Aukett Swanke Share News (AUK)

LONDON (Alliance News) - Royal Mail is amongst the worst-performing stocks in the FTSE 100 Tuesday after the UK's communications and postal regulator Ofcom widened its review of the company's regulation in light of the decision by competitor Whistl to pull its plans to launch its own direct delivery services in the UK.

Ofcom said it wanted to look at what changes to the overall postal framework might be appropriate to secure the so-called universal postal service - Royal Mail's obligation to deliver to every address in the UK at the same price. It also wants to look at how best to ensure Royal Mail continues to become more efficient in the absence of any competitor in the direct delivery market, and whether the company's wholesale and retail prices are affordable while being sufficient to cover the costs of the universal service.

It said it will also examine whether Royal Mail's commercial flexibility remains appropriate in the changing market, and, if not, whether wholesale or retail charge controls might be appropriate.

Ofcom had already announced a review of Royal Mail's efficiency in December, as well as its performance in the parcels market and the company's potential ability to set wholesale prices in a way that might harm competition.

Whistl was preparing to launch its own final deliver service in key cities and urban areas, but decided to abandon the project after LDC, the private equity arm of Lloyds Banking Group PLC, withdrew from talks about a possible investment in the company at the end of April.

Stock markets have fallen in Asia and across Europe again Tuesday, due to the ongoing jitters about Greece's possible exit from the eurozone, and ahead of the US Federal Reserve's latest policy decision on Wednesday.

Stock have also been hit by a sharp fall in Chinese stocks, with the benchmark Shanghai Composite Index losing 3.47% as China's securities regulator tightens margin financing.

China's Securities Regulatory Commission on Friday published draft rules that would cap the size of the country's margin trading and short selling for the first time, at four times a brokerage's net capital. Margin trading, where investors borrow money from a broker to buy stocks, had fuelled recent rallies in China's stock market and raised concerns that margin debt has created a bubble in the market. Traders have been taking advantage of lower borrowing costs after China's central bank cut interest rates in February.

Meanwhile, Greece's eurozone partners are drawing up an emergency plan to head off the threat of economic chaos in the country if the nation fails to reach a deal with its creditors this week, German media reported.

The plan includes the imposition at the weekend of capital controls to halt a possible run on Greek banks, according to the daily Sueddeutsche Zeitung.

The Eurogroup of finance ministers are due to meet Thursday to take stock of the long-running and increasingly fraught negotiations between Greece and its creditors - the European Commission, the European Central Bank and the International Monetary Fund.

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Markets: UK shares are lower mid-morning, with the increasingly rancorous Greek debt negotiations in the background and with the news that UK inflation rose in May after falling into negative territory in April. Chinese stocks plunged Tuesday, with the benchmark Shanghai Composite Index losing 3.47%, as China's securities regulator tightened margin financing. Analysts said stock declines on Monday and Tuesday reflected investors' unease about new margin-trading regulations. The pound is down against the dollar amid concerns about Greece and caution ahead of the Federal Reserve's two-day meeting which starts Tuesday.

Futures point to a lower open for US stock indices, with the DJIA currently indicated down 0.4%, the S&P 500 down 0.5% and Nasdaq 100 down 0.6%.

