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LONDON (Alliance News) - The crash of a Malaysian Airlines jet in eastern Ukraine is dominating attention at the UK market open Friday.
First news of the crash came out just prior to the London close Thursday, pushing down shares, and they have added to their losses Friday, as Israel has launched a ground offensive in Gaza, adding to the geopolitical uncertainty.
The UK Competition and Markets Authority has recommended an in-depth market investigation into the UK retail banking sector after finding that essential parts of it do not meet the needs of its customers.
Shire leads FTSE 100 gainers despite no announcement being forthcoming so far of a firm offer from AbbVie prior to Friday's regulatory deadline.
Spire Healthcare starts trading on the London main market Friday with a GBP842.3M market capitalisation.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.6% at 6,700.28
FTSE 250: down 0.7% at 15,441.84
AIM ALL-SHARE: down 0.2% at 768.32
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Hang Seng: down 0.6% at 23,390.58
Nikkei 225: closed down 1.0% at 15,215.71
DJIA: closed down 0.9% at 16,976.81
S&P 500: closed down 1.2% at 1,958.12
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GBP-USD: flat at USD1.7100
EUR-USD: flat at USD1.3525
GOLD: down at USD1,311.97 per ounce
OIL (Brent): down at USD108.17 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 British Summer Time)
09:00 EU Current Account
13:30 Canada Consumer Price Index
13:30 Canada Wholesale Sales
14:55 US Reuters/Michigan Consumer Sentiment Index Preliminary
15:00 US CB Leading Indicator
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The Malaysia Airlines jetliner that crashed in eastern Ukraine with 298 people aboard made no distress call, Malaysian Prime Minister Najib Razak said Friday, adding to suspicions that the plane was shot down. Najib offered condolences to the families and friends of those aboard flight MH 017, which was bound for Kuala Lumpur from Amsterdam, and vowed that "no stone will be left unturned" in the investigation of the disaster. US Vice President Joe Biden said Thursday the downing of the aircraft was "not an accident," characterizing it as being "blown out of the sky," US media reported. Both the Ukrainian government and pro-Russian separatists fighting in eastern Ukraine denied shooting down the Boeing 777-200. The crash follows the March 8 disappearance of another Malaysia Airlines plane, carrying 239 people bound for Beijing from Kuala Lumpur.
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The Israeli Defence Forces were conducting a ground operation Friday in the Gaza Strip, following the failure of ceasefire efforts after a 10-day air campaign. "A large IDF force has just launched a ground operation in the Gaza Strip. A new phase of Operation Protective Edge has begun," the Israeli military announced, later saying it was using draft orders to call up 18,000 reserve soldiers. Prime Minister Benjamin Netanyahu's office said the operation, which initially appeared to be a limited incursion, was launched late Thursday to strike "terror tunnels" from the Gaza Strip into Israel.
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The U.K 's current house prices sentiment rose in July, although at a slower pace than in June, results of a survey by Knight Frank and Markit Economics showed. The house price sentiment index, an indicator of house price trends, came in at 62.4 in July, a slight decrease from the 62.5 reading in the previous month. Any reading above 50 indicates rise in prices and this month's reading marked the sixteenth consecutive month of increase in house prices. The index rose in all the surveyed regions, with London showing the steepest increase as the index came in at 70.5 in July. The index was at 69.7 in the South East region and 68.3 in the East of England region.
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New house prices in most Chinese cities declined in June, data from the National Bureau of Statistics showed. Average new home prices in 55 of the 70 cities in China fell compared to the previous month in June. New home prices in Hangzhou fell the most, by 1.7%, followed by home prices declines in Luoyang, Changchun, Xiangyang and Guilin. Also, prices in major cities like Shanghai and Shenzhen dropped by 0.7% and 0.4%, respectively. However, new home prices in Beijing continues to rise, by 0.1% in June. On a year-over-year basis, new house prices in all the cities, with the exception of Wenzhou, increased in June.
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China's business confidence increased in July, results of a survey by research agency MNI showed. The MNI business sentiment index, a measure of current business expectations, rose to 58.2 in July from 55 in June. The index has remained above 50, which indicates rise in expectations, since January 2009. However, confidence concerning future business prospects decreased in July, though it remained above the no change mark of 50. The corresponding index fell to 61.5 in July from 64.2 in June.
