1st Dec 2015 11:21
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The Bank of England said the banking system is strong enough to continue lending in the event of a global economic downturn, although its stress tests showed that Royal Bank of Scotland Group and Standard Chartered had capital inadequacies at the end of 2014. However, because of actions taken to raise capital since the end of 2014, the Bank of England?s Prudential Regulation Authority did not require either RBS or Standard Chartered to submit revised capital plans. The stress tests did not show capital inadequacies for Barclays, HSBC Holdings, Lloyds Banking Group, Nationwide Building Society, or Santander UK.
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Theme parks and attractions operator Merlin Entertainments said trading has remained in line with its expectations and it is on track for the year to December 27, despite continued tough trading in its Resort Theme Parks operating division. Merlin said like-for-like revenue growth for its Legoland Parks division has remained robust in the 47 weeks to November 21, while its Midway Attractions business has seen growth, albeit at lower levels due to challenging markets in London and Hong Kong, which has been offset by strength elsewhere in Asia. For the Resort Theme Parks operating arm, however, trading at Alton Towers has remained significantly weaker year-on-year, though the year-on-year declines have eased in recent weeks.
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The US Senate said it will hold a hearing next week into the proposed takeover of SABMiller by rival Anheuser-Busch InBev. The Senate Judiciary Committee said its antitrust subcommittee will hold a meeting on the proposed merger of the two largest beer companies in the world on December 8.
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Anti-smoking campaigners are calling for an inquiry to be launched into whether employees of British American Tobacco paid bribes to politicians and civil servants in east Africa, The Times reported. According to a documentary aired by the BBC's Panorama, BAT, which owns the Dunhill and Lucky Strike cigarette brands, paid bribes to officials in east Africa, based on evidence from former employee Paul Hopkins, who was based in Kenya and worked for the tobacco giant for 13 years. Hopkins said he was planning to meet with the Serious Fraud Office this week and said he was told bribery was the way of doing business in Africa, adding some BAT managers were aware of his activities.
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Specialty chemicals company Croda International said it has struck a deal to acquire Netherlands-based Incotec Group BV for EUR155.0 million, including debt. Incotec, based in Enkhuizen, develops and supplies technologies for vegetable seeds and field crops. In the financial year ended September 30, it had revenue of EUR71 million.
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St Modwen Properties said its pretax profit for the year to end-November is "likely to be in line with market expectations". The property regeneration company said that activity across its commercial portfolio is progressing in line with regional market recovery. It disposed of a number of mature assets during the year, and used the sale proceeds to fund strategic acquisitions across the UK.
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Vehicle hire company Northgate said its pretax profit dipped in the first half due to weaker margins and a hit from the euro to its Spanish business, along with a change in revenue mix. Northgate's pretax profit for the half to the end of October was GBP42.8 million, down from GBP46.9 million, as its gross margins deteriorated year-on-year and it was hit by higher vehicle depreciation rates and by the weakness of the euro. The group will pay an interim dividend of 5.1 pence per share, up from 4.3p.
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The retail executive responsible for turning around the Garden Centre Group is understood to be preparing a bid to buy the Homebase DIY and garden centre business from Home Retail Group, the Financial Times reported. Nicholas Marshall told the FT he has been looking at Homebase for the past couple of years and was holding talks with private equity companies, though no approach has yet been made to Home Retail, which also owns the Argos retail chain. People close to the situation said Marshall would likely seek to transform Homebase from a DIY centre into a more family-friendly retailer, with more extensive garden and pet products.
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MARKETS
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UK indices were trading higher with the FTSE 100 buoyed by the banking sector, Babcock International Group were among the worst performers after being downgraded to Sell by Citigroup. Wall Street also was pointed toward a higher open.
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FTSE 100: up 0.6% at 6,395.53
FTSE 250: up 0.3% at 17,465.56
AIM ALL-SHARE: up 0.1% at 738.13
GBP: flat at USD1.5092 (USD1.5051)
EUR: flat at USD1.0592 (USD1.0566)
GOLD: up at USD1,069.36 per ounce (USD1,062.47)
OIL (Brent): down at USD44.51 a barrel (USD45.32)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The Bank of England is set to demand banks to set aside capital as buffer as soon as in March, in order to absorb losses in case of stress and support the real economy. In the semi-annual Financial Stability Report, the Financial Policy Committee said it intends to make active use of the time-varying countercyclical capital buffer. By moving early, the FPC expects to be able to vary the countercyclical capital buffer more gradually. The FPC expects the countercyclical capital buffer to be in the region of 1% of risk-weighted assets. Currently, the buffer rate is at zero percent.
