HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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BP said it swung to a loss in the first half of 2015 after revenue fell and it booked expected charges related to its long-awaited settlement over the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. The FTSE 100 oil and gas giant reported a replacement cost loss of USD6.26 billion in the second quarter of 2015, swinging from a USD3.18 billion profit a year earlier. That brought the replacement cost loss for the first half to USD4.16 billion, also swinging from a USD6.65 billion profit a year earlier. The first half loss was caused by a fall in revenue, the oil spill settlement and non-operating charges. BP was was hit by USD7.89 billion in non-operating net charges in the first half.
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Kantar Worldpanel said total UK grocery sales were higher in the most recent period under review, but said that the sales and market shares of all the big four supermarkets declined as discount challengers Aldi and Lidl continued to outperform. Tesco saw its sales in the period fall to GBP7.20 billion from GBP7.25 billion a year earlier, with its market share subsequently falling to 28.5% from 28.9%. J Sainsbury saw its sales decline by 0.3% in the period to GBP4.16 billion from GBP4.17 billion, but while its market share fell to 16.5% from 16.6% a year earlier, the decline for Asda, which is owned by US retailer Wal-Mart Stores, was even sharper, meaning Sainsbury's has overtaken Asda to hold the second-largest share of the UK grocery market after Tesco.
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Diageo said it has agreed a deal with Dutch brewer Heineken and the Ohlthaver & List to restructure their mutual operations in South Africa and Namibia. Under the deal, Diageo will sell its 42% stake in the DHN Drinks business and transfer its associated shareholder loan to Heineken. It will also sell its 25% equity stake in the Sedibeng brewery in South Africa to Namibia Breweries, which is owned by Ohlthaver & List, and transfer the associated shareholder loan to Heineken. In addition, it will sell its 15% stake equity stake in Namibia Breweries to Heineken. Under the restructuring, Diageo also will acquire the remaining shares it does not already own in Brandhouse Beverages Pty Ltd, its beer and spirits marketing joint venture in South Africa, and will make the business a wholly-owned subsidiary. Diageo will receive ZAR2.5 billion in cash for the restructuring, or around GBP128 million, and expects to complete the deals by the end of the year.
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UK media and communications regulator Ofcom said it has issued a statement of objections to postal service operator Royal Mail, with a provisional view that the company breached competition law by discriminating in its wholesale pricing against postal operators that competed with it on delivery. Ofcom said the provisional findings, part of the investigation launched following a complaint by Whistl Ltd, a former competitor of Royal Mail, found that Royal Mail's changes to prices, terms and conditions for the provision of access services included "unlawful price discrimination". In response Tuesday morning, Royal Mail said it was "disappointed" by the regulator's announcement and added it takes its compliance obligations "very seriously".
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Anglo-South African paper and packaging manufacturer Mondi said it expects a rise in first-half underlying operating profit and said it will recognise a one-off charge in the period. The company said its underlying operating profit for the first half of 2015 will be higher than the EUR377 million it posted a year earlier. Mondi added it has booked a EUR36 million charge in the half, primarily related to the closure of a small kraft paper mill in Finland, the shuttering of a consumer packaging plant in Spain and further restructuring in its US bags business.
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Hikma Pharmaceuticals said it has agreed a USD2.65 billion deal to acquire Roxane Laboratories Inc and Boehringer Ingelheim Roxane Inc from Boehringer Ingelheim, the German pharmaceutical company. The Roxane businesses are a US specialty generics operation. Hikma will issue 40 million shares to Boehringer at 2,350 pence per share, along with a USD1.18 billion cash payment. Hikma shares closed Monday at 2,080.00p. Hikma said the deal will significantly expand its US portfolio, including oncology, repiratory, extended release and controlled substances products.
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Engineer GKN said its pretax profit declined in the first half of the year, hit by continued weakness in some of its key markets, and said it has agreed a EUR706 million deal to acquire Fokker Technologies Group of the Netherlands. GKN said its pretax profit for the six months to the end of June was down to GBP212 million from GBP224 million a year earlier, despite an increase in sales for the group to GBP3.62 billion from GBP3.57 billion.
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Fashion retailer Next said its full-price brand sales rose in the first half of its financial year and said it has upgraded its full-year pretax profit expectations after its sales came in ahead of guidance. Next said its total sales in the 26 weeks to July 25 were up 3.5%, with 0.8% growth in retail sales and 7.5% growth in directory sales in the period. The sales were marginally ahead of the guidance of 0% to 3% growth that Next issued in March. As a result of the beat to its sales growth guidance, Next said it has upgraded its pretax profit forecast for the year to GBP810 million to GBP825 million, up 1.9% on its previous forecast.
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ITV maintained its outlook for 2015, continuing to expect "another strong performance with revenue growth across the business", as it posted a rise in pretax profit for its first half. The broadcaster posted a pretax profit of GBP327 million for the half year to end-June, up from GBP250 million a year before, as revenue rose to GBP1.36 billion from GBP1.23 billion. Revenue growth was boosted by a strong performance from its ITV Studios business, and 6% revenue growth in its Broadcast & Online segment. ITV will pay an interim dividend of 1.9 pence, up from 1.4 pence a year before.
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Zurich Insurance said it is evaluating a potential bid for RSA Insurance Group. In a short statement, the Swiss insurer confirmed it is evaluating a potential offer for RSA. It added that the announcement does not represent a firm offer to buy RSA and said there is no assurance that any offer will be made.
