28th Mar 2014 13:25
LONDON (Alliance News) - The life insurance sector was dragging down UK stock indices again Friday after the UK Financial Conduct Authority said it is set to begin an inquiry into up to 30 million policies sold from in the years prior to 2000.
The FTSE 350 sector is down 5.0% in reaction to the news. Full details are expected from the regulator on Monday.
A spokesperson for the FCA told Alliance News that the review, set to begin this summer, will include pensions, endowments, investment bonds and life insurance products.
FTSE 100-component Resolution Limited is the biggest faller, down 14%, while Phoenix Group occupies the bottom of the FTSE 250, down more than 21%. It is the second significant shock in as many weeks for the UK life insurance industry, following the annuity shake up announced as part of the UK government budget last week. The whole FTSE 350 Life Insurance sector has now had 8.8% wiped off its value since before the budget.
Legal & General Group is the third biggest faller on the FTSE 100, down 6.9%. The company released a statement Friday regarding the potential review, stating that it looks forward to the FCA's official guidance, noting "in view of today's disorderly market we are requesting that the FCA bring forward the publication of the plan."
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FTSE 100: up 0.1% at 6,594.42
FTSE 250: down 0.3% at 16,160.186
AIM ALL-SHARE: down 0.3% at 850.9
GBP-USD: up at 1.6637
EUR-USD: up at 1.3759
GOLD: down at USD1,289.70 an ounce
OIL (Brent): up at USD108.17 a barrel
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Key UK Corporate News
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FTSE 100: Ruspetro has signed a further crude oil prepayment facility with Glencore Energy UK Ltd, a subsidiary of Glencore Xstrata, for USD30 million. Aviva said it is to sell US equity manager River Road Asset Management LLC to asset manager Affiliated Managers Group Inc, as it continues to implement its strategy of simplifying its business model. Royal Bank of Scotland Group said it has completed the pricing of two sets of bonds that will raise about USD998.9 million before expenses, with the proceeds to be used for general corporate purposes. Randgold Resources announced that its attributable resources increased but its reserves fell by the end of 2013 due to mining depletion.
FTSE 250: Exhibitions and conferences organiser ITE Group said it expects "record" profits and a rise in revenues for the first half of its financial year, although it is being hit by the strength of sterling and the crisis in Ukraine. Capital & Counties Properties has formed a joint venture with Transport for London that will allow the re-development of the Earls Court exhibition centres in London to go ahead, a key part of a much bigger scheme for redeveloping the area. UK defence company QinetiQ Group said it is still on track to deliver on its own expectations in the financial year that ends on Monday. Hansteen Holdings has acquired a further GBP26 million units in the Ashtenne Industrial Fund, taking its stake to 36.7%. St Modwen Properties said the business has continued its strong performance since the start of the financial year, with a growing pipeline of development opportunities, and profits and cashflows in line with its expectations.
AIM: Shares in Metro Baltic Horizons have jumped. The company said it has reached a settlement with former company directors, and will receive GBP2.5 million. Bellzone Mining is up 34%. It said it is in talks with one of its major shareholders about getting more equity capital, a move that could lead to a takeover offer being made for the company. Shares in Strategic Natural Resources are trading higher. The natural resources development group said that despite the announcement of two legal battles being taken out against the company, talks with a potential strategic investor to help with its recapitalisation struggles are ongoing. Nighthawk Energy shares are up. The oil and gas exploration and production company said it swung to a pretax profit in 2013 as revenues were boosted by six new wells during the period. Shares in Songbird Enterprises are trading higher after the property company and owner of the Canary Wharf estate in London reported higher profits and net asset value for 2013, driven by a higher portfolio valuation and increased rental income. Optare is up; the bus and coach manufacturer said it has got a GBP4.9 million order for 37 of its vehicles from Ulsterbus Ltd, the provider of bus services in Northern Ireland. Shares in DiamondCorp are trading higher after the diamond development, exploration and mining company announced that it has placed 41.5 million shares to raise gross proceeds of roughly GBP2.1 million. Manroy is also trading up; the maker of heavy machine guns, weapon mounting systems and turrets said it has agreed a GBP16 million takeover by Belgian firearms company Herstal SA, ending months of talks that eventually hinged on a sale of Manroy's stake in a US business for a nominal sum. At the other end of the market, Kromek Group is trading lower; the supplier of radiation technology to the medical, security and nuclear markets has warned that revenues for its current financial year are expected to come in well below expectations due to delays for a large number of contracts, and therefore it no longer expects to be profitable this year. Berkeley Mineral Resources is trading down. The resource company said that its pretax loss widened in the six month to 31 December 2013. It posted a pretax loss of GBP882,900 from GBP592,481, as administration expenses rose to GBP883,00 from GBP597.341. Shares in Wessex Exploration are lower after the hydrocarbon exploration company said its pretax loss widened in its first half as the company was hit by losses related to its joint venture, Northpet Investments offshore Guyane. Metminco shares have also dropped after the company announced that a Court of Appeal in Chile has ruled that the company's First Easement Extension, which allows the company to engage in further mining activities at the Mollacas Copper Project, is invalid and void on technical grounds. FinnAust Mining shares are lower after the Finnish metals miner posted a widened pretax loss of GBP1.5 million for six months to the end of December, from a loss of GBP52,276 in the comparable period in the year before.
