funds and other financial services firms, raising money through a tax on homes worth more than GBP2 million, and by requiring tobacco firms to contribute to the cost of treating smoking-related diseases, the BBC reports. The so-called mansion tax would raise GBP1.2 billion a year, the crackdown on tax loopholes used by hedge funds would raise GBP1.1 billion, and the tobacco company requirements would raise about GBP150 million, the BBC quoted Miliband as saying in a speech to the Labour party annual conference ahead of next year's general election.
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Pro-Russian separatists in eastern Ukraine said Tuesday they will hold their own elections in November, a week after voting for a new Ukrainian parliament. "We will elect our Supreme Soviet and head of the republic on November 2," Alexander Zakharchenko, the leader of the self-declared Donetsk People's Republic, told Russia's Interfax news agency. The neighbouring "Luhansk People's Republic" will hold elections on the same day, local separatist leader Alexei Karyakin told the Itar-Tass news agency. The separatists were adamant that they won't allow next month's Ukrainian parliamentary elections to go ahead in their territories. President Petro Poroshenko has announced snap elections for October 26.
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Russian lawmakers on Tuesday gave preliminary approval to a bill that severely restricts foreign ownership of media companies, a move that critics say deals a further blow to the country's already tenuous press freedom. The bill, which sailed through the first reading in the lower house of parliament, or State Duma, by 434-1, bans foreigners from owning more than 20% of any national media outlet. Currently, ownership is restricted mainly for radio and TV stations, where foreigners may only hold up to 50%. The law is likely to hit high-profile publications like business newspaper Vedomosti, published jointly with the Wall Street Journal and the Financial Times, and the Russian edition of Forbes magazine, which is published by Axel Springer Russia, a subsidiary of German media giant Axel Springer AG.
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The manufacturing sector in Japan continued to grow in September, albeit at a slower pace, preliminary survey results from Markit Economics revealed, with a PMI score of 51.7. That's down from 52.2 in August, although it remains above the line of 50 that separates expansion from contraction.
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