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The Royal Bank of Scotland Group is close to agreeing a deal to sell its Indian private banking arm to local firm Sanctum Wealth Management, Reuters reports. RBS is understood to have signed a non-framework agreement and is now in talks to sell the business to Sanctum Wealth, Reuters said, citing an emailed statement from an RBS spokeswoman. Reuters also said RBS has ended it plans to sell its cash management and trade finance business in the United Arab Emirates to Abu Dhabi Commercial Bank, citing sources familiar with the matter.
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HSBC Holdings could be forced out of the FTSE 100 if it decides to move back to Hong Kong from London on completing the review of the best location for its headquarters, Sky News reported. The report said the issue is that the banking group's shares are listed in Hong Kong, widely seen as the most likely destination in the event of a move, as well as London. Citing sources, Sky News said that HSBC has been discussing the matter with its advisers. "The issue is understood to have arisen because under FTSE Group rules, companies which are listed on an overseas stock market in the same country as they are domiciled are not eligible for inclusion in its equity indices," the Sky News report said.
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Acromas Bid Co said it has sold a further 6% stake in over-50s products provider Saga, raising a total of GBP141 million. Acromas, owned by funds managed or advised by Charterhouse Capital Partners, CVC Capital Partners and Permira, said it sold 68.8 million shares in Saga for 205 pence per share.
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Domino's Pizza Group said its pretax profit increased in the first half of its financial year, driven by higher revenue, as its system sales surged higher in the period, prompting a hike to its dividend. The pizza delivery company said its pretax profit for the 26 weeks to June 28 was GBP32 million, up from GBP25 million a year earlier. Domino's said its revenue, which comprises revenue paid by its franchisees along with royalty payments, rose to GBP157.6 million in the half, up from GBP145.6 million.
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Melrose Industries said it has sold its Elster business to US industrial conglomerate Honeywell International Inc for GBP3.3 billion in cash. FTSE 250-listed Melrose said that in addition to the cash consideration, Honeywell will assume its FKI UK defined-benefit scheme and the McKechnie defined benefit pension plan, along with Elster's pension obligations, which together comprise the majority of the pension schemes on Melrose's books. Melrose is planning to use the consideration for the Elster businesses to return more than GBP2 billion to its shareholders and for general corporate purposes, including paying down its debt obligations.
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Drax Group said it swung to a pretax profit in the first half of 2015, leading to a higher interim dividend in line with its policy, but the electricity generator reiterated that it will be hit by changes to the UK climate change levy in the second half of the year. The power plant operator reported a pretax profit of GBP53.0 million in the first half of 2015, swinging from a GBP10.8 million loss a year earlier, as revenue for the period rose to GBP1.24 billion from GBP1.05 billion. Earnings before interest, tax, depreciation and amortisation also rose to GBP119.9 million from GBP101.9 million.
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Virgin Money Holdings (UK) reported a 37% increase in underlying profit, which the FTSE 250 lender said was a result of growing its balance sheet, an improvement in its net interest margin, and managing costs, though it warned of competition in the UK mortgage market. Virgin Money, which is now more than halfway through its first full year as a listed company after floating in November 2014, said it made GBP81.8 million underlying pretax profit in the six months ended June 30, compared with GBP59.7 million in the corresponding period the prior year.
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MARKETS
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Stocks in London are trading higher with the focus on a flurry of company updates and M&A activity. The Shanghai stock market seesawed before settling 1.7% lower Tuesday despite a promise by Chinese authorities to unleash more funds to stabilize the markets.
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FTSE 100: up 1.0% at 6,568.33
FTSE 250: up 0.8% at 17,410.24
AIM ALL-SHARE: flat at 747.72
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The pound is higher against the dollar following an in-line preliminary reading of second quarter UK GDP.
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GBP: up at USD1.5610
EUR: down at USD1.1060

GOLD: up at USD1094.90 per ounce
OIL (Brent): down at USD52.92 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The UK economy expanded at a faster pace in the second quarter largely driven by an improvement in services output, a preliminary estimate from the Office for National Statistics showed. Gross domestic product grew 0.7% sequentially, in line with forecast, following a 0.4% rise in the first quarter. GDP was 2.6% higher in the second quarter compared with the same quarter a year ago. The annual figure also matched expectations.
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Greece's government launched negotiations on a new multi-billion-euro bailout programme, insisting that it has taken all the measures agreed with creditors for reaching a deal. A delegation from the institutions overseeing the bailout - the European Commission, the European Central Bank, the International Monetary Fund - started talks at a technical level, visiting Greece's General Accounting Office, Greek Skai TV reported. Representatives from the European Stability Mechanism were also expected to provide input for the negotiations.
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The Chinese central bank is to inject CNY50 billion into money markets in the country through seven-day reverse bond repurchase agreements on Tuesday, Reuters reports, citing traders. The injection is the largest made by the People's Bank of China through open market operations since July 7.
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US-backed Kurdish forces in northern Syria captured a key town from Islamic State militants Monday but accused Turkey of shelling Kurdish villages in the area, potentially complicating the international campaign against the extremist group. At least four fighters and several civilians were wounded in three waves of alleged Turkish shelling in an area controlled by the Kurdish People's Protection Units and the Free Syrian Army. Turkish troops started airstrikes Friday targeting Islamic State in Syria but appear to have shifted focus to attacking bases of the outlawed Kurdistan Workers' Party in northern Iraq.
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US President Barack Obama is expected to deliver a message to the entire African continent during a speech at the African Union in Ethiopia on Tuesday, the last day of his four-day state visit to the region. Obama will also hold bilateral talks with AU Commission chair Nkosazana Dlamini-Zuma in the capital, Addis Ababa. He is then scheduled to meet with civil society representatives, a day after harshly criticizing the lack of human rights in Ethiopia where political opposition, civil society and media freedom are limited.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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