LONDON (Alliance News) - UK shares have opened higher Tuesday, catching up with gains made during the bank holiday Monday in Asia and Europe.
The mid-cap FTSE 250 is outperforming once again, led by AVEVA Group, which raised its total dividend and expressed confidence in achieving its targets for further growth, as it saw pretax profit rise in the year to end-March. AVEVA shares are up 11% at the open.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.3% at 6,835.64
FTSE 250: up 0.6% at 15,795.09
AIM ALL-SHARE: up 0.3% at 804.06
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Hang Seng: down 0.2% at 22,922.31
Nikkei 225: closed up 0.2% at 14,636.52
DJIA: closed Friday up 0.4% at 16,606.27
S&P 500: closed Friday up 0.4% at 1,900.53
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GBP-USD: up at USD1.6875
EUR-USD: up at USD1.3653
GOLD: down at USD1,283.72 per ounce
OIL (Brent): down at USD110.28 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times British Summer Time)
09:00 Italy Consumer Confidence
09:30 UK BBA Mortgage Approvals
13:30 US Durable Goods Orders
13:55 US Redbook index
14:00 US S&P/Case-Shiller Home Price Indices
14:45 US Markit Services PMI Preliminary
15:00 US Consumer Confidence
15:00 US Richmond Fed Manufacturing Index
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Optimism among UK services companies rose at the fastest pace since records began in 1998, survey results from the Confederation of British Industry showed. However, the quarterly service sector survey revealed that firms are struggling to find skilled staff. With a full year of growth under their belts, service sector firms are more upbeat than they have been for a long time, Katja Hall, the CBI's deputy director general said. "The recovery continues to strengthen with both consumer and business-facing firms taking on more staff and investing in training and IT," Hall added.
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Ukrainian President-Elect Petro Poroshenko promised to reach out to the country's restive east and to Russia, only hours before heavy fighting broke out for the first time Monday in the city of Donetsk, with separatists saying dozens died. The pro-Western businessman won Sunday's election with 54% of the vote, the country's election commission confirmed late Monday, with 90% of ballots counted. Former prime minister Yulia Tymoshenko came in a distant second with 13% of the vote. Poroshenko announced a Western-orientated foreign policy but promised to engage in dialogue with the regions controlled by pro-Russian separatists, saying there can be no solution without Moscow.
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European Central Bank President Mario Draghi said on Monday the bank remains alert to the risks to a prolonged period of low inflation and expressed readiness to take action if required. At an ECB forum in Sintra, Portugal, Draghi said a prolonged period of low inflation would call for a more expansionary stance, which would also include the asset purchase programme. If a temporary shock turns more persistent, any monetary policy response might arrive too late, he said, suggesting more pre-emptive action from the central bank.
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EU politicians started haggling Monday for the bloc's top jobs, after elections that saw the conservatives and socialists remain the strongest factions in the European Parliament, but also delivered gains for anti-establishment groups. In a move aimed at boosting voter turnout, Europe's political parties for the first time have put forward lead candidates for the post of European Commission president. The EU's executive proposes laws and plays an important role in ensuring they are implemented. However, the successful nominee must now win majority backing in the parliament and among the EU's 28 governments.
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Irish Deputy Prime Minister Eamon Gilmore resigned as Labour party leader Monday, following disastrous election returns in EU Parliament and local elections. Labour, which is the junior coalition partner to ruling Fine Gael, bore the brunt of an anti-austerity protest vote in the elections. Gilmore, who has led the Labour party for seven years, said "we must hear, heed and act on the message we received on Friday." The Labour party's support fell from 13.9 to 5.3% in the European Parliament elections. That paralleled a fall in support in local elections, from 14.2% to 7.2%. The party is not set to return any members to the EU Parliament.
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German consumer confidence is set to remain unchanged at a 7-year high in June, survey data from market research group GfK showed Monday. The forward-looking consumer confidence index revealed a reading of 8.5 points for June, unchanged from May. The score matched economists' expectations and was the strongest since January 2007.
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Ireland's jobless rate declined in the first quarter of this year, figures from the Central Statistical Office showed Monday. The unemployment rate fell to a seasonally adjusted 12.0% in the first quarter from 12.2% in the previous three months. In the same quarter last year, the rate was 13.7%. The rate has steadily eased from a peak of 15.1% in the first quarter of 2012.
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Egyptian authorities declared Tuesday a government holiday and ordered voting hours extended in the second day of the country's presidential poll, in an apparent bid to increase turnout. Prime Minister Ibrahim Mehleb told state television that the second and last day of voting would be a holiday for public-sector workers "in compliance with the desire of the people" to be able to vote. The moves came amid mixed reports about turnout in the polls, in which former army chief Abdel-Fattah al-Sissi is expected to easily defeat leftist candidate Hamdeen Sabahy.