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The UK manufacturing sector growth eased in November from the recent peak achieved in the prior month, survey data from Markit showed. The Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index for manufacturing fell to 52.7 in November from October's 16-month high of 55.2. The score was expected to fall to 53.5 in November from October's initial reading of 55.5. Nonetheless, a reading above 50 indicates expansion in the sector.
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The euro area unemployment rate declined to its lowest level since early 2012, data from Eurostat showed. The unemployment rate dropped marginally to 10.7% in October from 10.8% in September. This was the lowest rate since January 2012. The number of unemployed persons decreased by 13,000 from September to 17.24 million in October. Compared to previous year, unemployment fell 1.302 million. In the EU28, the jobless rate remained unchanged at 9.3% in October. This was the lowest rate recorded in the EU28 since September 2009.
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The Chinese renminbi has claimed its pride of position as one of the world's powerful currencies, underlining China's clout in the global scheme of things. The International Monetary Fund added Chinese renminbi as the fifth currency in its Special Drawing Rights basket, giving the yuan an international status. The yuan will be included into to the basket effective October 1, 2016. IMF chief Christine Lagarde said it is a recognition of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems.
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China's manufacturing sector activity continued to shrink in November but the pace of deterioration was the weakest since June, survey results published by Caixin and Markit Economics showed. However, the official Purchasing Managers' survey revealed that the manufacturing sector contracted the most in three years. The Caixin manufacturing Purchasing Managers' Index rose to 48.6 in November from 48.3 in October. Economists had forecast the score to remain unchanged at 48.3 in November. The official PMI fell to 49.6 in November, the lowest since 2012, from 49.8 in October. The expected score was 49.8. The non-manufacturing PMI rose to 53.6 from 53.1 a month ago.
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Ireland's manufacturing activity continued to expand strongly in November, albeit the rate growth was the weakest in twenty one months, survey figures showed. The seasonally adjusted purchasing managers' index dropped slightly to 53.3 in November from 53.6 in October. However, any reading above 50 indicates expansion in the sector. Moreover, business conditions have now strengthened in each of the past 30 months. New orders grew for the twenty-fifth successive month in November. New export order also rose sharply, with the rate of inflation little-changed from that seen in the prior month.
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Turkish Prime Minister Ahmet Davutoglu urged Moscow to reconsider economic sanctions imposed after Turkey shot down a Russian fighter plane last week, while refusing to apologise for the incident. "We hope that Russia will reconsider these reactions, these measures, which will be against our interests both," Davutoglu told journalists during a visit to NATO headquarters in Brussels. Russian President Vladimir Putin on Saturday ordered the sanctions, including bans on some Turkish exports, a prohibition on hiring Turkish nationals starting next year and suspension of visa-free travel for Turkish citizens.
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US President Barack Obama met with Putin on the sidelines of the COP21 climate conference in Paris on Monday. A statement from the Kremlin said Obama and Putin had a detailed exchange of views on the situation in Syria, where both countries have been conducting airstrikes. The Kremlin said the two leaders expressed support for moving towards a political settlement, which the US claims must include the removal of Syrian President Bashar al-Assad. During the meeting, Obama expressed regret over the shooting down of the Russian warplane by the Turkish air force in Syria.
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The US is "aggressively" strengthening its visa waiver programme in light of the terrorist attacks in Paris, the White House said. The visa waiver programme permits visa-free travel to the US for citizens of 38 countries, most of them in Europe. An estimated 20 million people, or about 40% of all overseas visitors, use it annually to enter the US without a visa for business or pleasure for up to 90 days. The White House said the changes implemented Monday include several steps to bolster the relationships between the US and the 38 visa waiver countries. Among them are a change in the application process to capture information about an applicant's past travel to countries believed to provide a safe haven to terrorists.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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