HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - HSBC Holdings is the best-performing stock in the FTSE 100 midday Friday after it said it is undertaking a review of the best place for its global headquarters, a move that follows previous criticism from HSBC executives of the UK's increasing levy on banks.

The UK bank levy was introduced in 2011 by the coalition government, which wanted to discourage risky borrowing in the wake of the financial crisis. The levy is imposed on parts of the bank's balance sheet, including on debt and some equity. Since it was imposed, the government has raised the levy several times, most recently at the annual Budget statement last March when it was raised to 0.21%. HSBC has been hit hardest by the levy of any UK bank.

"As part of the broader strategic review taking place, the board has therefore now asked management to commence work to look at where the best place is for HSBC to be headquartered in this new environment. The question is a complex one and it is too soon to say how long this will take or what the conclusion will be; but the work is underway," Flint told shareholders at the bank's annual general meeting.

Flint's confirmation of the review is a sign that management takes seriously the increasing concern among analysts and investors that the group is being weighed down by the burden of the UK's levy on banks' balance sheets.

The launch of the review comes at a crucial time for politicians, as there are only two weeks remaining in the run-up to the UK's General Election. Both the Conservative Party and the Labour Party have promised that the levy on banks will continue to be imposed.

UK lenders are also required to ring-fence their high street operations from investment banking businesses by 2019, as part of regulatory efforts to reduce risk in the event of a future financial crisis. HSBC has previously requested more time to implement the restructuring, although it has already said it will base its own ring-fenced UK retail banking operations in Birmingham.

Several major blue-chip firms reported first quarter results Friday.

Educational publisher and Financial Times owner Pearson reiterated its full-year earnings guidance as the strong US dollar helped boost sales in the first quarter of 2015, and Chairman Glen Moreno announced his intention to step down in the next year.

Moreno has been chairman of the publisher for more than nine years, a period in which Pearson shares have more than doubled. A committee headed by Independent Director Vivienne Cox will seek his successor.

Pearson said it continues to expect adjusted earnings per share of between 75 pence and 80 pence for the full year, assuming sterling exchange rates against the dollar and other key currencies as of January 21. The Financial Times owner said at constant exchange rates, sales were level compared with the first quarter of 2014. At actual exchange rates the strong dollar boosted headline sales 5%, although this was partly offset by the weakness of some emerging market currencies and of the euro and the Australian dollar against sterling.

Pharmaceutical giant AstraZeneca also maintained its full-year guidance as it posted a decline in core earnings per share and operating profit for the first quarter of 2015 due to continued investment into its pipeline of new drugs, and as generic competition to its maturing portfolio and the strong US dollar hit revenue.

However, a step-up in what AstraZeneca defines as "externalisation" revenue, meaning revenue from collaborations, commercialisation, partnerships and out-licensing deals and the sale of some of its products, helped drive up pretax profit in the quarter.

Consumer goods company Reckitt Benckiser Group reported 5% like-for-like sales growth across the business in the first quarter, with solid performances in its health and hygiene franchises slightly offset by like-for-like sales declines in its home and portfolio brands businesses.

The group, which makes brands ranging from cleaning products such as Cillit Bang to ibuprofen brand Nurofen, said like-for-like net revenue growth in its health business was 13% in the quarter, with strong growth for its Nurofen, Gaviscon, Strepsils, Durex and Airborne brands and with its consumer health franchise generally boosted by a strong cold and flu season.
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Markets: UK stocks are trading higher mid-morning, with HSBC Holdings the best-performing stock in the FTSE 100. Mining stocks are again amongst the best performers as commodity prices rise. The Brent oil price has hit its highest level since December 10.

US stock futures point to a higher open on Wall Street. The DJIA is currently set to open slightly higher, the S&P up 0.1% and the Nasdaq 100 up 0.6%, lifted by strong sales growth from Amazon, higher profits from Google, and better-than-expected results from Microsoft and Juniper Networks.