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Indian Premier Narendra Modi met with Afghan President Hamid Karzai on his first day in office Tuesday. He was also due to meet with eight other regional leaders who attended his inauguration Monday, according to the Ministry of External Affairs. The most significant meeting was expected to be with Pakistani Prime Minister Nawaz Sharif, amid expectations of a thaw in relations between the nuclear-equipped rivals.
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Jordan declared Syria's ambassador to the kingdom persona non grata Monday and ordered the envoy to leave the country within 24 hours over a series of statements deemed "threatening" to the country. Shortly afterwards, Syria said it was kicking the Jordanian ambassador to Damascus out of the country in response. According to Jordanian foreign ministry spokesperson Sabah al-Rifai, the government took the decision after Bahjat Suleiman made a series of Jordan-critical statements to media outlets and on social media.
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Malaysia and FTSE 250 satellite data company Inmarsat released raw communications data related to Malaysia Airlines flight MH370 that disappeared on March 8. "Finally, after almost three months, the Inmarsat raw data is released to the public," said a post on the Facebook page of relatives of people aboard the missing aircraft, who had pushed for the information to be published. "Hope this is the original raw data and can be used to potentially 'think out of the box' to get an alternative positive outcome," it said.
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BROKER RATING CHANGES
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TRADERS: KEPLER CHEUVREUX CUTS ASTRAZENECA TO 'REDUCE' ('HOLD')
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SOCGEN CUTS ASTRAZENECA TO 'SELL' ('HOLD') - PRICE TARGET 3600 (4661) PENCE
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Investec Downgrades SABMiller To Sell From Hold, Increases PT To 3,250p from 3,200p
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JPMORGAN ADDS ROYAL MAIL TO 'ANALYST FOCUS LIST' - OVERWEIGHT
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TRADERS: KEPLER CHEUVREUX CUTS BG GROUP TO 'REDUCE' ('HOLD')
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CITIGROUP RAISES CABLE & WIRELESS TO 'NEUTRAL' ('SELL') - TARGET 54 (50) PENCE
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TRADERS: EXANE BNP RAISES INFORMA TO 'OUTPERFORM' ('NEUTRAL')
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UBS CUTS HALFORDS GROUP TO 'NEUTRAL' ('BUY') - TARGET 525 PENCE
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PANMURE RAISES MARSHALLS GROUP TO 'BUY' ('HOLD') - TARGET 195 (170) PENCE
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NUMIS CUTS PUNCH TAVERNS TO 'SELL' ('HOLD')
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COMPANIES - FTSE 100
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US drugmaker Pfizer Inc on Monday abandoned its pursuit to buy AstraZeneca PLC, saying it does not plan to make an offer for the British drugmaker following the rejection of its final proposal last week. In a statement released Monday, Ian Read, Chairman and Chief Executive of Pfizer, said, "We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us. As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy." Leif Johansson, Chairman of AstraZeneca, said, "We note Pfizer's confirmation that it no longer intends to make an offer for AstraZeneca. We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company.
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British oil giant BP PLC and Russian state oil company OAO Rosneft said they have signed a deal to jointly develop the Domanik shale formations in Central Russia's Volga-Urals region. The two companies will form a joint venture that will be incorporated in Russia, with Rosneft owning a 51% stake in the company and BP owning the remaining 49% stake, said the firms in a statement Tuesday. Rosneft President and Chairman Igor Sechin and BP Russia President David Campbell signed the heads of agreement as part of the St. Petersburg International Economic Forum. The signature ceremony was led by Russian President Vladimir Putin. Sechin is said to be part of Putin's inner circle and has been targeted by US sanctions.
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Lloyds Banking Group PLC said it intends to go ahead with an initial public offering of TSB Banking Group PLC on the London Stock Exchange in June. In a statement, Lloyds said it will offer about a quarter of the shares in TSB to both institutional and retail investors. Moving to sweeten the deal for retail investors, Lloyds said they will be offered one free share for every 20 shares acquired up to GBP2,000 and held for one year after the IPO.
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Tullow Oil PLC said it will plug and abandon the exploration well 31/2-21S in the Gotama prospect, offshore Norway, after its drilling programme failed to encounter reservoir quality sandstones in the Upper Jurassic main target. The FTSE 100-listed oil company said that while the well encountered reservoir quality sandstones in the secondary targets, these intervals were water wet.
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Private equity firm Blackstone and US-based specialist insurer Philadelphia Financial will make a joint offer for Friends Life Group Ltd's tax planning arm, Sky News reported Friday. Earlier in May, Friends Life, the FTSE 100 financial services group, said discussions were ongoing over the sale of Lombard. According to the Sky News report, another private equity group, Permira, is also expected to bid for Lombard, though Warburg Pincus's interest has cooled.
