2nd Sep 2014 10:20
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Housebuilder Redrow became the latest housebuilder to say the UK housing market is reverting to more normal levels, as it reported an increase in profit and revenue for its recent full year. The company, which said pretax profit almost doubled in the full-year, said market conditions have returned to a more seasonal pattern of activity, meaning fewer people buying in the summer, with more in the spring and autumn. This comes after Berkeley Group Holdings on Monday said the UK housing market has reverted to normal transaction levels from the high point witnessed in 2013.
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Hammerson said it has completed the sale of its 50% stake in its last remaining office asset, 10 Grosvenor Street in Mayfair, London to its joint venture partner Grosvenor Fund Management's London Office Fund in a deal worth GBP54 million. The building is currently Hammerson's own headquarters, and staff will now relocate to a site in Kings Cross. The sale of the building completes Hammerson's disposal of its office portfolio, which has generated GBP690 million of funds which have been recycled into its retail-focused business including the acquisition of Victoria Quarter in Leeds.
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British Land and Development Securities said they have signed leases at their respective sites in Orpington and Hammersmith, London. FTSE 100-listed British Land said Metro Bank has signed for a 5,300 square foot unit on a 25-year lease at its Nugent Shopping Park in Orpington. Meanwhile, Development Securities in a joint statement with co-investor SWIP Property Trust said they have completed the final two lettings at 10 Hammersmith Grove to media company Fox International Channels Ltd and to tobacco firm Philip Morris International.
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Polymetal International outlined its plans for a slew of its gold projects, confirming plans to proceed with the construction and development of the Svetloye gold project and terminating or slowing development at three other sites ahead of the acquisition of the Kyzyl project. The Russia and Kazakstan-focused precious metals producer said the forthcoming acquisition of the Kyzyl gold project in Kazakhstan has resulted in it having to re-prioritise its project pipeline in order to focus capital and management resources on key sites and maintain a robust leverage level.
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Johnson Service Group said that revenue and pretax profit rose in its first-half, leading the company to up its interim dividend as its textile rental division performed ahead of management expectations. In its half-year results for the six months to June 30, the textile services group said pretax profit was up 46% to GBP6.5 million from GBP4.4 million the previous year while revenue was up 5.7% to GBP101.6 million from GBP96.1 million in the comparative half in 2013. The company upped its interim dividend by 25% to 0.5 pence per share from the 0.4 pence per share paid last year as part of its progressive dividend policy.
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Tesco's new Chief Executive Dave Lewis thinks he will bring a fresh non-retailing perspective to the UK's biggest grocer, admitting in an interview with the Evening Standard late Monday that he is "wonderfully naive" about some of the challenges that face him. Lewis, who has been brought in from consumer goods giant Unilver PLC, paid tribute to former CEO Philip Clarke, calling him a great retailer. But he added that great retailing hasn't worked in the CEO job recently so a fresh perspective is what is required at Tesco.
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MARKETS
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UK shares are higher after starting strongly on hopes for European Central Bank action later in the week and then being supported by a UK construction PMI reading that came in ahead of economists' predictions.
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FTSE 100: up 0.2% at 6,840.70
FTSE 250: up 0.1% at 15,979.41
AIM ALL-SHARE: up 0.3% at 781.42
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The euro is currently trading around its lowest level against the dollar since September 2013.
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GBP-USD: down at USD1.6527
EUR-USD: down at USD1.3112
GOLD: down at USD1276.50 per ounce
OIL (Brent): down at USD102.01 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The commission asked by the UK government to review the country's needs for additional airport capacity confirmed that it will not be considering the proposal put forward by London Mayor Boris Johnson for a new airport in the Thames Estuary, saying it would be too expensive and would cause "huge" economic disruption. In a statement, the Airports Commission said it had looked at the feasibility of an inner Thames estuary airport in detail and concluded that substantial disadvantages collectively outweigh the potential benefits. It said it hadn't been persuaded that a very large airport in the Thames is the right answer to London and the UK's needs, and it believes a hub airport should be part of an effective system of competing airports to meet the needs of a "widely spread and diverse market like London's".
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UK construction activity grew at a faster pace in August, defying expectations of a slow down, results of a survey by Markit Economics and the Chartered Institute of Purchasing & Supply, or CIPS, showed. The Markit/CIPS construction purchasing managers' index, or PMI, rose to 64 in August from 62.4 in July, less than the 61.5 expected by economists. This marked the fastest rate of increase since January and the second-strongest rate of expansion since the pre-recession peak of August 2007. A reading above 50 signals expansion in construction activity.
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Eurozone producer prices decreased in July after recovering in June, data published by Eurostat showed. Producer prices fell 0.1% in July from June due to a 0.6% drop in energy prices. In June, producer prices climbed 0.2%, which was the first monthly rise in 2014. Year-on-year, producer prices declined 1.1%, which was faster than the 0.8% fall in June. Both annual and monthly figures for July matched economists' expectations.
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Russia strongly criticized plans by Ukraine to give up the country's non-aligned status, and join NATO. "This idea by the government in Kiev is an attempt by the party of war to disrupt the attempts to find a political solution," Foreign Minister Sergei Lavrov said in Moscow, the Interfax news agency reported. Lavrov added that "it is a pity that the US, some EU member states and NATO officials are playing up the idea."
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The US military conducted an operation against Islamist al-Shabaab militants in Somalia, the Pentagon announced Monday, without providing further details. The announcement came nearly a week after the Somali government said it would launch a new offensive against the al-Qaeda-linked group, and days after an al-Shabaab attack in Mogadishu left 15 people dead over the weekend.
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Israel faced criticism for what was being described as the biggest appropriation of West Bank land in some 30 years. The military's Civil Administration on Sunday declared as "state land" 4,000 dunams (about 400 hectares) of territory south of Jerusalem. It said it acted on the instructions of the government. Israel Radio said the move was preparation for future expansion of the Gush Etzion settlement bloc. United Nations Secretary General Ban Ki-moon voiced "alarm" at the announcement.
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Iranian Foreign Minister Mohammad Javad Zarif is "quite optimistic" a deal can be struck with the West on his country's nuclear programme, despite a new round of sanctions imposed by the US, he said Monday. The US announced a series of measures Friday targeting entities and individuals who Washington alleges are helping Iran circumvent international sanctions and expand the country's arms proliferation programme.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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