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(Alliance News) - Cairn Energy said Wednesday that a tribunal established to rule on its claim against the Indian government has found in the company's favour, to the tune of USD1.2 billion.
Cairn's claim was brought under the terms of the UK-India Bilateral Investment Treaty.
The tribunal ruled unanimously that India had breached its obligations to Cairn under the treaty and has awarded Cairn damages of USD1.2 billion plus interest and costs, which now becomes payable.
The dispute between Cairn Energy and the Indian government stretches back to early 2014, when the Indian government froze Cairn Energy's 10% stake in Cairn India following the introduction of a retrospective tax legislation.
Cairn shares jumped 38% on the news early Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 6,441.75
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Hang Seng: up 0.8% at 26,327.89
Nikkei 225: closed up 0.3% at 26,524.79
DJIA: closed down 200.94 points, 0.7%, at 30,015.51
S&P 500: closed down 0.2% at 3,687.26
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GBP: up at USD1.3433 (USD1.3330)
EUR: firm at USD1.2193 (USD1.2175)
Gold: firm at USD1,866.40 per ounce (USD1,862.00)
Oil (Brent): down at USD49.54 a barrel (USD50.22)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
0700 EST US MBA weekly mortgage applications survey
0830 EST US personal income & outlays
0830 EST US advance report on durable goods
0900 EST US monthly house price index
1000 EST US new residential sales
1030 EST US EIA weekly petroleum status report
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A UK Cabinet minister has indicated that hopes are rising for a post-Brexit trade deal although major differences still remain between the UK and EU. Negotiators are continuing to talk in Brussels, while Prime Minister Boris Johnson and European Commission President Ursula von der Leyen are in close contact in an effort to resolve remaining difficulties. Cabinet minister Robert Jenrick said he is "reasonably optimistic" that a late deal will be agreed before the current trading arrangements expire at the end of the month. Johnson has previously said that the most likely outcome is failure to reach a deal, with the UK then relying on World Trade Organisation terms – meaning tariffs and quotas on trade with the EU. Despite his upbeat assessment, Jenrick told Sky News "serious areas of disagreement" remain on fishing and the "level playing field" measures aimed at preventing unfair competition on standards and state subsidies.
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The number of cars built in the UK has fallen again amid predictions from the Society of Motor Manufacturers & Traders of billions of pounds of lost production in the coming years. In the 11 months to November, total UK car production was down by 31% compared with the same period in 2019, representing a loss of 380,809 models at a cost of around GBP10.5 billion to the sector, said the SMMT. The industry is on course to produce fewer than a million cars this year for only the second time since the early eighties, with potential further production losses amounting to GBP55.4 billion over the next five years if the sector is forced to trade on WTO conditions in a no-deal Brexit, said the SMMT. The latest figures showed that car production fell by 1.4% in November to 106,243, amid the second national lockdown and its impact on the economy.
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Australia's trade surplus narrowed in November, showing the damage being caused by the country's worsening relations with China, according to newly released data by the Australian Bureau of Statistics. A goods trade surplus of just under AUD2 billion - about USD1.50 billion - was recorded for November, down from AUD4.7 billion in October. "An 11% increase in imports and a small increase in exports has more than halved the goods trade surplus this month," said ABS Head of International Statistics Branko Vitas. The surplus was undermined by a AUD1.22 billion - or 10% - decrease in exports to China, combined with a AUD889 million - or 11% - increase in imports from China. Canberra and Beijing have been locked in a diplomatic and economic standoff for most of this year, with China hitting out at a list of issues including Australia's call for an inquiry into the origins of Covid-19 and a ban on Huawei's participation in the country. The row has seen at least 13 Australian sectors hit with import levies by China, including beef, coal and barley.
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BROKER RATING CHANGES
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JPMORGAN RAISES ROYAL MAIL PRICE TARGET TO 415 (402) PENCE - 'OVERWEIGHT'
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JEFFERIES RAISES TRAVIS PERKINS PRICE TARGET TO 1597 (1525) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Accounting software firm Sage said it has agreed to sell its Asia and Australia businesses to Access Group for GBP95 million. For the financial year to September 30, the businesses being sold recorded revenue of GBP48 million and operating profit of GBP6 million. The consideration is payable in cash on completion. Sage is retaining its global products that are "core to its growth strategy", including Sage Intacct, Sage People and Sage X3. The transaction, which is subject to approval by the Australian Foreign Investment Review Board, is expected to complete in the next six months.
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British Land said it has agreed the sale of a 75% interest in a portfolio of three buildings in London's West End to Allianz Real Estate for GBP401 million. The transaction represents a blended net initial yield of 4.3%, a premium to September book value and is expected to complete in January. The property investor and developer will form a new joint venture with Allianz, with British Land's interest at 25% and Allianz's at 75%. British Land will continue to manage all three buildings and will receive an asset management fee. The sale brings total asset disposals to date in the current financial year to GBP1.1 billion. "Having delivered outstanding office space and attracted high quality occupiers, we are thrilled to have secured Allianz Real Estate as our partner and crystallised significant value for shareholders. This transaction demonstrates that like us, investors remain confident in the long term prospects for high quality assets in prime London locations," said Chief Executive Simon Carter.
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COMPANIES - FTSE 250
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Marston's said it will take over the operation of SA Brain & Co's portfolio of 156 pubs in Wales, on a combination of leased and management contract arrangements. Brains's business, founded in 1882, has been under "significant financial pressure" due to the pandemic, said Marston's. "In order to address Brains' immediate funding requirements, Marston's entered into collaborative discussions with the company with a view to preserving the freehold capital value for its stakeholders, protecting Brains strong, heritage brand name and, importantly, safeguarding the jobs of the pub teams within the business," Marston's said. The London-listed pub firm will continue to operate these pubs under the Brains' brand and will continue to offer Brains' beers. Marston's will operate the 141 freehold pubs on a leasehold basis, with effect from February 2021, with rent chargeable from April 2021. In addition, Marston's will operate 15 short-leasehold sites on a management contract basis for a period of two years. The transaction is expected to be earnings accretive in the first year after completion, and does not change Marston's plan to reduce borrowings to below GBP1 billion by the 2024 financial year.
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COMPANIES - GLOBAL
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Tesla Chief Executive Elon Musk said he once considered selling the electric car maker to Apple, but Tim Cook rejected a request for a meeting. Musk said he contacted Cook "to discuss the possibility of Apple acquiring Tesla (for one-tenth of our current value). He refused to take the meeting." Musk said he sought out the meeting with the Apple chief executive "during the darkest days of the Model 3 program", a reference to Tesla's first electric car designed for the mass market. As recently as 2018, Tesla was struggling to meet its vehicle production goals and turn a profit. Tesla's fortunes have changed since then and the car manufacturer is finally making money on a consistent basis after years of losses and continues to hit milestones for deliveries of its vehicles. Its shares have soared 665% this year alone, making it the world's most valuable automaker and among the top 10 biggest US companies in the S&P 500 index, which Tesla entered on Monday. Musk's tweet followed published reports suggesting Apple is working on developing its own electric cars, but Apple declined to comment.
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Wednesday's Shareholder Meetings
Integrated Diagnostics Holdings PLC - EGM re Egyptian listing
easyJet PLC - AGM
Avation PLC - AGM
Jaywing PLC - GM
RiverFort Global Opportunities PLC - AGM
Zambeef Products PLC - AGM
Kin & Carta PLC - AGM
Informa PLC - GM re Equity Revitalisation Plan
Tirupati Graphite PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
