6th Oct 2015 10:15
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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SABMiller said that group net producer revenue declined in both the second quarter and first half of its financial year due to unfavourable movements in foreign exchange rates. The brewer said it had brought forward its half-year trading update as it is in an offer period under the UK Takeover Code, resulting from the bid approach from Anheuser-Busch InBev last month. The drinks giant said that group net producer revenue in the six months ended September 30 fell 9% on the year before, also falling 9% in the second quarter to the same date, which it said was due to the continued depreciation of its key operating currencies against the US dollar. On an organic, constant currency basis, net producer revenue grew 4% year-on-year.
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BP completed a USD20.8 billion agreement with the US government and states on the Gulf of Mexico to settle claims over the 2010 Deepwater Horizon oil spill. The US Justice Department said the resolution - which includes federal civil environmental damages and economic damages for the five states and hundreds of local governments from Texas to Florida - is the largest settlement with a single company in the department's history.
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Royal Dutch Shell Chief Executive Ben van Beurden told a conference that clean renewable energy will struggle to displace fossil fuels as heavy industries will only gradually wean themselves off of coal, oil and gas. In a speech at the Oil and Money conference in London, van Beurden again called on governments to put a price on carbon emissions in order to cut coal consumption in favour of less-polluting natural gas.
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Two of the UK's biggest fund management companies are to quit the Investment Management Association amid criticism that the industry trade body has been "too aggressive", the Financial Times reported. Schroders and M&G Investments, which is owned by Prudential, have around GBP550 billion in combined assets under management, about 10% of the total of GBP5.5 trillion in assets managed by the IMA's members. Some City investors have said the association has been overzealous in carrying out reforms in areas such as the transparency of fund management fees and transactions costs, the FT said.
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Dixons Carphone said Graham Stapleton has been appointed chief executive of the company's Connected World Services division. Stapleton was formerly chief executive of Carphone Warehouse in the UK & Ireland.
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Low-cost airline easyJet said its passenger traffic and load factor both improved in September. The budget carrier said it carried 6.6 million passengers in September, versus 6.1 million a year earlier, up 7.6%. On a rolling 12-month basis, passenger numbers were up 6.0% to 68.6 million, it said. It also said its load factor for the month improved, up by 0.9 percentage point to 93.1% from 92.2% a year earlier.
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Greggs reported growth in sales in the third quarter of its financial year and said it expects to report full-year growth slightly ahead of previous expectations amid favourable market conditions. The bakery and food-to-go retailer also said the new UK National Living Wage will raise its costs, but noted that it already pays staff above the current minimum wage. Greggs said that total sales in the 13 weeks to October 3 rose 5% on the same period the year before, while own-shop like-for-like sales grew 4.9%, slightly ahead of its expectations. In the year to date, total sales grew 5.1% and own-shop like-for-likes rose 5.6%.
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Ted Baker reported a rise in profit in the first half of its financial year as it grew sales strongly in each of the regions in which it operates. The luxury fashion retailer reported a 15% rise in pretax profit in the 28 weeks ended August 15 to GBP17.8 million from GBP15.6 million the year before, as revenue grew by a quarter to GBP226.8 million to GBP182.2 million. Ted Baker will pay an interim dividend of 13.2 pence, up 17% on the 11.3p it paid the year before.
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Barclays Bank said it has completed an accelerated bookbuild offering to investors of 8.0 million shares in Betfair Group at GBP32.50 each. On Monday, the bank announced that it had launched the bookbuild on behalf of LE PEIGNÉ and Rothschild Wealth Management acting on an agency basis for Betfair shareholders that are connected to Betfair Co-Founder Edward Wray. It said at the time that the number of shares to be placed was 7.4 million, but on Tuesday said that this increased to 8.0 million owing to strong investor demand, 5.0 million of which were on behalf of LE PEIGNÉ, and 3.0 million on behalf of Rothschild and the Wray shareholders.
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Playtech said it will formally challenge the Central Bank of Ireland's decision to oppose its acquisition of Ava Trade, after the Irish financial services regulator clarified its position to the company. On Monday, Playtech reported it had received a letter from the regulator opposing its proposed USD105 million deal to buy contracts-for-difference broker Ava Trade. The deal has already been approved by the Financial Services Commission of the British Virgin Islands.
