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LONDON (Alliance News) - Shares in London have opened mostly flat Thursday, following a mixed session in Asia and hawkish rumblings emanating from both the Bank of England and US Federal Reserve on Wednesday.
Business supplies and outsourced business solutions provider Office2Office said it has reached an agreement to be taken over by EVO Business Supplies Ltd, in deal which values the business at approximately GBP19.1 million.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.1% at 6,758.82
FTSE 250: flat at 15,748.11
AIM ALL-SHARE: down 0.1% at 763.43
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Hang Seng: down 0.9% at 24,941.06
Nikkei 225: closed up 0.9% at 15,586.20
DJIA: closed up 0.4% at 16,979.13
S&P 500: closed up 0.3% at 1,986.51
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GBP-USD: flat at USD1.6588
EUR-USD: flat at USD1.3259
GOLD: down at USD1,279.86 per ounce
OIL (Brent): down at USD101.77 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times British Summer Time)
09:00 EU Markit Manufacturing and Services PMI Preliminary
09:30 UK Public Sector Net Borrowing
09:30 UK Retail Sales
13:30 US Jobless Claims
14:45 US Markit Manufacturing PMI Preliminary
15:00 US CB Leading Indicator
15:00 EU Consumer Confidence Preliminary
15:00 US Existing Home Sales
15:00 US Philadelphia Fed Manufacturing Survey
15:30 US EIA Natural Gas Storage
20:00 US American Petroleum Institute Monthly Report
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The Federal Reserve debated when to hike interest rates amid signs the labour market has moved closer to normal, according to the minutes of the Fed's July policy meeting. At the meeting held July 29-30 the Federal Open Market Committee voted 9-1 to maintain its current policy of very gradually withdrawing stimulus from the US economy. Fed forecasts show most officials expect to start raising rates next year, but some members are now making the case for a "relatively prompt" rate hike. The majority of Fed voters, however, think the Fed should be patient before hiking rates, as slack in the labor market remains a concern. The jobless rate rose to 6.2% in July.
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The manufacturing sector in China continued to expand in August, although it slowed dramatically, the latest flash purchasing managers' index from HSBC revealed on Thursday - with a three-month low score of 50.3. That was well shy of forecasts for a score of 51.5 and down sharply from 51.7 in July. A score above 50 means expansion in a sector, while a reading below 50 signals contraction.
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The manufacturing sector in Japan continued to expand at an accelerating pace in August, the latest flash purchasing managers' index from Markit Economics revealed on Thursday - with a score of 52.4. That handily beat forecasts for a score of 51.5 following the 50.5 reading in July.
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US President Barack Obama Wednesday vowed the US and its allies will be "vigilant and relentless" in striking against the Islamic State terrorist group and condemned the beheading of a US journalist. Speaking from Martha's Vineyard where he is on vacation with his family, Obama called for Middle Eastern nations and others to join together to "extract this cancer so it does not spread." A video released Tuesday by the terrorist group showed a masked extremist with a British accent beheading James Foley, 40, who went missing in Syria in November 2012.
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Israeli jets fired at 20 targets in the Gaza Strip overnight, a military spokeswoman said Thursday, as the United Nations made a renewed call for a ceasefire between Israel and Palestinian militant groups. The airstrikes hit various sites across Gaza, the military said. One rocket launched at Israel during the night was intercepted, the Israeli army said, following some 175 that were fired on Wednesday. The UN Security Council late Wednesday called on Israel and Palestinian negotiators to return to the table and "urgently reach a sustainable and lasting ceasefire."
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BROKER RATING CHANGES
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S&P CAPITAL IQ CUTS LEGAL & GENERAL TO 'SELL' ('HOLD') - TARGET 215 (230) PENCE
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BERENBERG RAISES NATIONAL GRID PRICE TARGET TO 850 (785) PENCE - 'HOLD'
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COMPANIES - FTSE 100
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The terms of a proposed settlement filed on Wednesday in the US will see Barclays Capital Inc, part of Barclays PLC, pay a USD23.0 million sum to the creditors of Thornburg Mortgage Inc, settling allegations of "improper" margin calls that contributed to the bankruptcy of the mortgage lender, the Wall Street Journal reported. The agreement was reached with the court-appointed trustee overseeing the liquidation of Thornburg Mortgage.
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GlaxoSmithKline said late Wednesday the US Food and Drug Administration has approved its Arnuity Ellipta treatment for asthma in patients aged 12 years and older. Arnuity is not indicated for the relief of acute bronchospasm, Glaxo said. It was approved for 100 microgram and 200 microgram doses, and is administered daily via the Ellipta dry powder inhaler, which is also used for a range of other respiratory medicines in Glaxo's portfolio.
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AstraZeneca said it has partnered with Illumina Inc to develop a gene-sequencing platform for companion diagnostic tests, applicable across AstraZeneca's oncology portfolio. AstraZeneca plans to use Illumina's technology for a diagnostic test in studies for one of its investigational oncology compounds, which AstraZeneca said could speed up the clinical trial process.
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COMPANIES - FTSE 250
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WH Smith said it expects full-year results to be in line with market expectations, adding that both of its main business lines remain highly cash generative. The FTSE 250-listed retailer said results for the year to August 31 should be in line with market expectations. It said its travel arm is continuing to perform well, and its new store opening programme is on track both in the UK and internationally. In retailer's high street arm, the firm said its focus on gross margin gains and tight cost controls was translating into a positive performance.
