LONDON (Alliance News) - UK Chancellor of the Exchequer George Osborne is expected Wednesday to again hail the country's continuing economic recovery whilst reiterating that yet more needs to be done to ensure it is sustained.
In his annual budget speech, which starts at 1230 GMT, Osborne is expected to again ensure that any handouts for individuals and businesses are balanced by spending cuts. He will focus incentives for businesses on trying to boost manufacturing and exports, while help for individuals is likely to see an extension of the Help to Buy scheme as well as new childcare subsidies for working families, according to media reports and commentators.
The budget speech will Osborne's fifth as chancellor and will likely be the penultimate one before a general election that's due in 2015.
Osborne got a boost ahead of the speech as unemployment in the UK declined in three months to January, data from the Office for National Statistics showed. During three months to January, unemployment was down by 63,000 from the August to October period. The jobless rate fell to 7.2% of the labour force from 7.4% in three months to October. Pay including bonuses for November to January increased 1.4% from a year earlier. Excluding bonuses, pay gained 1.3%.
The Confederation of British Industry is urging Osborne to focus on the so-called "rebalancing" of the economy. That means boosting manufacturing and exports so the country is less reliant on its service sector and imports. The lobby group also wants help for companies that use a lot of energy in the face of rising costs, and it is calling for a freeze on the air passenger duty.
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FTSE 100: Down 0.02% at 6,604.15
FTSE 250: Up 0.2% at 16,382.69
AIM ALL-SHARE: Up 0.1% at 867.72
GBP-USD: Up at 1.6644
EUR-USD: Down at 1.3925
GOLD: Down at USD1,345.18 an ounce
OIL (Brent): Down at USD106.03 a barrel
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Key UK Corporate News
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FTSE 100: Smiths Group has expanded its restructuring and cost savings programme after it reported lower first-half profits. Its detection unit continued to be hit by the slowdown in government spending and its medical unit was hit by customer destocking. The company is expecting an improvement in the second half thanks to its other business units, although it also warned that currency fluctuations are set to have an even greater impact. It hopes that by finding even more savings, it will free up more money to invest in its most profitable markets. A unit of China Minmetals Corp has for the first time admitted that it is in talks Glencore Xstrata to acquire interest in the Las Bambas project in Peru, the Wall Street Journal says. Barclays plans to solicit offers for its index business that could fetch USD400 million in a sale, Bloomberg reported, citing people with knowledge of the matter.
FTSE 250: Imagination Technologies Group said it has developed a new suite of graphics processors for mobile phones and other consumer devices. It said the new Wizard family of PowerVR Ray Tracing GPUs "dramatically" improves graphics, increasing realism and performance. Unite Group has received planning approval for the development of a new student property in Islington, central London. Ophir Energy has failed to find significant hydrocarbons in targeted reservoirs through drilling at the Padouck Deep-1 well in the Ntsina Block, offshore Gabon. Partnership Assurance Group reported a decline in new business sales in the fourth-quarter and said it expects a further fall in the first-quarter, due to the introduction of gender-neutral pricing and the retail distribution review. Kentz Corporation Ltd's handling company in the US, Valerus FS, has been awarded a USD38 million engineering contract from Cardon IV SA in Venezuela for work on a gas field.
AIM: Metminco is up after it got positive results from metallurgical test work and financial modelling at its Mollacas Project. It will now proceed with a feasibility study and an environmental impact study, which it expects to be completed by late 2014. EG Solutions is also up after it reported a widened pretax loss and lower revenues in its latest financial year, but expressed confidence for 2014, citing a large proportion of expected revenues that are already under contract and a pipeline of further opportunities. Sigma Capital Group is another gainer after it said 2013 was a "turning point". Its loss for the year narrowed as revenue from services more than doubled to GBP5.81 million while revenue from property activities rose more than threefold to GBP5.34 million. The company also announced an oversubscribed share placing, raising GBP8.0 million, for investing in the rented residential sector and for large scale development opportunities. Earthport is doing well after Japan's Kyodai Remittance signed a three-year contract and went live with its service, a deal Earthport said marks the early stages of its expansion into the Asia Pacific region. Altona Energy is up after it took full operational control of the Arckaringa Project in Australia. Paragon Resources is down after it raised GBP45,000 through a drawdown on its equity financing facility with Darwin Strategic Ltd. It needs to make an acquisition soon to meet the listing rules for an investment company or it faces having its listing suspended and then subsequently cancelled.
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Top Economics And General
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Policymakers of the Bank of England unanimously decided to maintain interest rate and quantitative easing as no member thought it appropriate to tighten, or to loosen, the stance of monetary policy at the current juncture. All nine members of the Monetary Policy Committee voted to retain the interest rate at 0.50% and quantitative easing at GBP 375 billion, the minutes of the meeting held on March 5 and 6 showed
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EU leaders will consider ratcheting up pressure on Russia through economic sanctions at this week's summit in Brussels, amid heightened tensions over Moscow's course of action in Ukraine's Crimea peninsula. The summit was meant to focus on the bloc's gradual economic recovery, as well as its future energy and climate change policies. But Ukraine will now dominate the agenda, with the 28 EU leaders due to "agree on a united European response" to the situation, EU President Herman Van Rompuy and European Commission President Jose Manuel Barroso have said.