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Acacia Mining said its production output in the third quarter was weaker than anticipated and said its full-year production will now fall below previous guidance. Acacia said its production in the third quarter was around 164,000 ounces of gold, lower than its had expected due to several short-term issues which hit production at its Bulyanhulu and Buzwagi mines over the period to the end of September, while North Mara performed in line with its expectations. All three mines are based in Tanzania.
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Speciality pharmaceuticals company BTG said it anticipates it will deliver full year revenue in the lower half of its guidance range, as interest in its varicose veins treatment Varithena has "not yet translated into sales growth." However, the company reiterated its expectations of double-digit revenue growth for the year.
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MARKETS
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UK indices were trading mixed on a quiet day in the economic calendar. SABMiller was the biggest FTSE 100 faller, down 2.7%, after saying revenue was hit by unfavourable movements in foreign exchange rates, while Glencore's rebound came to a halt, with the stock down 2.0%.
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FTSE 100: down 0.1% at 6,293.53
FTSE 250: down 0.1% at 17,101.68
AIM ALL-SHARE: up 0.1% at 734.62
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GBP: up at USD1.5170
EUR: up at USD1.1214
GOLD: up at USD1137.50 per ounce
OIL (Brent): up at USD49.36 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK housing equity injections decreased in the second quarter to its lowest level since early 2012, data from the Bank of England revealed. Households injected GBP10.9 billion versus GBP12.07 billion in the prior quarter. This was the lowest since the first quarter of March 2012.
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UK house prices dropped unexpectedly in September, data from Lloyds Banking Group's Halifax division revealed. House prices slid 0.9% month-on-month in September, reversing August's 2.7% increase, which was the biggest monthly growth in 15 months. Economists had forecast prices to gain 0.1%. During three months to September, house prices increased 2% from the previous three months.
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Twelve Pacific Rim countries reached an agreement on a trade pact that will lift most duties on trade and investment, set new business standards and protect intellectual property rights, the countries' trade ministers said. "After more than five years of intensive negotiations, we have come to an agreement that will support jobs, drive sustainable growth, foster inclusive development and promote innovation across the Asia-Pacific region," the ministers said in a statement after reaching final agreement on the Trans-Pacific Partnership. The US-led initiative, which US President Barack Obama aims to make one of his signature achievements, would encompass nearly 40% of the world's economy and cover about 800 million people. The US hopes it will tilt the economic balance of power in the region away from China. The Pacific Rim countries involved in the negotiations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.
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The Reserve Bank of Australia maintained its key interest rate for the fifth straight meeting. The policy board governed by Glenn Stevens decided to leave the cash rate at a record low 2.00%, in line with expectations. The bank had lowered the rates by 25 basis points each in February and May.
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Germany's factory orders declined in August as both domestic and foreign demand deteriorated from July, data from Destatis revealed. Factory orders dropped 1.8% month-on-month in August, confounding expectations for a 0.5% rise. Orders had declined 2.2% in July, which was revised from a 1.4% drop estimated initially. This was the second consecutive decrease in orders.
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Eurozone finance ministers expressed wariness on suggestions that the EU should grant budgetary leeway to member states that are contending with refugee influxes. The EU requires the public deficits in its member states to be brought down to 3% of gross domestic product while debt should be no higher than 60%. Within the eurozone, the commission can enforce its recommendations with fines. But some have been calling for Brussels to loosen the economic straitjacket as Europe contends with its largest influx of migrants and refugees since World War II, straining local resources. Diplomats said Austria, Italy and Luxembourg have been pushing for leeway under the EU budget rules, which foresee flexibility if there are "exceptional circumstances."
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Turkish President Recep Tayyip Erdogan called for progress in EU relations with Ankara and support for what he called a terrorist crackdown as Brussels sought help in stemming the flow of refugees reaching the bloc. Europe is grappling with the largest influx of refugees and migrants since World War II with many fleeing the war in Syria. Neighbouring Turkey has taken in more than 2 million Syrian refugees but is also a transit country for those seeking a better life in the European Union.
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