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LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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UK pharmaceutical giant GlaxoSmithKline PLC has agreed to a USD105 million settlement covering 44 US states over allegations that it unlawfully promoted its asthma treatment Advair and antidepressants Paxil and Wellburtin. As part of the settlement, announced on Wednesday by California attorney general Kamala Harris, Glaxo is required to continue its Patient First Program through to at least March 2019, amongst other stipulations such as a requirement that scientifically trained personnel must be ultimately responsible for developing and approving responses to health care provider questions on an unbiased, non-promotional basis. The Patient First Program reduces the financial incentives for sales representatives, and was brought into Glaxo's US operations in 2011. Following a spate of investigations across its international operations, starting with large scale bribery investigations from Chinese Authorities, Glaxo is implementing a new compensation programme in all countries it operates in by 2015.
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The Association of Mineworkers and Construction Union has rejected a government-brokered proposal for an ZAR800 monthly increase in order to end strikes which have crippled South Africa's platinum mining industry, Business Day reported. The union met with the Department of Mineral Resources for South Africa on Tuesday and discussed the possibility of an ZAR800 monthly increase to employees. However, according to the South African newspaper, the union rejected the offer and said its stance remains that of a ZAR12,500 basic wage. On Wednesday, the Mineral Resources Minister Advocate Ngoako Ramatlhodi met with the major platinum miners Lonmin PLC, Impala Platinum Holdings Ltd and Anglo American Platinum Ltd, a subsidiary of Anglo American PLC to discuss a further proposal from the AMCU, which the producers are currently mulling over.
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The US Court of Appeals in New Orleans has ruled that British oil giant BP PLC and Anadarko Petroleum, as co-owners of the ill-fated Macondo well, are automatically liable for violations of the pollution law. The two companies may face billions of dollars in fines. The Macondo well exploded in April 2010, triggering the Gulf of Mexico oil spill. While the US claims that 4.2 million barrels of oil were dumped into the Gulf of Mexico, BP pegs the figure at 2.45 million barrels.
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Lloyds Banking Group PLC said that it had agreed to sell a portfolio of UK commercial real estate loans for GBP352 million to Promontoria Holding 109 B.V. Promontoria is an affiliate of Cerebus Global Investors. The gross assets of the portfolio are GBP536 million, Lloyds said, and produced a loss of GBP17 million in 2013. Lloyd's said that it will use the proceeds of the sale for "general corporate purposes" and does not expect the sale to effect its capital position due to provisions it has already taken against the assets.
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Online fashion retailer ASOS PLC lowered its profit guidance for the current financial year and next year, after saying it was hit by heavy discounting and sterling strength, which it said took a big chunk out of its international business. ASOS shares dropped 44% on the warning to a 52-week low of 2,529.00 pence soon after at the open, dragging down with it the whole AIM All-Share index, of which it is the dominant constituent. The shares are currently quoted at 3,120.00 pence, down 31%. Finance Director Nick Beighton told journalists Thursday full-year profits will fall to around GBP45 million, compared to its previous profit guidance given in March of around GBP63 million to GBP65 million. ASOS also lowered its profit expectations for the next financial year, saying it was "resetting its expectations".
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Property website Zoopla Property Group PLC and lending and savings company OneSavings Bank PLC both priced their London initial public offerings. Additionally, real estate investment trust Secure Income REIT PLC began trading on the smaller AIM market. Zoopla priced its offering at a range between 200 pence to 250 pence per share, giving it an implied value of GBP940 million at the mid-point of the range. It said it expects to join the FTSE 250 soon after listing. Furthermore, OneSavings Bank priced its offering at 170 pence, giving it a total market capitalisation of GBP413 million. It expects to raise GBP134 million in total from the offering, of which it will receive GBP41.5 million, and its major shareholder OSB Holdco Ltd around GBP93 million.
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Johnson Matthey PLC said pretax profit increased in its full year as revenues from its Emission Control Technologies and Process Technologies divisions drove forward growth at the company. The multinational chemicals and precious metals company, said its pretax profit jumped 17% to GBP406.6 million for the twelve months ended March 31 from GBP348.6 million the previous year as revenues increased 4.0% to GBP11.16 billion from GBP10.73 billion. It proposed a final dividend of 45.5 pence, resulting in a full year dividend increase of 10% to 62.5 pence.
