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LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The UK's two biggest oil companies, BP PLC and Royal Dutch Shell PLC, will unveil multi-billion pound deals with China on Tuesday as the government attempts to position the UK as Beijing's preferred European investment partner, Sky News reported Monday, citing insiders. Sky News said that BP will announce a long-term deal to supply liquefied natural gas to China that is expected to be worth well over GBP5 billion, while Shell is expected to unveil its participation in a strategic framework agreement with state-owned China National Offshore Oil Corporation.
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Shell said late Monday it will sell a 19% stake in Australian oil and gas producer Woodside Petroleum Ltd. for about USD5 billion after tax. Shell, Woodside's largest shareholder with a 23.1% stake, noted that the stake sale will reduce its holding to below 5%.
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BG Group PLC said it will sell its 62.78% stake in the Central Area Transmission System gas pipeline in the UK North Sea to Antin Infrastructure Partners a total of up to GBP562 million, or about USD954 million, and expects to book a net profit of about USD700 million on the sale. However, it cautioned that the profit gain may be partly offset by a potential impairment of its associated UK North Sea assets after its interest in CATS was categorised as held for sale in its accounts in the second quarter. In a statement, BG Group said it will get GBP523 million when the deal is completed and a deferred payment of GBP39 million.
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Premier Oil PLC said it has sold its 30% stake in the PL359 oil license offshore Norway to Lundin Norway AS for USD17.5 million after tax, and expects the net profit on the deal to be about USD10 million. Licence PL359 contains the Luno II discovery. An appraisal well will be drilled on the licence, starting this month, the cost of which will be borne by Lundin Norway, Premier said.
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Premier Inn hotels and Costa Coffee chain operator Whitbread PLC reported strong sales growth for the first quarter of its new financial year, as the company said both business continued on their rapid growth trajectory. The hotel, restaurant and coffee chain operator has continued to invest heavily in all of its businesses, with expansion helping further market share gains. Sales from both businesses were up 13% in the 13 weeks to May 29, driven by a 6.9% increase in like-for-like sales. The group said its London-based Premier Inn hotels continue to drive growth behind its hotel business, while sales at its Costa Coffee chain has been aided by strong growth in system sales and in transactions per store.
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Fast-food chain group SSP Group PLC confirmed plans for a summer stock market debut on London's main market, while IT and business services provider FDM Group Holdings PLC priced its shares at 287 pence per share for its own initial public offering. SSP Group, said it's looking to raise gross proceeds of around GBP500 million from the issue of new shares, funds it said the company would use to reduce existing borrowings and to settle other financial obligations. Existing shares also will form part of the IPO. A person close to the IPO process told Alliance News the flotation will give SSP an enterprise value of between GBP1.6 billion and GBP2 billion, which would make it one of the biggest companies to make an initial public offering in London so far this year. SSP said a stock market debut is the logical next step for the group to achieve its plans for future growth.
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Equipment rental company Ashtead Group PLC reported higher profit and revenue for the fourth quarter of its last financial year and for the year as a whole, as it invested in expanding its fleet for hire and in acquisitions. The company reported a pretax profit of GBP70.8 million for the three months to April 30, up from GBP50.0 million a year earlier, as revenue rose to GBP355.7 million, up from GBP306.8 million. For the year to end-April, pretax profit rose to GBP365.5 million, from GBP214,2 million, as revenue rose to GBP1.48 billion, from GBP1.21 billion. It said it will pay a final dividend of 9.25 pence a share, up from the 6.0p final dividend it paid for fiscal 2013, meaning the total dividend for the year will rise to 11.5p, from 7.5p.
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Engineering firm Weir Group PLC said overall trading in April and May was in line with expectations, but it now expects 2014 profit and revenue to be more weighted towards the second half of the year after currency headwinds strengthened over the first half of 2014. Weir Group, which is holding a capital market presentation Tuesday focusing on its oil and gas division, said its full-year constant currency revenue and margin guidance remains unchanged.
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Crest Nicholson Holdings PLC said it will pay an interim dividend as profit and revenue rose in its first half, underpinned by strong buyer demand and improved mortgage access. The residential property developer saw pretax profit jump 37% to GBP38.4 million for the six months ended April 30 from GBP22.2 million a year earlier, as revenue rose 26% to GBP241.1 million from GBP192.0 million, reflecting an increase in sales and housing completions. The firm said revenue from house sales rose 31% on the previous period, reflecting volume growth and higher open market average selling prices. Crest Nicholson said purchaser demand continues to be very strong and high levels of forward sales mean that production capacity is currently the most "critical factor" for volume growth.
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Digital inkjet printing technology company Xaar PLC saw its shares slide after it warned that revenue will fall slightly in 2014 as it struggles to quickly expand the takeup of its technology outside ceramic tiles markets, and gross margins are expected to decline as it faces increased competition. The company had a stellar year in 2013 after its technology was taken up by the Chinese ceramic tiles market, and it had warned that growth was set to moderate as that impact wore off. Its rapid growth saw it promoted to the FTSE 250 in June 2013. However, it warned that it now expects revenue in 2014 to be about GBP130 million, down from the GBP134.1 million of revenue it reported in 2013.
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Kazakhmys PLC said the government of Kazakhstan has agreed to reduce mineral extraction tax rates at some of the company's mature assets, in a move worth about USD40 million a year at current metals prices. In a statement, Kazakhmys said the lower tax rate will apply to its deposits in the Zhezkazgan region of Kazakhstan, excluding its Zhomart mine, and at the Konyrat mine in the central region. The assets are among the company's most challenging, and were earmarked for sale in a restructuring the company announced in February. They have been particularly affected by declining grade and low profitability. The company said the new rates are effective retrospectively from January 1, 2014 and are applicable for a year, at which point a new application can be made.
