HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Regulators in the US, UK and Switzerland hit five banks, including HSBC Holdings and Royal Bank of Scotland, with USD3.38 billion in fines over foreign exchange failings and attempted manipulation of foreign exchange benchmark rates. The FCA fined Citibank NA USD358 million, HSBC Bank PLC USD343 million, JPMorgan Chase Bank NA USD352 million, The Royal Bank of Scotland PLC USD344 million and UBS AG USD371 million, saying the banks failed to control business practices in their G10 spot foreign exchange trading operations. The FCA's investigation into Barclays remains ongoing. In the US, the CFTC imposed fines of USD310 million each on Citibank and JPMorgan, USD290 million each for RBS and UBS, and USD275 million for HSBC. In Switzerland, regulator FINMA ordered UBS to disgorge a total of USD138 million.
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J Sainsbury said it will cut costs and capital expenditure so that it can invest more in pricing, as it swung to a pretax loss in the first half of the year and revealed the extent of its struggles with the price war engulfing the UK supermarket sector. "We will do whatever we need to do to compete toe-to-toe with whatever the market throws at us," Chief Executive Mike Coupe told journalists after the supermarket revealed it swung to an interim loss. Sainsbury's reported a pretax loss of GBP290 million for the 28 weeks to September 27, compared with a pretax profit of GBP433 million in the same period the prior year. It also warned it expects profitability to be lower in the second half than the first half, and expects like-for-like sales to be negative for the next few year. The grocer maintained its interim dividend at 5.0 pence per share, the same as last year, and said it will fix its dividend cover at 2.0 times its underlying earnings for 2014/15 and the next three years. "Our dividend for the full year is likely to be lower than last year, given our expected profitability," said Chairman David Tyler.
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British luxury fashion retailer Burberry Group reported a drop in its pretax profit in the first half, after taking a big hit from the strength of sterling, and it again warned of pressure to its margins for the full year due to weaker consumer confidence in Europe and slower Asian growth. Burberry posted a pretax profit of GBP142 million for the six months to September 30, down from GBP159 million the prior year, after taking a GBP31 million hit from the strong pound, as well as charges related to bringing its fragrance and beauty operation in-house and a finance charge related to its Chinese business.
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Security company G4S said organic revenue was up 4.2% in the first nine months of the year, and underlying profits up by even more, driven by its corporate revamp, strong sales growth in emerging markets and a return to strong growth in North America. The company also said it had agreed to sell its US government business for USD135 million in the third quarter, comprising USD80 million of cash and USD55 million of retained receivables. It expects to complete the sale by the end of the year.
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Outsourcing giant Capita said it is on track to meet market expectations for its 2014 results, after it won major deals like handling congestion charging in London and being made preferred bidder on a potential deal to handle The Co-operative Bank's mortgage servicing operation. It separately said that Finance Director Gordon Hurst will retire at the end of next February after 27 years with the company. Nick Greatorex, currently the executive director of Capita's insurance & benefits services division, will succeed Hurst as Finance Director from March 1.
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SSE said it has increased its interim dividend despite pretax profit falling during the first half of the year due to warmer weather, lower electricity output and weak gas prices. For the six months ended September 30, the company's pretax profit fell 6.2% to GBP316.6 million compared to GBP337.4 million a year earlier, mainly driven by a GBP22.1 million loss from its share of joint ventures and associate tax, compared to a GBP40.3 million profit in the first half of 2013 and warmer weather. SSE increased its interim dividend by 2.3% to 26.6 pence per share, compared to the 26.0 pence per share dividend paid in the previous year. SSE plans to deliver annual dividend increases at least in line with inflation over the coming years, it said in its statement.
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AstraZeneca and Amgen said psoriasis treatment Brodalumab met all the primary endpoints and key secondary endpoints in a phase III study into its use in patients with moderate-to-sever plaque psoriasis. The trial evaluating two doses of brodalumab in more than 1,800 patients with moderate-to-severe plaque psoriasis, comparing it with both Stelara and placebo at week 12.
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Rolls-Royce Holdings said it has been awarded a contract worth more than USD100 million to supply spare engines and parts to the US Air Force for its C-130J fleet and to support Foreign Military Sales customers. Rolls-Royce AE 2100 engines power all C-130J aircraft in the US military and global fleets, while legacy C-130 aircraft are powered by Rolls-Royce T56 engines.
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Mining giant BHP Billiton announced Tuesday it has scrapped plans to sell its Western Australian Nickel West business following a review of the business. The company said it will only pursue options that maximize value for shareholders. "The focus of Nickel West will remain on delivering safe and efficient production whilst pursuing every opportunity to maximise productivity, to reduce operating costs and increase free cash flow," BHP's Nickel West Asset President Paul Harvey said in a statement. The company had announced the review of the business in mid-May. The review considered all options for the long-term future of Nickel West, including the potential sale of all or parts of the business.
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Tullow Oil said it must focus its capital expenditure on more commercially viable prospects in Africa such as its TEN development project, and away from exploration, due to weak oil prices and an under-par performance from its European projects. Tullow expects its pretax operating cash flow before working capital for the full year to reach around USD1.70 billion. Capital expenditure is expected to reach approximately USD2.10 billion by the end of the year, in line with expectations, said Tullow. Capital expenditure for 2015 has not been finalised, but the company is expecting it to be in the region of USD2.0 billion, with USD900 million of it being spent on its TEN development project in West Africa.
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SEGRO said it has agreed a deal to sell a portfolio of six logistics properties and a smaller regional warehouse in the UK to Logicor. Logicor, the European logistics arm of US private equity group Blackstone Group LP, will pay GBP153.3 million for the portfolio, which includes logistics warehouses in Bardon, Bicester, Maidstone, Sheffield and Swindon and a smaller warehouse in Norfolk.
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Barratt Developments said it was on track to deliver a strong year of growth with market conditions remaining robust for the group across the country and its sales rate increasing in the period between the start of July and November 9. The FTSE 250-listed housebuilder said market conditions in the UK remain robust at present, with high customer interest levels and demand in all regions. The group said the more stable market gives it confidence in meeting its medium-term targets.
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WH Smith said its total group sales for the ten weeks to November 8 were flat year-on-year, with sales in its Travel business rising but High Street sales falling. On a like-for-like basis, sales in the ten-week period fell 1%, the FTSE 250 retailer said. Total Travel division sales increased 7% and were up 2% on a like-for-like basis. The gross margin in the business has increased in line with its expectations, WH Smith said, and it said it is making progress on new store openings in the UK and internationally.
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Essentra said it will buy the specialist packing arm of Clondalkin Group in a USD455 million deal and said it will issue shares to cover part of the consideration due. Essentra will place up to 9.99% of its existing ordinary share capital to cover part of the consideration on the deal. Under the programme, it will issue up to 23.7 million shares via an accelerated bookbuilding process. The placing is set to raise a total of GBP160 million, meaning the shares will be placed at around 675 pence per share.
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Workspace Group said it would raise funds in a new share placing for its refurbishment programme and potential building acquisitions, as it reported a big increase in pretax profit for the first half of its financial year driven by a combination of higher rents and property valuations. The company reported a pretax profit of GBP173.7 million for the six months to end-September, up from GBP107.8 million a year earlier, as its total rent roll rose to GBP61.3 million from GBP58.3 million and its underlying property valuation rose by 15% or GBP157 million to GBP1.23 billion. Workspace said it will place just over 14.6 million new shares in a cash-box placing, representing about 9.99% of its current share issue. It didn't give a price for the placing.
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MARKETS
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UK shares are trading lower, with downbeat sentiment affecting financial services after regulators in the US, UK and Switzerland hit five banks with fines over foreign exchange failings.

