8th Oct 2019 11:25
(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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London Stock Exchange Group said it is making "good" progress on its Refinitiv acquisition, shortly after Hong Kong Exchanges & Clearing pulled out of its bid to buy the operator of the London Stock Exchange. LSEG noted the announcement by HKEX to not make a formal offer for the group, after initially proposing a potential GBP30 billion takeover offer in mid-September. LSEG initially rejected the offer later that month. At the time of the rejection, LSEG said it saw "fundamental flaws" in the approach, and also noted any combination would come under intense scrutiny from a variety of regulators. On Tuesday, however, HKEX formally announced it had withdrawn its offer to buy the FTSE 100-listed financial exchange operator.
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easyJet said it delivered a "solid" performance in the fourth quarter, continuing to perform in line with expectations. As a result, easyJet expects headline pretax profit of between GBP420 million and GBP430 million - in the upper half of the airline's guidance range. In the year ending September 30, 2018, the airline recorded GBP578 million in headline pretax profit. easyJet full year passenger numbers increased by 8.6% year-on-year to 96 million, with capacity growing 10% to 105 million seats. Load factor declined 1.4 percentage points to 91.5%. Chief Executive Johan Lundgren said: "easyJet has continued to perform in line with expectations, despite challenging market conditions." Lundgren attributed the increased demand on the "disruption" seen at rivals British Airways and Ryanair Holdings. British Airways is owned by International Consolidated Airlines Group.
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PageGroup said profit for the third quarter of 2019 rose despite most regions being hit by increased macro-economic and political uncertainty during the period. For the quarter ended September 30, gross profit increased to GBP216.7 million from GBP207.9 million the same period the year before, a rise of 4.2% at reported currency rates and 2.1% at constant rates. The Europe, Middle East & Africa region was the largest contributor, with gross profit rising by 7.0% to GBP101.5 million from GBP94.9 million, with strong growth in Germany and Italy. Meanwhile the Americas had the strongest rate of growth, rising by 17% to GBP37.3 million from GBP31.8 million the prior year on a robust performance from the US and Latin America. However, Asia Pacific's profit fell by 4.0% to GBP44.1 million from GBP46.0 million, as PageGroup's operations in China declined on trade war uncertainty and social unrest hurting its business in Hong Kong. US-China trade war concerns also affected the group's business in Singapore. Finally, gross profit from the UK dropped by 4.1% to GBP33.8 million from GBP35.2 million, as increased Brexit uncertainty took its toll on candidate and client confidence at all levels within the period.
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MARKETS
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London shares were broadly lower on Tuesday with LSEG the worst blue chip performer, down 4.9%. In the FTSE 250, PageGroup was the worst performer, down 11%. Wall Street was pointed to a lower open. Ahead, Federal Reserve Chair Jerome Powell will speak at the National Association for Business Economics' annual meeting in Denver, Colorado at 1730 BST.
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FTSE 100: flat at 7,207.68
FTSE 250: down 0.3% at 19,354.61
AIM ALL-SHARE: down 0.1% at 862.26
GBP: down at USD1.2237 (USD1.2321)
EUR: flat at USD1.0986 (USD1.0992)
GOLD: flat at USD1,500.30 per ounce (USD1,501.30)
OIL (Brent): down at USD58.26 a barrel (USD59.22)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Chinese business activity expanding at its quickest pace in five months in September, the Caixin general services purchasing managers' index showed. The composite PMI, which covers both manufacturing and services, rose to 51.9 in September from 51.6 in August, its best performance since April. Caixin said the improvement was helped by improved manufacturing output, despite a slighter rise in activity in the services sector. "China's economy showed signs of marginal recovery in September, as the labour market improved and domestic demand increased at a faster pace," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.
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The US and Japan formally signed a bilateral trade agreement after US President Donald Trump again complained about Japan's chronic trade surplus with his country. The pact was signed by Japan's ambassador to the US, Shinsuke Sugiyama, and US Trade Representative Robert Lighthizer at the White House on Monday. Washington reached the deal with Tokyo amid its year-long trade war with Beijing. The deal, which was initially announced by Japan and the US last month, includes increased access to Japanese markets for American agricultural producers.
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Facing a staunch backlash in the US Congress over his decision to stand back in the face of a Turkish invasion of northern Syria, Trump threatened to destroy the Turkish economy if Ankara takes steps that are "off limits". The previous night, Trump had spoken with Turkish President Recep Tayyip Erdogan by phone and then issued a statement saying Ankara would go ahead with a "long-planned" operation in northern Syria. The Kurdish-led Syrian Democratic Forces, which have been the main partner allied with the US in defeating Islamic State, dominate areas in north-east Syria. Turkey considers the Kurdish People's Protection Units, which lead the SDF, an offshoot of the outlawed Kurdistan Workers' Party, which is waging an insurgency within Turkey.
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UK government debt is set to rocket to levels not seen since the 1960s in the event of a no-deal Brexit, a leading economic think tank has warned. The Institute for Fiscal Studies said following last month's spending review, Government borrowing was on course to top GBP50 billion next year, more than double what the Office for Budget Responsibility was forecasting as recently as March. However, in the event of even a "relatively benign" no-deal Brexit, the IFS said that could rise to almost GBP100 billion – while debt would climb to almost 90% of national income for the first time since the mid 1960s.
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Trump said he would prefer to strike a comprehensive trade bargain with China, in comments days before top US and Chinese officials are due to resume trade talks in Washington. But with little sign the two sides have made progress in bridging the distance between them, speculation has mounted in recent months they may reach a deal which addresses only some of Washington's extensive grievances. "I think it's not what we prefer at all. My inclination is to get a big deal," Trump told reporters when asked if he could accept a partial agreement. With eight days to go before the next round of punitive tariffs is due to hit, Beijing's top trade envoy Liu He will meet with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin beginning Thursday, Chinese state media reported. The high-level Chinese delegation also includes commerce minister Zhong Shan, central bank governor Yi Gang and vice minister of industry and information technology Wang Zhijun. The vice minister for agriculture Wang Shouwen has also been added to the negotiating team after China last month announced that it had started buying US soybean and pork.
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Campaigners are expected to lodge an appeal after a judge dismissed a legal action aimed at forcing the UK prime minister to request a Brexit extension if no withdrawal deal is secured with the EU by October 19. The Outer House of the Court of Session in Edinburgh refused the order sought by SNP MP Joanna Cherry QC and others in a judgment on Monday. Lord Pentland ruled it was not necessary to compel Johnson to comply with the terms of the so-called Benn Act given the "unequivocal assurances" of Boris Johnson and the government made before the court. The court's Inner House is expected to hear an appeal on Tuesday.
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