8th Dec 2015 11:14
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Anglo American outlined a "radical" portfolio restructuring and plans to cut costs further by suspending its dividend and cutting expenditure as the miner tries to adjust the business to be more competitive in an environment with falling commodity prices. The Anglo-South African miner intends to reduce its assets by 60%. It wants to sell more assets to build on the USD2.00 billion generated from asset disposals so far, and plans to double that amount by selling other assets related to phosphates and niobium, it said. Anglo American also will suspend its dividend for the second half of 2015 and for 2016. Once the dividend resumes, the miner plans to change its policy so it is more in line with earnings.
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Rio Tinto said that by the end of 2015, its aluminium product group will have delivered around USD300 million of cash cost improvements, a reduction of USD45 million in sustaining capital expenditure and cut working capital by around USD400 million from 2014. The Anglo-Australian miner said the momentum in operating cost reductions continues through a broad range of initiatives that should remove around USD300 million in additional cash costs from the product group in 2016, excluding any impact from currency or oil. Rio Tinto also confirmed that it expects total capital expenditure in 2016 will be around USD5 billion, compared to previous forecasts of less than USD6 billion.
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Royal Dutch Shell said it will go ahead with its plan to build a major new unit at the Pernis refinery in Rotterdam in the Netherlands. The oil and gas major said the Solvent Deasphalter unit will remove heavier fractions from crude oil, allowing the refiner to upgrade a larger part of its oil intake into light, high-grade products. Construction work on the project is planned to start next year, subject to permit approvals, and will be completed by the end of 2018.
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British American Tobacco is facing another accusation of bribery in Africa after another former employee of the company alleged the group bribed a local official to mis-report the impact of a fire at one of its warehouses in Uganda, the Financial Times reported. Solomon Muyita, a former corporate and regulatory affairs coordinator at the tobacco giant, made the claim in his case for unfair dismissal from the company in 2013. He said BAT bribed an official to secure a report stating there had been no harmful impact from the fire.
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The Royal Bank of Scotland Group said it has struck deals with three investment partners to provide more access to capital investment to private equity-backed businesses in the UK. RBS has signed deals with AIG Asset Management (Europe), Hermes Investment Management and M&G Investments, the latter the fund management arm of Prudential. Under the terms of the agreement, private equity-sponsored mid-market companies in the UK will be able to borrow up to GBP100.0 million in a single lending transaction which can be co-funded by all four of the partners.
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John Wood Group said it has won a new contract with oil and gas major ConocoPhillips in Australia. The "multi-year" contract will see Wood Group PSN provide brownfield engineering services to the Bayu-Undan field located south west of Timor-Leste and the Darwin liquefied natural gas plant at Wickham Point in Darwin, Australia, the oil services company said.
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Specialty chemicals company Victrex said its pretax profit and revenue both edged higher in the year to the end of September, despite taking a hit from the weak euro, as it outlined plans for an enhanced capital-return programme. The company said its pretax profit for the year to September 30 was GBP106.4 million, up 4.0% from the GBP102.7 million it made a year earlier. It declared a total dividend of 46.82p, up 4.0% from the 45.15p paid out the year earlier. The company added it will implement a new capital allocation framework, under which investment in its growth will remain the top priority but which may see it pay out special dividends in the future, dependent on certain cash targets being hit.
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MARKETS
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UK indices were trading lower with mining stocks weighing on the FTSE 100. Oil continued to trade near seven-year lows, still feeling the effects of OPEC's decision on Friday to maintain current production levels. Wall Street was pointed to a lower open.
