26th Oct 2016 09:59
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Lloyds Banking Group said it has set aside another GBP1 billion to deal with payment protection insurance claims, as it reported a drop in profit in the third quarter. The PPI provision was the largest part of GBP1.15 billion in conduct charges recorded by FTSE 100-listed Lloyds in its third quarter results, which contributed to a decline in the bank's statutory pretax profit to GBP811 million for the three months to September 30, down from GBP958 million in the same period the year prior. Excluding provisions for conduct claims, Lloyds reported an underlying profit for the third quarter of GBP1.91 billion, down from GBP1.97 billion in the year prior. Lloyds' total income for the three month period rose to GBP4.27 billion from GBP4.23 billion.
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CYBG confirmed a press report it is in talks to buy Royal Bank of Scotland Group's Williams & Glyn retail and commercial banking business. CYBG did not provide any financial details on the talks, but said that they are ongoing and that it has made a preliminary non-binding proposal to acquire the Williams & Glyn business. The challenger bank said there is no certainty a deal will be done and said it will pursue a transaction only "if it is determined by the board to be in the best interests of CYBG shareholders."
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Mid-cap lender Metro Bank reported growth in deposits and lending activity in the third quarter of 2016 and said it made its first underlying quarterly profit. Metro Bank said deposits on its books rose 66% year-on-year to GBP7.30 billion at the end of September, while lending activity increased 73% to GBP5.19 billion. Revenue in the quarter to September 30 was GBP53.4 million, up 78% year-on-year. Metro Bank said it now has 848,000 customer accounts, up 68,000 year-on-year.
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AstraZeneca said it has received positive results from a phase three trial on its Lynparza treatment for ovarian cancer. AstraZeneca said the results demonstrate a "clinically-meaningful and statistically-significant" improvement in progression-free survival for those treated with the drug compared to placebo. It said the survival median exceeded that of the phase two trial.
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UK telecoms regulator Ofcom said it has fined Vodafone Group total GBP4.6 million for "serious and sustained breaches of consumer protection rules" following two investigations into the company. Ofcom said the first investigation into the mobile telecoms giant found that 10,452 pay-as-you-go customers lost out when Vodafone failed to credit their accounts after they paid to 'top-up' their mobile phone credit. The affected customers collectively lost GBP150,000 over a 17-month period, the regulator said. The second investigation found that Vodafone failed to comply with the regulator's rules on handling customer complaints.
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Distribution and outsourcing group Bunzl said trading was in line with its expectations in the third quarter of 2016, and it has made further acquisitions in the UK, Northern Ireland and the Czech Republic. Bunzl said revenue in constant currencies rose 7.0% in the quarter to the end of September year-on-year, with 3.0% of this growth driven by acquisitions and 4.0% due to the impact of additional trading days compared to the same period a year before. Underlying revenue, stripping out those contributions, was broadly flat in the quarter, in line with trends in the first half of the year.
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Antofagasta said production in 2016 will be at the lower end of its guidance and warned it is likely to fall in 2017 as grades and throughput are expected to fall at two of its major mines. The Chilean copper and gold miner had previously warned that full-year production will be at the lower end of its 710,000 to 740,000 tonne guidance range, and said on Wednesday that production in 2017 is expected to be in the range of 685,000 to 720,000 tonnes. On a more positive note, net cash cost guidance for 2016 was lowered again.
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ConvaTec Group said it has set the price for shares in its initial public offering on the London Main Market at 225.00 pence per share. The company will have a total market capitalisation upon admission of GBP4.39 billion. Conditional dealings in the shares will start on Wednesday. ConvaTec will get gross proceeds of GBP1.47 billion from the offer, which will mostly be used to redeem or repay debt held by the company. It has been floated by current owners Nordic Capital and Avista Capital Partners. Following the float, Nordic will own 45% of the business, while Avista will own around 20%. ConvaTec makes products for managing chronic conditions, including acute wound care, ostomy care and continence products, and infusion devices used in treating diabetes.
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MARKETS
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London shares were lower mid-morning with the FTSE 100 below 7,000 points. Antofagasta and Lloyds were among the worst blue-chip fallers. The pound broke above the USD1.22 barrier against the dollar. Wall Street was pointed to a lower open.