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MARKETS
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UK stocks trade modestly higher with a number of stand-out gainers supporting indices, the slim stock market gains coming despite ongoing concerns over the situation in Iraq.
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FTSE 100: up 0.2% at 6769.18
FTSE 250: up 0.1% at 15720.78
AIM ALL-SHARE: down 0.03% at 786.04
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After the release of UK inflation data, the pound fell sharply against the dollar to a session low having peaked above USD1.70 on Monday.
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GBP-USD: down at USD1.6969
EUR-USD: down at USD1.3560

GOLD: down at USD1265.84 per ounce
OIL (Brent): down at USD112.63 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK inflation eased to the lowest since October 2009 due to a fall in transport and food costs, the Office for National Statistics showed. Inflation fell to 1.5% in May from 1.8% in April, when it was expected to drop marginally to 1.7%. The 1.5% was the weakest since October 2009. Month-on-month, the consumer price index fell unexpectedly by 0.1%, reversing the 0.4% increase posted in April. Economists had forecast a 0.2% rise for May. Consumer price inflation excluding cost of energy, food, alcoholic beverages and tobacco, eased to 1.6% in May from 2% in April.
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Chinese Prime Minister Li Keqiang was to meet Prime Minister David Cameron and Queen Elizabeth II, during a visit to Britain designed to promote economic ties and improve diplomatic relations. The Chinese leader, who arrived a day earlier, is accompanied by around 200 business leaders. According to British reports, deals worth around GBP18 billion are to be signed. The visit is the first by a Chinese premier to Britain after that of Li's predecessor Wen Jiabao three years ago.
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Germany's economic confidence weakened for the sixth successive month in June, survey data from the Mannheim-based Centre for European Economic Research/ZEW showed. The economic sentiment index fell unexpectedly to 29.8 in June, the lowest reading since December 2012, from 33.1 in May. The score was forecast to rise to 35. "The German economy is currently in a very good shape, but further increases are becoming more difficult," said ZEW President Clemens Fuest. "We had a strong first quarter in 2014 due to favorable weather conditions, but signs are that the second quarter will be weaker."
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New car sales in Europe rose in May for the ninth month in a row, data released showed, though they were still sluggish compared to previous years. Registrations in the EU increased by 4.5% year-on-year to just under 1.1 million, according to the Brussels-based European Automobile Manufacturers Association (ACEA). But the total figure was the second-lowest recorded for a month of May in the last decade.
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British Foreign Secretary William Hague is set to announce plans to re-open his country's embassy in Iran, British media reported. Diplomatic relations between the two countries were broken off in 2011, after an Islamist mob attacked the British embassy in Tehran. Relations however have slowly warmed since the election of President Hassan Rowhani last year, with both countries appointing non-resident charges d'affaires and officials paying each other a series of visits.
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Iraq's Sunnis would be advised to form their own autonomous areas, Nechirvan Barzani, the prime minister of northern Iraq's autonomous Kurdish region, told the BBC. "The best way is to have a Sunni region, like what we have in Kurdistan," he said after slamming the Shiite-led government of Iraq Prime Minister Nuri al-Malkiki for exclusionary policies which are making Sunnis "feel neglected." "There is no trust right now," Barzani said about Maliki's relations with the country's key ethnic and religious groups, while stressing the need for a political solution to the crisis. "If we think Iraq will go back like to before Mosul, then it is almost impossible," he said, adding that his Kurdish Peshmerga military forces would not aim to retake the country's second city.
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Jihadists from the radical Islamic State in Iraq and the Levant clashed with rebels and Kurdish militias overnight and into Tuesday in the north and east of the war-torn Syria, a watchdog said. ISIL engaged in fierce clashes with rival Islamist rebels in eastern Deir al Zour province as it tried to advance on their positions, the opposition Syrian Observatory for Human Rights said.
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Iraqi officials said security forces had fought off attacks by jihadist militants in several areas north of the capital Baghdad, as the US revealed that it was sending 270 troops to the conflict-ridden country to help secure its embassy. Security forces in the disputed Kirkuk province prevented an attack on a Shiite shrine by Sunni radicals of the Islamic State in Iraq and the Levant (ISIL), the Alsumaria News website reported, quoting a member of the provincial council. Troops reportedly changed out of their uniforms and joined fleeing civilians as the jihadists advanced last week, while Kurdish defence forces moved into abandoned army positions in Kirkuk city.
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More than 2,000 civilians have fled the Pakistani military's offensive against the Taliban stronghold in the north-west of the country, pouring over the border into Afghanistan, officials said. The army on Sunday launched an offensive in the tribal region of North Waziristan, after years of international pressure to move against militants. "At first we were suspicious that they might be insurgents in civilian clothes that could post a threat to us," said Sahira Sharif, an Afghan parliamentarian from the eastern province of Khost. "But when we visited them, we were sure now that they are genuine refugees," she told dpa.
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A fresh attack in the Kenyan coastal settlement of Mpeketoni has killed at least 15 people, following an earlier onslaught that left 49 dead, the newspaper Daily Nation said. The victims included two police officers, Daily Nation quoted police as saying. Two houses were torched in the same area. There was no immediate confirmation of the report.
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