FTSE 100: down 0.6% at 6,668.45
FTSE 250: down 0.7% at 17,613.13
AIM ALL-SHARE: down 0.5% at 767.09
GBP: down at USD1.5582
EUR: down at USD1.1251
GOLD: down at USD1,183.83 an ounce
OIL (Brent): down at USD63.84 a barrel
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Other Top Corporate News
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Whitbread reported a rise in total revenue in the first quarter of its financial year as it continued to grow sales at both its Premier Inn and Costa Coffee chains. The hotel and coffee shop chain operator reported a 12.5% rise in total sales in the 13 weeks to May 28, with Premier Inn revenue up 14.3% and Costa Coffee up 17.2%. On a like-for-like basis, sales grew 6.3% and 5.0%, respectively.
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Industrial equipment rental company Ashtead Group reported strong growth in profit and revenue for its recently-ended financial year as it achieved growth in both the UK and US, hiked its dividend, and gave a positive outlook. The company reported a pretax profit of GBP473.8 million for the year to April 30, up from GBP365.5 million a year earlier, as revenue grew to GBP2.04 billion from GBP1.63 billion. It said it will pay a final dividend of 12.25 pence, meaning a total of 15.25p for the whole year, up by a third from 11.5p a year earlier.
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Kier Group said it has won new construction contracts worth GBP247 million in total through the National Health Service's ProCure21+ publicly-funded procurement programme.
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Crest Nicholson Holdings struck a bullish tone about its prospects, as the homebuilder reported that first-half pretax profit rose by about 52%. Chief Executive Stephen Stone said the business has the longer-term opportunity to achieve a "natural scale" approaching 4,000 units and GBP1.4 billion of revenue. The company said it is on track with a three-year plan to grow revenue towards GBP1 billion by October 2016.
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Dignity said it is spending GBP38 million in cash on expanding its funeral network. Dignity said it is acquiring 38 of 83 locations currently served by Laurel Funerals. Separately, Dignity said it has arranged a GBP26.25 million debt facility with Royal Bank of Scotland PLC, part of Royal Bank of Scotland Group PLC, which will be secured against assets including those being acquired. Dignity said the debt wasn't required to fund the acquisition. Dignity said it is only acquiring funeral locations in parts of the UK that "complement its own geographic spread" so as to avoid any concerns about competition.
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AIM Movers
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Lekoil shares are up after it received ministerial consent for its farm-in to the Otakikpo Marginal Field in Nigeria. Daniel Stewart Securities said it doesn't know why its share price has risen so sharply recently but said its planned placing is likely to be priced at a discount to its current share price. Iofina is another gainer after it raised its iodine production target for the first half of 2015, saying it now expects to produce over 280 metric tons of crystalline iodine, ahead of the 220 to 260 metric tons it had previously guided. Pressure Technologies is up after it said it swung to a pretax loss in the first half of its financial year due to costs of acquisitions and the fall in the oil price, but said revenue rose to GBP32.1 million from GBP19.9 million. Europa Oil & Gas is doing well after it said a recent independent assessment of its interest in a licence in the Porcupine Basin, offshore West Ireland, estimates a mean un-risked net present value of USD1.6 billion. Jarvis Securities is up after it declared a special dividend of 10 pence a share. Flowgroup has lost more than a third of its value as it reduced the number of boiler installations it had planned for 2015 and said it would instead focus on its cost reduction programme, after it was hit by a ruling by the European Court of Justice that a UK sales tax reduction on energy saving products breached EU laws. The company also warned that it will now taker longer than expected to become net cash flow generative and profitable. Thor Mining has lost more than a quarter of its value after it raised GBP525,000 by placing 1.05 billion shares at 0.05 pence each, money it will use to progress its Spring Hill gold project in Australia. PowerFilm is also a big faller after shareholders approved its de-listing from the AIM market. Aukett Swanke Group is down after it said results for its current financial year depend on its second-half performance in the UK, where it expects a pick up in activity following the Conservative Party's surprise majority victory in the General Election in May.
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Top Economics And General
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Athens' eurozone partners are drawing up an emergency plan to head off the threat of economic chaos in Greece if the nation fails to reach a deal with its creditors this week, German media reported. The plan includes the imposition at the weekend of capital controls to halt a possible run on Greek banks, according to the daily Sueddeutsche Zeitung. The Eurogroup of finance ministers are due to meet Thursday to take stock of the long-running and increasingly fraught negotiations between Greece and its creditors - the European Commission, the European Central Bank and the International Monetary Fund.