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FTSE 100: down 1.1% at 6,943.76
FTSE 250: down 1.1% at 17,612.01
AIM ALL-SHARE: down 0.1% at 824.95
GBP: up at USD1.2209 (USD1.2159)
EUR: up at USD1.0925 (USD1.0885)
GOLD: up at USD1,273.96 per ounce (USD1,270.60)
OIL (Brent): flat at USD50.05 a barrel (USD50.70)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK mortgage approvals increased to a three-month high in September, the British Bankers' Association reported. The number of mortgages approved for house purchases rose to 38,252 in September from 37,241 in August. This was the highest since June, when approvals totalled 39,880. In September, gross mortgage borrowing of GBP12 billion was 2% lower than in September 2015. Net mortgage borrowing was 2.6% higher than a year ago. Consumer credit continued to show annual growth of over 6% despite only moderate retail sales growth, supported in the case of personal loans and overdrafts by favourable interest rates, the BBA said.
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UK Chancellor of the Exchequer Philip Hammond is facing an GBP84 billion black hole in public finances fuelled by Brexit in next month's mini-budget, a think tank has warned. Analysis of projections by independent forecasters shows the economy is expected to be GBP60 billion smaller in 2020 than was expected just before the referendum, the Resolution Foundation said.
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The UK government's decision to back Heathrow expansion plunged the Conservatives into turmoil as Cabinet ministers hit out at the move and a prominent MP quit. Tory supporting councils are poised to support legal action challenging the plans and Foreign Secretary Boris Johnson insisted the scheme was "undeliverable". Conservative bosses were forced to announce the party would not fight the by-election triggered by Zac Goldsmith in protest over the third runway. The Richmond Park and North Kingston constituency was held by the Liberal Democrats until 2010 and splitting the Tory vote could allow them to retake the seat. Goldsmith said the decision to push ahead with the new runway was "catastrophic" and announced he will stand as an independent.
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UK Prime Minister Theresa May has been accused of ignoring her own "dire warnings" about the consequences of a so-called hard Brexit after a recording emerged of her setting out fears for the economy. The Prime Minister told investment bankers at an event at Goldman Sachs before the June 23 referendum she was concerned businesses would leave if Britain quit the bloc. She has since said that Britain should have maximum freedom to trade in the single market but not at the expense of immigration controls. In a recording leaked to the Guardian from the event on May 26, she says: "I think the economic arguments are clear. I think being part of a 500-million trading bloc is significant for us. I think, as I was saying to you a little earlier, that one of the issues is that a lot of people will invest here in the UK because it is the UK in Europe."
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The governor of the Bank of England said Tuesday monetary policy has become overburdened and he would welcome government policies to help boost the economy. Speaking to the House of Lords Economic Affairs Committee, Mark Carney said the Bank's policies could not "do it all". "Monetary policy has been in many respects overburdened in providing support to the economy," he said. "The government has signalled some resetting of that burden between monetary, fiscal and other policies and that is welcome."
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European Commission President Jean-Claude Juncker expressed confidence in achieving a breakthrough in the deadlock over an EU-Canada trade deal, as a new round of crisis talks was under way. Belgium's federal government has so far failed to sway the country's French-speaking Wallonia region to support the Comprehensive Economic and Trade Agreement, which aims to ease the flow of goods between Canada and the EU. The deal is supposed to be signed by Canadian Prime Minister Justin Trudeau and EU officials in Brussels on Thursday, but that requires all 28 EU member states to be on board. "As we speak, the summit tomorrow is still possible," European Council President Donald Tusk told EU lawmakers in the French city of Strasbourg.
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Multiple fires were set off overnight at a migrant camp near the northern port city of Calais, as a week-long government operation to evacuate the "Jungle" camp and dismantle the makeshift shelters continued. French firefighters had put out the fires, and there were no reports of serious injuries. Regional prefect Fabienne Buccio told broadcaster BFMTV that setting off fires was a tactic migrants had used previously to destroy parts of the camp before leaving, saying that it was mostly makeshift shops that were set alight overnight. More than 4,000 people have been taken to shelters, either in accommodation centres around France where they can apply for asylum, or to a container site near Calais where minors are waiting to see if they can be reunited with family in Britain.
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US Republican presidential candidate Donald Trump maintains that his campaign is "very close or winning" with just two weeks to go until US elections. "Honestly I think we're doing really well all over," Trump told Fox News on Tuesday even as most opinion polls show him trailing Democrat Hillary Clinton nationwide and in most key states ahead of November 8 elections. The victor will be determined based on the winners in each state rather than the overall popular vote, and the candidates are focusing their attention in the remaining days on some dozen states that could go to either candidate.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
Copyright 2016 Alliance News Limited. All Rights Reserved.
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