1st Oct 2015 10:35
LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Investment trust Alliance Trust announced a series of sweeping changes to its investment strategy, dividend policy and board on Thursday, changes which come in the wake of the sustained public spat between the company and activist investor Elliott Advisors. The trust said it will change its investment mandate to focus on global equities and will dispose of non-core investments. It will also award its investment mandate to Alliance Trust Investments at a fee rate of 35 basis points on average net asset value, which it said is among the lowest in the industry. It will also introduce the MSCI All Country World Index as a formal benchmark for its performance. Beyond the mandate change, the trust said it will cut costs. Alliance Trust said it will simplify its structure and will move to a board consisting solely of non-executive directors, which will mean Chief Executive Katherine Garrett-Cox will step down from the board, though will remain as the trust's CEO.
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The UK's digital economy minister has dealt a blow to a push by BT Group's rivals for the company to be forced to spin-off its Openreach infrastructure business, the Financial Times reported. Speaking to the FT, Ed Vaizey said he was a "sceptic" about the need to split BT from Openreach. "I think full separation would be an enormous undertaking, incredibly time consuming [and would have] lots of potential to backfire," he said. "Ofcom is looking at it, I am a sceptic but we will have to see what Ofcom comes out with."
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Traders have started quoting prices for Glencore debt in a way normally associated with lower-quality paper, or junk bonds, the Financial Times reported. The shift seen in pricing in the private over-the-counter markets in the past week came after wild swings in the share price of the multi-commodities miner and trading house, amid investor concerns about its ability to handle its debt obligations within a tough commodities market. Glencore currently has an investment grade rating from rating agencies, but dealers and investors this week said trading in its USD36 billion in bonds outstanding has moved to a cash basis, normally used for junk bonds which have a higher risk of default.
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Investment and wealth management company Rathbone Brothers said it has struck a deal to buy the remaining 80.1% stake in Vision Independent Financial Planning and Castle Investment Solutions it did not already own. The consideration for the two businesses will comprise an initial cash payment of GBP5.0 million, plus the net asset value of the acquired companies upon completion, with a further GBP13.0 million due based on Vision hitting growth and operational targets through to 2020.
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Cranswick said revenue in the first half of its financial year grew slightly ahead of the board's expectations and said it remains well-positioned to achieve further growth during the rest of the year. The pork and poultry producer said that total revenue in the six months to September 30 rose 10% on the same period the year before, driven by strong volume growth across most product categories and a positive contribution from poultry producer Benson Park which it bought last year.
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Property company LondonMetric Property said it has sold two retail parks in Milton Keynes and Southampton for a total of GBP43.4 million. LondonMetric said it has sold the Westcroft retail park in Milton Keynes for GBP27.2 million and the Mountbatten retail park in Southampton for GBP16.2 million. The sale prices reflect a blended net initial yield of 5.7% and both were bought by large UK institutional investors, which LondonMetric did not name.
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Biomass power plant operator Drax Group said it has appointed Will Gardiner as its new finance director, effective from November 16. He will take over from Tony Quinlan, who stepped down in May and was replaced on an interim basis by Michael Scott, who will continue in the role until Gardiner takes up the position. Gardiner is joining from chipmaker CSR, which was recently acquired by US rival Qualcomm, where he was the chief financial officer.
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Gulf Keystone Petroleum said it has received the competent person's report on the reserve estimates for its oil assets in the Kurdistan region of Iraq, upgrading estimates. The report has upgraded the 1P reserve estimate for the Shaikan crude oil field by 55% compared to the March 2014 estimate to 306 million barrels of oil gross, from 198 million previously. The 2P reserve estimate has been more than doubled to 639 million barrels gross, from 299 million previously, which will significantly de-risk the commercial attraction of the field, Gulf Keystone said.
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Energy technology company Intelligent Energy Holdings said it has struck a deal to acquire the energy management business of GTL, which provides energy to telecommunications towers in India, as it said trading had accelerated in the second half of its financial year. Intelligent Energy said the acquisition of the business, for around GBP85 million, will strengthen is Distributed Power and Energy division and will provide the company with a customer base to which it can start rolling out its fuel-cell technology. Intelligent Energy said the deal provides a major platform for fuel cells to be deployed as a distributed power service. Intelligent Energy expects to earn around GBP120 million in revenue per annum and to make estimated earnings before interest, taxation, depreciation and amortisation margins pre-financing of around 15% on the acquired business.