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Galliford Try PLC said that its Infrastructure business has been appointed as a framework contractor to both Lots 1 and 2 of the Midlands Highway Alliance framework. The Midlands Highway Alliance is the regional highways maintenance procurement partnership established in 2007 between 20 local authorities in the Midlands, and the Highways Agency. The framework lots have a current project combined value of up to GBP261 million to the appointed contractors, over the initial three-year framework term, said Galliford Try. The Midlands Highway Alliance also retains an option to extend the framework for a further year in March 2017.
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Online domestic appliance retailer AO World PLC said it swung to a loss in its recent financial year, on the back of costs associated with its recent stock market flotation in London, even as revenues surged on strong volume growth in domestic appliances. The group, which is set to join the FTSE 250 index on June 23, said the current financial year has started well, and trading has been in line with its expectations, while its plans to broaden its product range in the UK are being implemented ahead of schedule, and its European strategy is progressing well. "Our UK business continues to build strongly, aided by a successful rebranding, introduction of same-day delivery, and entering the small domestic appliance and television markets," said Chief Executive John Roberts.
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Wm Morrison Supermarkets PLC is set to announce a wave of management restructuring within its stores, which could see as many as 2,000 job losses, according to The Guardian. The newspaper said the supermarket chain's plans to slim down management will be announced in coming weeks, in a move resulting from trials of three possible smaller management structures in around seven of its new stores, The Guardian said.
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MARKETS
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The UK's leading share indices are trading slightly lower, with London's junior market, AIM, being dragged significantly lower by a profit warning from its largest constituent - ASOS.
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FTSE 100: down 0.3% at 6800.95
FTSE 250: down 0.3% at 15942.7
AIM ALL-SHARE: down 1.6% at 799.72
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The pound is trading at an eight-day high against the dollar, while the euro has barely moved ahead of the all-important policy announcement from the European Central Bank.
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GBP-USD: up at USD1.6776
EUR-USD: up at USD1.3616

GOLD: down at USD1244.16 per ounce
OIL (Brent): down at USD108.00 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The European Central Bank is expected Thursday to deliver a round of aggressive interest rate cuts as part of a far-reaching package of monetary measures aimed at heading off the threat posed to the eurozone's fragile recovery by deflation. Analysts predict that the Frankfurt-based bank will trim both its benchmark refinancing rate and its deposit rate by between 10 and 15 basis points, as well as pumping more funds into the eurozone's financial system to boost the corporate sector's access to credit.
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Average house prices in the UK rose 3.9% month-over-month in May following two months of declines, as demand outstripped supply, according to a report released by Lloyds Banking Group's Halifax division. The pace of gain in house prices was the highest since October 2002, with the average house price now at 184,464 pounds. In April and May, house prices had slid 0.3% and 1.2%, respectively. Halifax noted that even as new buyer enquiries grew steadily so far this year, the number of homeowners providing instructions to put their property on the market for sale declined for the fourth consecutive month.
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The Irish service sector continued to grow in May, with activity and new business rising sharply in the month, the results of a survey by Markit Economics showed. The seasonally adjusted Investec purchasing managers' index fell slightly to 61.7 in May from 61.9 in April. Any reading above 50 indicates expansion in the sector. The reading suggests a sharp expansion by the service sector, in line with the increased new orders in May.
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Germany factory orders recovered at a faster than expected pace in April, official figures revealed. Factory orders increased 3.1% in April from March, Destatis reported. Economists were expecting a 1.4% rise in orders after falling 2.8% in March.
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Activity in China's services sectors continued to expand in May but at a slower pace, the latest survey from HSBC and Markit Economics revealed. The services PMI saw a score of 50.7 last month, the bank said - down from 51.4 in April. The composite PMI climbed into expansion at 50.2 in May - up from the revised 49.5 in April (originally 49.4) and snapping a three-month string of decline.
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The US economy has been growing at decent pace since the arrival of warmer weather, with all twelve of the Federal Reserve districts reporting an increase in activity in the past few months, according the Fed's Beige Book. The pace of growth was characterized as "moderate" in the Boston, New York, Richmond, Chicago, Minneapolis, Dallas, and San Francisco Districts, and modest in the remaining regions.
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The ruling party in South Korea narrowly lost out to the opposition in local elections, reports said Thursday, in the first nationwide vote since the fatal sinking of the Sewol ferry in April. Amid the highest voter turnout in 16 years, the opposition New Politics Alliance for Democracy (NPAD) won nine gubernatorial seats, while the conservative Saenuri Party won eight, Yonhap News Agency reported. The ruling party had feared a backlash at the polls after public anger erupted over the deaths of some 300 people, mostly high school students, in the sinking of the ferry off the country's south-west coast.
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