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LONDON (Alliance News) - The FTSE 100 index is flat at the open Friday, as the failure of Greek debt talks on Thursday offsets strong leads from stock markets in the US and Asia.
The mid-cap FTSE 250 is performing better, led by shares of telecommunications firm Colt Group. The stock is up 20% after the company received at GBP1.72 billion takeover offer from majority shareholder Fidelity. However, the independent directors of Colt quickly said the offer "undervalues" the company.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: flat at 6,705.91
FTSE 250: up 0.3% at 17,734.11
AIM ALL-SHARE: up 0.1% at 764.90
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Hang Seng: up 0.3% at 26,775.51
Nikkei 225: closed up 0.9% at 20,174.24
DJIA: closed up 1.0% at 18,115.84
S&P 500: closed up 1.0% at 2,121.24
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GBP: down at USD1.5856
EUR: down at USD1.1313
GOLD: down at USD1,199.41 per ounce
OIL (Brent): down at USD64.18 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)
EU EcoFin Meeting
09:00 EU Current Account
09:30 UK Public Sector Net Borrowing
13:30 Canada Retail Sales
13:30 Canada Consumer Price Index
17:00 US FOMC Member Mester speech
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Eurozone leaders will hold an emergency summit on Monday to discuss the situation in near-bankrupt Greece, after their finance ministers failed to secure a breakthrough in the country's bailout crisis. "It is time to urgently discuss the situation of Greece at the highest political level," EU President Donald Tusk said in a statement issued on Thursday evening. Fears are mounting that cash-strapped Greece will soon go bankrupt. It is seeking to access EUR7.2 billion remaining in its international bailout, but has been struggling for months to agree with its creditors on prerequisite economic reforms.
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Greek Finance Minister Yanis Varoufakis said he has warned his eurozone counterparts that "we are dangerously close to a state of mind that accepts an accident" involving his near-bankrupt country. "I urged my colleagues not to fall prey to this state of mind," he said. "We can forge a good agreement. Our government is standing by with ideas and with a determination to cultivate the two forms of trust necessary to end this Greek drama - the trust of our partners...and the trust of our people." Varoufakis said he presented the eurozone finance ministers' Eurogroup panel with "a comprehensive proposal that can, if accepted, in a short space of time resolve the Greek crisis once and for all." This includes an automatic deficit brake, he said.
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Under the motto "We're staying in Europe," thousands gathered in downtown Athens to demand that the government reach a deal with international creditors that will ensure that Greece stays in the eurozone. Attendees included pro-European sympathizers from centre-right and centre-left parties, including legislators. Many came with whistles, an attempt to "wake up" Greek citizens to the dangers that would come if the current government fails in its negotiations with creditors, resulting in an exit from the euro. It came hours after another demonstration by left-wingers calling for Greek negotiators to maintain a hard line in their talks with international creditors.
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Sentiment among UK households concerning house prices increased for the twenty-seventh consecutive month in June, improving to an eight-month high, as households expects that any uncertainty caused by the general election has passed, a survey from Knight Frank and Markit Economics showed. The house price sentiment index rose to 59.5 in June from 58.0 in the previous month. This marked the twenty-seventh successive month that the index remained above 50, a level separating rise and decline in prices.
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Denmark voted for a change of government, which put an end to Prime Minister Helle Thorning-Schmidt's four years as head of a left-leaning government with a swing to the right. Thorning-Schmidt conceded defeat and announced she would resign as leader of the Social Democrats that she has led since 2005. The result suggested a comeback for Lars Lokke Rasmussen, leader of Venstre, a liberal party, who has been backed by the opposition as premier.
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The US House of Representatives approved a bill granting President Barack Obama wide-ranging authority to negotiate trade deals. The 218-208 vote on so-called fast-track trade authority came as part of an agreement among lawmakers to revive Obama's trade agenda, after part of his trade package failed to pass the lower chamber of Congress last week. Twenty-eight Democrats joined majority Republicans, who are traditionally advocates of free trade, in support of the measure. The vote should clear the way for completion of trade deals under negotiation with Pacific Rim countries and the EU.
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Japan's central bank said it would keep its aggressive monetary easing steps to combat deflation and stimulate the world's third-largest economy. The Bank of Japan's policy board voted to maintain its key policy of increasing base money at an annual pace of about JPY80 trillion through asset purchases, the bank said in a statement issued after a two-day meeting. The bank decided in April 2013 to introduce aggressive monetary easing measures to achieve 2% inflation within about two years in a country which has been plagued by deflation for nearly two decades. In April, Japan's consumer prices climbed for the second straight month, rising 0.3% compared to a year earlier, still far below the 2% target set by the bank. The rate has slowed partly due to plunging oil prices.
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The EU said representatives from the maritime regulatory authorities of the EU, the People's Republic of China and the US met in Brussels to discuss antitrust and regulatory issues in maritime transport. The delegates confirmed their renewed intention to cooperate on these matters.
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Dylann Storm Roof, the suspect in the Charleston, South Carolina, massacre at an historic black church arrived back in the state after being captured earlier in the day in the neighbouring state of North Carolina. Roof, 21, was booked into a detention centre in the southern city on the US East Coast, news reports said. Roof was captured during a traffic stop in Shelby, North Carolina, about 300 kilometres from Charleston. Roof, a white man, is suspected of killing nine people in a shooting spree at a Wednesday night Bible study meeting at the Emanuel African Methodist Episcopal Church, one of the oldest black churches in the US South.
