LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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The UK government has sold off another 1% stake in Lloyds Banking Group, a further step in returning the bank to full private ownership. Stock-exchange documents confirmed that the UK government now owns 12.97% of the bank, down from 13.99% previously. In a statement, the Treasury said it has now raised GBP14.5 billion from reducing its stake in Lloyds from its peak of 43% after bailing it out for GBP20.5 billion during the financial crisis of 2007-09.
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Anglo American said it has reached a deal to sell its interest in two copper mines to a consortium for up to USD500 million. The subsidiary, Anglo American Norte, holds the Mantoverde and Mantos Blancos copper mines located in northern Chile, and the miner has agreed to sell them to an investor consortium led by Audley Capital Advisors, with Orion Mine Finance as the principal co-investor, for an up-front cash consideration of USD300 million, with potential upside to up to USD500 million, it said.
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South32 said its pretax profit fell in the financial year to the end of June and said it will seek to cut its costs substantially over the next three years. The company, which was spun-off from mining giant BHP Billiton earlier this year, said its pro-forma pretax profit for the year to the end of June was USD28.0 million, down from USD64 million a year earlier, as pro-forma revenue fell to USD7.74 billion from USD8.34 billion a year earlier.
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Meggitt said it has won a USD25 million contract from Public Works Government Services Canada on behalf of the country's Department of National Defence. Under the three-year deal, the aerospace and engineering company said it will provide in-service support to the Canadian Armed Forces on the Meggitt Small Arms Trainer and Indirect Fire Trainer.
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Distribution and outsourcing company Bunzl said its pretax profit rose in the first half on the back of better revenue and said it has made four more acquisitions. The company, which distributes items such as plastic bags, latex gloves, safety goggles and cleaning supplies to retail and food industry clients, said its pretax profit for the six months to the end of June was up to GBP147.1 million from GBP132.3 million a year earlier, an 11% rise, on the back of a 7% rise in revenue to GBP3.14 billion from GBP2.94 billion. The group said it will pay an interim dividend of 11.75 pence per share, up from 11.00 pence per share a year earlier. Bunzl also said it has acquired Meier Verpackungen in Austria, Steiner Industries in Chicago, Cater Plus in Adelaide, and Delta Hospitality in Brisbane.
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Drugmaker AstraZeneca and Peregrine Pharmaceuticals said they have entered into a cancer immunotherapy clinical trial collaboration. The collaboration will evaluate Peregrine's investigational phosphatidylserine signaling pathway inhibitor, bavituximab, in combination with AstraZeneca's investigational anti-PD-L1 immune checkpoint inhibitor, durvalumab. The planned Phase I/Ib trial will evaluate the safety and efficacy of bavituximab in combination with durvalumab in multiple solid tumours.
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Engineer GKN is undertaking a review of its farming and mining equipment business and could end up selling the division, The Sunday Times reported. The engineer, which makes components for cars and planes, is understood to have started an informal review of its GBP780 million land systems business, the newspaper said. The division makes parts such as wheels and chassis for tractors and excavators but has been hit as demand for heavy equipment continues to fall, particularly in the US.
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Construction and infrastructure company Balfour Beatty said its joint venture with Morgan Sindall Group and BAM Nuttall has been awarded a GBP416 million deal to construct part of the Thames Tideway Tunnel on behalf of developer Bazalgette Tunnel, while engineering services company Costain Group also said it has part of the deal. Balfour said the equal joint venture between the three, known as BMB, was named preferred bidder on the contract in February and will handle the building of the six-kilometre 'West' section of the 25 kilometre tunnel. Costain said its joint venture with VINCI Construction Grands Projets and Bachy Soletanche has been awarded a GBP605 million deal to handle the 'East' works package on the project. Separately, International Public Partnerships, the FTSE 250-listed infrastructure investor, said it has committed to invest up to GBP210.0 million in the Thames Tideway Tunnel project via the Amber Consortium.