FTSE 100: up 0.4% at 7,082.08
FTSE 250: up 0.4% at 17,754.00
AIM ALL-SHARE: up 0.3% at 753.40
GBP: up at USD1.5118
EUR: flat at USD1.0819
GOLD: down at USD1,191.61 an ounce
OIL (Brent): up at USD65.36 a barrel
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Other Top Corporate News
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Defence and aerospace group BAE Systems said it has started a review of part of its US Intelligence and Security business after seeing a number of expressions of interest in the unit. FTSE 100-listed BAE said its manpower and services businesses within the US Intelligence and Security arm, which spans technical, mission and IT support services and which predominantly serves the US government, has generated external interest and a number of enquiries. As a result, BAE has hired external adviser to back a strategic review of the business.
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Royal Dutch Shell said it has taken into account the risks presented by the recent Petrobras scandal in Brazil after expanding its operations in the country via its merger earlier this month with BG Group, and said it will consider buying any assets the scandal hit oil company puts up for sale, Reuters reported Thursday.
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Dixons Carphone said it has struck a deal to sell its 83% stake in The Phone House Netherlands to Relevant Holdings, a vehicle set up by Dutch telecoms retailer Optie1. Dixons Carphone did not provide any financial details on the sale. Following completion of the deal, expected to happen in June, Dixons Carphone will retain a minority stake in the Dutch retailer and will work to develop its Connected World Services' partnerships in the Netherlands, with an initial focus on insurance and technical support services.
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Motor insurer Admiral Group said it traded in line with expectations in the first quarter and said it has decided it will not issue interim management statements going forward. The company said trading in the first quarter to the end of March was in line with its expectations and said no significant developments have occurred since it published its 2014 results in March.
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J Sainsbury said it will cut 800 jobs as part of its restructuring plans, as it works to "improve efficiency and customer service in stores". The company said its department and deputy manager positions will be reviewed with more resource invested in other shop floor roles. Reducing the number of department manager roles will give in-store staff the opportunity to extend their hours or take additional shifts, meaning more customer-facing staff will be on hand to offer service, it said. Sainsbury's aims to make GBP500 million in cost savings over the next three years to help fund investments in customer service, price and quality, and said the job cuts will help to achieve this.
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The UK government's stake in Lloyds Banking Group has fallen by another percentage point just two weeks ahead of the UK General Election, according to the body responsible for managing the state's stakes in bailed out banks on Friday. According to UK Financial Investments, the UK economic and finance ministry's stake in Lloyds has been reduced to 20.95% from 21.99% previously.
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GKN said its Driveline business has won a contract to supply an all-wheel drive system in China and said its Aerospace arm has secured a deal with Gulfstream Aerospace Corp to supply wing skins for G500 and G600 business jets. The FTSE 100-listed aerospace and automotive components company said its GKN Driveline business has become the first Tier One supplier for the design, development and manufacturing of all-wheel drive systems to be used on SAIC Motors' new MG GS compact SUV. It will also provide the front wheel-drive system for the car too.
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Phoenix Group Holdings said it is on track to meet its financial targets over the short and medium term, as the company reported a fall in first-quarter cash generation. Phoenix reported cash generation of GBP87 million in the three months ended March 31, compared with GBP235 million in the corresponding period of the prior year. "Phoenix Group remains well placed in a changing regulatory environment. We are on track for both our Solvency II Internal Model Application and to achieve an investment grade credit rating during 2015," Clive Bannister, chief executive, said. Just Retirement confirmed that it will provide an advice service to Phoenix's retiring pension savers.
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UBM reiterated its expectations for the full year, as it said it had performed in line with expectations in the first quarter of 2015. The company said growth in its Events business in the quarter to end-March had been as anticipated, with its largest events continuing to drive its performance. Other Marketing Services also performed as expected, and its PR Newswire business performed "satisfactorily", UBM said. Its integration of Advanstar, which it acquired for USD972 million last December, is progressing well with synergies in line with its expectations.
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Aerospace and defence engineer Cobham said it has struck a deal to sell its Weinschel and Inmet business to US technology manufacturer API Technologies in an USD80 million all-cash deal. Weinschel and Inmet were acquired by Cobham as part of the acquisition of telecoms equipment manufacturer Aeroflex in September last year.
