5th Jan 2016 11:11
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Next maintained its profit guidance for its full financial year and declared a further special dividend, despite saying sales in its fourth quarter were "disappointing" as they missed the bottom end of its guided growth range. The retailer said total brand sales rose 3.7% in the year to January 2, with Next Retail up 2.1% and Next Directory up 6.1%, but this was below its previously guided range of between 4% and 6% growth for total sales. Next said its performance in the fourth quarter was "disappointing" due to unusually warm weather in November and December, while Next Directory was hit by poor stock availability from October onwards, leading to the lower-than-expected growth figure in the year to January 2.
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HSBC Holdings has escaped formal action from the City regulator over allegations its Swiss private bank helped clients to evade tax, Sky News reported. Citing sources, the report said the UK's Financial Conduct Authority ended its examination of the unit several months ago. The conclusion of the review was not made public at the time it ended, the report said. According to the sources, a major tax investigation was a matter for the UK's tax and customs authority, HM Revenue & Customs.
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Old Mutual late Monday said its Old Mutual (Bermuda) Holdings subsidiary completed the sale of Old Mutual (Bermuda) to Beechwood Bermuda on December 31. "This transaction represents an important step in the preparations for the group's exit from its Bermuda businesses by the end of 2018 when the guaranteed minimum accumulation benefits liabilities to customers are due to expire," Don Hope, chairman of Old Mutual (Bermuda) Holdings, said.
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Property developer Great Portland Estates said it has agreed to sell 60 Great Portland Street in central London for GBP102.2 million, in line with the valuation of the property in September 2015. The FTSE 250-listed company said the property has been sold to Cityhold Office Partnership, a joint venture between TIAA-CREF General Account and the AP1 and AP2 Swedish national pension funds. "The sale of 60 Great Portland Street continues our disciplined and profitable recycling from mature assets back into our largest ever development programme which we expect to be a significant driver of future returns," said Toby Courtauld, Great Portland's chief executive.
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AA said it has inked a joint venture deal to develop connected-car software for services provided by roadside assistance clubs. The venture, which has been named Intelematics Europe, will be co-owned by the AA, roadside assistance clubs in the Netherlands and in Austria, and Intelematics, which provides similar services in Australia and has a joint venture in the US with Auto Club Enterprises. The technology will enable information to be shared through a small device embedded in the vehicle in question, which could be used to improve safety and security of vehicles and people in them.
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Bwin.Party Digital Entertainment reported a rise in net revenue in the fourth quarter of 2015, ahead of its merger with smaller peer GVC Holdings. The online gaming company said net revenue in the fourth quarter of 2015 grew 4% year-on-year, driven by sports betting and casino, as strong growth in mobile benefited from further product enhancements. Bwin added that its takeover by peer GVC is expected to complete on February 1.
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Builders' merchant and DIY company Grafton Group said it has acquired London-based timber specialist T Brewer & Co for an undisclosed amount. Grafton said T Brewer has three branches, in Clapham, Enfield and Amersham, and generated around GBP14.0 million in revenue in 2015. The group said the acquisition will extend its coverage in the London merchanting market, providing a new area of growth for the company.
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Central and Eastern European budget airline Wizz Air Holdings said its passenger traffic and load factor both improved in December. Wizz Air said it carried 1.5 million passengers in December, up from 1.3 million a year earlier. For the 12 months to the end of December, its passenger traffic increased 22%, up to 19.2 million from 15.8 million. The company's load factor also improved in December, up 0.8 percentage point to 85.1% from 84.3%.
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MARKETS
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UK indices were trading lower with fashion retailer Next leading the decliners after a disappointing Christmas period and was also downgraded by S&P Capital IQ to boot. Wall Street pointed to a lower open.
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FTSE 100: down 0.1% at 6,089.12
FTSE 250: down 0.1% at 17,108.88
AIM ALL-SHARE: down 0.2% at 734.15
GBP: flat at USD1.4676 (USD1.4670)
EUR: flat at USD1.0775 (USD1.0791)
GOLD: up at USD1,077.84 per ounce (USD1,074.80)
OIL (Brent): flat at USD36.99 a barrel (USD36.90)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK construction sector strengthened more than expected in December, survey results from Markit showed. The Chartered Institute of Procurement & Supply/Markit Purchasing Managers' Index rose to 57.8 in December from a seven-month low of 55.3 in November. It was forecast to rise moderately to 56. A score above 50 indicates expansion.
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Chinese authorities have announced measures to support investor sentiment such as liquidity boost by the central bank and more steps to regularise stock selling by major shareholders, after stock markets witnessed massive sell-off on Monday. The People's Bank of China on Tuesday pumped USD19.94 billion or 130 billion yuan in its 7-day reverse repurchase operation, the biggest such injection since September. Funds were offered at 2.25%, the bank said on its website. Reports also suggested that state-owned investment funds intervened to support the equity market. The Chinese stock market witnessed a 7% sell-off on Monday that led to suspending trade after the new "circuit breaker" was triggered on its very first day of introduction. The rout spread to the global markets, sparking declines.
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A top Federal Reserve official downplayed the Chinese economic slowdown as a factor in determining US monetary policy. "I don't see that as a significant risk to the forecast, but it is certainly a risk," Cleveland Fed President Loretta Mester told Bloomberg in a televised interview. "Underlying fundamentals of the US economy remain very sound," she added.
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Eurozone inflation remained stable in December, flash data from Eurostat showed. Consumer prices advanced 0.2% year-on-year in December, the same rate as seen in November but below the 0.4% rate forecast by economists. Headline inflation has been below the European Central Bank's target of 'below, but close to 2%' since early 2013.
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Germany's unemployment rate remained unchanged in November, labor force survey published by Destatis showed. The jobless rate came in at adjusted 4.5%, the same rate as seen in October. In the same period last year, the rate was 4.9%. There were 1.94 million unemployed in November, up by 88,000 from October.
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Bahrain, the United Arab Emirates and Sudan followed ally Saudi Arabia's lead in severing or downgrading ties with Iran as regional tensions escalate over the Saudi execution of a Shiite dissident cleric. Bahrain and Sudan cut off diplomatic links with Iran on Monday, and the UAE downgraded its ties with the Islamic republic. Riyadh meanwhile stepped up its own measures against Tehran, with Saudi Arabia's General Civil Aviation Authority announcing that airlines had been instructed to stop all flights to and from Iran. The diplomatic fallout came only hours after the Saudi government broke off relations with Tehran, where protesters had stormed the Saudi embassy on Saturday night to protest Riyadh's execution of Nimr al-Nimr, a Shiite critic of the Saudi authorities.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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