HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Regulators in the US, UK and Switzerland have hit five banks, including HSBC Holdings and Royal Bank of Scotland, with USD3.38 billion in fines Wednesday over foreign exchange failings and attempted manipulation of foreign exchange benchmark rates, but Barclays hasn't yet been fined as it tries to strike a "more general coordinated settlement".

The UK's Financial Conduct Authority fined Citibank USD358 million, HSBC USD343 million, JPMorgan USD352 million, RBS USD344 million and UBS USD371 million, saying the banks failed to control business practices in their G10 spot foreign exchange trading operations. 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.

Earlier this month, HSBC took a charge of USD378 million over the foreign exchange investigation, more than enough to pay up to UK regulators, but not enough to meet the combined USD618 million of fines and penalties imposed Wednesday by the regulators. HSBC is expected to make up the shortfall in its report and accounts at the full year.

At the end of last month, RBS set aside GBP400 million for regulators' investigations into the foreign exchange market, in line with the size of its fine. However, RBS reiterated Wednesday that it remains in discussions with other governmental and regulatory authorities over the issues, including the US Department of Justice and other financial regulatory authorities. RBS said that the timing and amounts of further settlements and related litigation risks are uncertain and could be significant.

"In relation to Barclays Bank PLC, we will progress our investigation into that firm which will cover its G10 spot FX trading business and also wider FX business areas," the FCA said in a statement.

In a response, a Barclays spokesperson said it had decided against agreeing to a settlement on similar terms to the other banks.

"Barclays has engaged constructively with its regulators, including the UK FCA, and the US CFTC, in this round of settlement discussions, and has considered a settlement from these agencies on closely similar terms to those announced this morning," the spokesperson said. "However, after discussions with other regulators and authorities, we have concluded that it is in the interests of the company to seek a more general coordinated settlement".

J Sainsbury has 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.

Sainsbury's kept its interim dividend at 5.0 pence, but warned investors they are facing lower dividend payments for the full year and beyond.

"The UK grocery market is changing faster than at any time in the past three decades. We must evolve our business to meet the challenges this presents to ensure we continue to win for customers, colleagues and shareholders," the grocer said.

Sainsbury's said it will invest a further GBP150 million in pricing, on top of what it is investing already - half of which will fall in the second half of the current financial year, and the rest in the first half of the next financial year.

It said it will focus on areas its customers tell them "price matters most", although it wouldn't give any details apart from saying it will cut nappy prices, and executives also refused to breakdown what Sainsbury's is already investing in prices.

AIM-listed Cloudbuy and ANGLE have come out and clarified recent deals in which top executives used shares as security for loans from Equities First Holdings LLC to fund house moves, as scrutiny of unusual share transactions involving the US stock loan company increased.

The news comes as the Daily Mail reported that the UK's Financial Conduct Authority is set to investigate a series of announcements made by Quindell PLC regarding a stock-for-loan deal done by three of its executives with Equity First Holdings.

Those loans were used to buy more Quindell shares, a move that was supposed to signal the directors' confidence in the company. However, the unusual deal only promoted a new sell-off in Quindell shares.

The FCA declined to comment to Alliance News. The London Stock Exchange wasn't immediately available for comment.

The mechanics of the loans being provided by Equities First are the same in each case: it takes shares as a security for a loan and takes a percentage of the value as well as a financing arrangement fee. Equities First can legally do as it pleases with the shares, but pledges to hold them and not use them for short selling. The loanees are required to buy back the shares once the loans mature.

ANGLE Chief Executive Andrew Newland transferred up to 3.5 million shares to Equities First as security for a loan facility in connection with moving house. He got a payment equal to 62% of the three-day average mid-price per share less a financing arrangement fee of 2%.

"Andrew has entered into this finance arrangement to bridge the purchase and renovation of a new house. Andrew believes strongly in the future value of ANGLE and does not want to sell his shares into the market. This facility enables him to return to his original position once the facility is repaid," ANGLE Chairman Garth Selvey said.

CloudBuy, meanwhile, said Chairman Ronald Duncan had pledged up to 4.5 million shares to Equities First in return for a loan that is also partly being used for a house move.

