HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Admiral Group leads the fallers on the FTSE 100 Wednesday after it lowered its margin expectations, warning that a decline in premiums had caused a decline in car insurance revenue in the UK in the first half of the year, despite customer numbers increasing.

Admiral said UK car insurance revenue decreased to GBP0.85 billion, from GBP0.92 billion in the first half of 2013. Group revenue also decreased during the period, coming in at GBP1.0 billion, compared with GBP1.1 billion last year.

Admiral also said it intends to issue GBP200 million in ten-year debt. It's the first time the insurer will issue a bond. "For a company that has previously prided itself on having no debt, this represents something of a U-turn," said Berenberg analyst Peter Eliot.

Life insurer Aviva also fell even though it set out some new cashflow targets at its capital markets day, part of its ongoing attempts to make its balance sheet less complicated and improve profitability and shareholder returns.

It said it now wants to double the annual excess cashflow booked by the holding company to GBP800 million by the end of 2016, from GBP400 million in 2013, and reduce the operating expense ratio to below 50% by the same time, from 54% in 2013.

However, investors hoping for potentially higher dividend payouts in the near term may be disappointed that Aviva only reiterated its deleveraging targets. It still wants to reduce the intercompany loan balance to GBP2.2 billion by the end of 2015 and reduce its gross external leverage ration to below 40% of tangible capital "over the medium term".

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MARKETS: UK stock indices are lower Wednesday for a third consecutive day, ahead of the latest Federal Reserve policy meeting minutes due at 1900 BST. Ahead of the minutes, US stock futures indicate that a fractionally firmer open can be expected on Wall Street, with the DJIA and the S&P 500 futures both pointing 0.1% higher.

