27th Jan 2016 11:16
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Royal Bank of Scotland Group said it will make a GBP4.2 billion payment into its main pension scheme, while setting aside billions of pounds to deal with past misconduct and an impairment charge in relation to its private bank. Wednesday's actions are expected to wipe GBP3.6 billion from the group's tangible net asset value and leave its common equity tier one ratio - a key measure of financial strength - 1.2 percentage points lower as of the end December, compared to the end of September. The latest developments underline the scale of the turnaround job required from Chief Executive Ross McEwan, who has been leading the effort to return the bank to health.
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The board of HSBC Holdings will meet on Wednesday to consider moving the banking giant's headquarters to Hong Kong from London, Reuters reported. There are concerns about China's increasing influence over Hong Kong, with its independence possibly a factor in the decision, the report said, citing a senior source at the bank. A decision on the domicile issue could come as early as this week, Reuters said.
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Aberdeen Asset Management said it continued to suffer net outflows in the quarter to the end of December, driven by continued volatility in emerging markets, and said it will cut further costs as it looks to cope in a tough investment environment. The emerging markets fund manager, which has suffered in recent months from its exposure to a slowing Chinese economy, said it recorded net outflows of GBP9.1 billion for the quarter to the end of December, compared to the GBP12.7 billion it posted in the quarter to the end of September.
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Business software company Sage Group said its organic revenue grew in the first quarter of its financial year, with good growth in its recurring revenue stream. Sage said its organic revenue, on a like-for-like and constant currency basis, grew 6.6% in the quarter to the end of December.
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Antofagasta said its copper and gold production accelerated in the fourth quarter but said full-year 2015 production still was lower than the year before. The group said its copper production for the fourth quarter to the end of December hit 169,900 tonnes, up 8.2% from the third quarter, thanks to higher production from its Los Pelambres and Centinela concentrates projects, plus the contribution from the Antucoya and Zaldivar mines. For all of 2015, however, copper production dipped to 630,300 tonnes, down 11% year-on-year. Gold production for the fourth quarter was 55,700 ounces, up 22% on the third quarter, mainly due to higher grades from Centinela. But gold production for the year also fell, down to 213,900 ounces from 270,900 in 2014.
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Rio Tinto said that it has reached a binding agreement to sell its Mount Pleasant thermal coal assets to MACH Energy Australia for USD224 million plus royalties. With the recently announced binding agreement for the sale of Rio Tinto's interest in the neighbouring Bengalla coal joint venture, this amounts to USD830 million of agreed sales. Mount Pleasant is a large-scale, thermal coal asset in the Hunter Valley of New South Wales with total marketable reserves of 474 million tonnes.
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The largest investor in grocer J Sainsbury is close to giving its support for a renewed bid for Home Retail Group, The Times reported. The Qatar Investment Authority, which owns a 25% stake in Sainsbury's, is understood to have indicated it would support the UK supermarket chain should it make a renewed bid for Home Retail, the owner of Homebase and Argos, of more than GBP1.0 billion.
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Wealth manager Brewin Dolphin Holdings said its core fund inflows remained robust in the first quarter, as it continues to focus on its discretionary fund management business. The FTSE 250-listed group said its total funds under management increased to GBP33.2 billion at the end of the quarter, from GBP32.0 million at the end of September. The group said its total core funds under management, which only includes its discretionary and execution-only funds, rose 4.2% in the quarter to GBP29.7 billion, as it continues to focus on this business. Other income fell in the quarter, in line with this strategy shift.
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Buy-to-let lender and consumer debt purchaser Paragon Group of Companies said its financial performance met its expectations in the quarter to the end of December and said it remains confident on the outlook for the buy-to-let market in the UK, despite regulatory changes. The FTSE 250-listed group said its underlying operating profit, which strips out fair value items and acquisition-related costs, rose 14% in the quarter year-on-year. Its pretax profit was GBP33.9 million for the quarter, up from GBP30.2 million.