"In order to minimise disruption around the move, we put in place a facility which would allow us to remain in our existing house whilst the renovation was carried out, following this we will sell the existing house and release the equity," Duncan said.

Other AIM-listed companies whose directors are known to have engaged with Equities First as part of their share dealings are IQE and Igas Energy. Both these deals were the same as the Quindell deal in that the loans were used to buy more stock in each company.

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Markets: UK shares are trading lower, with downbeat sentiment affecting financial services after regulators in the US, UK and Switzerland hit five banks with more than USD3.2 billion in fines over foreign exchange failings and attempted manipulation of foreign exchange benchmark rates.

Futures indicate a higher open on Wall Street. The DJIA and Nasdaq Composite are pointed up 0.1%, while the S&P 500 is set to open up 0.2%.

FTSE 100: down 0.6% at 6,597.54
FTSE 250: down 0.2% at 15,596.45
AIM ALL-SHARE: down 0.4% at 718.91
GBP-USD: down at USD1.5815
EUR-USD: down at USD1.2462
GOLD: up at USD1,163.45 an ounce
OIL (Brent): down at USD81.02 a barrel
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Other Top UK Corporate News
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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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Moneysupermarket.com Group said its first-half pretax profit increased by a third, boosted by revenue increases across its brands, and a gain on the sale of a stake in HD Decisions Ltd. It made a GBP26.4 million pretax profit in the six months ended June 30, compared with GBP19.8 million in the corresponding period a year earlier. Revenue increased to GBP122.4 million from GBP112.3 million.
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Building products distributor SIG saw its shares fall after it said it had slightly lowered its expectations for the year due to weak economic conditions in Europe, although it also raised its cost benefit targets from the strategic initiatives it is taking.
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Diploma Chairman John Rennocks is to step down from his role after Diploma's annual general meeting in January. The company said it will appoint John Nicholas, currently a senior independent director on Diploma's board, as its new chairman following Rennock's departure after the AGM on January 21.
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AIM Movers
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Mountfield shares are up after its Connaught Access Flooring subsidiary won a contract worth around GBP4.5 million to supply and install access flooring at a newly-built office development in the City of London. Solo Oil is up after it said it is moving closer to completing its deal to buy a stake in the Kiliwani North Development license from Aminex. Proteome Sciences is down after it warned that contract delays will mean its full-year revenue will come in below market expectations and lower than the revenue posted last year. Physiomics is down even though it posted a slightly narrowed loss in its year to end-June of GBP464,252, down from GBP543,791 a year before, as revenue rose to GBP267,903 from GBP240,000.
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Top 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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Afternoon Watchlist (all times in GMT)

15:00 US Wholesale Inventories
17:00 US Fed Minneapolis's Narayana Kocherlakota speech
23:50 Japan Domestic Corporate Goods Price Index
23:50 Japan Foreign bond/stock investment
23:50 Japan Machinery Orders
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Thursday's Key UK Corporate Events

London Stock Exchange Group - Half Year Results
Rolls-Royce Holdings - Interim Management Statement
Premier Oil - Interim Management Statement
Spirent Communications - Interim Management Statement
New World Resources - Q3 Results
Catlin Group - Q3 Results
3i Group - Half Year Results
WS Atkins - Half Year Results
Electrocomponents - Half Year Results
Great Portland Estates - Half Year Results
Rexam - Interim Management Statement
Norcros - Half Year Results
Ted Baker - Interim Management Statement
Trinity Mirror - Interim Management Statement
UTV Media - Interim Management Statement
Vedanta Resources - Half Year Results
SABMiller - Half Year Results
Genel Energy - Interim Management Statement
ITV - Interim Management Statement
SOCO International - Interim Management Statement
Infinis Energy - Interim Results
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Thursday's Key Economic Events (all times in GMT)

00:01 UK RICS Housing Price Balance
04:30 Japan Industrial Production
05:30 China Industrial Production
05:30 China Retail Sales
05:30 China Urban investment
07:00 Germany Consumer Price Index
09:00 Italy Consumer Price Index
09:00 EU ECB Monthly Report
10:00 Ireland Consumer Price Index
13:30 US Jobless Claims
15:00 US JOLTS Job Openings
16:00 US EIA Crude Oil Stocks change
19:00 US Monthly Budget Statement
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