22nd Sep 2015 10:08
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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J Sainsbury was the only big four UK supermarket to increase sales in the past 12 weeks, for the second consecutive period, according to Kantar Worldpanel's grocery market survey. In second place was Tesco, with an overall sales decline of 1% to GBP6.98 billion from GBP7.05 billion, despite increased revenue in the Express convenience stores business. Its market share fell to 28.2% from 28.8%. In third place was Wm Morrison Supermarkets, which experienced a 1.4% fall in sales to GBP2.64 billion from GBP2.68 billion. Its market share also slipped to 10.7% from 10.9%, and is likely to fall further in the coming months as the recently-announced store closures take effect. Meanwhile, German discounters Aldi and Lidl once again demonstrated strong growth as their combined market share grew to 9.8% from 8.4%. Aldi's sales rose 17.3%, while Lidl's sales increased 16.0%.
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Aerospace and engineering group Meggitt said it has struck a USD340.0 million cash deal to acquire the composites arm of US manufacturer EDAC from Greenbriar Equity Group and its other owners. The composites arm of the company produces aerospace components for jet engines and airframes, with more than 85% of revenue derived from the civil aerospace market. Its customer base includes the likes of General Electric and United Technologies, Meggitt said.
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Anglo-Australian mining giant BHP Billiton said it is considering raising new funds and is kicking off a marketing effort across Europe, Asia and the US. BHP said that, subject to market conditions, it may "consider the issuance of multi-currency hybrid capital instruments to institutional debt investors." The group said it is considering raising new funding for general corporate purposes, including refinancing its debt, and said there is currently a robust appetite for hybrid capital amongst global debt investors. It added it is not considering an issue that would contain any rights to convert holdings into BHP shares.
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Tesco is set to decide in the next couple of days whether to abandon the sale of its Dunnhumby customer data unit, after financing concerns meant all but one of the bidders have dropped out of the auction, Sky News reported. Sky, citing insiders, said Tesco Chief Executive Dave Lewis is to hold talks with colleagues and advisers later this week about plans for Dunnhumby, which uses data collected from the retailers' Clubcard loyalty scheme. WPP, the marketing and advertising group, is understood to be the sole bidder still in the race to buy Dunnhumby, after private equity suitors withdrew from the process.
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BT Group Chief Executive Officer Gavin Patterson set out the company's future strategy in Britian, including aims for a universal minimum broadband speed of 5-10 megabits per second, aims to go beyond the UK's current plans to cover 95% of premises with fibre broadband, and a new 'Openreach charter' to address customer service issues. At a conference in London, Patterson committed to BT's support for the UK government in delivering a universal minimum broadband speed, and pledged the company would introduce a satellite broadband service for some of the UK's more remote premises by the end of the year.
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British American Tobacco said it has bought the CHIC Group, the market leading e-cigarette business in Poland, and said it has signed a vapour products technology-sharing term sheet with the US's RJ Reynolds Tobacco Co. The tobacco company said that the CHIC Group has 800 points of sale in Poland, a dedicated e-liquids production facility, a modern research and development centre and leading Polish e-cigarette brands including VOLISH, P1, Provog, Cottien, LiQueen and Aromativ. It did not say how much the acquisition would cost.
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Breakdown cover and roadside assistance company AA said its trading profit fell in the first half, though it said it is trading in line for the full year and said it will pay an interim dividend, its first since listing in mid-2014. The group said it will pay an interim dividend of 3.5 pence per share and said it will pay out a total of GBP55.0 million in dividends for the financial year to the end of January, ahead of the GBP50.0 million commitment it made when it refinanced its debt earlier this year.
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Dairy Crest Group said sales in its four key brands in the first half of its financial year were in line with last year and that its expectations for the full year remain unchanged. The dairy company said that two of its four key brands Cathedral City and Frylight have continued to perform strongly in the six months ending September 30, while Clover and Country Life sales have fallen in a challenging butter and spreads market. Dairy Crest added that the sale of its Dairies operations to Muller UK & Ireland Group is expected to complete by the end of 2015, and once completed should benefit the company's year-end net debt.
