LONDON (Alliance News) - UK shares have opened lower Monday, amid a strengthening dollar and continue pro-democracy protests in Hong Kong.
Balfour Beatty leads FTSE 250 fallers by a country mile, down 25%, after it said it expects its Construction Services UK division to take another GBP75 million hit to its profit this year and said it has appointed auditors KPMG LLP to undertake a detailed independent review of the contract portfolio within the business.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.3% at 6,632.50
FTSE 250: down 0.1% at 15,364.94
AIM ALL-SHARE: up 0.3% at 751.36
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Hang Seng: down 1.8% at 23,253.99
Nikkei 225: closed up 0.5% at 16,310.64
DJIA: closed up 1.0% at 17,113.15
S&P 500: closed up 0.9% at 1,982.85
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GBP-USD: flat at USD1.6248
EUR-USD: up at USD1.2690
GOLD: flat at USD1,218.38 per ounce
OIL (Brent): down at USD96.35 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times British Summer Time)
09:30 UK Consumer Credit and M4 Money Supply
10:00 EU Business Climate, Consumer Confidence, Economic Sentiment
13:00 Germany Consumer Price Index
13:30 US Personal Income and Spending
15:00 US Pending Home Sales
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Tens of thousands of demonstrators blocked major streets in Hong Kong as protests widened against China's decision to restrict open elections in the territory. Some commuters were unable to get to work when protesters refused to open up passage. More than 200 bus routes were suspended or rerouted, according to the city's Transport Department. Police used tear gas, pepper spray and baton charges overnight, but failed to disperse the protesters.
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Relations between Russia and the US need a new "reset", Russian Foreign Minister Sergei Lavrov said Sunday, adding that the tensions over Ukraine and Washington's sanctions will take time to resolve. "It is now necessary for what Americans would probably call a 'reset'," Lavrov told a Russian television interviewer. Perhaps the effort could be described as "reset 2.0," he went on to say.
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The extreme rightwing National Front has been elected for the first to the French Senate on Sunday, as French President Francois Hollande's Socialists and other left-wing parties lose their majority in the country's upper house.
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The leader of an al-Qaeda affiliate targeted in US airstrikes in Syria Sunday warned other rebel groups not to side with Western countries. "I advise and warn the sincere fighting groups on the ground: do not allow the West and America to exploit the injustice that the Islamic State has done to you," Abu Mohammed al-Jaulani, head of the al-Nusra Front, said in an audio message released on jihadist websites. "Do not let that injustice lead any of you to follow the West or participate in its alliance of evil," al-Jaulani said, saying that the goal of the US was to enlist Syrian rebels in a "secularist project" or bring about a settlement with the regime of President Bashar al-Assad.
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The International Monetary Fund on Friday approved USD130 million in emergency financial aid to Guinea, Liberia and Sierra Leone to fight the Ebola outbreak that has now claimed more than 3,000 lives. The World Health Organization (WHO) said Friday that the death toll in Guinea, Liberia and Sierra Leone had risen to 3,083 and that the total number of cases stood at 6,553.
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Europe defeated the US to retain the Ryder Cup after wins in the singles by Rory McIlroy, Graeme McDowell, Martin Kaymer and rookie Jamie Donaldson at Gleneagles Sunday. After Justin Rose snatched a half point for Europe against Hunter Mahan, victory was sealed when Donaldson beat Keegan Bradley in match 10 of the 12 singles. The American, four shots down, conceded after a superb approach shot on the 15th by Donaldson close to the pin, giving Europe an unassailable 14.5-9.5 lead. The final score was 16.5-11.5.
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BROKER RATING CHANGES
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SHORE CAPITAL RAISES SABMILLER TO 'HOLD' ('SELL')
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UBS RAISES MICRO FOCUS TO 'BUY' ('NEUTRAL') - TARGET 1,140 (900) PENCE
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TRADERS: MERRILL LYNCH RAISES ROTORK TO 'BUY' ('NEUTRAL')
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COMPANIES - FTSE 100
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Aberdeen Asset Management reported a 2.7% increase in assets under management over July and August, as positive market movements and performance more than offset GBP1.7 billion of net outflows. In the three months to the end of June, Aberdeen recorded GBP8.8 billion of net outflows, prompting the asset manager to say that net outflows have "moderated" in the two months since. Aberdeen said inflows were won into higher margin products, while outflows were more weighted towards lower-margin capabilities.
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Standard Chartered said Sunday it has temporarily suspended banking services at some of its branches in Hong Kong until further notice. The announcement comes amid the pro-democracy protests in Hong Kong. The Asia-focused lender said that from September 29, Monday, onwards until further notice, it will temporarily suspend banking operations at five of its branches in Hong Kong.
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BP and Royal Dutch Shell are among those in the final running for a fiercely contested deal to operate some of the largest oil fields in the Persian Gulf, the Daily Telegraph reported, citing the United Arab Emirates oil minister.
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The insider who blew the whistle on the accounting problems which arose at Tesco last week attempted to raise the alarm in the past but was ignored, The Sunday Times reported. The whistleblower, an unnamed accountant with the supermarket chain, raised concerns with his superiors but "failed to get traction", according to a senior source at the company cited by the newspaper.