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Rio Tinto, Chinaclo And IFC Sign Investment Framework With Government Of Guinea For Simandou South
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COMPANIES - FTSE 250
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QinetiQ Group PLC said it had completed the sale of its US Services division to The SI Organisation Inc for an initial consideration of USD165 million. The sale was first announced in April and has a potential earn-out of up to USD50 million in addition. The earn-out, which is conditional on the divisions gross profit performance, is expected no earlier than end-March 2015. It will now begin its previously announced share buy-back of GBP150 million. QinetiQ expects the sale, share buyback and debt repayment to be earnings enhancing.
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AVEVA Group PLC upped its total dividend and expressed confidence in achieving its targets for further growth, as it saw pretax profit rise in the year to end-March. The engineering software and services proposed a total dividend of 27.0 pence, up 13% from 24 pence in the previous year. The company also paid a special dividend of 147 pence per share to shareholders in August 2013. It posted a pretax profit of GBP69.0 million, up from GBP63.5 million, as revenue rose to GBP237.3 million from GBP220.2 million, boosted by growth in its three-dimensional design platform AVEVA Everything 3D, and a strong performance in its Engineering and Design Systems division.
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Genus PLC said it has agreed with Yunnan Shennong Agricultural Group Co Ltd to cancel the companies' joint venture plans at the present time. The animal genetics company said that the establishment of a joint venture will not proceed, following its February deal with Shennong to build and operate a 1,000 sow nucleus farm to support Shennong's expansion. Genus said that the joint venture will no longer go ahead due to the previously announced current adverse market conditions for pig production in China; pork prices in China have decreased significantly, pushing pig producers in the country into losses.
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A G Barr Remains Confident In Meeting FY Expectations
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Ophir Energy Says Affanga Deep-1 Well Offshore Gabon Found No Significant Hydrocarbons; Says Affanga Deep-1 Well Found Thinner-Than-Expected Sandstone, Poor Reservoir Characteristics; Says Rig Will Move To Spud Okala-1 Well On Mbeli Block
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COMPANIES - ALL-SHARE AND AIM
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Engineering business Renold PLC said it narrowed its losses in the full year, as it continues with its internal "self-help measures" in the face of challenging market conditions. The company, which makes industrial chains and other power-transmission products, has been struggling for some time and has blamed this on a "lack of external support from the market". Renold posted a pretax loss of GBP5.9 million for the year ended March 31, compared with a GBP11.9 million loss a year earlier.
Despite an improved performance the company said it will not pay a dividend for the recent year, but this policy will remain under review as its performance continues to improve.
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Firestone Diamonds Has Raised USD225.2M For Liqhobong Diamond Mine; Financing Consists Of Debt Facility, Subscription, Mezzanine Facility
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Rare Earth Minerals Exercises Option To Increase Stake In Mexican Megalit Lithium Joint Venture To 30% From 10%; To Pay Bacanora USD500K Cash, Plus USD1.0M In Drilling Costs
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Mediterranean Oil & Gas Says Operator Has Spudded Malta Well Hagar Qim 1; Says Malta Well Will Take 2-3 Months To Complete
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Max Petroleum Says KZIE-3 Appraisal Well East Kyzylzhar I Field Been Abandoned
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Ferrex Says Mebaga Project Returns Rock Samples With High Iron Values; After Approval From Gabon Ministry Of Economy, Due Dilligence At Proposed Anglo American, Kumba Transaction Near End
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Leni Gas & Oil Has Received Approval To Put GY-664 Well Into Production By End Of This Week; To Spud GY-665 Well In Next 24 Hours, 800 Feet From GY-664 To 3,500 Feet Depth
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Trafalgar New Homes Raises GBP200,000 Through issue Of 10M Shares At 2 Pence
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Optare Says Union Led Strike Action At Sherburn To Take Place May 27; Says Discussions Remain Ongoing, Hopes For Resolution On Strike Action
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Accesso Technology Says It Has Made Confident Start To The Year
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Punch Taverns Says Has Received Debt Restructuring Proposal From Creditors; Says Creditors Represent 34% Of Punch A And B Notes, 50% of Junior Notes; Says Creditor Proposal Would See Punch A And B Exchanged For Shares, As Well As Cash, Junior Notes; Also Would Allow Junior Creditors To Buy Shares At Significant Discount; Proposal Would Result In GBP0.6B Reduction In Net Debt, 15% Share Dilution
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Lamprell In New Contact Award From Subsidiary Of Shelf Drilling Ltd
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Ruspetro Signs USD22M PrePayment Facility With Glencore For Domestic Offtake Of Crude Oil
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Tuesday's Scheduled AGMs/EGMs
AG Barr
Mallett
Highland Gold Mining
accesso Technology Group
Coalfield Resources
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
10 Apr 2015 16:03