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A joint venture between Interserve and Shanks Group has agreed funding terms to commence construction of its 27-year Public Private Partnership contract with Derby City and Derbyshire County Councils, said the companies. The contract is set to generate estimated revenues of GBP950 million and will see Resource Recovery Solutions (Derbyshire) Ltd, a special purpose vehicle, build and operate a new waste treatment facility in the city.
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Kazakhmys H1 Pretax Loss USD118M Vs USD244M; Revenue USD1.29B Vs USD1.57B; To Focus On Copper Production In Continuing Group; Production Outlook: FY Cathode Equivalent Output Of 80-85kt
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Premier Oil H1 Production Averaged 64.9kboepd, Up From 58.6kboepd, Ahead Of Guidance; Maintains Full-Year Production Guidance Of 58-63kboepd; H1 Pretax Profit USD50.4M, Down From USD214.6M Year Before; Sales Revenue USD884.7M, Up From USD757.8M Year Before; Will Continue Share Buyback Programme Until Price Reflects Value Of Business
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Phoenix Group H1 IFRS Operating Profit GBP266M Vs GBP186M; Interim Dividend Flat At 26.7p Per Share
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COMPANIES - LONDON MAIN MARKET AND AIM
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Costain Group PLC reported an increase in profit and revenue for the first half, despite being beset by a number of problems within its natural resources division. The engineering solutions provider posted pretax profit of GBP5.8 million for the six months ended June 30, up from GBP3.1 million a year earlier, as revenue rose to GBP529.1 million from GBP462.9 million. Costain said its infrastructure division, which incorporates the group's activities in the highways, rail and power sectors, had a strong first half, with an increase in revenue, operating profit and order book.
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Business supplies and outsourced business solutions provider Office2Office PLC said it has reached an agreement to be taken over by EVO Business Supplies Ltd, in deal which values the business at approximately GBP19.1 million. The all-cash offer from EVO, a newly-created company owned by funds managed by private equity firm Endless LLP, is for 51 pence per share, a premium of around 84.6% on Office2Office's closing price of 27.63 pence per share on Wednesday.
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Biofrontera AG said it has filed action for negative declaratory relief against its former supplier Biosynth AG, which has been claiming that Biofrontera terminated a mutual venture over the production and marketing of its drug Ameluz. Biofrontera refutes this, saying that it had only terminated a supply agreement. It believes that Biosynth making its claims in order to trigger "material financial concessions". Biofrontera said it had terminated the supply agreement, because Biosynth had not fulfilled standards set by the European Medicines Agency for a component of Ameluz.
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Leni Gas & Oil Says GY-668 Well Intersects 191 Feet Of Net Oil Pay In Goudron Sandstones; Says GY-668 Drilled To 1,946 Feet Depth, To Be Completed As Production Well
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Skyepharma H1 Pretax Loss GBP18.1M Vs Pretax Loss GBP1.6M; Says Prospects Remain In Line With Its Expectations
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Quindell H1 Pretax Profit GBP153.7M Vs GBP39.2M; Revenue GBP357.3M Vs GBP163.3M; Remains Confident Of Meeting All KPIs For FY2014; FY Revenue Guidance GBP800M-GBP900M
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Igas Has Secured Rig for Ellesmere Port Exploration Well, Will Spud Late 2014
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London Mining H1: Loss From Operations Of USD29.3M Vs USD10.2M Profit; H1: Revenue Down 22% To USD110.6M, Sales Vols Offset By Lower Market Prices; CEO: No Production Hit From Ebola, Supply Chain Disrupted
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Sportech PLC H1 Pretax Profit GBP87.8M Vs GBP2.6M; Revenue GBP52.6M Vs GBP54.4M
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Bacanora, Rare Earth Minerals Lithium Bearing Clay Units At Buenavista Concession Confirmed; Lithium Bearing Clay Units Intersected At Megalit JV
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COMPANIES - INTERNATIONAL
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Bank of America Corp has reached a nearly USD17 billion settlement of federal, state and civil allegations over troubled mortgage bonds, according to US media reports Wednesday. The agreement could be announced Thursday, Bloomberg News reported, citing two people with knowledge of the settlement who spoke on condition of anonymity. Bank of America settled a separate case early this year with the Federal Housing Finance Agency for USD9.5 billion.
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Computer and printer maker Hewlett-Packard Co. said Wednesday after the markets closed that its third quarter profit fell 29% from last year, hurt mainly by higher restructuring charges even as revenue grew 1%. The company's quarterly earnings per share, excluding items, came in line with analysts' expectations, but its quarterly revenue beat analysts' forecast. At the same time, the company narrowed its full year earnings outlook.
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Warren Buffett's Berkshire Hathaway Inc has agreed to pay an USD896,000 civil penalty to settle charges that it violated pre-merger reporting and waiting requirements when it acquired voting securities of USG Corp., the Department of Justice announced Wednesday. The Justice Department's Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit in US District Court in Washington, D.C., against Berkshire Hathaway for violating the notification requirements of the Hart-Scott-Rodino Act of 1976.
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Thursday's Scheduled AGMs/EGMs
Blue Planet International Financials Investment Trust
Triad Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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