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Pro-Russian activists stormed the Ukrainian navy headquarters in Crimea, media reports said, a day after Russia signed an accession treaty with the leaders of the Black Sea peninsula. The activists took down the Ukrainian flag and replaced it with Russia's, the Russian Interfax news agency reported. Tensions are rising in Crimea after Russian President Vladimir Putin signed the treaty with its Moscow-backed leaders of Crimea and Sevastopol, which finalizes the two regions' accession to Russia. Shortly after the ceremony in the Kremlin, one Ukrainian and a Russian soldier were killed in the Crimean capital Simferopol.
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US Vice President Joe Biden's mission to Poland and the Baltic countries includes energy security for Ukraine and the rest of Europe. Biden, sent by the White House on an emergency journey to reassure the region of US support during the tense situation over Crimea, on Tuesday discussed with leaders several avenues to explore, including reverse gas flow and fracking for gas trapped in deep underground shale. He also announced that the US has deployed a dozen F-16 fighter jets to the Lask Airbase in Poland as part of its expansion of the US rotation into NATO's Baltic air policing programme to protect Estonia, Latvia, and Lithuania as military tensions in the region grow.
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International Monetary Fund chief Christine Lagarde arrived Wednesday at a French court for questioning over her role in a massive state payout to a controversial businessman when she was finance minister. The Court of Justice of the Republic is charged with investigating and prosecuting crimes by ministers in the course of their duties. Lagarde was already questioned by the court in May over the state's 400-million-euro payment to Bernard Tapie in 2008 to settle a long-running dispute over the sale of his sportswear company Adidas.
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Bank of Japan policymaker Takahide Kiuchi said side effects of further monetary easing would outweigh the positive effects and that would undermine economic stability in the long run. "If the current large-scale monetary easing policy were to be protracted or such policy strengthened by additional measures, the associated side effects would instead outweigh the positive effects," Kiuchi told business leaders in Shiga. He said the 2% inflation target is well above the level that is consistent with the economy's growth potential. There will be room for a future review of the level
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The Thai Constitutional Court will rule this week on the legality of Thailand's last general election in which several constituencies failed to conduct the polls, reports said. After hearing the testimony of the plaintiff Ombudsman Pornpetch Vichitcholachai, and the defendants representing the government of Prime Minister Yingluck Shinawatra, the judges said they would announce their verdict on the constitutionality Friday, Thai TV reported.
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The search for a missing Malaysian airliner entered its 12th day with investigators still puzzled over why the aircraft disappeared and where it could possibly be now, a Malaysian aviation official said. "We are still clueless," the official said on condition of anonymity because he was not authorised to speak to media. A local newspaper reported that investigators found information on landing strips in Diego Garcia, Maldives, Sri Lanka and India in the flight simulator seized from the house of the plane's pilot, Zaharie Ahmad Shah, but a police source said he was not aware of such report.
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Iran and six world powers were working on a compromise over an Iranian plutonium-producing reactor project, delegates said on the second day of negotiations in Vienna. The reactor, which has yet to be completed, is a central topic at the talks on ending the stand-off over Tehran's nuclear programme because the other governments are concerned that Iran could use the plutonium that the facility in the western city of Arak would produce for making nuclear weapons. A shutdown is out of the question, Iranian Deputy Foreign Minister Abbas Araghchi said, according to the Iranian state broadcaster Press TV.
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Afternoon Watchlist
12:30 UK Budget Report
15:30 US EIA Crude Oil Stocks change
18:00 US Fed Interest Rate Decision
18:00 US FOMC Economic Projections
18:00 US Fed Pace of Treasury Purchase Program
18:30 US Fed's Monetary Policy Statement and press conference
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Thursday's Key UK Corporate Events
Next Full Year Results
United Utilities Trading statement
Ted Baker Full Year Results
Crest Nicholson Interim Management Statement
WADdisco Full Year Results
Savills Full Year Results
FW Thorpe Full Year Results
UK Commercial Property Trust Full Year Results
Robinson Full Year Results
Cello Group Full Year Results
Premier Farnell Full Year Results
MyCelX Tech Corp Full Year Results
Arbuthnot Full Year Results
Ophir Energy Full Year Results
Investec Trading Statement
Emis Group Full Year Results
Secure Trust Bank Full Year Results
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Thursday's Key Economic Events
All Day EU European Council meeting
07:00 Germany Producer Price Index
07:15 Japan Bank of Japan Governor Kuroda Speech
08:30 Switzerland SNB Interest Rate Decision
11:00 UK CBI Industrial Trends Survey
12:30 US Initial Jobless Claims
14:00 US Existing Home Sales
14:00 US Philadelphia Fed Manufacturing Survey
14:30 US EIA Natural Gas Storage change
19:00 US American Petroleum Institute Monthly Report
20:30 US Bank Stress Test Info
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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1
Copyright © 2014 Alliance News Limited. All Rights Reserved.
IN BRIEF: Altona raises funds, sees admission to Main Market on June 9
Altona Rare Earths PLC - London-based mining exploration company - Announces the publication of its prospectus in respect of the proposed admission to the Official List and to trading on the London Stock Exchange's Main Market. Expects admission June 9. Further, raises GBP2.0 million via oversubscribed GBP1.7 million placing and subscription of GBP322,700 through the issue of 40 million shares at 5 pence each. Funds will be used to complete Altona's maiden compliant mineral resource estimate and a scoping study for its flagship asset, Monte Muambe Rare Earths mining project in Mozambique, which is expected to be published in August. In addition, says in line with the company transitioning into a highly technical phase of exploration and development at admission, Christian Taylor-Wilkinson will step down as both chief executive and director. Cedric Simonet, the chief operating officer, will be appointed chief executive officer at admission.
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