16th Jul 2015 10:10
LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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UK media and communications regulator Ofcom said it has completed the first phase of its Strategic Review of Digital Communications and said it will seek views on a number of potential changes, including on the possible break-up of BT Group. Ofcom outlined a range of potential options to improve competition in the communications market and will seek views and evidence on a series of future regulatory approaches regarding BT. These would include retaining the current model, where BT's Openreach infrastructure business is required to provide access to the network to competing providers, or strengthening the current regulatory model, which would impose new rules on BT, including controls on its wholesale charges with stronger incentives to improve quality of services and tougher penalties should it fail to meet targets. The option also includes separating the Openreach business from BT, something rival Sky recently called for.
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Anglo American said it had a "solid" production performance in the second quarter of 2015 that was in line with its expectations but said it will report a substantial impairment charge in the first half totalling between USD3.0 billion to USD4.0 billion. The multi-commodity miner said iron ore production from its Kumba operations in South Africa fell 9% year-on-year to 10.4 million tonnes from 11.5 million tonnes due to mining feedstock constraints, but iron ore production from Minas Rio in Brazil totalled 1.8 million wet tonnes, up 55% as it continues to ramp-up.
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Anglo-Australian mining giant Rio Tinto reported that its global iron ore production for the second quarter grew 9% from last year, while shipments increased 8%. However, the company lowered its forecast for full-year iron ore shipments, citing weather disruption in the first half of the year at its Pilbara operations. Rio Tinto, the world's second-largest iron-ore producer, said its global iron ore production for the second quarter increased 9% on a 100% basis to 79.7 million tons. The company's second quarter iron-ore production also rose 7% sequentially. Iron ore sales account for roughly 90% of the profit of Rio Tinto.
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Dixons Carphone reported growth in profit in its recently-ended financial year as sales continued to grow following the merger of Dixons Retail and Carphone Warehouse last year. The electricals and telecoms retailer said pretax profit in the year to May 2 rose to GBP287 million from GBP77 million the year before, as revenue grew to GBP8.3 billion from GBP1.9 billion. Total like-for-like sales were up 6% on the prior year. Dixons Carphone said that the integration of the two businesses is progressing well and is expected to deliver at least GBP80 million of synergies by the financial year 2017, one year ahead of plan. Dixons Carphone will pay a final dividend of 6 pence, up from the 4p it paid the year before, taking the total dividend for the year to 8.5p from 6p, a 42% increase.
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Sports Direct International reported growth in profit in its recently ended financial year, boosted by a rise in revenue as it extends its portfolio across the UK and Europe. The sporting goods retailer reported a 31% rise in pretax profit in the year ended April 26 to GBP313.4 million from GBP239.5 million the year before, as revenue grew 4.7% to GBP2.8 billion from GBP2.7 billion. It said revenue and profit growth was driven by continued expansion in the UK and across Europe. Sports Direct will not pay a dividend for the year, saying the payment of dividends remains under review.
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The UK government sold off just shy of a further 1% of its stake in Lloyds Banking Group. The government now holds a 14.98% stake in Lloyds, cutting its stake from the 15.90% it held after it sold down its stake earlier this month.
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Barclays said Michael Rake will remain on its board as deputy chairman and senior independent director until a new chief executive is appointed, after which he is expected to leave to take up the chairmanship of payments company Worldpay. The FTSE 100-listed bank said Rake will remain his in role until John McFarlane has reverted to his role as non-executive chairman and a replacement senior independent director is in place.
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Information services and credit reports company Experian said it has made an encouraging start to its current financial year, with progress made across the business, even as foreign exchange translation challenges continue. Experian said it has seen good progress in its software and analytics, fraud and identity management, consumer and business information arms and has seen improved trading in Brazil in the first quarter to the end of June.
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Imperial Tobacco Group is considering selling an additional stake in its Spanish logistics unit Cia de Distribution Integral Logista Holdings, Bloomberg reported, citing people with knowledge of the matter. Imperial Tobacco, which owns about 70% of Logista, may reduce its holding to just over 50% via a sale to institutions, the report stated. The company could also seek a buyer for the entire stake, the report added. Spokesmen for Imperial and Logista declined to comment.
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Premier Oil said it has been awarded two blocks in round one of the licensing round in Mexico through its joint venture. The FTSE 250-listed oil company said Blocks 2 and 7, which the joint venture has been awarded, contain "numerous leads in established and emerging plays". The blocks are located in the shallow water Sureste Basin in the Gulf of Mexico.