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Chinese Premier Li Keqiang said economic growth higher or lower than 7.5% in 2014 would be acceptable, state-run Xinhua News Agency reported late Thursday. "Growth rate slightly higher or lower than 7.5% is acceptable, as long as our development creates jobs, boosts incomes, has quality and efficiency, favors energy savings and environmental protection, and is not an exaggeration and is real," he said at an economic symposium on Tuesday. Li said the government will stick with targeted macro-control policies and permit the market to play a bigger role.
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Members of the Bank of Japan's monetary policy board were content with the pace of the country's economic recovery, minutes from the bank's June 12-13 meeting revealed - and they expect the recovery to continue. Downside risks include the pace of the economic recovery in the US, and the potential for further debt concerns in Europe.
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BROKER RATING CHANGES
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TRADERS: EXANE BNP RAISES BURBERRY TO 'OUTPERFORM' ('NEUTRAL')
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BARCLAYS RAISES BRITISH LAND PRICE TARGET TO 936 (695) PENCE - 'OVERWEIGHT'
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GOLDMAN RAISES HIKMA PHARMACEUTICALS TO 'BUY' ('NEUTRAL') - PT 2250 (1800) PENCE
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COMPANIES - FTSE 100
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RSA Insurance Group PLC Chief Executive Stephen Hester is to cut out nearly 10% of the company's GBP2.0 billion in annual costs, the Financial Times reported online on Thursday. According to the report, investors said that Hester, who joined the insurer in February, is set to reduce the insurer's expense base by almost GBP150.0 million over the next three years. The FT also reported that the Central Bank of Ireland is able to fine RSA up to GBP35.0 million, though it said the final amount is likely to be considerably lower. RSA caught the attention of regulators in the wake of an accounting scandal at its Ireland business last year.
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Royal Bank of Scotland Group PLC is considering the sale of the overseas operations of its private banking arm, Coutts, the Financial Times reported online on Thursday. The FT reported that bankers said splitting Coutts in two would make sense, because its international clients are on average "much richer" than those in the UK, so the service required is different.
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The UK Competition and Markets Authority recommended an in-depth market investigation into the UK retail banking sector after finding that essential parts of it do not meet the needs of its customers. The watchdog is now consulting on its provisional decision that there should be an investigation into the markets for personal current accounts and banking for small-and-medium enterprises. The probe could result in structural remedies, such as breaking up banks through divestments, or behavioural changes that may include improved transparency and the provision of better information to customers. The CMA will make a final decision on a market investigation in the autumn.
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COMPANIES - FTSE 250
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SIG PLC said it has acquired Sodimat SAS, a specialist distributor of flat roofing products in France, for EUR4.4 million in cash. "This infill acquisition is in line with the group's strategy of expanding its French roofing business, Lariviere, in the South of France, and strengthening its offering in flat roofing, which SIG believes to be an attractive segment of the market," SIG said in a statement.
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Homeserve Says Trading In Line With Expectations;Says UK Business Has Made Solid Progress In First 3 Months Of FY; Says UK Business On Target For 0.3M Gross New Customers In FY For 2M Total; UK Business On Target For 82% Retention Rate; International Business Growing Customer Numbers, Trading As Expected
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DCC Says Q1 Trading In Line with Budget But Behind YOY; Energy Division Trades Broadly In Line With Budget But Behind Last Year
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COMPANIES - MAIN MARKET AND AIM
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Sterling Energy PLC said its pretax profit declined slightly in its first half as a drop in revenues due to field decline and scheduled maintenance at its Chinguetti oil field in Mauritania hit the company.
The oil and gas exploration and production company said its pretax profit fell to USD1.7 million for the six months ended June 30 from USD1.8 million the previous year, as revenues fell 15% to USD9.1 million from USD10.6 million. The company said its revenues fell as average net production fell 18% to 436 barrels of oil per day from 534 barrels of oil per day due to natural field decline at the Chinguetti field and a scheduled 10 day maintenance programme which started in January.
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Development Securities PLC said the period since March 1 has been an "exciting" time for the company, as it added to its portfolio, notably through the GBP20.9 million acquisition of Cathedral Group Holdings Ltd in May. The acquisition of the mixed-use regeneration developer added nine projects in Greater London and the South East of England to Development Securities' portfolio, representing over five million square feet of residential-led mixed-use development.
