17th Jun 2016 10:28
LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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BP and Russian state-owned oil company Rosneft formed a new joint venture to explore for prospective resources within two basins in Russia with work expected to start in the winter season of 2016 to 2017. The pair, which already have a long-standing relationship, will call the new venture Yermak Neftegaz, with BP owning 49% and Rosneft holding the other 51%, after the pair signed final and binding agreements at the St Petersburg International Economic Forum. BP has committed to contributing USD300.0 million to fund costs that will be incurred by the new joint venture company whilst Rosneft will contribute the licences that will be explored and a subsidiary which will carry out the initial drill work.
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A UK parliamentary committee published a report recommending a "major change" in the way the UK energy system is operated by breaking up National Grid, claiming the company has "conflicts of interest". The Energy & Climate Change Committee, comprising cross-party members who examine the activities and policy of the Department for Energy & Climate Change, has called for a move toward local energy networks compared to one national network that distributes energy around the country as the market moves toward more low-carbon, renewable sources. National Grid shares were down 1.0% Friday.
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HSBC Finance Corp, a unit of HSBC Holdings, on Thursday said it has agreed to pay USD1.58 billion to settle a 14-year shareholder class action based on events that took place prior to HSBC's acquisition of Household International Inc in 2003. The bank said it could have faced liability up to USD3.6 billion. The settlement is expected to result in a pretax charge to HSBC Finance of about USD585 million, including legal fees and expenses, in the second quarter of 2016. The settlement is subject to court approval and is expected to result in a pretax charge to HSBC Finance of about USD585 million, including legal fees and expenses, in the second quarter of 2016. The bank said it could have faced liability up to USD3.6 billion.
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Tesco continued to shed non-core assets, with the UK grocer selling its Dobbies Garden Centres business to an investor group for GBP217 million in cash. The investor group purchasing Dobbies is led by Midlothian Capital Partners and Hattington Capital. Tesco, which bought the business in 2007, will use the proceeds for "general corporate purposes". "It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths," Chief Executive Dave Lewis said in a statement.
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JD Sports Fashion said sales have been boosted by the Euro 2016 football tournament, which began last week, leaving it well-positioned to deliver an "excellent" first-half result to end July. The sporting goods retailer said it has seen a further boost to sales in recent weeks thanks to the football cup, and although it faces a strong comparative for the remainder of the year, its strong start will help facilitate delivery of current market expectations.
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John Wood Group said it has stepped in to buy a fabrication and manufacturing business in Aberdeen, Scotland from a company that recently went into administration, in a move which will expand Wood Group's capabilities within the UK oil and gas sector. The oilfield services and engineering firm said Enterprise Engineering Service appointed administrators late last month, and John Wood has now acquired the assets of the business to boost its asset integrity management capabilities, adding fabrication to its services, which focus on driving efficiencies and extending the life of upstream and midstream assets. No financial details were provided about the purchase.
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Events company UBM said it has completed the sale of its PR Newswire business to Cision, a PR software company owned by Chicago-based private equity house GTCR Canyon Holdings. UBM had announced the sale of the business in late 2015 and said the total cash proceeds from the sale will be GBP490.0 million. As it previously announced, UBM will return GBP245.0 million of the proceeds to shareholders via a special dividend, payable on July 8.
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Cobham said it has secured 100% take-up of its rights issue of shares after the underwriters managed to place the 3% shares not taken up by investors. Cobham, which serves the aviation, maritime, defence and space sectors, raised the GBP506.7 million to shore up its finances after it issued a profit warning in April.
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MARKETS
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London stocks were ending a difficult week on a positive note, with banking and housebuilding stocks among the blue-chip gainers as fears of UK vote next Thursday to leave the EU easing among investors. The pound was rebounding and gold slid back below USD1,300 an ounce. Wall Street was pointed to a lower open.
