1st Apr 2015 10:18
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Standard Chartered announced a series of further management changes, coming in the wake of the its announcement in February of the departures of Chairman John Peace and Chief Executive Peter Sands. The bank said Group Executive Director Viswanathan Shankar has resigned from his position to pursue other interests. As a result of his departure, the board of Standard Chartered will, from May 1, comprise three executive directors, comprising its chief executive, deputy chief executive and finance director. Shankar's departure is also in line with the bank's intention to reduce the overall size of its board to 14 directors in due course. Elsewhere, the bank said Jonathan Paul has been appointed as group head of financial markets, while Sumit Dayal has been appointed group head of corporate finance.
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Antofagasta said all of its mines in the north of Chile have now restarted normal operations following heavy rains in the region which resulted in the suspension of operations. Antofagasta last week said it has suspended operations at the Centinela, Antucoya and Michilla mines, all of which are located in the desert, one of the world's driest. It said the suspension was primarily to ensure the safety of employees, though it said some processing of stockpiled material has been possible. The company said Wednesday some production had been lost following the heavy rains which hit the region last week. The rains caused flash flooding and the evacuation of a number of people from the Atacama desert region.
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Royal Dutch Shell has moved a step closer to returning to oil and gas exploration in the Arctic after the US government upheld a 2008 lease sale, Reuters reports. The US Interior Department upheld a 2008 lease sale in the Chukchi Sea off Alaska, meaning Shell has moved closer to returning to exploration work in the region since it lost control of the Kulluk oil rig in 2012. The Interior's Bureau of Ocean Energy Management will now consider Shell's exploration plan and will perform an environmental assessment of it, which would take at least 30 days. But Shell, in anticipation of returning to the region, has already moved rigs to Alaska, Reuters said.
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Evraz will return USD375 million to its shareholders through a tender offer even though its pretax loss widened in 2014 on the back of a USD1.0 billion foreign exchange loss caused by the devaluation of the rouble, saying it has "improved business prospects" in 2015. The FTSE 250-listed steel miner reported a pretax loss of USD1.08 billion in 2014, compared with a USD637 million loss in 2013, on the back of the substantial foreign exchange loss and an impairment charge. However, earnings before interest, tax, depreciation and amortization rose 28% to USD2.32 billion, from USD1.82 billion, as Evraz opitmised its assets and cut costs. The figure was also given a lift as expenses in dollar terms fell at its at Russian and Ukrainian subsidiaries due to drop in the local currencies.
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FirstGroup said its trading in the fourth quarter and whole of the financial year that ended on Tuesday was in line with its expectations, with good performances in its UK bus and rail operations. The company said its UK bus business is delivering volume growth and achieving a positive yield, and it has made progress on cutting costs within the division. Its UK rail business is outperforming on the back of strong passenger demand, and the company noted it has recently signed franchise agreements for both the First Great Western and First TransPennine Express services.
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ICAP said its ICAP Shipping business has signed a joint venture agreement with ship-broking group Howe Robinson Group Pte. ICAP will take a 35% stake in the joint venture, called Howe Robinson Partners. ICAP said it intends that the joint venture will house ICAP Shipping's India, Dubai and US operations in due course. The new business will based in Singapore and will have offices in London, Hamburg, Copenhagen, Gibraltar, Shanghai, Tokyo and Hong Kong. No financial details on the deal were disclosed.
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Carillion said it has won contracts and been awarded preferred bidder status on UK projects worth a total of GBP123 million but said its Dubai joint venture has pulled out of a major project. The company will handle a GBP17 million contract to build a 260-bed student accommodation site in Newcastle under Select Property's Vita Studnent brand. Work has started on the project, with completion scheduled for May 2016. Carillion has also been selected a preferred bidder on a Vita Student scheme in Glasgow worth GBP32 million and on a CitySuites project, also from Select Property, in Manchester worth GBP34 million.
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Senior has bought Lymington Precision Engineering Ltd for an initial GBP45.8 million in cash, a deal it expects to boost its earnings even though the newly acquired company is set to be hit by the steep drop in oil prices. Senior could pay up to GBP31.7 million more for Lymington depending on the acquired company's performance in the next 12 months. Lymington makes precision-machined components, fabrications, assemblies and kit sets for the oil and gas, telecommunications, aerospace, defence, land and sea systems, nuclear and marine industries. It will be integrated into Senior's Flexonics Division and its current management team is staying with the business.