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BROKER RATING CHANGES
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EXANE BNP RAISES ASHTEAD TO 'OUTPERFORM' ('NEUTRAL') - TARGET 1300 (1200) PENCE
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MORGAN STANLEY CUTS KINGFISHER TO 'UNDERWEIGHT' ('EQUAL-WEIGHT')- TARGET 310 P.
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CITIGROUP RAISES HIKMA PHARMACEUTICALS TO 'BUY' ('NEUTRAL') - TARGET 2400 PENCE
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GOLDMAN CUTS PZ CUSSONS TO 'NEUTRAL' ('BUY') - TARGET 370 (345) PENCE
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COMPANIES - FTSE 100
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Standard Life said that David Nish is standing down as chief executive after six years in the role, with Keith Skeoch, the head of its increasingly influential investments arm, to become the leader of the FTSE 100 group. In a statement, the Edinburgh-based investments and savings company said that Nish and the remaining board directors discussed succession planning for months, particularly in the wake of the sale of its Canadian business and the acquisition of Ignis Asset Management. Standard Life said that Nish will stand down as chief executive from August 5, with a seven-week handover to come before he goes on "garden leave" until the end of March 2016.
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COMPANIES - FTSE 250
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The independent directors of telecommunications and IT firm Colt Group have said that a 190 pence per share offer from Fidelity for the remaining share in Colt it does not already own "undervalues" the company, and makes no recommendation as to whether or not shareholders should accept the offer. The offer from FMR LLC and FIL Ltd, together known as Fidelity, values the company at around GBP1.72 billion. Fidelity said this offer price will not be increased. FMR already has a 62.43% shareholding in Colt. Fidelity said it has received irrevocable undertakings to accept the offer for 70.15 million shares, or around 7.8% of Colt's issued share capital. The offer price is at a 21% premium to Colt's closing price of 157 pence Thursday. The stock is up 20% at 187.50 at the open Friday.
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N Brown Group reported growth in revenue in the first quarter of its financial year and said its guidance for the full year remains unchanged. The online, catalogue and stores retailer said group revenue was up 2.5% in the 13 weeks to May 29, as like-for-like sales rose 1.5% and product revenue grew 4.3% but financial services revenue fell 1.9%. "We have had an encouraging start to the year, but there remains a lot to do," Chief Executive Angela Spindler said in a statement.
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Petrofac said its Offshore Projects & Operations business unit has secured contract renewals for operations and maintenance work worth around USD400 million on the UK continental shelf. The renewals include a five-year contract for the provision of operations and maintenance teams for CNR International (UK) Ltd, and a two-year contract with Eni SpA in the East Irish Sea.
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Card Factory said some of its directors and members of its senior management team will sell a 2.2% stake in the company via an accelerated bookbuild placing of 7.4 million shares. Card Factory shares closed Thursday at 359.50 pence per share. At that price, the offering is worth GBP26.6 million. The selling shareholders, which include Chief Executive Richard Hayes and Chief Financial Officer Darren Bryant, will continue to have an interest in 56.4 million shares between them, representing 16.6% of the issued share capital of greeting card retailer.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Auto Trader Group expressed confidence for growth in its current year, as it posted a rise in pretax profit for its recently ended financial year in its maiden results since it listed on the London Stock Exchange in March. The digital automotive seller raised GBP2.35 billion in its initial public offering earlier this year, and is set to join the FTSE 250 this coming Monday. For the year to March 29, the company posted a pretax profit of GBP10.9 million, up from GBP3.7 million a year before, as revenue rose to GBP255.9 million from GBP237.7 million and administrative costs fell. Additionally, the company's margins increased to 61% from 57% in the previous year. The company said its new financial year has started well and in line with its expectations.
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Fyffes said it is increasing its target earnings ranges for the full year 2015 as it has performed strongly in the year to date. The Irish fruit and fresh produce company has increased its earnings before interest, tax, depreciation and amortisation target range to between EUR55 million and EUR61 million from between EUR44 million and EUR50 million, and has also increased its adjusted earnings per share to between 12.2 cents and 13.9 cents from between 10 cents and 11.8 cents. Fyffes said it has continued to perform well in the year by securing necessary increases in the selling prices of bananas and pineapple in response to currency headwinds, and also performed strongly during the recently-ended US melon import season.
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COMPANIES - INTERNATIONAL
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South Korean conglomerate Hyundai said it has sold a fifth of its shipping unit to a Japanese private equity firm. Japan's Buffalo Finance, set up by financial service provider Orix, will take over 22.6% of shares in Hyundai Merchant Marine Co, for KRW647.5 billion, South Korea's Yonhap News Agency reported. The move is in line with ongoing restructuring by debt-ridden parent Hyundai Group, Yonhap said. Hyundai Merchant has also been trying to sell 49% stakes in two of its container terminals in the US to a private equity firm there, it said.
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Jana Partners disclosed in a regulatory filing that it has taken a 7.2% stake in ConAgra Foods Inc. Jana also announced that it is prepared to nominate three directors to the company's board.
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Microchip Technology announced, in connection with the previously announced definitive agreement under which Microchip will acquire Micrel Inc, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, had expired on June 15, 2015, and the Federal Cartel Office in Germany had cleared the transaction on June 17, 2015. There is no further antitrust clearance required for closure of the transaction. In May, Microchip said that it agreed to buy Micrel for USD14.00 per share. The acquisition price represented a total equity value of about USD839 million, and a total enterprise value of about USD744 million, after excluding Micrel's cash and investments on its balance sheet of about USD95 million.
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Friday's Scheduled AGMs/EGMs
Charlemagne Capital
Eland Oil and Gas
Avocet Mining
Horizon Discovery
Peninsular Gold
W Resources
Iofina
NextEnergy Solar Fund
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