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MARKETS
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London shares have continued Thursday a rally begun on Wednesday, with miners and oil companies leading the FTSE 100, with Brent oil rising about USD49 a barrel.
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FTSE 100: up 1.1% at 6,127.04
FTSE 250: up 0.9% at 16,833.39
AIM ALL-SHARE: up 0.2% at 726.41
GBP: up at USD1.5138
EUR: down at USD1.1151
GOLD: down at USD1,113.30 per ounce
OIL (Brent): up at USD49.26 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Eurozone manufacturing activity grew at a slower pace as estimated in September, final data from Markit showed. The manufacturing Purchasing Managers' Index fell to a five-month low of 52 in September from 52.3 in August. The reading came in line with flash estimate. Production and new business both expanded at moderate rates in September. Job creation was reported for the thirteenth straight month in September.
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China's manufacturing conditions deteriorated the most in six-and-a-half years in September as orders declined sharply on weak foreign demand, results of a private sector survey revealed. The final manufacturing Purchasing Managers' Index dropped to 47.2 in September from 47.3 in August, survey data from the Caixin Insight Group and Markit showed. That was the lowest reading since March 2009. Meanwhile, the official manufacturing PMI rose moderately to 49.8 in September from 49.7 in August, reflecting marginal improvement in production and new orders. The divergence between the two PMIs is because activity among the large state-owned firms that are more heavily represented in the official index will have been boosted most by the recent pick-up in fiscal spending and infrastructure investment, Julian Evans-Pritchard, an economist at Capital Economics, said. The official non-manufacturing PMI came in at 53.4 in September, the same reading as seen in prior month. The Caixin composite PMI fell to 48 in September from 48.8, separate survey results showed. The services PMI dropped to 50.5 from 51.5 a month ago.
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An index measuring business sentiment in Japan weakened in the third quarter of 2015, the Bank of Japan said in its quarterly Tankan business survey. The large manufacturers' index came in with a score of 12, missing forecasts for 13 and down from 15 in the previous quarter. The outlook came in with a score of 10, matching forecasts but down sharply from 16 in the three months prior. The survey is closely watched by the Bank of Japan for formulating policies.
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Ireland's manufacturing sector growth improved further in September on marked growth of new business, while the rate of expansion in production slowed to a 19-month low, survey figures from Markit Economics showed. The seasonally adjusted Investec purchasing managers' index rose marginally to to 53.8 in September from 53.6 in August.
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Global growth will probably be slower this year than in 2014, International Monetary Fund chief Christine Lagarde said in Washington. Global growth hovered at 3.4% a year in 2013 and 2014, according to IMF estimates. Lagarde said she expects "only a modest acceleration" next year. "The prospect of rising interest rates in the US and China's slowdown are contributing to uncertainty and higher market volatility," she said in a speech at the Council of the Americas.
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Syrian Islamist rebels shelled regime troops in the central province of Homs on Thursday, a day after Russian jets mounted air strikes in the area, activists said. The shelling targeted the regime's Moolouk military base and villages under the control of forces loyal to Syrian President Bashar al-Assad on the northern outskirts of Homs, the Syrian Observatory for Human Rights said. The Britain-based watchdog reported unspecified casualties among al-Assad's forces.
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The Afghan military retook control of the strategic northern city of Kunduz from Taliban forces overnight, officials said. "The only remaining parts to be cleared are the outskirts of Kunduz, which is going to be cleared of the insurgent presence soon," Hamdullah Danishi, the acting governor of Kunduz, told dpa.
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The US House of Representatives passed short-term spending legislation to fund the government through December 11, as lawmakers worked down to the wire to prevent a federal shutdown at midnight. The lower chamber voted 277-151 to pass the measure, hours after the Senate overwhelmingly approved the measure. The measure overcame efforts by conservative Republicans that would have forced the federal government to shut down unless the budget withdrew federal money from women's health provider Planned Parenthood.
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