(Alliance News) - The UK Financial Conduct Authority on Friday said it is putting in place a package of remedies to improve competition and to protect home and motor insurance customers from loyalty penalties.
The City regulator said the measures include new rules preventing renewal quotes for home and motor insurance consumers from being more expensive than they would be for new customers. The FCA said it is tackling the practice of "price walking", whereby insurers increase prices for existing customers each year at renewal. At the same time, they offer below-cost prices to attract new customers.
'These measures will put an end to the very high prices paid by many loyal customers," said Sheldon Mills, executive director for Consumers & Competition at the FCA. "Consumers can still benefit from shopping around or negotiating with their current provider - but won't be charged more at renewal just for being an existing customer."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 7,047.03
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Hang Seng: up 0.1% at 29,134.47
Nikkei 225: closed up 2.1% at 29,149.41
DJIA: closed up 141.59 points, or 0.4%, at 34,464.64
S&P 500: closed up 4.89 points, or 0.1%, at 4,200.88
Nasdaq Composite: closed down 1.72 points at 13,736.28
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EUR: down at USD1.2182 (USD1.2200)
GBP: flat at USD1.4180 (USD1.4181)
USD: up at JPY109.93 (JPY109.71)
Gold: down at USD1,889.91 per ounce (USD1,891.30)
Oil (Brent): up at USD69.06 a barrel (USD68.93)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
UK Chancellor Sunak hosts G7 finance ministers, central bank governors virtual meeting
0830 EDT US advance economic indicators report
0830 EDT US personal income & outlays
1200 EDT US industrial production
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Indoor hospitality is set to return in early July in Ireland under recommendations made by public health officials to the Dublin government. A Cabinet sub-committee was convened on Thursday night to discuss the latest advice on lifting lockdown restrictions from the National Public Health Emergency Team. A full Cabinet meeting is to be held on Friday to sign off on the proposals ahead of a public announcement by Taoiseach Micheal Martin. Nphet is understood to have advised that hotels can reopen on June 2, with outdoor hospitality, such as pubs and restaurants, to resume on June 7. That day also will see the return of gyms and cinemas, while the number of people allowed to gather at outdoor events next month will be 100, or up to 200 in larger venues. The return of indoor dining and pubs will take place on July 5, under the Nphet advice.
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Australia moved ahead with a World Trade Organization case against Chinese tariffs on barley imports, as strains between the two countries showed little sign of abating. Trade Minister Dan Tehan said Canberra would ask the WTO to establish a dispute settlement panel to look at the case, the next step in a bid to get the tariffs declared illegal. Tehan said Beijing's decision to slap an 80% tax on imports of the grain from Australia had "effectively stopped Australia's barley trade with China." Australia's barley exports to China had been worth around USD1 billion a year, used most notably in brewing. China argues that Australian farmers produce the grain with government subsidies and sell it below cost, hurting domestic producers.
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Japan's unemployment rate nudged up in April, figures showed. The Statistics Bureau of Japan said the jobless rate edged up to 2.8% in April from 2.6% the month before. Consensus, according to FXStreet, had expected the rate to come in at 2.7%.
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BROKER RATING CHANGES
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CREDIT SUISSE RAISES NATIONAL GRID PRICE TARGET TO 1075 (1020) PENCE - 'OUTPERFORM'
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BARCLAYS RAISES VISTRY TO 'OVERWEIGHT' (EQUAL WEIGHT) - TARGET 1,600 (945) PENCE
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COMPANIES - FTSE 100
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AstraZeneca said its Tagrisso drug received EU backing as an adjuvant treatment for adults with early-stage, epidermal growth factor receptor-mutated non-small cell lung cancer. An adjuvant therapy is designed to enhance the activity of another treatment. Epidermal growth factor receptor are proteins involved in cell division, when they are mutated it could lead to higher amounts of the protein being produced, potentially enhancing cancer cell growth. Tagrisso "demonstrated a statistically significant and clinically meaningful improvement in disease-free survival", Astra said.
