Last checked at LONDON (Alliance News) - The FTSE 100 is on the verge of snapping a five day losing streak Wednesday, led higher by the likes of RSA Insurance Group, which unveiled its new chief executive, and GlaxoSmithKline, which has just reported strong results.
RSA Insurance has picked former Royal Bank of Scotland chief Stephen Hester as the man to lead it out of its current crisis.
Hester joins as the troubled insurer seeks to recover after discovering a GBP200 million accounting black hole in its Irish business. Hester, who was replaced as RBS chief executive by Ross McEwan in October after five years at the helm, will earn a basic salary GBP950,000 a year at the insurance group, with a potential for a bonus. RSA said 50% of any bonus award must be deferred into RSA shares for three years.
"The challenges of recent months have demonstrated that we have not lived up to our stakeholders' expectations and performed to our true potential. We have an obligation to deliver shareholder value and excellent products and services that provide everyday protection for our customers," Hester said in a statement.
“I look forward to getting started immediately and working closely with the board on the business review to ensure that we are able to deliver strength and value to all of our stakeholders and re-emerge as an attractive solidly performing group,” he added.
At RBS, Hester led the 81% UK state-owned bank back from a damaged balance sheet and the disastrous acquisition of Dutch bank ABN Amro that had forced it into a taxpayer bailout. In the end, he was virtually forced out of the bank by its political masters, but is well respected in the City for the turnaround job he started there, and RSA shares are up as a result.
In addition to its Irish woes, insurer RSA recently has been hit by big weather-related claims.
GlaxoSmithKline, meanwhile, just reported higher fourth quarter profits as revenues increased and it cut costs, and it confirmed that it expects to launch late stage clinical trials on ten new drugs over the next two years.
The performance was driven by strong sales of vaccines and pharmaceuticals, while sales of consumer healthcare products was flat. Currency fluctuations also weighed on its reported results for the year.
It predicted further growth in revenues and earnings this year as it develops its portfolio and further cuts costs, while it's planning to return a chunk of the proceeds from its recent asset sales to its shareholders.
The company said it is still too early to predict the impact of the probes into its selling practices in China, and Chief Executive Andrew Witty declined to go into any detail. He said Glaxo's business in China had started to stabilize, but the timing of the end of the probe into the allegations of bribery by Glaxo agents in China was up to the Chinese authorities.
At the other end of the blue-chip index, Hargreaves Lansdown reported record pretax profit and revenue for the half-year, as it continued to add new clients amid buoyant stock market conditions in London. However, its shares fell as Chief Executive Ian Gorham warned that profits will be hurt if interest rates remain low and analysts said the strong results had still missed forecasts.
The company was heavily involved in the Royal Mail flotation, handling the retail offering, and saw a surge in client numbers which helped boost its first-quarter result.
In the FTSE 250, interdealer broker ICAP said revenue in the third quarter fell by 6%, with its profit hit by reduced investment banking activity and new regulation over the swaps market. It kept its full-year outlook unchanged, and said its electronic markets were holding up well in the face of the recent decision by the Federal Reserve to start reducing its asset purchase programme.
London's commuters have faced a difficult time getting to work Wednesday morning as a strike on the London Underground and another severe storm combined to cause chaos throughout London's transport system.
Millions of people have been hit by the 48-hour strike on the tube network. Transport for London said that there will only be a limited service on the network until Friday morning, with 42 stations closed altogether Wednesday, including several in central London. The Circle line was closed altogether, with limited service on most other lines.
The strike by the RMT and TSSA unions is to protest plans by Transport for London to cut nearly 1,000 jobs and close all London Underground ticket offices. TFL says the plan will modernise the system - it claims that most journeys made are now ticketless - and save GBP50 million a year.
These problems were being compounded by problems on the overland rail network into London as the latest in a series of winter storms to batter the UK caused speed restrictions to be imposed, cancellations and long delays. The National Rail Enquiries website was showing disruption on routes run by CrossCounty, First Great Western, South West Trains and Southeastern.
The TSSA union said underground services had been reduced by over 70% Wednesday morning.
House prices are likely to continue rising for at least another ten years, UK Chancellor George Osborne told British lawmakers as he attacked local dissenters for slowing down planning reforms, The Times has reported, citing Osborne's testimony to a panel of the House of Lords.
The Chancellor told peers that the shortage of housing was an historic problem as he stressed that the coalition was trying to boost supply as well as providing cheaper home loans to struggling families, the paper said. He defended the government's Help to Buy policy in the face of criticism from Liberal Democrats such as Vince Cable, who suggested last week reducing the maximum home purchase of GBP600,000, it added.
Three senior executives from the failed Anglo Irish Bank, which cost taxpayers EUR29 billion (USD39 billion) to bail out, have gone on trial in Dublin. The bank rescue was a major factor in forcing Ireland into an EUR85 billion international bailout in 2010, after its banking and fiscal crises threatened to destabilize the euro.
Former Chairman Sean Fitzpatrick and senior executives Pat Whelan and William McAteer each face charges of illegally providing financial assistance to 16 people to buy shares in the bank in 2008, in an apparent attempt to prop up its share price. All three deny the charges.
