LONDON (Alliance News) - Shares in London have started the week firmly Monday, shaking off another set of weak economic data from China, as Greece edges closer to concluding its third debt bailout deal.
Aerospace firm Meggitt leads blue-chip gainers, up 1.6%, after saying it agreed to buy the advanced composites unit of FTSE 250 aerospace and defence manufacturer Cobham for USD200 million. Cobham shares are up 0.8%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 6,723.39
FTSE 250: up 0.2% at 17,691.77
AIM ALL-SHARE: up 0.1% at 753.70
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Hang Seng: down 0.2% at 24,499.54
Nikkei 225: closed up 0.4% at 20,808.69
DJIA: closed down 0.3% at 17,373.38
S&P 500: closed down 0.3% at 2,077.57
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GBP: flat at USD1.5491
EUR: up at USD1.0973
GOLD: up at USD1,097.40 per ounce
OIL (Brent): up at USD48.37 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 in BST)
09:30 EU Sentix Investor Confidence
15:00 US Labor Market Conditions Index
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Greece's creditors have agreed amongst themselves a draft bailout memorandum that they now hope to finalise with Athens in the coming days, sources said on Saturday, amid growing pressure on the two sides to strike a deal. "We hope that everything will go well," Greek Economy Minister Giorgos Stathakis told journalists in Athens outside the hotel where the negotiations on a new bailout for his near-bankrupt country were taking place. When asked whether an agreement was within reach, he said that reports to this effect "could be" correct. The two sides are under pressure to strike a deal and give Greece access to bailout funds by August 20, when it is supposed to make a EUR3.2 billion debt repayment to the ECB.
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Chinese exports declined sharply at a faster than expected pace in July, figures from the General Administration of Customs showed. Exports decreased 8.3% year-over-year in July, reversing the 2.8% increase in the previous month. Economists had expected exports to decline 1.5%. At the same time, imports were down 8.1% in July. It was forecast to fall 8%. The trade surplus totalled USD43.03 billion, which was below the expected surplus of USD54.7 billion.
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China's consumer prices increased at a faster rate for the second straight month in July, with the growth exceeding the consensus estimate, figures from the National Bureau of Statistics showed. Additionally, producer prices fell at a steeper than expected pace and declined by the most in 6 years. Consumer prices increased 1.6% year-over-year in July following the 1.4% rise in June. In May, prices had risen 1.2%. Economists had expected a 1.5% growth for the month. A separate report released by the agency showed that its producer prices contracted further by 5.4% annually in July, following a 4.8% drop in the previous month. The drop was steeper than the 5% decline expected by economists and marked the lowest since October 2009.
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At least 14 people were killed and four missing in a typhoon in eastern China over the weekend, authorities said. Typhoon Soudelor made landfall on the south-eastern province of Fujian and moved to neighbouring Zhejiang and Jiangxi provinces before being downgraded to a tropical storm.
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Japan's consumer sentiment decreased in July, after rising slightly in the prior month, survey figures from Cabinet Office showed. The consumer confidence index fell to 40.3 in July from 41.7 in June. In May, the score was 41.4.
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Japan's economy is set to continue recovering moderately, the Bank of Japan said in its monthly report. According to BoJ, exports will increase moderately, albeit with some fluctuations, and public investment will continue its moderate declining trend. Slightly raising its assessment for housing investment, the bank said it will continue picking up. The bank also said private consumption will be resilient. The bank observed that inflation was about zero percent but inflation expectations appear to be rising on the whole from a somewhat longer-term perspective.
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Ireland's construction sector activity expanded at the weakest pace in three months in July, though activity, new orders and employment all continued to increase sharply, survey figures from Markit Economics showed. The Ulster Bank Construction Purchasing Managers' Index fell to 59.1 in July from 65.7 in the previous month. Any reading above 50 indicates expansion in the sector, but it was the lowest reading in three months.
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The White House said Friday it was still confident of winning congressional approval for the Iran nuclear deal despite an influential senator's announcement that he will vote against it. The announcement from Senator Chuck Schumer "was not particularly surprising to anyone here at the White House," spokesman Josh Earnest said. He said that Schumer's decision did not alter the White House's confidence that it will be able to mobilize a majority of Democrats in both the House and the Senate in support of the deal.
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The US military has deployed six F-16 strike fighters to Turkey's Incirlik Air Base to participate in the air campaign against the Islamic State jihadist organization in Syria, US Forces Europe said Sunday. The US Air Force Fighting Falcons were moved to the base along with support equipment and about 300 personnel in support of Operation Inherent Resolve. As part of the operation, the US has been carrying out airstrikes against Islamic State targets in Iraq since August 2014 and in Syria since September 2014.
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Iraqi Prime Minister Haider al-Abadi called for the posts of vice president and deputy premier to be abolished as part of a reform plan following massive protests against alleged government corruption and incompetence. There are three vice presidents and three deputy premiers in Iraq. Al-Abadi proposed forming a judicial commission to examine corruption claims against incumbent and former officials.