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BAE Systems said it expects a short-term trading disruption in the US, will take a goodwill impairment charge on the sale of a majority stake in its South African business, and will book extra charges related to commercial shipbuilding programmes in the US. BAE said, however, that in spite of the extra charges, it retains its guidance for its 2014 full year earnings. Elsewhere, BAE said its group order intake in the calendar year to August 23 was GBP7.9 billion, with GBP2.6 billion of this from non-UK or US markets.
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Food and support-services company Compass Group said strong growth in its fourth quarter was again driven by North America and its emerging and fast growing markets, but said that while its full-year expectations remains "positive and unchanged", it has suffered a big hit from sterling strength. Compass said that for the full financial year ending September 30, it expects its North America and Fast Growing & Emerging regions to deliver "healthy levels" of organic growth, while it said it also has seen improvements through the year in Europe and Japan.
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AstraZeneca said it has presented new data from its oncology pipeline at the European Society of Medical Oncology congress in Madrid, which it said demonstrates the strength and rapid progression of the pipeline. In its immuno-oncology pipeline the company's biologics research and development arm MedImmune presented eight abstracts to show the activity and tolerability of its MEDI4736 compound on its own and in combination with tremelimumab.
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COMPANIES - FTSE 250
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Balfour Beatty said it expects its Construction Services UK division to take another GBP75 million hit to its profit this year and said it has appointed auditors KPMG LLP to undertake a detailed independent review of the contract portfolio within the business. Balfour said trading across the rest of the company remains in broadly line with expectations. The company said it is now at an advanced stage in the process of appointing a new chief executive. Balfour also said it intends to update on the sale of its Parsons Brinckerhoff business in October and said it anticipates GBP200 million will be returned to shareholders via a share buyback programme following completion of the divestment. Balfour said its final dividend for the year would be assessed in light of the sale of the Parsons Brinckerhoff business.
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Morgan Advanced Materials said Chief Executive Mark Robertson announced his intention to step down from the company to take up the position of CEO of an undisclosed private equity-backed business.
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Workspace Group said it has exchanged contracts on the disposal of a portfolio of non-core industrial estates for gross proceeds of GBP44.3 million. The London real estate investment trust is selling the portfolio to Capital Industrial One BV. The portfolio of 10 industrial sites - which total 281,500 square feet - have been sold at a premium of 35% to the March 2014 valuation, said the FTSE 250-listed company. The disposal reflects a net yield of 5.3%.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Bango, the mobile payments company, revealed a firm placing, placing and open offer to raise up to GBP6.0 million before expenses in order to strengthen its balance sheet, give it increased resources, and to maintain research and development expenditure. In a statement, Bango said it is looking to issue 4.2 million new shares through a firm placing and 2.1 million new shares through the placing and open offer, both at 96 pence per share.
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Endeavour International said the Rochelle field remains offline, with production not expected to commence before October 10. Endeavour International is an oil and gas exploration and production company focused on the acquisition, exploration and development of oil and natural gas in the North Sea and the US. The company said that it has been informed by the operator of the Scott platform that the Rochelle field, one of its North Sea producing fields, remains offline. While repairs of the Scott export compressors were successfully completed, the gas cooler failed a leak test during commissioning, said the company.
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COMPANIES - INTERNATIONAL
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Software giant Microsoft Corp has Sunday promised all corporation to the Chinese regulatory authorities related to the antitrust probe against the company in China. This was emphasized by Microsoft CEO Satya Nadella at a meeting with China's top regulator State Administration for Industry and Commerce in Beijing.
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European regulators will likely publish this week details of its probe on the tax deals granted to multinational companies like US technology giant Apple Inc and Italian automaker Fiat SpA that it believes have violated EU laws, according to media reports on Sunday. The European Commission, the EU's antitrust authority, commenced a formal probe in June whether tax deals granted to Apple in Ireland, Fiat's finance arm in Luxembourg, and coffee retailer Starbucks Corp in the Netherlands amounted to illegal state aid. The probe is part of the European efforts to focus on tax avoidance by companies in Europe following the financial crisis.
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Air France pilots ended a strike that has lasted for two weeks. However, pilots' union SNPL and the airline have yet to reach an agreement over a dispute about the carrier's plans to expand its budget subsidiary Transavia.
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Air Berlin, Germany's second-largest airline, said it cancelled an order for 33 Boeing Co aircraft worth about USD5 billion at list prices. It noted that the cancellation agreement does not provide for any obligation of the Air Berlin group to make any compensation payments to Boeing. The cancellation removes 15 long-range 787 Dreamliners and 18 single-aisle 737 jetliners from Boeing's backlog. The Air Berlin group said it will adapt the existing fleet to its needs by the acquisition or leasing of suitable aircraft, although at a lower number of aircraft than initially envisaged.
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Monday's Scheduled AGMs/EGMs
Pinewood Shepperton
Clipper Logistics
Speymill
Maple Energy
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
1 Jun 2015 09:17