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Top Economics And General
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UK's economic growth came in line with preliminary estimate at the end of 2013, data from the Office for National Statistics showed Friday. Gross domestic product rose 0.7% sequentially in the fourth quarter, unrevised from the second estimate published on February 26. Year-on-year, GDP gained 2.7%, also as previous estimated. At the same time, economic growth for 2013 was revised down to 1.7% from 1.8%. The current account deficit was GBP 22.4 billion in the fourth quarter, down from a revised deficit of GBP 22.8 billion in the prior quarter. The deficit in fourth quarter equated to 5.4% of GDP at current market price, the statistical office reported.
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British consumer confidence hit its highest level since August 2007 on upbeat general economic and personal finance expectations, a closely watched survey showed Friday. The consumer sentiment index came in at -5 in March, up from -7 in February, the market research group GfK said. The score was forecast to rise to -6.
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Eurozone economic confidence improved more than expected in March driven by markedly more confident consumers, monthly data from the European Commission showed. The economic sentiment index rose to 102.4 from 101.2 in February, when it was expected to climb to 101.4. Industry confidence remained broadly unchanged at -3.3 as a result of managers' brighter production expectations being canceled out by moderately deteriorating appraisals of the level of overall order books and the stocks of finished products.
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The inflation rate in Japan came in at 1.5% on year in February, the Ministry of Internal Affairs and Communications said - in line with expectations and up from 1.4% in January. Core inflation came in at 1.3%, matching forecasts and unchanged from the previous month.
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Retail sales in Japan were up 3.6% on year in February, the Ministry of Economy, Trade and Industry said - coming in at 10.913 trillion yen. That topped forecasts for an increase of 3.5% following the 4.4% gain in January.
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The unemployment rate in Japan came in at a seasonally adjusted 3.6% in February, the Ministry of Internal Affairs and Communications said. That beat forecasts for 3.7%, which would have been unchanged from the January reading.
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Both houses of the US Congress overwhelmingly approved legislation Thursday to provide USD1 billion in loan guarantees to Ukraine. The Senate bill passed 98-2, while the House bill passed 399-9. They measure now awaits the signature of President Barack Obama, who returns Saturday after visits in Europe and Saudi Arabia. The International Monetary Fund on Thursday offered Ukraine between USD14 billion and USD18 billion dollars in loans over two years to help the country avoid financial collapse after months of unrest that led to the Russian annexation of Crimea. In Ukraine, former premier Yulia Tymoshenko announced her candidacy in presidential elections slated for May 25.
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The search for missing Malaysia Airlines flight MH370 has been moved about 1,100 kilometres to the north after a new analysis of its flight path suggested the plane was travelling faster than previously thought, Australian officials said. The international team of aircraft and boats would now comb approximately 319,000 square kilometres of the Indian Ocean located around 1,850 kilometres west of Perth, the Australian Maritime Safety Authority said. The shift came as the weather cleared, allowing the search by ships and planes from Australia, the US, China and Japan to continue.
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An Islamist alliance supporting Egypt's ousted president Mohammed Morsi Thursday said that "the mask has fallen" with army chief Abdel-Fattah al-Sissi's declaration that he will seek the presidency. "The mask has fallen from the face of the man who carried out the coup after plotting it with Egypt's enemies," the pro-Morsi National Alliance in Defence of Legitimacy said in a statement.
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Afternoon Watchlist
14:55 US Reuters/Michigan Consumer Sentiment Index
16:45 US Fed's George Speech
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Monday's Key UK Corporate Events
Polymetal International Full Year Results
Bowleven Interim Results
Burford Capital Full Year Results
KCOM Group Trading Statement
Quindell Full Year Results
Martin Co Full Year Results
Straight Full Year Results
YouGov Half Year Results
Toumaz Full Year Results
Ocean Wilsons Holdings Full Year Results
Caledonia Mining Full Year Results
SkyePharma Full Year Results
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Saturday's Key Economic Events
01:30 US Fed's Evans Speech
Monday's Key Economic Events
00:15 Japan Nomura/ JMMA Manufacturing Purchasing Manager Index
00:50 Japan Industrial Production
06:00 Japan Annualized Housing Starts
06:00 Japan Construction Orders
06:00 Japan Housing Starts
07:45 France Gross Domestic Product
08:00 Germany Retail Sales
09:30 UK Consumer Credit
09:30 UK M4 Money Supply
09:30 UK Mortgage Approvals
09:30 UK Net Lending to Individuals
10:00 EU Consumer Price Index
14:55 US Fed's Yellen Speech
15:30 US Dallas Fed Manufacturing Business Index
15:45 US Chicago Purchasing Managers' Index
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By Alice Attwood; [email protected]; @AliceAtAlliance
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