6th Mar 2014 10:46
LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Schroders PLC reported a 24% increase in pretax profit after a year in which management and performance fees swelled on the back of strong net inflows and reinforced by the acquisition of Cazenove Capital. Schroders will pay a 58.0 pence full-year dividend, up from 43.0 pence in 2012, with Chief Executive Michael Dobson stating that the 35% increase was the culmination of a strong financial position and confidence in opportunities for continued growth in the long-term. The FTSE 100 asset manager and private bank reported a GBP447.5 million pretax profit for 2013, up from GBP360.0 million in 2012, after assets under management grew to GBP262.9 billion from GBP212.0 billion, driving revenue to GBP1.81billion from GBP1.43 billion.
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Engineering firm IMI PLC reported an increase in profit and revenue for the full year, reflecting a strong performance across the business, but warned of pressures on profit margins in the first half of 2014. The FTSE 100 company posted pretax profit of GBP297.7 million for 2013, up from GBP274.8 million, as revenue climbed 3% to GBP1.74 billion from GBP1.70 billion a year earlier.
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Construction giant Balfour Beatty PLC reported a sharp drop in profit for 2013, as it was hurt by the reorganisation of its UK construction business and a significant downturn in the Australian natural resources sector. In November, the company warned that its professional services business had seen further deterioration in Australia, in both volume and pricing. These issues have not subsided, the company said, and despite cost-reduction measures, the division saw profit decline. The FTSE 250 company posted pretax profit of GBP32 million for 2013 compared with GBP147 million a year earlier, even though group revenue rose to GBP8.74 billion from GBP8.66 billion.
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Vedanta Resources PLC said it has hired Tom Albanese as Chief Executive Officer. Albanese will join Vedanta's board upon his appointment, which will take effect April 1, 2014. He takes over from outgoing CEO, M.S. Mehta, who is retiring at the end of March.
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Aviva PLC reported a rise in annual operating profit, prompting Chief Executive Mark Wilson to declare its turnaround is intensifying. The life insurer reported a GBP2.05 billion operating profit for 2013, compared with GBP1.93 billion in 2012, while swinging to a GBP2.15 billion profit after tax from 2012's GBP2.93 billion loss, which including a writedown of the value of Aviva USA.
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Aggreko PLC said pretax profit and revenues largely met expectations in its full year, as both fell in comparison to 2012 when the London Olympics provided the company with strong figures. The temporary power company said its pretax profit fell 9.3% to GBP333 million from GBP367 million in the previous year, slightly down on its restated expectations of pretax profit of at least GBP335 million, as revenues fell as expected to GBP1.57 billion from GBP1.58 billion in 2012.
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Cobham PLC said full-year pretax profit tumbled 38% amid challenging trading conditions in the defence and security markets, while boosting its dividend as it realigns the organisation to ready for its next stage of development. The aerospace and security technology company said pretax profit came in 38% lower than 2012 at GBP127 million from GBP204 million, noting that strong growth in its commercial markets was offset by continued weakness in the defence and security markets, which resulted in a 4% decline in organic group revenue - revenue stated at constant translation exchange rates. Total group revenue increased 2% to GBP1.79 billion, up from GBP1.75 billion in 2012.
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Betfair Group PLC saw its shares rise after it said customer numbers, revenues and profits all rose in its fiscal third quarter and it gave a positive outlook, partly thanks to soaring growth in mobile betting. The online betting company, which has just gone through a restructuring after hitting a tough patch, said revenues were up 5% to GBP95.4 million in the three months to end-January, driven by strong growth in the markets that is has deemed sustainable after its revamp. Its earnings before interest, tax, depreciation and amortisation, excluding certain items and foreign exchange losses, rose 28% to GBP20.2 million, from GBP15.8 million.
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Europe's largest low-cost carriers, Ryanair Holdings PLC and easyJet PLC, both reported continued growth in passenger numbers in February, while passenger numbers declined at Irish carrier Aer Lingus Group PLC.
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Ryanair, Europe's largest low-cost carrier said it flew 4.5 million customers in February, up 7% from 4.2 million a year earlier, bringing the total number of people it has carried in the year to the end of February to 81.9 million, up 3% on the previous 12 months. The carrier's load factor, a measure of how full its planes are, also increased to 78%, from 77%, while the figure for the 12 months period was 83%.
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Aer Lingus said passenger numbers fell to 558,000 in February, from 575,000 a year earlier, while traffic measured in revenue passenger kilometres fell to 737 million, from 740 million. Its passenger numbers for the year to end-February are down 1.6% at 1.1 million. Its load factor also fell 1.0% in February to 67.3% as capacity rose 1.2%. Load factor for the year to end-February was up 0.5 points at 66.9%.