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Amlin reported that profit in the first half was hit by a change to its accounting for the seasonality of catastrophe reinsurance earned premium, with the effects to unwind in the remainder of 2015. The specialty insurer and reinsurer said it made a GBP143.3 million pretax profit in the six months to the end of June, down from GBP148.5 million in the corresponding period the prior year. Amlin increased its interim dividend by 3.7% to 8.4 pence per share. Responding to speculation of a takeover offer for the company, Chief Executive Charles Philipps told journalists: "We are not for sale. We are not running a sale process."
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AIM-listed gaming company GVC Holdings said it has made a fully-funded proposal to acquire larger online gaming company Bwin.Party Digital Entertainment, the latest attempt by the company to derail Bwin.Party's planned takeover by 888 Holdings. GVC said it has made a bid of 25 pence per share in cash and 0.231 GVC shares for every Bwin.Party share, a deal which values the FTSE 250 company at around 124 pence per share, or around GBP1.02 billion in total. Bwin.Party shares ended Friday at 114.30p and are trading down 3.2% to 110.70p early Monday.
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MARKETS
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Share prices are sharply lower in London, after concerns over slowing growth in China spurred panic selling of equities across Asia, prompting many to term it "Black Monday".
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FTSE 100: down 2.3% at 6,045.20
FTSE 250: down 2.8% at 16,408.11
AIM ALL-SHARE: down 3.0% at 710.60
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GBP: up at USD1.5709
EUR: up at USD1.1472
GOLD: down at USD1154.30 per ounce
OIL (Brent): down at USD43.47 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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China is planning to allow its state pension fund to invest in stock markets for the first time, the BBC reported, citing a report by Chinese official news agency Xinhua. The BBC said the new rules will allow the fund to invest up to 30% of its net assets in domestically-listed shares. The fund currently holds CNY35 trillion in assets, according to Xinhua. The move is the latest made by the Chinese government to arrest the slide in the country's stock market seen in recent weeks. The fund will be allow to invest not only in shares but in a range of market instruments, including derivatives.
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The UK economy is expected to grow at a faster pace this year as household spending and productivity growth pick up. The Confederation of British Industry forecast 2.6% growth this year, up from the prior estimate of 2.4%. Similarly, the outlook for 2016 was raised to 2.8% from 2.5%.
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The number of dead in the crash of a military jet taking part in an air show in Britain could be as high as 11, a police spokesman said. The victims were primarily pedestrians on a busy road in southern England where the Hawker Hunter military jet plunged to the ground Saturday, just 400 metres away from viewers at the Shoreham Airshow near Brighton. There were no reports of casualties among the air show's audience.
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British Foreign Minister Philip Hammond on Sunday reopened his country's embassy in Tehran, four years after it was stormed by protesters angry at Britain's backing of sanctions against Iran over its nuclear programme. Hammond is the first British foreign minister to visit Iran since 2003. The visit comes after Iran and a group of world powers agreed to a deal last month to end a dispute over Iran's nuclear programme.
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German Chancellor Angela Merkel is to host the French and Ukrainian leaders in Berlin on Monday amid a recent upsurge in violence in eastern Ukraine and moves by Europe to review sanctions imposed on Moscow for its role in the conflict. The key focus of the talks between Merkel, Ukrainian President Petro Poroshenko and French President Francois Hollande is likely to be concerns that the fragile ceasefire deal hammered out in Minsk in February has collapsed in light of recent fighting between government forces and pro-Russian separatists in Ukraine's east.
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Talks aimed at defusing tensions between the Koreas entered a third day Monday, following recent exchanges of artillery fire and threats of war. There were no obvious signs of progress in the talks, the South Korean news agency Yonhap reported. The North's ruling party newspaper Rodong Sinmum accused Seoul of deliberately escalating tensions. Kim Kwan Jin, South Korea's national security adviser, and Hwang Pyong So, the North Korean military's highest political officer, are meeting at the border village of Panmunjom, South Korean presidential spokesman Min Kyung Wook said.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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