FTSE 100: down 0.4% at 6,599.88
FTSE 250: down 0.2% at 15,593.25
AIM ALL-SHARE: down 0.3% at 719.18

GBP-USD: down at USD1.5860
EUR-USD: flat at USD1.2475

GOLD: up at USD1,164.75 per ounce
OIL (Brent): down at USD81.19 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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British unemployment continued to decline in three months to September from the prior quarter, the Office for National Statistics said. There were 1.96 million people out of work during three months to September, down 115,000 from June. The ILO jobless rate came in at 6%, down from 6.3% posted in three months to June. Economists had forecast the rate to drop to 5.9%. Average earnings including bonuses for employees grew 1% from a year earlier and the pay excluding bonuses was 1.3% higher than the previous year.
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UK inflation is likely to fall temporarily below 1% over the next six months, the Bank of England said in its Inflation Report. Inflation will rise gradually back to the 2% target as external pressures fade and unit labor cost growth picks up, it said. As the outlook for global growth has weakened, growth in the UK is projected to be a little weaker than in August. Further, the bank reiterated that when the bank rate does begin to rise, the pace of rate increases in expected to be gradual, with rates probably remaining below average historical levels for some time.
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Ukrainian President Petro Poroshenko has accused Russia and the Moscow-backed separatists in eastern Ukraine of abandoning the peace accords agreed in September. In a telephone call with German Chancellor Angela Merkel late Tuesday Poroshenko said a recent inflow of troops and heavy weapons was evidence of this. Merkel said the conflict in Ukraine will be a main issue at the G20 summit this weekend in Australia. Participants in the summit in Brisbane include US President Barack Obama and Russian President Vladimir Putin.
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Obama and Chinese President Xi Jinping announced new climate change targets at the end of their two-day talks in Beijing. Xi said China's CO2 emissions would peak around 2030, with non-fossil fuel sources making up 20% of energy sources by then. He did not put a target on emissions levels or reduction, but it was the first time China, which relies heavily on coal-powered electricity generation, has put a date on a CO2 peak. Obama announced a new target for the US to cut its net greenhouse gas emissions to 26-28% below 2005 levels by 2025, compared with the previous target of a 17% cut by 2020.
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Japanese Prime Minister Shinzo Abe is considering postponing a tax hike and dissolving the powerful lower house for a snap election in December, reports said. "The prime minister is considering various options, and one of them is a House of Representatives election by the end of the year," the Kyodo News agency reported, citing an unnamed government source.
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The United Nations envoy for Syria on Tuesday said that a proposal to "freeze" fighting in the key northern city of Aleppo could provide a model for progress in the war-torn country. The UN proposal was "a new way for approaching the de-escalation of violence in particular in one place to start with - Aleppo," Staffan de Mistura told journalists before leaving the Syrian capital, Damascus.
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