(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The UK government said it was prepared to approve the GBP4 billion takeover of FTSE 250-listed aerospace and defence firm Cobham by a US private equity firm. UK Secretary of State for Business, Energy & Industrial Strategy Andrea Leadsom said she was "minded to accept undertakings offered" by US private equity firm Advent International Corp that would "address the concerns identified" about the potential acquisition. "No decision will be taken until the consultation has concluded and the representations have been carefully considered," the UK department added. The undertakings proposed include safeguarding security arrangements which apply to Cobham when protecting UK government information, maintaining its capability to honour the terms of its existing contracts, and giving the UK Ministry of Defence notice of any plans to sell any or all of the firm.
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Rio Tinto refuted any suggestion the final mining plan for the Oyu Tolgoi project in Mongolia was illegal. The FTSE 100 miner noted court proceedings in Mongolia after the Darkhan Mongol Nogoon Negdel non-governmental organisation alleged due process was not followed by the Mongolian government when finalising plans and financing for Oyu Tolgoi. "Rio Tinto strongly refutes any suggestion the underground mine development and financing plan or any of the foundational Oyu Tolgoi agreements are illegal," said Rio Tinto. The Oyu Tolgoi mine has one of the world's largest copper and gold deposits. It is located in the southern Gobi desert, some 550 kilometres south of Ulaanbaatar and not far from the Chinese border. The government of Mongolia has a 34% stake in the mine, which Rio Tinto has managed since 2010.
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Melrose Industries reported a mixed recent performance, with the Automotive and Powder Metallurgy units hurt by industrial action. The London-based industrial turnaround specialist said it has traded in line with expectations for 2019. By division, the company said Aerospace, part of the acquisition of GKN, has achieved sales growth of over 5% in the four months to the end of October compared to the same period last year, outperforming the expected longer-term average growth rate. Melrose also noted "good margin improvement" in this division. Turning to Automotive, Melrose said it has delivered a higher profit and margins, but sales were down by 5% year-on-year. In Powder Metallurgy, meanwhile, sales fell by 13% over the four-month period. Both divisions were hurt by a strike by workers at General Motors Co in the US, Melrose explained. The company said Powder Metallurgy sales would have been in line with board expectations had it not been for the strike.
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Halma said "good organic and acquired growth" resulted in a strong year-on-year rise in first half earnings, and the hazard detection and life protection products supplier remains on track to deliver another good full-year performance. For the six months to September 30, Halma recorded pretax profit of GBP105.8 million, up 12% from GBP94.5 million in the year-ago period. Revenue increased by 12% year-on-year to GBP653.7 million from GBP585.5 million. The revenue growth was attributed to good organic constant currency revenue growth of 5%, a 4% contribution from acquisitions and a positive currency translation effect of 3%. Halma upped its interim dividend payment by 7.0% to 6.54p per share from 6.11p a year ago.
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easyJet reported a "strong" end to its recent financial year, with financial results meeting expectations. The company also announced a new Holidays business as well as a plan to make all flights net zero carbon, both from Tuesday. The Holidays business push takes advantage of the recent demise of travel firm Thomas Cook, while easyJet said the environmental measure will cost it about GBP25 million in its new financial year. easyJet's pretax profit for the year to September was 3.4% lower at GBP430 million, with the headline figure dipping 26% to GBP427 million. This is towards the top of the guided range of GBP420 million to GBP430 million, for headline pretax profit. easyJet will be paying a dividend of 43.9 pence per share, meaning a 25% cut from the year before.
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MARKETS
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London shares were sharply higher with Halma the best blue chip performer, up 11%. Conversely, Mexican gold miner Fresnillo was the worst large cap performer, tracking spot gold prices lower. Wall Street was set for a higher open having edged to fresh record highs on Monday.
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FTSE 100: up 1.1% at 7,388.91
FTSE 250: up 1.1% at 20,655.92
AIM ALL-SHARE: up 0.1% at 894.90
GBP: down at USD1.2934 (USD1.2969)
EUR: flat at USD1.1067 (USD1.1068)
GOLD: down at USD1,465.02 per ounce (USD1,469.08)
OIL (Brent): down at USD61.82 a barrel (USD62.20)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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US Federal Reserve Chair Jerome Powell reasserted the independence of the US central bank during White House talks with President Donald Trump on Monday, the Fed said. Powell attended the meeting, which comes amid an unprecedented campaign of public attacks on the central bank, at the invitation of the president, and was joined by Treasury Secretary Steven Mnuchin, the Fed said in a statement. Trump, who has lambasted Powell in harsh, personal terms over monetary policy, tweeted that the meeting was "good & cordial", adding that "everything was discussed" including interest rates, inflation, foreign exchange and the Fed's balance sheet policies. The Fed said Powell's comments were consistent with last week's congressional testimony and did not concern "expectations for monetary policy", except to say it will depend entirely on new economic information.
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An agreement has been reached in the dispute over the EU budget for 2020, diplomats and members of the European Parliament said on Monday evening. Government officials from the 28 member states and lawmakers have agreed to provide around EUR153.6 billion in disbursements next year. Additional money should be provided, among other things, for climate change, the fight against youth unemployment and digitization. The two sides had failed to reach a compromise on the spending package late on Friday. EU member states had agreed on a budget of EUR153.1 billion for next year, while lawmakers from the European Parliament were pushing for a more ambitious EUR159.1 billion.
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About 100 anti-government protesters remain holed up at a Hong Kong university as a police siege of the campus entered its third day. City leader Carrie Lam said 600 people had left the Hong Kong Polytechnic campus, including 200 who are under 18 years old. Police have surrounded the university and are arresting anyone who leaves. Groups of protesters made several attempts to escape on Monday, including sliding down hoses to waiting motorcycles, but it was not clear if they evaded arrest. Lam said those under 18 would not be immediately arrested but could face charges later. She said the other 400 who have left have been arrested. Meanwhile, China hinted it might overrule the Hong Kong's high court ruling on Monday to strike down a ban on face masks that was aimed at preventing protesters from hiding their identity to evade arrest.
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