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Card Factory said it made a profit in the first half of its financial year, having suffered a loss the year before, as revenue rose and it declared payment of a special dividend. The card and gifts retailer said that it made a pretax profit of GBP24 million in the six months ended July 31, after it suffered a GBP7.9 million pretax loss in the same period the prior year, boosted in the current year due to a significant reduction in net financing expenses to GBP2.1 million from GBP11.2 million.
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IG Group Holdings said revenue increased substantially in the first quarter against a weak comparative, but said the volatile market conditions make it difficult to predict an outcome for the full year. The spread betting and contracts-for-difference company said it is trading in line with its expectations at present, with revenue in the first quarter to the end of August up 24% to GBP106.0 million, though it noted the same period last year was "particularly subdued". IG said the turmoil in Chinese markets served to push client activity to a peak at the end of August.
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MARKETS
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UK indices trade lower with downgrades from Credit Suisse hurting miners who were again amongst the worst performers.
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FTSE 100: down 2.2% at 5,973.52
FTSE 250: down 1.5% at 16,641.87
AIM ALL-SHARE: down 0.7% at 734.43
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The pound was down against the dollar after UK government borrowing increased in August.
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GBP: down at USD1.5470
EUR: down at USD1.1180
GOLD: down at USD1130.42 per ounce
OIL (Brent): down at USD48.13 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK budget deficit exceeded expectations in August, data published by the Office for National Statistics showed. Public sector net borrowing excluding public sector banks increased by GBP 1.4 billion from last year to GBP 12.1 billion in August. It was forecast to rise to GBP 9.2 billion. In August, central government net borrowing rose by GBP 1.6 billion. At the same time, central government receipts decreased by GBP 0.3 billion. Data showed that corporation tax fell by GBP 0.2 billion and income tax related payments by GBP 0.4 billion in August.
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The Asian Development Bank cut its two-year growth forecast for the region, amid a slow recovery in major industrial economies and weaker prospects for China and India. The Manila-based bank said developing Asia's gross domestic product growth is expected to slow to 5.8% in 2015, from 6.2% in 2014. Growth is expected to pick up to 6% in 2016, but revised forecasts were lower than initial projections of 6.3% for both years.
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Chinese President Xi Jinping's visit to the White House on Friday will feature all the pomp of an official state visit, complete with military honours and a sparkling state dinner, but the external images belie the tensions between the world's major powers that have threatened to derail the visit. The hacking of US government personnel records allegedly by Chinese hackers, and concerns about economic manipulation and other issues, have even prompted opposition Republicans to urge the visit be cancelled. The White House has downplayed tensions, but insists it will confront disagreements head on.
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Alexis Tsipras was sworn in for the second time as the prime minister of Greece on Monday after winning a snap election he called to renew his SYRIZA party's mandate as the country prepares to implement tough reforms as part of its bailout plan. Having fallen short of an outright parliamentary majority, Tsipras has said he plans to form a government with former junior coalition partner, the Independent Greeks. A breakaway anti-austerity faction of SYRIZA that formed its own party failed to secure any seats in Parliament in Sunday's elections.
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EU interior ministers were set Tuesday for a new attempt at thrashing out a deal on the redistribution of 120,000 asylum seekers within their bloc, amid mounting pressure on Europe to deliver a credible response to its migration crisis. "[Tuesday] will be an important day in Brussels," said Luxembourg Foreign Minister Jean Asselborn, who will be chairing the talks since his country currently holds the EU's rotating presidency. "We all know that we have to find a common European solution." The continent is contending with its most significant influx of migrants and refugees since World War II, many of them fleeing war in countries such as Syria.
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Joao Vaccari Neto, the former treasurer of Brazil's ruling Workers' Party, was sentenced to more than 15 years in jail for his involvement in a corruption scheme surrounding the state-controlled oil giant Petrobras, Brazilian media reported. Vaccari Neto was sentenced to 15 years and four months for passive corruption and money laundering, while former Petrobras service director Renato Duque was handed 20 years and eight months in prison for the same two crimes - plus criminal association.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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