Anglo Asian Share News (AAZ)

LONDON (Alliance News) - RSA Insurance Group Chief Executive Stephen Hester Thursday went a long way to meeting his asset disposal target, selling the insurer's Polish and Baltic operations as part of its efforts to shore up its balance sheet in the wake of big losses in Ireland.

Hester had set out plans to raise GBP300 million from disposals in late February, and less than two months later he has sold the Baltic and Polish operations for exactly that amount in cash. The disposal is expected to add around GBP200 million to RSA’s tangible net assets, improving its capital strength.

The asset disposals were part of the package of measures that the former Royal Bank of Scotland boss had announced to shore up the insurer's balance sheet in the wake of the problems it had in its Irish operations. Last month, it undertook a GBP773.0 million rights issue, having said it would also scrap its dividend.

RSA found a GBP200 million capital hole in its Irish business late last year after it conducted a review following the discovery of financial irregularities. It injected GBP40.0 million into its Ireland business in March, on top of the GBP220 million injected in 2013. It also swung to a loss in 2013 due to the Irish losses and as it was hit a surge in weather-related claims because of severe flooding in parts of southern and south-west England and bad weather across Europe.

Hester said the insurer will continue to evaluate further disposals of businesses it considers non-core. and expects to sell some this year.

Royal Dutch Shell has made a deep water gas discovery at the Rosmari-1 well off the coast of Malaysia, adding to a sequence of exploration successes in the region. It is planning further exploration at the block and said the finding shows the potential for getting more gas out of the strategically important region for Shell.

--------

FTSE 100: Up 0.1% at 6,591.35
FTSE 250: Up 0.7% at 15,853.15
AIM ALL-SHARE: Up 0.3% at 826.20
GBP-USD: Up at 1.6814
EUR-USD: Up at 1.3860
GOLD: Down at USD1,303.33 an ounce
OIL (Brent): Down at USD109.15 a barrel

--------

Key UK Corporate News

--------

FTSE 100: Diageo has reported another dip in sales in the third quarter due to further volume declines and weaker Emerging Markets. The world's largest spirits producer said that organic net sales were down 1.3% in the quarter ended March 31, while volume fell by 1%. It also said current exchange rates would wipe around GBP330 million off of its operating profit for the year ending June 30. GlaxoSmithKline has confirmed it is investigating allegations of misconduct in its Jordan and Lebanon operations, the latest in a series of mounting investigations across its business. Severn Trent and United Utilities will resubmit their business plans for the period 2015-20 after regulator Ofwat said their proposals on risk and reward were not in line with its expectations.

FTSE 250: Taylor Wimpey has experienced a strong first few months of the year, with the market improving in all regions of the UK thanks to the government's mortgage financing scheme as well as a general improvement in availability of affordable mortgages. Just a day after rival Persimmon reported a further jump in home sales at higher average prices, Taylor Wimpey said it had experienced higher sales rates, a jump in its order book and higher selling prices in recent months. It also gave a bullish outlook, predicting margin improvements this year and next. Synergy Health said exchange rate movements and the postponement of surgical procedures due to bad winter weather in Europe and the US meant its revenue was lower than expected in the last quarter. It added that it had worked hard to improve its operating margin and as a result still expects to report a result in line with its expectations, although it didn't give details of the measures it took. Ferrexpo said sales volumes increased in its first quarter due to strong production from its Yeristovo mine, and it reduced its cash costs by 21% partly due to a devaluation of the Ukrainian currency. Cobham has sold the last of its non-core businesses, a small business based in Texas in the US, to the unit's management. Standard & Poor's has lifted its outlook on Thomas Cook Group to Positive, from Stable, following a detailed financial review of the group's progress in implementing its transformation strategy.

AIM All-Share: Leni Gas & Oil is a big gainer after it received approval to start drilling at the Goudron Field in Trinidad and started moving its drilling rig to the field in preparation. Bullabulling Gold has shot higher after it received a takeover offer from Norton Gold Fields Ltd. It didn't give details of the offer, but said it will evaluate it. Havelock Europa is doing well after it swung to a pretax profit in 2013 for the first time since 2008, cut its debt, and said it would try and achieve more cost savings. Blur is a big faller after it revised its full-year 2013 revenue expectations lower due to delayed revenue recognition on a number of project bookings. Those will now be recognised in 2014 and beyond. Anglo Asian Mining is down after it revised down expected production from its new agitation leaching plant at Gedabek in Azerbaijan and dropped its 2014 gold production target despite significantly increasing production in its first quarter. Public Service Properties Investment is another loser after it said it was looking into the implications of European Care & Lifestyles (UK) Ltd falling into administration. The company let nine care facilities in Merseyside and one in Scotland to European Care & Lifestyle companies in 2004 on 35 year leases. It also holds the license for the domiciliary care business operated by European Care & Lifestyles, and became a minority shareholder in it, as well as providing it with a subordinated loan note, after selling it some properties in 2012. Sefton Resources is down after it issued 4 million shares to convert USD10,000 of a previously announced loan note.

--------

Top Economics And General

----------
At least three people were killed and 13 injured in a clash involving pro-Russian activists at a national guard base in south-eastern Ukraine, the interior minister said, as top diplomats gathered in Geneva for crisis talks. The discussions among Russia, Ukraine, the US and EU got under way as part of efforts to defuse the escalating tensions between Kiev and Moscow as more violence between Ukrainian forces and pro-Russian activists were reported. About 300 activists were involved in an attack Wednesday night on the base in Mariupol, in which they opened fire and threw Molotov cocktails at Ukrainian authorities, Minister Arsen Avakov said on his Facebook page.
----------
NATO decided Wednesday to deploy extra equipment and military personnel in its eastern expanses, as the standoff intensified between pro-Russian militants and Ukrainian troops in eastern Ukraine. "We will have more planes in the air, more ships on the water and more readiness on the land," NATO Secretary General Anders Fogh Rasmussen said. The alliance's easternmost member states have said they feel threatened by Russia, which has annexed the Black Sea peninsula of Crimea from Ukraine in March.
----------
Germany's producer prices dropped for an eighth successive month in March and at a faster than expected pace, data from Destatis showed. The producer price index (PPI) fell 0.9% year-on-year in March, same as in February. Economists had a forecast a fall of 0.7%. Producer prices have declined every month since August last year and the biggest fall in the cycle was in January, when they dropped 1.1%.
----------
Murky waters and strong sea currents have hindered repeated attempts to find any more survivors in a passenger ferry which sank off the South Korean coast, officials said. The confirmed death toll reached nine in the sinking Wednesday of the Sewol ferry, as fears grew for hundreds still missing, most of them high school students. Navy and Coast Guard divers failed to enter the capsized boat after 10 attempts, South Korea's Yonhap News Agency reported.
----------

Afternoon Watchlist (all times British Summer Time)

13:30 US Jobless Claims
15:00 US Philadelphia Fed Manufacturing Survey
15:30 US EIA Natural Gas Storage change
20:00 US American Petroleum Institute Monthly Report

--------

Tuesday's Key UK Corporate Events

Nostrum Oil and Gas Full Year Results
Genel Energy Interim Management Statement
Polymetal International Production results

-------

Tuesday's Key Economic Events (all times British Summer Time)

13:55 US Redbook index
14:00 US Housing Price Index
15:00 EU Consumer Confidence Preliminary
15:00 US Existing Home Sales
15:00 US Richmond Fed Manufacturing Index

-------

By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1

Copyright © 2014 Alliance News Limited. All Rights Reserved.