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LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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UK media and communications regulator Ofcom outlined the scope of its review into the regulation of postal service operator Royal Mail, including whether any price controls should be imposed on the company given the lessening of competition in the postal services market. The review will examine whether any changes to the current postal regulatory framework could be appropriate in order to maintain the universal postal services and will study how to ensure Royal Mail continues to become more efficient given the absence of any significant end-to-end competition for the letters market.
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The UK Competition and Markets Authority outlined the areas it will be investigating in its current phase II probe of BT Group's GBP12.5 billion acquisition of peer EE, releasing a statement of issues. The investigation was fast tracked to a phase 2 probe at the request of BT in May. In the statement the CMA outlined ten 'theories of harm', namely scenarios that could result in a substantial lessening of competition and that it intends to investigate. These include the potential for the merger to lead to the weakening of competitors in the retail mobile space, and of the merged companies having an ability and incentive to refuse to supply or offer worse terms for wholesale mobile services to mobile virtual network operators, or to increase the price or degrade the quality of wholesale retail broadband services.
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Marks & Spencer Group said John Dixon, its General Merchandise division executive director, has left the company to pursue other career opportunities and it has appointed the head of its Food division to replace him. Dixon will leave the FTSE 100-listed retailer's board with immediate effect and will leave the company on a date to be agreed. Dixon said he is leaving to become the chief executive of another company, though he did not name the company. Steve Rowe will take on responsibility for the General Merchandise business. Rowe is currently the executive director of Food at the company and will be replaced, on an interim basis, by Andy Adcock, who is currently the trading director of the Food division.
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British Land said it and partner Oxford Properties have signed a lease agreement with DRW Trading Group for the Leadenhall Building in the City of London. The building, known as the "Cheesegrater", is now nearly 90% let or under offer, with only five more floors to be filled, the property developer said. DRW is a trading house based in Chicago.
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AstraZeneca announced that it has completed its agreement with Swiss specialty pharma firm Tillotts Pharma, part of the Zeria Group, for the divestment of global rights, outside the US, to gastroenterology drug Entocort (budesonide). Entocort is a gastroenterology medicine for patients with mild to moderate Crohn's disease and ulcerative colitis. It is currently available in over 40 countries, with total product sales of USD53 million outside the US in 2014.
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Home emergency company HomeServe said it is trading in line with its expectations and expects to deliver robust growth for its 2016 financial year to the end of March. HomeServe said it is continuing to make investments to grow its international business and said the majority of its marketing activity, as in previous years, will be weighted to the second half. HomeServe said its UK business is trading in line, with 2.1 million customers on its books by the end of June. In the US the group said it is confident of its prospects, given the strong pipeline in place, and said it had 2.1 million customers in that market as well at the end of June.
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B&M European Value Retail said its sales revenue rose in the first quarter of its financial year, despite a slowdown in like-for-like sales growth year-on-year. The discount retailer said its total group sales revenue for the 13 weeks to June 27 was GBP456.6 million, up from GBP367 million in the comparable period a year earlier. Total group sales growth in the quarter was 24%, slowed from the 32% growth it posted a year earlier, while its like-for-like sales growth slowed to 1.1%, compared to 6%.
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888 Holdings said it has struck a deal to acquire FTSE 250-listed online gaming rival Bwin.Party Digital Entertainment in cash and shares, seemingly trumping the previous offer made for Bwin.Party by AIM-listed GVC Holdings. 888 has been competing with GVC to acquire Bwin.Party since May, when 888 entered the fray after GVC had already made its intentions clear. GVC made a bid for Bwin.Party last week which valued the company at 110p per share, or GBP906.5 million. Its offer is being co-financed with Canadian gaming company Amaya Gaming Inc.
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MARKETS
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London's main stock indices are reading lower mid-morning as the German Parliament prepares to vote on the terms of the third Greek bailout, while company-specific news sees Royal Mail and retailer Marks and Spencer among the worst blue-chip fallers.
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FTSE 100: down 0.1% at 6,787.86
FTSE 250: flat at 17,759.85
AIM ALL-SHARE: up 0.1% at 757.36
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GBP: up at USD1.5627
EUR: down at USD1.0892

GOLD: down at USD per ounce
OIL (Brent): up at USD57.00 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Bank of England Governor Mark Carney hinted that the central bank will start to consider changing its UK interest rate policy at end of 2015, but said that any increases would be slow and that interest rates would rise to no more than 2.25% in the medium term. Speaking at Lincoln Cathedral in a speech about the Magna Carta and the Bank of England, Carney said the decision on when to start the process of raising interest rates in the UK, from the current 0.5% rate, "will likely come into sharper relief around the turn of this year". "It would not seem unreasonable to me to expect that once normalisation begins, interest rate increases would proceed slowly and rise to a level in the medium term that is perhaps about half as high as historical averages," Carney said.
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Federal Reserve Chair Janet Yellen said the labour market in the US has move demonstrably closer to a more stable state, providing a reason for the likelihood that the central bank will hike short-term interest rates later this year, The Wall Street Journal reports. Yellen, speaking before the Senate Banking Committee, having appeared before the House Financial Services Committee on Wednesday, did not specify when the Fed is likely to start raising its benchmark interest rate from its current 0.25% level, though earlier she had said it could happen "at some point this year".
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The Greek crisis is slowly subsiding with the country's banks due to reopen Monday after the European Central Bank lifted the emergency funding limit by EUR900 million for a week and the Eurozone officials agreed to a short-term loan. Since late June, Greece has had a bank holiday, with the daily withdrawal limit at ATMs set at EUR60 a day. Despite banks set for opening Monday, it is likely that the cash withdrawals limit will only be eased gradually. In the meantime, it is expected that with the EUR7 billion bridge loan as agreed in principle by the Eurozone finance ministers would be used by Greece to repay EUR3.9 billion to the ECB as well as its missed payments to the International Monetary Fund. The third bailout deal of EUR86 billion needs to be approved by 18 national parliaments of the euro area before starting fresh negotiations. On Thursday, Finland's parliament approved providing an EU-wide loan to Greece. And it is expected that parliamentary approval from five countries - Germany, the Netherlands, Austria, Slovakia and Estonia - might be coming in on Friday.
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The UK government has confirmed speculation that it plans to open National Parks, Areas of Outstanding National Beauty, and World Heritage Sites in the country to oil and gas shale fracking. The controversy surrounding fracking in the UK has reached a pivotal point. The UK government has affirmed its support for the shale industry, even shunning renewable energy in favour of it, but local councils and a large amount of the public pressure have stood in the way of it progressing its plans.
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The leading economic index in the UK, which measures the future economic activity, decreased in May, the results of a survey by the Conference Board showed. The Conference Board leading economic index fell 0.4% in May, following a 0.3% climb in April.
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The UK said it will contribute GBP6 billion to projects benefiting from finance by the European Fund for Strategic Investments, which is at the heart of the EUR315 billion Investment Plan for Europe. The co-financing pledge - the biggest yet by any country - will come from various programs and bodies that are focused on promoting economic growth. Britain is the ninth country to contribute to the Plan after Germany, Spain, France, Italy, Luxembourg, Poland, Slovakia and Bulgaria, even before the EFSI becomes operational.
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