LONDON (Alliance News) - Share prices have opened higher in London Tuesday, after Asian stock markets rebounded from their worst early losses, as a rise in US stock index futures helped soothe investor sentiment following China's "Black Monday".
RSA Insurance leads FTSE 100 gainers, up 5.1%, after receiving a revised takeover offer from Swiss rival Zurich Insurance Group and saying it has indicated a willingness to recommend it.
Just behind is BHP Billiton, up 3.8%. The miner said its profit and earnings both plummeted in its recent financial year due to falling commodity prices, but it surprised the market by improving its dividend.
Here is what you need to know at the London market open:
FTSE 100: up 1.3% at 5,977.53
FTSE 250: up 1.0% at 16,372.25
AIM ALL-SHARE: up 0.2% at 703.88
Hang Seng: down 0.5% at 21,156.62
Nikkei 225: closed down 4.0% at 17,806.70
DJIA: closed down 3.6% at 15,871.35
S&P 500: closed down 3.9% at 1,893.21
GBP: up at USD1.5768
EUR: down at USD1.1549
GOLD: down at USD1,148.63 per ounce
OIL (Brent): up at USD43.13 a barrel
(changes since end of previous GMT day)
ECONOMICS AND GENERAL
Tuesday's Key Economic Events still to come
(all times in BST)
09:00 Germany IFO Business Climate, Current Assessment, Expectations
09:30 UK Index of Services
13:55 US Redbook index
14:00 US Housing Price Index
14:00 US S&P/Case-Shiller Home Price indices
14:45 US Markit PMI Composite and Services Preliminary
15:00 US New Home Sales
15:00 US Richmond Fed Manufacturing Index
15:00 US New Home Sales
15:00 US Consumer Confidence
China's central bank said it will inject more money into the country's markets, as it also set its currency fix slightly weaker following the three-day devaluation which drove the value of yuan down last week. The People Bank of China set Tuesday's central parity rate for yuan at 6.3987 per dollar, compared to Monday's reference rate of 6.3862. In addition, the bank said it will inject CNY150 billion via 7-day reverse repos, a decision which should also help to underpin some improved sentiment in Asian markets, according to Bloomberg.
A leading economic index for China remained positive in July, the latest survey from the Conference Board showed, advancing 0.9%. That follows the downwardly revised 0.6% increase in June (originally up 1.0%) and the 1.1% jump in May.
US Federal Reserve official Dennis Lockhart has repeated his view that the US central bank could raise its key interest rate this year, the Financial Times reports. Lockhart, in a speech made on Monday in California, said the Atlanta Federal Reserve's baseline forecast "is for moderate growth with continuing employment gains and a gradually rising rate of inflation." "Consistent with this picture, I expect the normalisation of monetary policy - that is, interest rates - to begin sometime this year," he added. "I expect normalisation to proceed gradually, the implication being an environment of rather low rates for quite some time."
Germany's economic growth improved as initially estimated in the second quarter, driven by strong exports. Gross domestic product rose 0.4% quarter-on-quarter, faster than the 0.3% expansion seen in the first three months of the year, final data from Destatis showed. The growth rate matched the preliminary estimate released on August 14. Annual growth in the German GDP accelerated to a price-adjusted 1.6% from 1.2% in the first quarter. The calendar adjusted GDP also grew 1.6% versus 1.1% expansion seen a quarter ago. Annual figures also came in line with preliminary estimate.
President Recep Tayyip Erdogan officially called for new elections in Turkey, less than three months after the last polls. The announcement came after Erdogan met with the speaker of parliament and follows coalition talks, which got off to a rocky start and never seemed destined to reach a result. The ruling Justice and Development Party, which Erdogan helped found, failed to secure a majority in parliament in June for the first time since 2002.
A leader of the Jundullah militant group in Afghanistan's Kunduz province was killed in a US drone strike, the national intelligence agency said. The Jundullah group is a branch of the Islamic Movement of Uzbekistan in Afghanistan.