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Rotork said its order intake dropped in the first quarter on the back of the challenging conditions in oil and gas markets and continued uncertainty in some of its markets, with revenue falling on the back of the slow start to the year and the timing of projects.
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Petra Diamonds said it will launch a USD300 million note issue in order to fund the construction of a processing plant at the Cullinan mine in South Africa. The FTSE 250-listed diamond miner said it will issue USD300 million in senior secured lien notes due 2020. Petra's lender group has also agreed, in principle and subject to the closing of the note issue, to increase its debt facilities by around USD81.6 million to USD302.4 million.
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AIM Movers
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Totally shares have risen by two-thirds, but the company says it is not aware of any reason for the rise. Immedia Group shares are up by almost half after it secured a 12-month deal with BT Group under which it will provide a digital radio channel to employees of its Openreach local network business using Immedia's mobile audio streaming platform. RapidCloud International is also doing well after it won a new contract with RedBox, the courier service owned by carrier AirAsia. Under the five-year deal, RapidCloud will design, build and operate a cloud-based logistics management system for RedBox. The platform will provide an end-to-end service for monitoring RedBox's entire shipment network. SyQic is also up after its Malaysian SyQic Capital Sdn Bhd subsidiary received an offer for a GBP3 million working capital facility and said its cash position has improved following the receipt of payments due from its telecoms partners.
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Other Top Economics And General
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Labour leader Ed Miliband is set to claim on Friday that Prime Minister David Cameron has diminished the influence of the UK globally, as Cameron continued his warnings of the dangers of a coalition between Labour and the Scottish National Party and made a renewed push to win over UK Independence Party voters with the launch of an English manifesto.
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Polling remains mixed as the UK election campaign moves into its final fortnight, with the Tories taking a relatively solid lead in two polls, but Labour repeating the trick in pair of other surveys. The Tories took a four-point lead in the latest ComRes poll for the Daily Mail and ITV News, rising two percentage points to 36% against 32% for Labour, which fell a percentage point. The latest Survation poll also has the Tories leading by four points at 33% to Labour's 29%. But the daily YouGov/The Sun survey had Labour gaining one percentage point to 35%, giving them a two-point lead over the Tories at 33%. Panelbase also has Labour in the lead, by three points at 34% to 31% for the Tories.
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British households perceive that the value of their home increased in April, a survey from Knight Frank and Markit Economic showed. The house price sentiment index, or HPSI, rose to 58.2 in March from 57.5 in the previous month. This marked the twenty-fifth consecutive month of the index remaining above 50. A reading above 50 signals a rise in house prices, while a figure below 50 indicates a decline. The latest increase was only moderate as compared to March, suggesting that households believe prices continued to rise in spite of the uncertainty surrounding the outcome of next month's General Election.
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Eurozone finance ministers expressed frustration over the slow pace of negotiations between Greece and its creditors, with the cash-strapped country appearing no closer to accessing bailout funds. The leftist government of Greek Prime Minister Alexis Tsipras has been struggling to agree with the international creditors on reforms that would unlock EUR7.2 billion remaining under the country's existing bailout. Fears are rife that Athens may soon go bankrupt and end up having to leave the eurozone.
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German business confidence improved for the sixth consecutive month in April, reports said, citing survey results from Munich-based Ifo Institute. The business confidence index rose more-than-expected to 108.6 in April from 107.9 in March. It was forecast to rise to 108.4. The current conditions index came in at 113.9 in April. Economists had forecast it to rise slightly to 112.4 from around 112 in March.
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Afternoon Watchlist (all times in BST)

13:30 US Durable Goods Orders
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Monday's UK Corporate Events

Playtech - Interim Management Statement
Centrica - Interim Management Statement
Lok'nStore Group - Half Year Results
Rotork - Interim Management Statement
Polyus Gold International - Trading Statement
LifeLine Scientific - Full Year Results
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Monday's Key Economic Events (all times in BST)

n/a Germany Import Price Index
n/a UK Nationwide Housing Prices
11:00 UK CBI Industrial Trends Survey
11:00 Ireland Retail Sales
14:45 US Markit PMI Composite
15:30 US Dallas Fed Manufacturing Business Index
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