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FTSE 100: up 1.5% at 6,040.02
FTSE 250: up 1.8% at 16,320.08
AIM ALL-SHARE: up 0.2% at 710.95
GBP: up at USD1.4269 (USD1.4082)
EUR: up at USD1.1250 (USD1.1114)
GOLD: down at USD1,284.96 per ounce (USD1,309.49)
OIL (Brent): up at USD48.06 a barrel (USD47.48)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The Brexit campaigns were halted following the murder of Labour MP Jo Cox, though that did not stop a series of further interventions coming prior to the tragedy and from outside the official campaigns. The Remain camp got another boost from the Bank of England, the UK's central bank, which warned the value of the pound could plummet if Britain votes to leave the European Union and pre-poll jitters are already undermining the housing market. The warning came as an increasingly bitter war of words erupted between Bank Governor Mark Carney and MP Bernard Jenkin, a prominent Leave campaigner and chairman of the Commons Public Administration Committee. Jenkin sent a letter to Carney suggesting the governor had broken impartiality rules by making his views on the referendum known. Carney said the letter amounted to a "political threat". Jenkin hit back, describing the governor's reaction as "very aggressive".
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The man held over the attack on Labour MP Jo Cox is "not a violent man and is not that political", his brother has said. Tommy Mair, 52, was detained by police near his home in Birstall, West Yorkshire. Officers were seen searching his home not far from the scene of the attack, during which the alleged assailant reportedly shouted "Britain first". Scott Mair, 50, told reporters on Thursday that his brother had a "history of mental illness, but he has had help". And he told the Sun: "We are struggling to believe what has happened. My brother is not a violent man and is not that political." "We don't even know who he votes for. I am visibly shaken at this news. I am so sorry for the MP and her family."
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A Brexit vote is likely to send the pound plummeting as pre-poll jitters are already hitting the housing market, the Bank of England has warned. The intervention came as Governor Mark Carney insisted he has every right to comment on the economic impact of withdrawal after being accused of breaking impartiality rules by a leading Leave campaigner. The Bank insisted it is "increasingly probable" a Leave vote in next week's referendum would sharply damage the value of sterling across international money markets.
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British households perceived that the value of their home increased in June, though at a slower rate than in the previous month, survey figures from Markit Economics and Knight Frank showed.
The Knight Frank/Markit House Price Sentiment Index, or HPSI, dropped to 59.7 in June from 61.0 in the previous month. However, a reading above 50 signals a rise in house prices.
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Eurozone finance ministers have paved the way for a new bailout payment to Greece of EUR7.5 billion, the head of their Eurogroup panel, Jeroen Dijsselbloem, said. Athens and its creditors spent months negotiating reforms and cost-cutting measures that would allow money to continue flowing from Greece's third, EUR86 billion bailout, which was agreed to last year. Only EUR2 billion euros have been paid out so far. The new disbursement will provide "oxygen" for the Greek economy, EU Economy Commissioner Pierre Moscovici said. "We are on the right track," he added.
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A group of EU member states agreed to take a final stab at hashing out a controversial tax on financial transactions, after failing to meet a self-imposed June deadline to resolve their differences. Austria, Belgium, 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 this year. "There must be a final decision in September," said Austrian Finance Minister Hans Joerg Schelling, who has been leading the negotiations. "If we don't have a solution in September, then we probably won't get one," he added.
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US presidential candidate Bernie Sanders said he will not end his campaign despite having virtually no chance of overtaking rival Hillary Clinton for the Democratic Party's nomination. "The revolution must go on," Sanders said in a live-streamed video address. He said his campaign and Clinton's campaign would continue discussions "to make sure your voices are heard" and that the Democratic Party approves the most progressive agenda in its history at its convention next month. Sanders also vowed to do everything in his power to defeat Donald Trump, the presumptive Republican nominee.
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Ukraine slammed UN Secretary General Ban Ki-moon after a statement prepared to be delivered by Ban referred to Russia as having a "critical role" in resolving the crisis in Ukraine and protecting human rights. Volodomyr Yelchenko, Ukrainian ambassador to the UN, told reporters in New York that he was "outraged" by the text sent out by the UN chief's office early Thursday morning because it seemed to suggest that Russia could play a positive role in the conflict.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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