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PZ Cussons has bought Glanbia out of their Nigerian joint venture for GBP21 million in cash, and has signed a long-term deal with the Irish ingredients company for the supply of milk-based products to the venture. PZ Cussons said the deal to take full control of Nigerian evaporated milk and milk powder venture Nutricima will boost its earnings in its next financial year. Nutricima made revenue of GBP74.4 million in the year to May 31, 2014, and a pretax profit of GBP1.3 million. Its gross assets were GBP57.9 million at that date.
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ASOS reported an increase in revenue for the first half of its financial year after a "record Christmas season", but a drop in profit as its gross margin took a hit from price investments it is having to make. The online fashion retailer reported a 10% drop in pretax profit for the six months to February 28 to GBP18 million from GBP20 million the year before, while revenue was up 14% to GBP550.5 million from GBP481.7 million. It said that its gross margin fell by 230 basis points to 48.2% from 50.5% due to the launch of its zonal pricing strategy and planned investment in international prices, which together with increased investment in building its global distribution capacity led to a reduction in profit.
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MARKETS
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London stock indices trade higher, rebounding from an end-of-quarter drop on Tuesday, as investor sentiment was lifted by better-than-expected manufacturing Purchasing Managers' Index readings in the UK and Europe.
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FTSE 100: up 1.0% at 6,840.70
FTSE 250: up 0.5% at 17,174.62
AIM ALL-SHARE: up 0.2% at 717.32
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GBP-USD: down at USD1.4756
EUR-USD: down at USD1.0738
GOLD: down at USD1181.99 per ounce
OIL (Brent): down at USD55.07 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The British manufacturing sector expanded at the fastest pace in eight months during March on stronger growth in production and new orders that led to increased hiring, survey results from Markit Economics and the Chartered Institute of Procurement & Supply showed. The Markit/CIPS Purchasing Managers' Index rose to 54.4 from 54 in February, which was revised down from 54.1. The latest reading was in line with economists' expectations.
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China's manufacturing sector slipped into contraction in March, the latest report from HSBC showed on Wednesday, with a PMI score of 49.6. That was higher than the preliminary reading of 49.2, although it was down from 50.7 in February. It also moved below the boom-or-bust line of 50 that separates expansion from contraction. "The latest data indicate that domestic and foreign demand remains subdued amid weaker market conditions, which dampened output growth as a result. Meanwhile, company downsizing policies contributed to a further decline in manufacturing employment, with the pace of job shedding the strongest since last summer," said Annabel Fiddes, Markit economist.
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Japan's manufacturing sector decelerated in March but continued to expand, the latest survey from Markit Economics showed on Wednesday, with a PMI score of 50.3. That's down from 51.6 in February, although it remains barely above the boom-or-bust line of 50 that separates expansion from contraction. The March reading also represents a 10-month low score. "Latest data signaled a weaker improvement of operating conditions in the Japanese manufacturing sector. Manufacturers reduced their workforce numbers for the first time since September 2014 in March, albeit at a fractional rate," said Markit economist Amy Brownbill.
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Greece failed to reach a deal with the European Union and International Monetary Fund to unlock further financial aid on Tuesday, after the creditors dismissed the package of reforms tabled by Athens as ideas rather than a concrete plan, Reuters reports. The lack of a deal will raise the pressure on Greece's government, which is facing the prospect of running out of money in a few weeks though if fail to convince its creditors to give it more. Athens said it remains keen on striking a deal based on its long-held demand that any measures it is asked to implement in exchange for the further funding will not hamper its economic growth. It added that lenders are to intensify their efforts to collect data in Athens.
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Diplomatic talks between Iran and world powers to secure a landmark nuclear deal carried on past their scheduled deadline on Tuesday, as negotiators battle to salvage the terms of an accord following nearly a week of discussions, the Financial Times reports. The talks in Lausanne, Switzerland carried past midnight on Tuesday as it became clear no sweeping deal would be in the offing. Marie Harf, spokesperson for the US State Department, said enough progress had been made in the talks to merit carrying on into Wednesday, but said there were "several difficult issues still remaining", according to the FT.
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