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Record AuM Equivalents USD54.1B On June 30, Up From USD51.9B On March 31; AuM Increase Due To Net Inflows To Passive Hedging
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Pentagon Protection Changes Name To YOLO Leisure And Technology, Resumes Trading On AIM
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Redefine International: Portfolio Occupancy Remains Steady At 97.2%
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Anglo Asian Mining Q2 Gold Production Up 39% On Q1 To 15,736oz; Q2 Silver Production Down On Q1, 8,785oz Vs 13,139oz; Keeps Gold Production Forecast, Raises Copper Forecast
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Darty Finance Director Dominic Platt To Step Down September 2015; To Transfer Remaining Central Support Functions To Paris From London Over Coming Year
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PhotonStar LED To Raise GBP2.2M In Share Placing Of 31.4M New Shares At 7p Per Share; H1 Revenue Down To GBP3.8M Vs GBP4.3M; New-Build Construction Projects Have Been Delayed; Maintained Adjusted EBITDA In H1
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SyQic H1 Performance Solid, Expects To Meet Market Expectations For Financial Year
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IXICO Says Revenue For 16 Months To June 30 Ahead Of Expectations; Says It Has Been Boosted By New Contracts Wins
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Avanti Communications Expects FY Revenues Of USD64-65M, In Line With Market Expectations
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Spire Healthcare Prices London Main Market IPO At 210p, Giving GBP842.3M Market Cap; Says IPO Will Raise Gross GBP315M For Co, GBP0.2M For Selling Shareholders; Conditional Dealings Start Friday
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Walker Crips Net Group Revenue Up 12% To GBP3.6M In Quarter; Net Fees Accounted For Most Of Revenue Increase, Up 20%; Assets Under Management On June 30 Up 3% On March To GBP1.37B
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4d Pharma Acquires Microbiota Co Ltd For Total Consideration Of GBP2.0M Paid Through Share Issuance
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PME African Infrastructure To Acquire 50% Stake In Sheltham Holdings Does Not Own
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Essenden Says In 28 Weeks To July 13, Like For Like Sales Up 7.1%; Says Significant Growth In EBITDA During H1
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Findel Q1 Performance Improves On Better Margins And Cost Savings; Strong YOY Profit Growth Due To Express Gifts Performance; FY Profit And Margin Targets Remain Unchanged
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Ducat Ventures Proposes Placing To Raise GBP3.3M Before Expenses At 8p Each; Proposes GBP2.0M Share Deal To Acquire OptiBiotix Health; Says Enlarged Market Cap Will Be GBP5.7M; Proposes Name Change To OptiBiotix Health
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COMPANIES - OTHER
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Google reported a 22% rise in second quarter revenue Thursday, with sales reaching 16 billion dollars. But the company's continued spending on potential new businesses such as self-driving cars and ultra-fast internet networks hit Google's bottom line. The web software giant posted weaker than expected earnings with profit per share of USD6.08 compared to an expected USD6.25.
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IBM reported stronger than expected revenue and sales for its second quarter Thursday as its move to higher profit businesses appeared to be paying off. The company said it earned USD4.32 per share, up 34% from the year earlier quarter. Revenues were down 2% to USD24.4 billion, beating the USD24.1 billion target expected by analysts.
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Italian automaker Fiat SpA said Thursday that it has not held talks with German auto giant Volkswagen AG regarding a potential merger. "Fiat states that they have not held discussions with Volkswagen regarding a potential merger," Fiat said in a statement. German business magazine Manager Magazin reported Thursday on its website that the controlling families of Volkswagen are in talks with Fiat to buy the Italian car maker. Volkswagen's Chairman and one of the main shareholders, Ferdinand Piech, reportedly held discussions with members of the Elkann and Agnelli families that control Fiat.
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Friday's Scheduled AGMs/EGMs
Land Securities Group
DCC
Templeton Emerging Markets IT
Aurora Investment Trust
Findel
Edinburgh Investment Trust
Walker Crips Group
Volex Group
Fidelity China Special Situations
Homeserve
FW Thorpe
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.