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easyJet said it carried 4.2 million passengers in February, up 2.9% from 4.1 million a year earlier, bringing its total for the rolling 12 month period to 61.6 million, up 3.5% from 59.5 million. Its load factor for February rose to 90.7%, from 90.5%, while the figure for the rolling 12 months was 89.4%, up from 89.2%.
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Man Group PLC said it has entered into an irrevocable, non-discretionary arrangement with Goldman Sachs International to repurchase shares in the company on its behalf. Man had previosuly said it would buy back up to a maximum consideration of USD115 million during the period from March 6 to December 19. All shares repurchased will be canceled. As announced on February 27, the purpose of the share repurchase program is to return surplus capital to shareholders.
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MARKETS
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Shares are mixed ahead of the Bank of England and European Central Bank meetings, with blue-chips trailing.
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FTSE 100: down 2.72 at 6,772.70
FTSE 250: up 21.88 at 16,636.23
AIM ALL-SHARE: up 3.78 at 896.54
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GBP-USD: flat to up at USD1.6722
EUR-USD: flat to down at USD1.3732
GOLD: down at USD1,334.30 per ounce
OIL (Brent): up at USD107.95 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK house price growth accelerated unexpectedly in February, survey data showed. The Halifax house price index rose 2.4% from January, a report published by Lloyds Banking Group showed. This was the eleventh monthly increase in the past twelve months, it said. House prices were forecast to grow 0.7%, following January's 1.2% increase.
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Registration of new passenger cars in the UK increased for the twenty-fourth consecutive month in February amid continuing improvement in consumer confidence, data released by the Society of Motor Manufacturers and Traders (SMMT) revealed. New car registrations increased 3% annually to 68,736 units in February, marking the twenty-fourth successive growth.
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The Bank of England's monetary policy meeting is likely to be a 'non-event', with policymakers expected to pledge a low interest rate regime and refrain from any action that risks recovery. The nine-member rate-setting committee is expected to retain the interest rate at a historic low 0.50% and its quantitative easing programme unchanged at GBP 375 billion. The interest rate has been at the current 0.50% since March 2009, when policymakers lowered it by half a percentage point, and launched its asset purchase programme valued at GBP 75 billion.
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The European Central Bank is expected to announce Thursday its decision to hold interest rates at a record low of 0.25% despite concerns about low levels of inflation. The ECB last trimmed borrowing costs in November, when it cut its benchmark refinancing rate by 25 basis points. Since then, a slew of key economic indicators have pointed to the eurozone economy gaining strength, helped along by a pickup in exports and corporate investment. However, ECB chief Mario Draghi warned this week that at 0.8% in February, consumer prices remained "way below" the bank's annual inflation target of just under 2%, which could create a problem in ensuring price stability.
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The Bank of Japan is prepared to adjust its monetary policy further if required to achieve the 2% inflation target, Deputy Governor Kikuo Iwata said, reiterating the central bank's policy stance. In a speech delivered at the Upper House Budget Committee, Iwata said that the central bank will continue to assess the risks to its economic and price outlook, and make necessary changes to meet the goal of hitting the price target. According to Iwata, Japan's economy is on steady track towards achieving the 2% inflation target.
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China's economic growth could be a little lower than the 7.5% target this year, and the government is focused more on creating jobs than strictly maintaining the strong growth momentum, Finance Minister Lou Jiwei said. Speaking to the media on Thursday during the annual parliament session, Lou said that he sees growth of 7.2% of 7.3% for this year, signaling that the 7.5% target is flexible.
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Economic growth in the emerging markets weakened further in February as an improvement in service sector activity was more than offset by a slowdown in the manufacturing sector, survey data published by Markit Economics and HSBC Bank revealed. The Emerging Markets Index, which gauges business activity across emerging market economies, dropped to 51.1 in February from 51.4 in January, marking the third successive decline.
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Germany's construction growth improved further in February despite seeing the sharpest fall in order intakes since April 2013, survey data from Markit Economics showed. The headline seasonally adjusted Purchasing Managers' Index rose to 53.6 from 52.5 in January. Activity in the sector has now risen for 10 consecutive months, with the latest pace of expansion above the average for this sequence of growth.
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France's unemployment rate decreased moderately in the December quarter, after staying steady in the preceding two quarters, data published by statistical office Insee revealed. The ILO (International Labor Organization) measure of unemployment rate for metropolitan France and overseas departments decreased to a seasonally adjusted 10.2% in the fourth quarter from 10.3% recorded in each of the preceding three quarters. Compared to the fourth quarter of 2012, the jobless rate was unchanged.
