13th Mar 2014 11:49
LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Shares in Wm Morrison Supermarket PLC dropped at the open after reporting a 13% decline in underlying profits in its recent financial year and a swing to a pretax loss on big exceptional charges. The UK's fourth-largest supermarket chain warned that it expects to make underlying profits for the current financial year well down from what it made last year. The supermarket chain said it swung to a pretax loss of GBP176 million for the year, compared with a pretax profit of GBP879 million the prior year. Morrisons also said it will invest GBP300 million this year in customer propositions, including price cuts.
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Bwin.party Digital Entertainment PLC's decision to focus on only the most lucrative online betting and gaming markets is showing signs of paying off, as it said it swung to a profit it 2013 thanks partly to much bigger cost reductions than it had targeted. The result marks a turnaround for a company that has reported a pretax loss for the past two years and declining profits for three years before that. The company reported a pretax profit of GBP44.9 million for the year, compared with a GBP23.5 million loss in 2012.
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F&C Asset Management PLC reported a swing to annual pretax profit but warned that it continues to face "significant headwinds in the short-term" after reporting GBP19.0 billion in net outflows during 2013, with a shareholders' vote on the Bank of Montreal's takeover offer looming. Reporting what was likely to be its last full-year results as a listed company, the FTSE 250 asset manager said it swung to a GBP15.7 million pretax profit in 2013.
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Home Retail Group PLC shares hit the highest level for nearly three years, after the home and general merchandise retailer reported strong like-for-like sales growth from both its Argos and Homebase chains in its last financial year. Home Retail said it now expects group "benchmark" pretax profit, which strips out costs such as amortisation of acquisition intangibles, store impairment charges and exceptional items, to beat the top-end of current market expectations.
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SIG PLC said pretax profit for the year plummeted and revenue rose during a year of "contrasting halves," culminating in the firm boosting its dividend payment. The specialist building products distributor said full year pretax profit dropped to GBP2.1 million from GBP43.7 million in 2012. Despite the huge drop in pretax profit, the firm boosted its total dividend for the year to 3.55 pence, up 18%.
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MARKETS
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Supermarkets are heavily underperforming after Morrisons joined the race to slash costs and cut prices as the sector is dragging down UK indices.
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FTSE 100: down 0.2% at 6611.55
FTSE 250: down 0.4% at 16270.17
AIM ALL-SHARE: down 0.4% at 883.84
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GBP-USD: up at USD1.6682
EUR-USD: up at USD1.3950
GOLD: up at USD1368.00 per ounce
OIL (Brent): down at USD108.13 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The growth of house prices in the UK slowed in February, the latest survey from the Royal Institute of Chartered Surveyors revealed - posting a six-month low score of +45. That was well shy of forecasts for +52, which would have been unchanged from the January reading - which was revised down from 53.
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China's industrial production and retail sales grew less than expected in the first two months of 2014, data showed. Industrial production increased 8.6% in January to February period from last year, the National Bureau of Statistics said. Production was forecast to grow 9.5%, following a 9.7% rise in December. Another report from the statistical office showed that retail sales grew by a double-digit 11.8% year-on-year in January to February, but below the 13.5% increase forecast by economists.
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China's Premier Li Keqiang said the government's 7.5% economic growth target for 2014 is flexible. Job creation and income generations are the key determinants of policies, he said at a press conference Thursday. "We can tolerate a bit higher or lower growth," he added. Further, Li said some loan defaults are unavoidable but overall risks are under control. China should step up supervision and handle such cases in a timely way to ensure that there are no systemic risks, he said. He observed that China's government debt to GDP is below international averages and risks are under control.
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British Prime Minister David Cameron was due to meet Palestinian President Mahmoud Abbas, with his visit to the West Bank coming on the back of the worst exchange of fire between Israel and Palestinians since a 2012 ceasefire. The radical Islamic Jihad faction said it had launched a barrage of 130 rockets at Israel on Wednesday to avenge the killing of three of its fighters the previous day.
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France's EU measure of inflation accelerated at a slightly faster-than-expected pace in February, figures from the statistical office INSEE revealed. The harmonized index of consumer prices, or HICP, rose 1.1% year-on-year, following a 0.8% increase in January. Economists had expected an inflation figure of 1%.
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EU negotiators failed to strike a deal Wednesday on a new scheme to shield taxpayers from bank bailouts, despite the clock ticking on the much-touted measure. "We are not yet there," negotiators from the European Parliament said in a joint statement, following six hours of talks with representatives from the EU's governments. "Some progress has been made," they added. "It is clear to us though that there is still much work to be done."
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Italian Prime Minister Matteo Renzi announced a headline-grabbing package of economic reforms, including a EUR10 billion cut on labour taxes, but failed to write the measures into law. Some 10 million workers - those earning up to around EUR1,500 net a month - will benefit from the tax break, effective from May, Renzi said. It would boost pay packets by about EUR1,000 per year, he added. He told reporters he was "defeated" in attempts to introduce the tax cut from April, because of technical difficulties.
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German Chancellor Angela Merkel said that Europe was ready to stand by former Soviet republics in the face of possible Russian aggression. Whether it is Moldova or Georgia, "we will show them solidarity," Merkel told the German parliament. Like Ukraine, Moldova has come under pressure from Russia to abandon an association agreement it has negotiated with the EU.
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The Organization for Economic Cooperation and Development in Paris has suspended Russia's membership process. At the same time, the OECD, a club of 34 developed and emerging economies, says it plans to step up its cooperation with non-member Ukraine.
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Just hours after western leaders jointly warned Moscow against the accession of Ukraine's region of Crimea, the leaders of the US and Ukraine gave an added push for dialogue. US President Barack Obama and Ukraine's interim Prime Minister Arseniy Yatsenyuk met Wednesday at the White House and appealed to Russia to resume dialogue in order to avoid what Obama called high "costs" if it stays on its current path in Crimea. Yatsenyuk declared that his government was "absolutely ready and open for talks with the Russian Federation" and urged Moscow to "start the dialogue" without guns and tanks.
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The latest lead to a missing Malaysian airliner came to nothing after rescuers did not locate any parts of the jet in an area of the South China Sea picked out by a Chinese satellite. "Our plane did not find anything there," said Azharuddin Abdul Rahman, chief of the Department of Civil Aviation, of the area south of Vietnam where the satellite had spotted floating objects a day after the plane disappeared last weekend. Vietnamese search officials also said they had not found anything of significance in the area.
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Protests against Venezuela's leftist government turned violent again Wednesday, claiming four lives in the western city of Valencia. The victims include a member of the country's national guard. The exact circumstances surrounding the deaths was unclear, news reports said.
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The death toll from a gas explosion that flattened two buildings in New York's East Harlem neighbourhood has risen to six, local media reported Thursday. Rescue workers were searching the rubble for nine people still missing.
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Former Goldman Sachs banker Fabrice Tourre was ordered Wednesday to pay USD825,000 for defrauding investors who bought sub-prime mortgage-backed securities from his bank prior to the collapse of the housing market. The former Goldman Sachs Group vice president was found liable in August for his role in a failed USD1 billion investment in a civil case brought by the US Securities and Exchange Commission, the agency that oversees Wall Street. The court found that the banker with the nickname Fabulous Fab provided false marketing materials to investors. In email to his girlfriend he callously joked that he even sold the junk "widows and orphans."
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