South and North Korea reached an agreement in talks to defuse tensions in the latest crisis on the peninsula. Under the agreement, North Korea's "quasi-state of war" would be lifted, and South Korea would stop its broadcast of propaganda by loudspeaker across their shared border, South Korean security advisor Kim Kwan Jin said from Seoul. North Korea apologized for a landmine explosion that critically wounded two South Korean soldiers.
BROKER RATING CHANGES
TRADERS: BARCLAYS CUTS HOME RETAIL TO 'UNDERWEIGHT' ('EQUAL WEIGHT')
TRADERS: HSBC CUTS STAGECOACH TO 'HOLD' ('BUY') - TARGET 390 PENCE
TRADERS: HSBC RAISES NATIONAL EXPRESS TO 'BUY' ('HOLD') - TARGET 330 PENCE
COMPANIES - FTSE 100
BHP Billiton said its profit and earnings both plummeted in its recent financial year due to falling commodity prices, but the miner surprised the market by improving its dividend. The multi-commodity giant also reported large reductions in costs as it tries to battle the downturn in the mining industry, including reducing its capital expenditure budget by a further USD500 million in the 2016 financial year. The miner reported a pretax profit of USD8.05 billion in the year ended June 30, a huge fall from the USD21.73 billion profit made a year earlier, as revenue dropped to USD43.45 billion from USD55.04 billion. BHP increased its dividend for the full year to 124.0 cents per share from 122.0 cents last year. Analysts were expecting the dividend to remain flat year-on-year.
RSA Insurance Group said it has received a revised takeover offer from Swiss rival Zurich Insurance Group and said it has indicated a willingness to recommend it, though Zurich said it reserves the right to make a bid below the price at which the new offer has been made. The bid is for 550.00 pence per share, or GBP5.59 billion in total, and would allow RSA shareholders to get the 3.5 pence per share dividend RSA announced in its interim results earlier this month. RSA shares closed Monday at 495.00p.
Antofagasta reported a huge fall in profit and earnings in the first half of the year, as expected, and cut its dividend, after being hit by lower production, sales and commodities prices. The miner said pretax profit fell to USD297.3 million in the first half of 2015 from a USD820.8 million profit a year earlier, as revenue declined to USD1.78 billion from USD2.60 billion. Earnings before interest, tax, depreciation and amortisation dropped to USD561.6 million, just over half the USD1.09 billion reported a year earlier. That was slightly below analyst expectations. Antofagasta slashed its interim dividend to 3.1 cents per share, compared to 11.7 cents a year earlier.
BT Group said it has begun its first field trial with its new ultrafast broadband technology, dubbed G.fast, in Huntingdon, Cambridgeshire. The technology underwent its first trial in 2013. G.fast is delivering speeds of up to 330 megabits per second, which BT said is "more than ten times the current UK average", and it is targeting speeds of up to 500 megabits per second "within a decade" as the technology is developed further. The trial comes as UK telecoms regulator Ofcom is considering the potential separation of BT's infrastructure division Openreach from the rest of BT, amongst other options, as part of its ongoing strategic review of digital communications.
Tesco has received three separate binding offers for its South Korean arm valuing the business around USD5.9 billion, Reuters reports, citing people familiar with the matter. The bids have ben made by a consortium of Affinity Equity Partners and KKR, Carlyle Group and MBK Partners, all private equity houses.
COMPANIES - FTSE 250
The UK Competition and Markets Authority said it has provisionally cleared the acquisition of 99p Stores by Poundland Group. Earlier this year, Poundland agreed a GBP55 million cash and shares deal to buy its smaller rival, paying GBP47.5 million in cash and a further GBP7.5 million in shares. In April, the CMA referred the acquisition for an in-depth phase 2 investigation following an initial investigation. However, the CMA on Tuesday said that the Inquiry Group of independent panel members examining the merger found that it would not be expected to result in a substantial lessening of competition.