FTSE 100: down 0.5% at 6,703.07
FTSE 250: down 0.8% at 15,521.77
AIM ALL-SHARE: down 0.3% at 780.56
GBP-USD: down at 1.7112
EUR-USD: flat at 1.3611
GOLD: up at USD1,324.88 an ounce
OIL (Brent): down at USD108.66 a barrel
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Other Top UK Corporate News
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AbbVie retracted any statements that suggested it had the support of Shire shareholders in its bid to acquire the UK-listed company for GBP30.1 billion, after potentially over-stepping the mark when it comes to UK takeover rules. In a pre-market statement Wednesday, AbbVie said it wished to clarify some press and newswire reports about its latest takeover bid for pharmaceuticals rival Shire. It said it had not received any written commitments of support from Shire's shareholders and "accordingly retracts the statements".
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HSBC Holdings said its Cayman Islands subsidiary will sell most of its corporate and retail banking business to Butterfield Bank (Cayman) Ltd, and will also start to prepare to wind itself down. The bank didn't give any financial details for the asset sale, but said the wind-down preparation will include stopping taking any new business immediately and looking to minimise the impact on any remaining customers.
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BT Group will reveal its new mobile services for business customers next Thursday as it readies to re-enter the market ahead of a consumer launch later in the year.
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UK food wholesaler Booker Group said it has started its new financial year well, with sales in the first quarter in line with expectations, and its turnaround plans for recent acquisition Makro on track. Total sales in the 12 weeks to June 20 were up 3.8% including sales from Makro. Non-tobacco sales were up 5.4%, while tobacco sales rose 0.7%. Makro is a Netherlands-based wholesale business which Booker acquired in July 2012.
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Centamin said its gold production rates fell in its second quarter compared to the previous year, as underground ore grades remained below forecast and open-pit ore production dropped. Despite its recent difficulties, the FTSE 250 miner reaffirmed its production forecast for the full-year and said it continues to move towards its long-term target of 450,000 to 500,000 ounces per year from 2015 onwards. Centamin said its gold production fell 13% to 81,281 ounces for the three months ended June 30 from 93,624 ounces in the same period the previous year.
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Housebuilding and construction business Galliford Try said it has continued to make progress since publishing its interim management statement in May and expects pretax profit to be at the upper end of analysts' current range of GBP92.8 million to GBP95.2 million. On May 14, the company said it made a strong start to 2014 and expected to report pretax profit for its full-year to June 30 above analysts' consensus of GBP89.7 million and not less than GBP92.0 million.
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Providence Resources said that the operator of its part-owned Spanish Point appraisal and exploration well off the coast of Ireland has postponed the well until 2015 due to rig refurbishment delays. The Irish oil and gas exploration company said operator Capricorn Ireland Ltd, a subsidiary of Cairn Energy, said the Porcupine Basin site will not be drilled in 2014 as planned. Capricorn holds 38% of the site while Providence holds 32%. Providence said the decision was made following extensive delays in the refurbishment of the Blackford Dolphin drilling rig, which had been scheduled to drill the well. The refurbishment meant that drilling operations would not be able to start until at least October, which is in the difficult to drill winter period.
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AIM MOVERS
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Roxi Petroleum has seen its share price more than double after the company said it has found oil and gas at the A5 well on the BNG Contract Area, situated on the edge of the Caspian Sea in western Kazakhstan near two major oilfields. Shares in Daniel Stewart Securities have also risen after the company said it narrowed its loss in its last financial year, and said the first quarter of the current financial year has seen a further pick-up in activity with a strong pipeline. Frontera Resources shares are up after it started a new drilling campaign on the Mtsare Khevi gas complex in the country of Georgia. Mwana Africa is up after it said it swung to a pretax profit in its last financial year as revenue jumped, expenses fell and it booked a major impairment reversal after the nickel price rose and it restarted a nickel mine. At the other end of the market, shares in Ascent Resources have dropped as the company said its planned subscription of GBP15 million in equity funding has not been completed after the investor failed to receive key funds required to make the cash transfer. Victoria Oil & Gas is also down after the company said its Gaz du Cameroun subsidiary has increased the supply of gas to gas-to-power customers in Douala, Cameroon, but it has decided to outsource development of its gas pipeline, which has hit further delays.
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Top Economics And General
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UK house prices fell by more than expected in June, after rising strongly in the previous month, latest survey figures from Halifax showed. The house price index dropped 0.6% from May, when it climbed 4%. Economists had forecast a 0.3% fall. The latest decline was the biggest since March, when prices decreased 1.2%. It was the fourth monthly decline since last December, the lender said. Year-on-year, house prices rose 8.8% in the three months to June, which was slightly faster than May's 8.7% increase. Economists were looking for an 8.9% gain. In June, the standardized average price of a UK house was GBP183,462 versus GBP184,566 in the previous month and GBP167,668 a year ago.
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Shop prices in the UK tumbled 1.8% on year in June, the British Retail Consortium said - falling for the 14th straight month. The headline figure follows the 1.4% contraction in May, and marks the sharpest rate of decline in eight years, the BRC said. Among the individual components of the survey, food prices were up 0.6% - also an eight-year low - while non-food prices fell 3.4%.
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The UK economy is estimated to expand at a faster pace in the second quarter, the National Institute of Economic and Social Research said late Tuesday. Gross domestic product is estimated to expand 0.9% in the second quarter, faster than the 0.8% growth seen in the first quarter. The institute projected 2.9% growth in 2014 and 2.4% in 2015. The think tank said the month-on-month fall in industrial production would weigh only marginally on the wider economy. Moreover, it expects manufacturing to rebound in June. The UK Office for National Statistics is slated to publish preliminary GDP data for the second quarter on July 25.
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Chinese consumer prices inflation slowed in June from an 4-month high, as food prices increased at a slower rate, a report from the National Bureau of Statistics showed. The increase was slightly below the consensus estimate. Consumer prices increased 2.3% year-on-year in June following the 2.5% increase in May. Economists had expected prices to rise 2.4%.
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In a separate report, the statistics bureau said that producer prices in China fell 1.1% year-over-year in June. This was a faster rate of decline than the 1% drop expected by economists. In May, prices had decreased 1.4%. Producer prices for means of production dropped 1.5% while prices for means of subsistence rose 0.2% in June.
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Israel launched an air offensive in response to increasing rocket attacks by Palestinian militants, conducting repeated strikes that killed at least 25 Palestinians Tuesday in the Gaza Strip. Among the dead were eight children and two women. The fatalities included several militants from Hamas and the Islamic Jihad group, Gaza emergency services chief Ashraf al-Qedra said. Israel's cabinet, meanwhile, authorized the army to call up 40,000 reservists should it decide to expand the operation, possibly into a ground offensive. So far, only thousands of reserve soldiers have received orders.
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Rioters took to the streets in several areas across Brazil after the 7-1 defeat of Brazil in the World Championship semi-final against Germany, local media reported Wednesday. In Sao Paulo, 23 buses were set on fire, according to news portal UOL. Twenty of the buses were in a transportation authority depot for repairs. No one was injured in this incident. Two cars were also set ablaze and a shop selling electrical appliances were broken into and looted in Sao Paolo. Six people, including four minors, were arrested in the rioting.
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Afternoon Watchlist (all times British Summer Time)
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15:30 US EIA Crude Oil Stocks change
19:00 US FOMC Minutes
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Thursday's Key UK Corporate Events
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Low & Bonar Half Year Results
Barratt Developments Trading statement
Premier Oil Trading Update
Supergroup Full Year Results
Burberry Group Trading statement
Halfords Group Interim Management Statement
Ashmore Group Trading statement
Associated British Foods Interim Management Statement
Bloomsbury Publishing Interim Management Statement
Hays Trading statement
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Thursday's Key Economic Events (all times British Summer Time)
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n/a China New Loans
00:01 UK RICS Housing Price Balance
00:50 Japan Machinery Orders
01:00 China Foreign Exchange Reserves
01:00 China Trade Balance
04:00 Japan BoJ Interest Rate Decision
06:00 Japan Consumer Confidence Index
06:30 France Consumer Price Index
07:45 France Industrial Output
09:00 EU ECB Monthly Report
09:30 UK Total Trade Balance
12:00 UK BoE Interest Rate Decision
12:00 UK BoE Asset Purchase Facility
13:30 US Jobless Claims
15:00 US Wholesale Inventories
15:30 US EIA Natural Gas Storage change
18:15 US Fed's George Speech


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Copyright 2014 Alliance News Limited. All Rights Reserved.


By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

Copyright 2014 Alliance News Limited. All Rights Reserved.