24th Oct 2019 11:19
(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Royal Bank of Scotland Group reported a third-quarter loss on increased payment protection insurance provisions. In the three months to September 30, RBS recorded an operating pretax loss of GBP8 million compared to a GBP961 million profit a year before. The loss was attributed to a GBP900 million PPI provision. In September, the lender warned of a "spike" in PPI claims in the days leading up to the Financial Conduct Authority's deadline of August 29. The bank's loss attributable to shareholders totalled GBP315 million, compared to a GBP448 million profit in the third quarter last year and a GBP1.33 billion profit in the second quarter of this year. Net interest income declined 6.5% to GBP2.01 billion from GBP2.15 billion. RBS said it was hurt from a "particularly challenging" quarter from investment bank NatWest Markets.
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AstraZeneca posted a dip in third-quarter profit as a result of research & development expenses, as well as administrative costs. For the three months ended September, the FTSE 100-listed pharma firm's pretax profit was USD409 million, down 14% from USD477 million the year before. This reduction was the result of a 32% rise in selling, general & administrative costs to USD3.20 billion from USD2.42 billion, on top of a 5.5% jump in research & development expense to USD1.35 billion from USD1.28 billion. Total revenue rose 20%, reaching USD6.41 billion from USD5.34 billion. This was thanks both to a 16% rise in product sales to USD6.13 billion from USD5.27 billion and to a more than trebling of collaboration revenue to USD274 million from USD74 million.
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Woodford Patient Capital Trust said it has appointed Schroder Investment Management as its new portfolio manager, following exit of star fund manager Neil Woodford last week. Schroder Investment Management, part of FTSE 100 listed asset manager Schroders, will takeover as portfolio manager by the end of 2019, when the trust will be renamed Schroder UK Public Private Trust. Neil Woodford's Woodford Investment Management resigned as portfolio manager of Woodford Patient Capital on Tuesday last week following the wind up of his flagship LF Woodford Equity Income Fund.
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MARKETS
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London shares were higher on a busy day on the corporate earnings front, with AstraZeneca the best blue chip performer, up 3.8%. The pound was flat against the dollar as investors await on the European Union's decision on whether to grant Britain a Brexit extension. Wall Street was pointed to a higher open with Amazon.com scheduled to announce its third-quarter earnings after the markets close on Thursday in New York.
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FTSE 100: up 0.8% at 7,321.20
FTSE 250: up 0.1% at 20,200.04
AIM ALL-SHARE: up 0.3% at 888.63
GBP: flat at USD1.2885 (USD1.2887)
EUR: firm at USD1.1130 (USD1.1114)
GOLD: down at USD1,488.52 per ounce (USD1,493.54)
OIL (Brent): firm at USD60.84 a barrel (USD60.08)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The eurozone economy is mired close to stagnation in October, according to survey results from IHS Markit, with demand for goods and services falling once again. The eurozone flash composite output index read 50.2 for October, up slightly from 50.1 in September. The flash services purchasing managers' index was 51.8, up from 51.6, and the manufacturing PMI was unchanged at 45.7. Any reading below 50 represents contraction, and above expansion.
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The downturn in the German economy has continued, IHS Markit said. For October, the composite output index was 48.6, little-changed from the 48.5 in September, which had been the worst reading in nearly seven years. Germany's manufacturing PMI reading was 41.9, a slight improvement on September's 10-year low of 41.7, as declines in factory output and new orders eased. The services PMI was 51.2, in positive territory but down from 51.4 in September, with October's figure the worst in 37 months. IHS Markit noted employment has fallen in Germany for the first time in six years, with job losses largely focused on manufacturing.
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EU leaders are continuing to consider whether to grant a further extension to Brexit against the objections of Boris Johnson. The UK prime minister has warned he will push for a snap general election if he is forced to accept a lengthy delay to Britain's departure, potentially into the new year. However there are signs of divisions among ministers and senior No 10 advisers over whether to press for a December poll. Dominic Cummings, Johnson's chief adviser, is reportedly leading calls to abandon attempts to get the prime minister's Brexit deal through Parliament and go for an election. But Northern Ireland Secretary Julian Smith is said to be among ministers arguing it is still possible to pass a bill ratifying the agreement, despite Tuesday's defeat for Johnson's attempt to fast-track it through the Commons.
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The number of workers in retail companies in the UK has fallen by 85,000 in the past year, new figures suggest. Full-time and part-time employment was lower than a year ago, while the number of hours they worked also fell, said the British Retail Consortium. Employment trends in the retail sector are in "stark contrast" to the UK's labour market as a whole, said the report. The BRC said it expects the long-term decline in employment to continue amid weak consumer spending and fierce competition in the industry.
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US President Donald Trump on Wednesday said he will lift sanctions on Turkey after the Nato ally agreed to permanently stop fighting Kurdish forces in Syria. Trump made the announcement as he defended his decision to withdraw American troops, saying the US should not be the world's policeman. "We're getting out," Trump said at the White House, asserting that tens of thousands of Kurdish lives were saved as the result of his actions. "Let someone else fight over this long, blood-stained sand," he added. Trump warned that if Turkey does not honour its pledge for a permanent ceasefire, he will not hesitate to reimpose sanctions.
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