Al Noor Hospitals Group said it expects "slightly higher growth in revenue and earnings" in the second half of 2015 compared to the first, and reported an 8.5% rise in revenue for its first half, although higher operating costs resulted in a somewhat lower pretax profit. The Abu Dhabi private healthcare service provider proposed an interim dividend of 4.1 pence, up from 3.7 pence a year before.
Russia-focused gold and silver miner Polymetal said its pretax profit came in higher in the first half of 2015 after it managed to pull down its costs sufficiently to offset a fall in revenue caused by lower gold and silver prices. Polymetal said its pretax profit for the six months to the end of June was USD157.7 million, up from USD141.4 million, as the group managed to cut costs successfully to offset its revenue falling to USD648.0 million from USD726.9 million. The group has proposed an interim dividend of 8.0 US cents per share.
Petrofac said it swung to a pretax loss in the first half of 2015 despite revenue rising in the period, after the company booked multiple exceptional items and its margin was squeezed, but it kept its interim dividend flat from last year. The engineering and service company reported a USD183.0 million pretax loss in the first half of 2015, swinging from a USD188.0 million profit a year earlier, despite revenue rising to USD3.18 billion from USD2.53 billion. Petrofac retained its interim dividend from last year of 22.0 cents per share.
Marine engineering services company James Fisher & Sons said its pretax profit ticked lower in the first half of 2015, as the company was hit by the downturn in activity in the oil and gas industry, but it still raised its dividend. The company said its pretax profit in the first half to the end of June was GBP17.9 million, down from GBP20.8 million a year earlier, as revenue fell to GBP213.1 million from GBP216.1 million. James Fisher said it will pay an interim dividend of 7.80 pence per share, up from 7.10p a year earlier.
Regus posted robust results for the first half of the year, with the group's pretax profit more than doubling, its revenue pushing higher and its return on investment in the period improving, all in line with its expectations. The office space provider said its pretax profit for the six months to the end of June was GBP79.1 million, more than double the GBP31.0 million it posted a year earlier. Regus raised its interim dividend by 12% to 1.4 pence per share, up from 1.25p.
COMPANIES - LONDON MAIN MARKET AND AIM
Totally said it has raised GBP1.05 million through a share subscription, and also proposed a share consolidation and the appointment of Bob Holt, currently chairman of Mears Group PLC, as its new non-executive chairman.
Gulf Marine Services posted a solid set of results for the first half, with profit and revenue both higher and the group's fleet utilisation remaining strong, along with confidence that earnings will improve in the second half. The company, which provides self-propelled self-elevating support vessels to the offshore energy sector, said its pretax profit for the six months to the end of June was USD36.1 million, up from USD34.3 million a year earlier, as revenue for the group increased to USD98.2 million from USD90.7 million. The company added it would pay a flat interim dividend of 0.41 pence per share.
COMPANIES - INTERNATIONAL
Boeing started issuing notices for what could be hundreds of layoffs at its satellite business, a move it blamed partly on the stalled reauthorisation of the US Export-Import Bank, which supports many of its sales, according to media reports. The company expects to lay off "several hundred" workers over the coming months and into early 2016. Boeing last week reportedly confirmed it had lost a satellite deal from Asia Broadcast Satellite because the company couldn't secure financing.
Monsanto Co has made an increased takeover offer to Syngenta, seeking to draw the Swiss pesticide producer to the negotiating table after its earlier approach was rejected, Bloomberg reported citing people familiar with the matter. The recent offer values Syngenta at about CHF470 per share in cash and stock, compared with the CHF449 the US firm offered earlier this year, the report said. That would translate to a market capitalization of about CHF43.7 billion or USD47 billion. The proposal contains a higher proportion of cash than the prior bid, which envisioned a split of 45% cash to 55% Monsanto shares, the people said.
Tuesday's Scheduled AGMs/EGMs
Acorn Income Fund
By Tom Waite; firstname.lastname@example.org; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
(Alliance News) - Acorn Income Fund Ltd on Monday said its net asset value improved by 9.7% in the first half of 2019.The investment firm reported NAV per share as at June 30 of 421.93 to a