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UK consumer prices increased in May after falling in April for the first time since 1960, the Office for National Statistics reported. Consumer prices rose 0.1% from last year as expected by economists, offsetting April's 0.1% fall. Month-on-month, the consumer price index gained 0.2%, the same as in April, and matched expectations. Core inflation, which excludes energy, food, alcoholic beverages and tobacco, rose to 0.9% from 0.8% in April.
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House price inflation in the UK eased in April, reaching the lowest in sixteen months, after accelerating in the previous month, figures from the Office for the National Statistics showed. Average house prices increased 5.5% year-over-year in April, slower than March's 9.6% growth. In February, prices had risen 7.4%. The increase in April was the lowest since November 2013, when prices had risen 5.4%, and matched the rate of December 2013. The pace of annual house price growth fell across the majority of the UK, the ONS added.
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Germany's consumer prices increased for the fourth straight month in May at the fastest pace in seven months, as initially estimated, final data from the statistical office Destatis showed. Consumer prices rose 0.7% from last year, following a 0.5% increase in April. The annual increase matched the preliminary estimate published on June 1. The latest figure was the highest since October last year, when inflation was 0.8%. Prices of food and non-alcoholic beverages grew 1.4% year-on-year in May and recreation and culture prices increased 1.7%.
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The European Central Bank received the seal of approval on Tuesday for its government bond-buying programme. In endorsing the programme, the European Court of Justice in Luxembourg rejected challenges by a group of German politicians and economists to the ECB's bond-buying scheme as set out under the so-called Outright Monetary Transactions plan.
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Eurozone employment increased slightly in the first quarter, Eurostat reported. Employment rose 0.1% from the prior quarter, the same rate of growth as seen in the fourth quarter. Year-on-year, employment growth slowed marginally to 0.8% from 0.9% a quarter ago.
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Syrian Kurdish forces dealt a strategic blow to the Islamic State jihadist group, seizing a key border town that provided the extremists with one of their main supply routes from Turkey. Video recorded from the Turkish side of the border showed fighters waving the flag of the Kurdish People's Protection Units near the spot where, only 24 hours earlier, Islamic State members had pushed fleeing civilians back from the border fence. The green, white and black tricolour adopted by Syrian rebels was seen draped over the border crossing itself in the footage published by the Turkish DHA news agency.
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The Yemeni branch of al-Qaeda, seen as the international jihadist network's most active and dangerous branch, confirmed that its leader Nasir al-Wuhayshi had been killed in a US drone strike. A video message released by al-Qaeda in the Arabian Peninsula named the group's military leader Qasim al-Raimi as al-Wuhayshi's successor.
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The outbreak of Middle East Respiratory Syndrome, or MERS, in South Korea has claimed three more lives in the last 24 hours, bringing the number of deaths to 19, according to the latest government figures. One of the latest victims was 49 years old, the youngest person to die in what has become the biggest outbreak of MERS outside the Middle East, Yonhap News Agency reported. The coronavirus has infected over 150 people, and over 5,500 people are under quarantine, Yonhap reported.
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The Cairo Criminal Court sentenced former Egyptian president Mohammed Morsi to life imprisonment on espionage charges. The court was expected to pass judgement later on a second case in which Morsi, Egypt's first democratically elected president, faces the death penalty for allegedly organizing jailbreaks during the 2011 revolution that ended the 30-year rule of dictator Hosny Mubarak. Presiding judge Shaaban al-Shami passed death sentences on Brotherhood deputy leader Khairat al-Shater, Morsi's former presidential office director Ahmed Abdel-Ati and former parliamentarian Mohammed al-Beltagi.
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Afternoon Watchlist (all times in BST)

13:30 US Housing Starts
13:55 US Redbook index
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Wednesday's UK Corporate Events

Severfield - Full Year Results
Betfair Group - Full Year Results
Wynnstay Properties - Full Year Results
Berkeley Group - Full Year Results
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Wednesday's Key Economic Events (all times in BST)

00:50 Japan Merchandise Trade Balance Total
n/a China FDI - Foreign Direct Investment
09:00 Italy Global Trade Balance
09:30 UK BOE Credit Conditions Survey
09:30 UK ILO Unemployment Rate
09:30 UK Bank of England Minutes
10:00 EU Construction Output
10:00 EU Consumer Price Index
12:00 US MBA Mortgage Applications
15:30 US EIA Crude Oil Stocks change
19:00 US Fed Interest Rate Decision
19:00 US Fed's Monetary Policy Statement
19:00 US FOMC Economic Projections
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