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FTSE 100: down 0.5% at 6,195.01
FTSE 250: down 0.4% at 17,295.16
AIM ALL-SHARE: down 0.5% at 738.33
GBP: down at USD1.4997 (USD1.5065)
EUR: flat at USD1.0847 (USD1.0843)
GOLD: down at USDUSD1,071.90 per ounce (USD1,076.02)
OIL (Brent): flat at USD41.28 a barrel (USD41.12)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK industrial production grew slightly as expected in October, figures from the Office for National Statistics showed. Industrial output edged up 0.1% in October from September, when it remained flat. The monthly growth rate came in line with expectations. Meanwhile, manufacturing output declined for the first time in three months in October. Output fell 0.4%, reversing a 0.9% rise in September. Output was expected to drop marginally by 0.2%. On a yearly basis, growth in industrial output improved unexpectedly to 1.7% from 1.5%. Economists had forecast a 1.2% rise for October.
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Like-for-like sales in the UK fell 0.4% on year in November, the British Retail Consortium said. That missed forecasts for an increase of 0.5% and was down from the 0.2% decline in October. Overall retail sales were up just 0.7% on year in November, the BRC said - after adding 0.9% in the previous month.
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UK house prices declined unexpectedly in November, survey data from the Lloyds Banking Group's Halifax division showed. House prices slid 0.2% in November from October, when they grew 1%. Economists had forecast a 0.2% rise for November. Prices in the three months to November advanced 9% from same period a year earlier compared to a 9.7% rise in three months to October. The annual growth was expected to slow slightly to 9.5%.
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China's exports declined for the fifth straight month on weak global demand, while imports dropped by less than expected in November, official data showed. Exports decreased 6.8% in November from last year, the General Administration of Customs reported. Shipments were forecast to drop at a slightly slower pace of 5% after falling 6.9% in October. At the same time, imports slid 8.7% annually, but better than an expected decline of 11.6% and an 18.8% fall seen in October. Nonetheless, the trade surplus fell unexpectedly to USD54.1 billion from USD61.6 billion in October. It was forecast to rise to USD63.5 billion in November.
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Eleven EU countries failed to overcome their last differences on the creation of a controversial tax on financial transactions, but decided to continue their negotiations on Tuesday. Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain have been negotiating the tax for nearly three years. They had at one point planned to start implementing the levy in 2016. EU Economy Commissioner Pierre Moscovici said the countries are just "a few centimetres" away from an agreement. The idea of introducing a financial transaction tax in the EU has long been controversial. It had failed to find support among the bloc's 28 member states, leading the 11 countries to use a go-it-alone approach known as enhanced cooperation.
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Key issues that have dogged climate talks on a global agreement to limit carbon emissions persisted Monday, as ministers meant to provide a political push to the two-week negotiations began rolling their sleeves up. French Foreign Minister Laurent Fabius, who is overseeing the talks, began the second week with a warning that only a few days were left to seal an agreement. A draft put forward Saturday lays out potential options, in some cases underscoring the breadth of difference that still need to be bridged, prompting leaders to lend mounting urgency to their calls for progress.
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The couple suspected of carrying out last week's massacre in San Bernardino, California, had been radicalized well before they opened fire on a holiday party, authorities said. "As the investigation has progressed, we have learned that both subjects were radicalized and had been for some time," said FBI Assistant Director David Bowdich, who heads the agency's Los Angeles field office. Investigators have interviewed more than 400 people in a "massive" investigation since Wednesday, when Syed Farook, a health inspector for the San Bernardino County Public Health Department, and his wife, Tashfeen Malik, allegedly attacking the party for his co-workers, Bowdich said. He said Farook and Malik planned the attack in which 14 people were killed and 21 wounded, and even practiced target shooting in the previous days. They died in a shootout with police hours after the massacre.
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The US Defence Department confirmed the leader of the Islamic State movement's Libya branch was killed last month in a US airstrike. Abu Nabil, also known by the alias Wissam Najm Abd Zayd al-Zubaydi, was killed in an airstrike on November 13, a Pentagon spokeswoman told dpa. The death had been initially announced by the US but then withdrawn, pending confirmation. It took weeks to confirm the death due to the unstable security situation on the ground in Libya, the US spokeswoman said.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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