3rd Jun 2014 10:21
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Plumbing and heating products distributor Wolseley PLC reported higher trading profit for its fiscal third quarter, driven by strong growth in the US and Nordic countries, but adverse currency movements knocked GBP200 million off its revenue and GBP12 million off its profit. Wolseley reported trading profit of GBP153 million for the three months to April 30, up from GBP150 million a year earlier, as margin improvements offset a slight decrease in revenue to GBP3.12 billion, from GBP3.23 billion. However, profit from ongoing businesses would have been up 9.1% at constant currencies on a 6.0% rise in revenue.
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AstraZeneca PLC announced that its investigational drug AZD0914 for the treatment of uncomplicated gonorrhoea had been granted 'fast track' status by the US Food and Drug Administration, while also providing details of the development of its oncology pipeline. The treatment has been granted fast tracked as gonorrhoea is becoming "increasingly resistant to existing antibiotics and poses a serious global public health threat", AstraZeneca said. This means that the drug will be eligible for priority review from the FDA, and a five-year extension on its market exclusivity if it is approved. After successfully rejecting a USD69.3 million takeover bid from US drugmaker Pfizer Inc, AstraZeneca has been presenting information on its oncology pipeline at the 50th American Society of Clinical Oncology Meeting in Chicago.
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Wm Morrison Supermarkets PLC has fallen foul of the adjudicator of the groceries code after overcharging suppliers, the Financial Times reported. According to the FT, the Groceries Code Adjudicator stepped in after the supermarket debited 67 suppliers without their permission. The newspaper quoted a spokesman for Wm Morrison saying: "We mistakenly took payments from a small number of suppliers as we rolled out the programme and these were paid back as soon as we discovered the error. We made these refunds without any prompting."
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Estate agency Foxtons Group PLC saw its shares slide after it said Chief Executive Michael Brown had decided to step down on July 1 after 7 years at the helm, for personal reasons. In a statement, the company said Chief Operating Officer Nic Budden will take over as CEO, while Brown has agreed to stay on the company's board as a non-executive director. Stefano Curzio will step down as a non-executive director October 1. "Nic has worked side by side with Michael for many years and has been a core architect of Foxtons' success. He is the natural successor to Michael and the unanimous choice of the board," Chairman Garry Watts said in a statement.
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Pennon Group PLC raised its dividend after reporting higher full-year profit, with profit growth at its South West Water unit more than offsetting a decline at its waste recycling and management business Viridor. The company reported a pretax profit of GBP158.7 million in the year to end-March, up from just GBP13.6 million a year earlier. It said it will pay a final dividend for the year of 20.92 pence, up 6.2% on the previous year. That will bring the total dividend to 30.31 pence, a 6.5% increase. The growth was driven by South West Water division, the licensed water and sewerage service provider for Devon, Cornwall and parts of Dorset and Somerset.
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DCC PLC said it has acquired Williams Medical Holdings, which supplies medical equipment and pharmaceuticals to general practitioners and primary care organisations in the UK, in a move to strengthen its healthcare division. The FTSE 250 support services business operating in healthcare, as well as sectors including energy and technology, said it has paid cash for the acquisition based on a GBP45.0 million enterprise value, a measure of a company's value equivalent to market capitalisation plus debt, minority interest and preferred shares, less its cash. However, no specific financial details of the deal were provided.
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MARKETS
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Stocks are broadly lower across the UK and Europe, amid a busy morning of economic data that looks like to pile pressure on European Central Bank President Mario Draghi to take action at a highly anticipated policy meeting on Thursday.
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FTSE 100: down 0.3% at 6840.81
FTSE 250: down 0.5% at 16011.67
AIM ALL-SHARE: down 0.3% at 810.41
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The euro rose slightly against the dollar in the wake of the low eurozone CPI print and a decrease in the unemployment rate.
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GBP-USD: up at USD1.6760
EUR-USD: up at USD1.3608
GOLD: up at USD1246.40 per ounce
OIL (Brent): down at USD108.35 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Eurozone inflation slowed more than expected in May, raising concerns about deflationary pressures. Inflation fell to 0.5% in May from 0.7% in April, flash estimates published by Eurostat showed. The rate was forecast to ease marginally to 0.6%. Inflation held below the European Central Bank's target of 'below, but close to 2%' for the sixteenth consecutive month.