Ukrainian opposition leader Vitaly Klitschko has urged the EU to meditate in the country's deep political crisis. "Someone should follow the course of negotiations and mark all commitments and obligations," Klitschko said after a meeting with EU foreign policy chief Catherine Ashton late Tuesday in Kiev. Klitschko added that Ashton had assured him that the EU is ready to send high-level mediators to negotiations between opposition leaders and the government.
The United Nations said it would not condone any action that undermines the democratic process in Thailand, following an inconclusive general election at the weekend. UN Secretary General Ban Ki-moon raised concerns about obstruction of voting in Sunday's general election, and urged all parties to resolve their differences through dialogue.
"Any action that undermines democratic processes and hinders the democratic right of the Thai people cannot be condoned," he said of the political deadlock.
The announcement came as Bangkok's Criminal Court approved arrest warrants for 19 leaders of ongoing anti-government protests for violating the terms of a state of emergency. The court agreed that the leaders of the People's Democratic Reform Committee had violated the emergency decree enforced in the capital last month.
A dozen civilians have been killed during clashes between Muslim Seleka fighters and Christian vigilante groups in the northern Central African Republic despite the reinforced presence of African peacekeepers in the area, according to witness reports. Seleka fighters, supported by mercenaries from Chad and Sudan, attacked residents this week in Bossembele and Boali, about 100 kilometres north-west of the capital, Bangui.
--------
FTSE 100: up 0.2% at 6,463.69
FTSE 250: up 0.4% at 15,594.27
AIM ALL-SHARE: up 0.01% at 857.56
GBP-USD: 1.6277
EUR-USD: 1.3515
GOLD: USD1,257.82 an ounce
OIL (Brent): USD105.91 a barrel
--------
KEY UK CORPORATE NEWS:
FTSE 100: British Land plans to increase its shareholding in specialist retail park property group Hercules Unit Trust to 54.2%, from 49.2%, in a deal which will cost it GBP41 million. It said its holding could rise even higher. Rolls-Royce is to face criminal charges after being accused of exposing employees to radiation at its facilities in Derby, The Times reported, citing the Health and Safety Executive.
FTSE 250: HomeServe said its expects its full-year pretax profit, excluding exceptional items, to meet market expectations as it said its UK business was starting to stabilise following its recent struggles. It said UK customer numbers at the end of December were 2.1 million, giving it greater confidence that the business will stabilise its customer numbers at above 2.0 million. PayPoint said that Warren Tucker, the former chief financial officer of UK defence technology company Cobham, will succeed David Newlands as its new Chairman from the end of its Annual General Meeting in July. Unite Group has exchanged contracts on a development site near the University of Aberdeen, Scotland, which it plans to transform into accommodation for 400 students. The 120,00 square foot scheme, still subject to planning consent, is expected to have a total development cost of GBP20 million and is expected to deliver yield in line with Unite's target returns of 9.5% to 10% on cost.
AIM: Aeorema Communications is a big riser after the events and communications company posted a pretax profit of GBP225,941 in the half-year to end-December, almost doubled from GBP114.460 from the previous year. Serabi Gold is up after it said drilling at its Sao Chico gold project had intersected further high-grade gold deposits, suggesting a significant extension of the mineralisation at the site. Serabi will now undertake some initial development of the deposit and is acquiring essential fleet so it can start the earthworks and ramp portal development at Sao Chico. Ascent Resources is a big faller after it entered into a convertible loan note agreement for up to GBP5 million. The company said the first GBP2 million of the loan notes will be drawn down in the next few days and used to fund existing project commitments in Slovenia. West African Minerals is another faller after it raised about GBP3.7 million in a placing of 52.8 million shares at 7 pence each, raising money to fund the development of its Binga license zone in Sierra Leone.
--------
AFTERNOON WATCHLIST: US ADP Employment Data, US ISM Non-Manufacturing PMI, EIA Crude Oil Stocks Change
--------
Thursday's Key UK Corporate Events
AstraZeneca Full Year Results
Enterprise Inns Interim Management Statement
Compass Group Interim Management Statement
Redhall Full Year Results
Beazley Preliminary results
Investec Interim Management Statement
LondonMetric Property Interim Management Statement
Easyjet January Traffic Statistics
Grainger Interim Management Statement
Supergroup Interim Management Statement
Smith & Nephew Preliminary results
Avon Rubber Interim Management Statement
TUI Travel Q1 Results
Vodafone Group Interim Management Statement
Wincanton Interim Management Statement
Darty Interim Management Statement
-------
Thursday's Key Economic Events
05:00 Japan Consumer Confidence Index
11:00 Germany Factory Orders
12:00 UK BoE Interest Rate Decision
12:45 EU ECB Interest Rate Decision
13:30 EU ECB Monetary policy statement and press conference
13:30 US Initial Jobless Claims
13:30 US Nonfarm Productivity Preliminary
13:30 US Trade Balance
15:30 US EIA Natural Gas Storage change
-------
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
Copyright © 2014 Alliance News Limited. All Rights Reserved.
22 Apr 2024 20:03
EARNINGS AND TRADING: Zenova's Kitemark award; Carnival's eyes savings
(Alliance News) - The following is a round-up of earnings and trading updates by London-listed companies, issued on Friday and Monday and not separately reported by Alliance News:
Read more