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BROKER RATING CHANGES
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Cantor Cuts Ryanair To Hold From Buy; Price Target Raised To EUR14 From EUR13.50
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TRADERS: NUMIS CUTS SENIOR PLC TO 'ADD' ('BUY')
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BARCLAYS RAISES AGGREKO TO 'OVERWEIGHT' ('EQUAL WEIGHT') - TARGET 1280 (1700) PENCE
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COMPANIES - FTSE 100
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Aerospace and engineering group Meggitt said it has struck a USD200 million deal to acquire the advanced composites unit of FTSE 250 aerospace and defence manufacturer Cobham. Meggitt will pay USD200 million in cash to acquire the division, which makes a range of engineering aerospace components and secondary structures. It will be integrated into Meggitt's Polymers & Composites division. The deal will be backed by a USD300 million credit facility, Meggitt said. Cobham said the deal is in line with its strategy of "simplifying its portfolio by focusing on segments where it has scale and market leading positions".
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Financial services company Hargreaves Lansdown said it has hired Chris Hill as its new chief financial officer. Hill is expected to take up the role in March 2016, until which time Simon Cleveland will continue to act as interim chief financial officer. Hill joins from IG Group Holdings, where he has been chief financial officer for the last four years. IG Group Chairman Andy Green said the company will start the search for Hill's successor immediately. The company also briefly confirmed that it is trading in line with its expectations.
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Pearson is expected to announce a GBP400 million deal as early as this week to sell its 50% stake in The Economist Group, the Financial Times reports. The De Rothschild family and Exor, the investment vehicle run by Italy's Agnelli family, are likely to emerge as the largest shareholders in The Economist Group, the publisher of The Economist magazine, following the deal, though the details of the sale are still being worked out, the FT said, citing people close to the matter.
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The UK data regulator is understood to be "making inquiries" after mobile retailer Carphone Warehouse, part of Dixons Carphone, said the personal details of up to 2.4 million of its customers may have been accessed in a cyber-attack, the BBC reports. The Information Commissioner's Office, which probes data breaches, confirmed to the BBC that it was aware of the incident and was working on a response. The breach was discovered on Wednesday and made public on Saturday, with Carphone Warehouse saying the credit card details of up to 90,000 people may have been accessed.
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COMPANIES - FTSE 250
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Construction and support services company Carillion said it has been selected for all three lots of the UK government's Facilities Management Services agreement. Carillion has been named as a supplier on the Total Facilities Management, Hard Facilities Management, and Soft Facilities Management lots of the agreement. The total scheme is expected to see the government spend between GBP1.3 billion and GBP4.1 billion on outsourced facilities management contracts which will run until the end of July 2019.
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Insurer esure Group cut is interim dividend, as it said its underlying pretax profit dropped in the first half of 2015, in line with guidance, despite a rise in gross written premiums and in-force policies in the period. The company said its underlying pretax profit, which strips out exceptional gains and costs, fell by 21% to GBP46.5 million in the six months to the end of June from GBP59.1 million a year earlier. As a result of the fall in profit, it cut interim dividend to 4.2 pence per share from 5.1 pence per share a year earlier.
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Nostrum Oil & Gas said it has made a further approach to Tethys Petroleum to acquire the company, less than a month after Tethys had rejected its previous overtures. Nostrum said it has made a informal bid to acquire the entire issued share capital of Tethys for CAD0.2185 per Tethys share, valuing Tethys at around CAD73.6 million, or around GBP36.2 million.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Gamma Communications said it has won UK government framework agreements to supply new Crown Commercial Service Network Services. The communications services technology provider said it had been awarded eight out of ten possible lots. These lots cover communications services, including data, voice, mobile and integrated communications, Gamma said.
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Wearable technology company Fitbug Holdings said it has raised GBP1.7 million through the placing of shares, a share subscription, and the issue of a convertible loan note, and said it has restructured all of its existing loans on favourable terms.
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Waste management company Biffa could be valued at up to GBP1 billion when it floats on the London Stock Exchange next year amid expectations of a wave of consolidation in the industry, fuelled by new technologies which convert waste into recycled products or energy, the Financial Times reports. Biffa, the second-biggest waste manager in the UK by sales, hired investment bank Rothschild in May to prepare it for a flotation, which has been pencilled in for spring 2016, the newspaper said.
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The private equity owner of housebuilder Countryside is understood to be holding a beauty parade of investment banks to act as bookrunners for a planned initial public offering in London next year, Sky News reports. Countryside, one of the biggest privately-owned housebuilders in the UK, is thought to be considering the stock market float amid a string of upcoming UK government schemes being launched to accelerate the construction of new homes.
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COMPANIES - INTERNATIONAL
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Billionaire Warren Buffett's Berkshire Hathaway is nearing a deal to acquire Precision Castparts, the Wall Street Journal reported, citing people familiar with the matter. According to the WSJ report, an acquisition of Precision Castparts could exceed USD30 billion and also be Berkshire Hathaway's largest ever takeover. A deal could be announced as soon as Monday. Portland, Oregon-based Precision Castparts makes metal components such as fasteners and turbine blades for aircraft companies like Airbus Group and Boeing Co. Berkshire Hathaway holds a 3% stake. Berkshire Hathaway said Friday after the markets closed that its second quarter profit fell 37% from last year, hurt by lower investment gains and insurance-underwriting losses.
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Monday's Scheduled AGMs/EGMs
No meetings scheduled.
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
25 Jan 2017 09:47