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Self-storage provider Big Yellow Group said its revenue increased in the first quarter of its financial year, boosted by the acquisition of its regional portfolio joint venture, though like-for-like revenue also increased. Big Yellow said its total revenue in the first quarter to the end of June was GBP24.1 million, up from GBP18.9 million a year earlier, thanks to the company acquiring the 67% of the Big Yellow Partnership Ltd, its regional joint venture, that it did not already own in December. But like-for-like revenue, which does not include those regional stores, also increased, up to GBP20.7 million from GBP18.9 million.
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MARKETS
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London shares are higher mid-morning, as markets across Europe are lifted by the Greek Parliament's approval of the country's new debt bailout programme, while investor focus now will switch to the European Central Bank's rate decision due at 1245 BST and press conference at 1330 BST.
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FTSE 100: up 0.5% at 6,787.48
FTSE 250: up 0.6% at 17,737.07
AIM ALL-SHARE: up 0.2% at 757.65
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GBP: down at USD1.5621
EUR: down at USD1.0908
GOLD: down at USD1145.29 per ounce
OIL (Brent): up at USD57.90 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The Greek Parliament's overnight decision to back tough economic reforms could clear the way for the European Central Bank on Thursday to boost emergency funding to the nation's embattled banks. The ECB meeting comes just hours after Greek Prime Minister Alexis Tsipras rammed a set of tax and pension reforms aimed at securing the country's third bailout in five years through the legislature in Athens. Greek banks have been kept afloat for months by funds provided to the nation's central bank under the ECB's Emergency Liquidity Assistance scheme. After leaving the ELA for Greece once again this week unchanged at EUR89 billion, ECB President Mario Draghi could announce at his press conference that the ECB has raised the emergency financial support levels for Athens. This could help ease the pressure on cash-strapped Greece's financial system, so as to allow the nation's banks to reopen after they were closed two and half weeks ago amid government-imposed capital controls.
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A debt haircut for Greece also should mean its exit from the eurozone, German Finance Minister Wolfgang Schaeuble said in an interview. He said many economists, including Greek ones, have expressed doubts that Greece could emerge from its financial crisis without a reduction in its debt, which the International Monetary Fund has called unsustainable. "A true haircut on debt is not compatible with membership in the currency union," the conservative politician told Deutschlandfunk, while noting that a haircut "would possibly be the better path for Greece".
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The UK Competition and Markets Authority said it is taking a series of measures to improve compliance, bring greater clarity to shoppers and simplify the regulations regarding supermarket promotions. The CMA completed an investigation into promotions used in supermarkets after consumer-advocacy group Which? submitted a super-complaint in April raising concerns about misleading offers and a lack of comparable prices because of the limitations of unit pricing. On Thursday, the CMA said that in its investigation it found examples of pricing and promotional practices that have the potential to confuse or mislead consumers and which could be in breach of consumer law.
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Eurozone inflation slowed as estimated in June largely due to a fall in energy prices, final data from Eurostat showed. Inflation eased to 0.2% in June from 0.3% in May. It came in line with the flash estimate released on June 30. Inflation is well below the European Central Bank's targets of below, but close to, 2% over the medium term. Core inflation that excludes energy, food, alcohol and tobacco slowed marginally to 0.8% in June from 0.9% in May.
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The US Federal Reserve is getting more optimistic that the US economy is on the right track after a second straight rough winter. With the jobs market improving, each of the Fed's 12 districts reporting activity expanded from mid-May through June, according to the most recent Beige Book. Respondents told the Fed that consumer spending is picking up, the housing market is steady, and lending activity in on the rise. The Beige Book is expected to give the Fed another reason to raise interest rates, perhaps as early as September. Fed Chair Janet Yellen said as much Wednesday when she gave a relatively upbeat assessment of the U.S economy to Congress. She said the Fed was going to raise rates this year if the recovery proceeds.
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The Asian Development Bank cut its economic growth forecast for developing Asia amid slower-than-expected growth in the US and China. The Manila-based bank said the region's gross domestic product was projected to grow by only 6.1% from the original forecast of 6.3% in its annual Asian Development Outlook published in March.
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US President Barack Obama defended the Iranian nuclear deal as meeting the top US priority of preventing Tehran from getting a nuclear bomb, even as the agreement came under fire Wednesday from lawmakers in Washington and key US ally Israel. "Without a deal, we risk even more war in the Middle East," he said. Congress has 60 days to approve the deal.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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