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Tritax Big Box REIT said it is seeking to raise GBP100.0 million through a placing, open offer and subscription to back its investment plans. The group, which invests in 'big box' warehouse property, said it will issue a total of 80.6 million shares at 124 pence per share through the placing, open offer and subscription. The stock closed Tuesday at 131.38p.
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Britvic said trading for the first quarter to December 20 had been hit by difficult trading conditions, but that revenue was boosted by encouraging Christmas trading. The soft drinks company reaffirmed its earnings before interest, tax, depreciation and amortisation guidance range of GBP180 million to GBP190 million, after it said it saw good trading in its core markets over the entire Christmas period, with reported revenue for the first quarter 4.8% ahead of last year at GBP311.6 million.
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Shareholders in National Australia Bank voted in favour of de-merging the CYBG business, paving the way for the owner of the Clydesdale and Yorkshire bank lenders to come to market in London. Shareholders in the Australian lender voted "overwhelmingly" in favour of the demerger of the CYBG business, NAB said in a filing with the Australian Securities Exchange. CYBG is set to be valued at up to GBP2.1 billion when it floats in London, with the final pricing of its IPO due on February 2. Some 25% of the demerged business will be floated in London.
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MARKETS
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UK indices were mostly lower, with mining stocks weighing on the FTSE 100. RBS also was among the blue-chip fallers after being hit by a slew of provisions and charges. Investors await a Federal Reserve decision after the London close, the first since the US rate hike announced in December. Wall Street was pointed to a lower open.
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FTSE 100: down 0.4% at 5,885.00
FTSE 250: down 0.2% at 16,139.48
AIM ALL-SHARE: flat at 684.04
GBP: flat at USD1.4305 (USD1.4342)
EUR: flat at USD1.0873 (USD1.0850)
GOLD: flat at USD1,116.62 per ounce (USD1,118.01)
OIL (Brent): flat at USD31.14 a barrel (USD31.68)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK mortgage approvals declined unexpectedly to a seven-month low in December, the British Bankers' Association reported. The number of mortgages approved in December fell to 43,975 from 44,533 in November. It was the lowest since May, when mortages totalled 42,945. It was forecast to rise to 45,500. Likewise, mortgages including re-mortgage decreased to 75,745 from 75,971 in the previous month. Gross mortgage borrowing of GBP12.4 billion in December was 24% higher than a year ago and overall new borrowing in 2015 was some 6% higher than the previous year.
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UK house prices increased at a slower pace in January, data from the Nationwide Building Society showed. House prices climbed 4.4% year-on-year, slightly slower than a 4.5% rise in December. Economists had forecast the annual growth to accelerate to 4.6%. On a monthly basis, house prices rose only 0.3% after increasing 0.8% in December. Prices were expected to rise 0.6%.
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Germany's consumer confidence is set to remain unchanged in February as modest improvements in economic expectations and willingness-to-buy were offset by deterioration in the income outlook, survey results from GfK showed. The forward-looking GfK Consumer Confidence Index showed a score of 9.4 points for February, unchanged from January, the Nuremberg-based market research group said. Economists had expected slight easing to 9.3 points. "The consumer climate has therefore been able to withstand the recent growth in risks it is facing," GfK said.
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Profits earned by Chinese industrial enterprises declined at a faster pace in December, figures from the National Bureau of Statistics showed. Industrial profits fell 4.7% year-over-year at the end of the year, which was worse than the 1.4% decrease in November. It was the seventh month of drop in a row. In the whole year 2015, total industrial profits contracted 2.3% compared with the preceding year.
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Italian Finance Minister Pier Carlo Padoan and the European Commission reached a deal that will allow Italy to purge its banks of loans that are not likely to be repaid. The deal would create a so-called bad bank in line with EU rules on state aid. Efforts to create a bad bank have been under way for several months.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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