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Euro area unemployment rate unexpected dropped in April, but remained at a high level, figures from Eurostat showed. The seasonally adjusted jobless rate fell to 11.7% from 11.8% in March. Economists had expected the rate to hold steady at 11.8% for the fourth straight month.
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UK house prices rose more-than-expected in May though at a slower rate than in April, survey figures from the Nationwide Building Society showed. House prices climbed 0.7% month-on-month in May, rising for the thirteenth consecutive month, following a 1.2% increase in April. This slightly exceeded forecasts of a 0.6% rise. The average price of a house in the UK was GBP 186,512 during May versus GBP 183,577 in the previous month. On a year-over-year basis, house prices rose at a faster rate of 11.1% in May compared with a 10.9% increase in April. It was the fastest rate of increase since prices started rising in March 2013. Economists had forecast a 10.9% increase.
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The UK construction sector expanded sharply in May, but the momentum continued to ease from the post-crisis highs seen earlier in the year. The seasonally adjusted Markit/ Chartered Institute of Purchasing & Supply Construction Purchasing Managers' Index fell to 60.0 in May from 60.8 in April.The headline index was above the 50.0 no-change level for the thirteenth successive month, but the latest reading signaled the slowest pace of growth since October 2013.
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Ireland's manufacturing sector continued to show a sharp improvement in May, driven by robust output and new order growth that led to the fastest employment growth since late 1999, survey figures from Markit Economics showed. The seasonally adjusted Investec purchasing managers' index, or PMI, fell to 55.0 in May from 56.1 in April. Any reading above 50 indicates expansion in the sector.
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China's manufacturing sector contracted marginally in May, as output shrank slightly, while new orders stabilized after a three-month sequence of declines. The HSBC manufacturing Purchasing Managers' Index rose to 49.4 in May from 48.1 in April but down slightly from the earlier flash estimate of 49.7, final survey data from Markit Economics showed Tuesday.
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India's central bank decided to leave its key interest rates unchanged, but reduced the statutory liquidity ratio of banks. The repo rate, the rate at which the Reserve Bank of India lends to banks, was maintained at 8.00%.
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US President Barack Obama arrived in Poland for an official visit on amid fresh violence in neighbouring Ukraine. Obama was greeted at the airport by President Bronislaw Komorowski, with whom he is to hold bilateral talks. The US president will also hold separate talks with Prime Minister Donald Tusk later in the day. The meetings are expected to be dominated by the crisis in Ukraine. The country's president elect, Petro Poroshenko, is due to meet Obama in Warsaw on Wednesday. In eastern Ukraine, meanwhile, pro-Russian separatists said that airstrikes by government forces had killed at least one civilian.
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The heads of the Russian energy company Gazprom and Ukraine's Naftogas reach a tentative deal in a row over gas supplies, EU Energy Commissioner Oettinger says, adding that a final round of negotiations would take place this week or next. "The two chief executives have a shared proposal for a bulk deal: for the resolution of unpaid invoices through a redemption plan and for an acceptable price for both sides to be charged in future," Oettinger says after three hours of talks in Brussels. The deal, reached in bilateral talks between the Russian and Ukrainian chief executives, would now be evaluated on a legal, financial and economic basis and in talks with both countries' governments, Oettinger says.
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Egypt's Presidential Election Commission is expected to officially name former army chief Abdel-Fattah al-Sissi as the country's next president. Unofficial results from last week's presidential poll showed al-Sissi gaining more than 96% of the vote, with spoiled ballots outnumbering those cast for leftist challenger Hamdeen Sabahy. Under the Egyptian constitution, al-Sissi will be deemed to be president as soon as the results are officially announced. He would only start performing his functions once he takes the oath of office. No date has yet been set for that ceremony.
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Syrians headed for the polls, with Bashar al-Assad expected to easily win a third seven-year term as president, as voting was only taking place in the country's government-held areas. Polling was taking place in the midst of a civil war that has killed more than 162,000 people so far. The election has been denounced as a "farce" by the opposition and its Western supporters. The poll is the first to see al-Assad face rival candidates. But the two low-profile figures running against him are not expected to make any impact. There was no voting taking place in rebel-held areas, which include most of northern and eastern Syria.
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