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COMPANIES - FTSE 250
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AG Barr said trading so far this year has been in line with board expectations. "Despite lockdown restrictions being in place across much of the first quarter, Barr Soft Drinks trading has been relatively strong since the start of the new financial year. As lockdown restrictions have eased we have seen a positive impact on both our sales volume and mix, with a shift back towards 'drink now', hospitality and leisure," the company said. "While the pace and extent of the reopening of the hospitality sector varies by region, our Funkin business is already beginning to see the benefits, delivering on-trade sales that provide optimism for the sector's recovery." Funkin is the company's cocktails business. It saw a strong performance in the "take-home" channel in 2020, and AG Barr said that momentum has continued this year. "Current trading is encouraging, and we have clear plans to further invest in our brands, with exciting consumer engagement and marketing activity planned across the year," AG Barr added. The company also plans to recommence dividends. It will report on payout plans during a half-year trading update in August.
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Tui agreed to sell its 49% stake in the RIU Hotels joint venture for EUR670 million, giving a total enterprise value of EUR1.5 billion. The Hanover, Germany-based holiday operator sold the stake to Saranja, an entity of Riu Group, owned by siblings Carmen and Luis Riu. The joint venture includes a real estate portfolio of 21 properties, and the disposal is part of Tui's aim to reduce capital tied up in real estate. Tui will receive EUR540 million when the transaction is completed with the remaining earn-out element to be delivered once Riu Hotels delivers its 2022 and 2023 financial year operating budget. Tui said it expects the sale to produce significant profit. The company said that it expects the sale to be completed in late summer.
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COMPANIES - MAIN MARKET AND AIM
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Fulham Shore said 71 of its 73 restaurants are open following the easing of restrictions on indoor dining in the UK. Of these, 53 of 54 Franco Manca pizzerias are open and 18 of 19 Real Greek restaurants. Since the start of its new financial year at the end of March, the company has opened a new Franco Manca on High Holborn in London and is set to open another on Mitchell Street in Glasgow. Revenue since the start of indoor dining in England on May 17 was 103% of what was made from fewer restaurants in the same period of 2019 and 92% of 2019 revenue on a like-for-like basis. "This recent sales performance is very encouraging despite the restaurants having restricted capacity due to social distancing," the company said.
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Gresham Technologies agreed to buy US-based Electra Information Systems for USD38.6 cash, with part of that deferred. To help pay for the acquisition, it launched a share placing and retail offer to raise GBP21.0 million, planning to issue up to 13.1 million shares at 160 pence each. Electra is a provider of post-trade processing software. It recorded pretax profit of GBP400,000 in 2020 on GBP10.1 million in revenue.
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Oxygen-equipment developer Belluscura started trading on AIM on Friday after raising GBP17.5 million in its IPO. The company, an investee of Tekcapital, will have a GBP51 million market capitalisation on admission. Belluscura earlier in May said IPO funds would be used to improve marketing, research new products and help secure US Food & Drug Administration approvals.
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COMPANIES - GLOBAL
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Shares in the delivery arm of Chinese e-commerce firm JD.com rallied as much as 14% on their debut in Hong Kong on Friday after raising more than USD3 billion in the financial hub's second-biggest initial public offering this year. The listing of JD Logistics comes despite concerns about the IPO market in the city due to Beijing's crackdown on some of China's biggest e-commerce companies. The firm's price rallied to a high of HKD47.75 soon after trading began, well up from its starting price of HKD40.36, before settling back slightly. JD.com was slightly lower. JD Logistics has a huge network of delivery lines covering cold-chain, bulky deliveries and "last mile" logistics, and its army of red delivery staff are a daily sight across mainland China.
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Swiss Bank Julius Baer admitted it participated in money laundering of USD36 million in bribes in the "FIFAgate" scandal over television broadcast rights, US officials announced. The bank admitted in federal court that it conspired to launder the funds through the US to officials with FIFA and soccer federations in the Americas. "Their behavior has earned them the equivalent of a red card, and the money the bank now owes the US government is more than double what it admits to laundering," FBI Assistant Director-in-Charge William F Sweeney Jr said in a statement. It was the latest twist in the scandal which shook up the international footballing body, forcing long-time chief Sepp Blatter to step down in 2015.
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Friday's Shareholder Meetings
AG Barr PLC - AGM
Agronomics Ltd - GM re fundraising
AIQ Ltd - AGM
Aseana Properties Ltd - GM re future of company
Ebiquity PLC - AGM
HSBC Holdings PLC - AGM
Minoan Group PLC - AGM
Real Estate Investors PLC - AGM
Reckitt Benckiser Group PLC - AGM
Rotala PLC - AGM
Tekcapital PLC - AGM
Wameja Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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