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Crimean authorities said they will hold a referendum on March 16 on whether the Ukrainian region should join the Russian Federation. The referendum is being brought forward from March 30, the region's deputy prime minister, Rustam Temirgaliyev, told reporters in Simferopol, according to Russian news agencies. He said voters will have two options: Either to vote for Crimea becoming part of the Russian Federation, or to vote for the return of the region's 1992 constitution, which laid down Crimea as an autonomous region within Ukraine.
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US Secretary of State John Kerry is holding talks with counterparts from Italy, France, Germany and Britain over the Ukraine crisis, diplomatic sources said in Rome. The talks, involving Foreign Ministers Federica Mogherini of Italy, Laurent Fabius of France, Frank-Walter Steinmeier of Germany and state minister Hugh Robertson of Britain were taking place on the sidelines of an international conference on Libya. Sources said participants were "coordinating positions" ahead of a EU summit in Brussels on Ukraine.
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The EU imposed asset freezes on deposed Ukrainian president Viktor Yanukovych hours before the bloc's leaders were set to consider possible action against Russia over its military intervention in Ukraine. The EU published the names of 18 people suspected of embezzling Ukrainian state funds, whose assets held in the bloc are to be frozen, with provisions in place for the funds to later be recovered by the state. The list includes former interior minister Valeriy Zakharchenko, former prosecutor general Pshonka Pshonka, former justice minister Olena Lukash, former prime minister Mykola Azarov and two of Yanukovych's sons.
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The EU on Wednesday upped the pressure on France and Italy to reinvigorate their sputtering economies, warning that the wider eurozone may face trouble otherwise. Presenting the latest round of EU reviews, Economy Commissioner Olli Rehn noted that while the four largest economies in the crisis-battered currency bloc - Germany, France, Italy and Spain - "could make the largest contribution to growth in Europe," all four countries have problems with economic imbalances. Italy faces particular pressure because the European Commission deems that it faces an "excessive" imbalance that could warrant further EU action.
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Italy's new government will not breach EU rules on public deficits, Economy Minister Pier Carlo Padoan pledged in an interview. There had been suggestions that Prime Minister Matteo Renzi would seek weaker austerity targets to fund an ambitious programme of reforms. Last year, Renzi said the EU requirement to keep deficits below 3% of gross domestic product (GDP) was "outdated." "We cannot afford to go back over the 3%," Padoan told the business newspaper Il Sole 24 Ore. "It would be a mistake. If we manage to grow through structural reforms, we will automatically gain more margins on public accounts."
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Qayum Karzai, the brother of Afghan President Hamid Karzai, said that he was pulling out of the April 5 elections to support ex-foreign minister Zalmai Rassoul instead. "My decision to enter in the presidential campaign was for the interest of the people and for the development of Afghanistan," said Qayum Karzai, standing alongside Rassoul, during a press conference to announce his withdrawal.
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Iran will not dismantle its nuclear programme but is prepared to provide assurances that it will remain peaceful, Foreign Minister Mohammad Javad Zarif said. "Those who are calling for the dismantling of Iran's nuclear programme are conducting wishful thinking," Zarif said after talks with his Indonesian counterpart Marty Natalegawa in Jakarta. "The only way you can have assurances that Iran's programme will remain peaceful is to have it out in the open under international monitoring," he said.
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North Korea turned down a proposal from South Korea for the Red Cross organizations in each country to hold talks on further reunions of families separated by the division of the peninsula. Pyongyang told Seoul that the atmosphere was not yet appropriate for such talks, the Unification Ministry in Seoul said, quoting a statement from the Red Cross in North Korea.
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Libya's government has Saadi Gaddafi, a son of the former dictator Moamer Gaddafi, in its custody, the government said Thursday on its Facebook page. Saadi Gaddafi took refuge in neighbouring Niger after the 2011 uprising against his father.
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Caracas broke off diplomatic relations with Panama late Wednesday for suggesting a special meeting of the Organization of American States (OAS) over the persistent street demonstrations in Venezuela. At least 18 people have died since mid-February in protests against the administration of Venezuelan President Nicolas Maduro, who has accused his Panamanian counterpart Ricardo Martinelli of conspiring against him.
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Singapore police said the chief executive of a virtual currency exchange company whose body was found last week died an "unnatural death," news reports said. First Meta Exchange boss Autumn Radtke, 28, was found dead near an apartment block in the city-state. Preliminary investigations suggested that no foul play was involved, police said. Companies like First Meta Exchange allow users to exchange between different national and virtual currencies such as bitcoin.
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