3i Group Share News (III)

LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Budget airline easyJet upgraded its full-year profit guidance following a strong summer trading season. The airline said its pretax profit for the financial year to the end of September is now expected to be GBP675 million to GBP700 million, up from its previous guidance of GBP620 million to GBP660 million. The group said its load factor in August was 94.4%, a new monthly record for the company, while passenger numbers increased to 7.1 million, another record.
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South African billionaire Christo Wiese is now training his sights on the UK supermarket industry, The Daily Telegraph reported, following his acquisitions of gym chain Virgin Active and fashion retailer New Look. Wiese, who owns a 19% stake in frozen food retailer Iceland and who has been linked with a takeover of Wm Morrison Supermarkets in the past, told the Telegraph that his investment firm, Brait, may make its next venture in the UK supermarket sector. He said it would be prepared to overlook some of the strict investment criteria in place at Brait if the right opportunity in the supermarket sector arose. He said that if Shoprite, the South African supermarket chain he owns, "perceives the right opportunity they will certainty pursue it".
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Rio Tinto outlined the next phase of its plans to capitalise on the iron ore market "through a relentless focus on productivity and efficiency, technology, and people development" to drive down costs at its flagship Pilbara iron ore mine in Australia. The miner believes, despite a slowdown in China and considerably lower iron ore prices compared to a year ago, that steel demand across China and the rest of the world will grow at an average of 2.5% per year over the next 15 years. "This rigorous analysis confirms that Chinese crude steel production is expected to reach around 1.0 billion tonnes by 2030," said the miner. Away from China, Rio Tinto sees opportunities in other emerging markets and said non-Chinese steel demand is expected to increase by 65% by 2030.
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Barclays said late Wednesday it is selling a range of non-core operations in Portugal at a likely loss of about GBP200 million, as it seeks to cut risk-weighted assets and improve returns to shareholders. The bank said it has agreed to sell its retail banking, wealth and investment management businesses in Portugal, as well as part of its corporate banking business which serves smaller businesses, to Spanish lender Bankinter. According to Bankinter, it is to pay about EUR100 million for the operations. Barclays also agreed to sell its Portuguese life insurance and pensions business to Bankinter Seguros de Vida, a joint venture between Bankinter and Spanish insurer Mapfre. According to Bankinter, the joint venture is to pay EUR75 million for the business. Some operations in Portugal are to be retained.
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The European Commission said it has opened an in-depth investigation to assess whether the proposed acquisition by Mondi of two industrial packaging plants currently owned by Walki is in line with the EU Merger Regulation. The Commission indicated concerns that Mondi's acquisition of two of Walki's packaging plants could lead to less choice and higher prices for customers of certain packaging materials, used for example to transport and protect fresh food or paper. Mondi is a vertically integrated packaging and paper manufacturer, and also operates a number of plants across Europe, manufacturing extrusion coating products. The plants Mondi intends to buy from Walki also manufacture extrusion coating products.
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US computing and IT services group IBM announced an expansion of its Internet of Things platform, called IBM IoT Foundation, through a collaboration agreement it has inked with chipmaker ARM Holdings. The deal will allow IBM to provide out-of-the-box connectivity with ARM mbed-enabled devices to analytics services.
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Private equity company 3i Group is understood to have started talks with advisers on a strategic review of Mayborn Group, which could lead to a GBP275 million sale of the business, Sky News reported. Mayborn is the owner of the Tommee Tippee baby products range and has been owned by 3i since it acquired the company in 2006.
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FTSE Russell confirmed late Wednesday that Berkeley Group Holdings will replace Weir Group in the FTSE 100 from the market open on Monday, September 21, following completion of its quarterly review. Sophos, Circassia Pharmaceuticals, and P2P Global Investments will join the FTSE 250, replacing Lonmin, Premier Farnell, and James Fisher & Sons.
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Go-Ahead Group said its annual pretax profit was pulled lower by exceptional costs and it will miss its operating profit goal for its bus division by a year. However, the transport operator also said revenue rose sharply in the recent financial year, and its underlying profit was higher on the back of a better-than-expected outcome for its rail division. Go-Ahead will pay a final dividend of 63.4 pence per share, up from 59.0p a year before, meaning its full-year dividend will be up 6.5% to 90.0p per share.
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Motor retailer and aftersales services provider Lookers said it has struck an GBP87.5 million cash deal to acquire Addison Motors, which trades as Benfield Motor Group. Benfield is based in Newcastle-upon-Tyne and operates 30 car dealerships across the UK, offering sales, service, parts and bodyshop facilities for new and used cars and commercial vehicles, Lookers said.
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MARKETS
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UK stock indices were higher, with easyJet the best performer after it upgraded its full-year profit guidance and oil-related stocks benefiting from a rise in crude prices overnight.
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FTSE 100: up 1.5% at 6,175.74
FTSE 250: up 1.0% at 17,045.60
AIM ALL-SHARE: up 0.6% at 734.64
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The euro tradef higher against the dollar ahead of the European Central Bank's rate decision and press conference at midday Thursday. The pound was down after UK service sector PMI data came in weaker than expected.
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GBP: down at USD1.5272
EUR: up at USD1.1231

GOLD: down at USD1131.00 per ounce
OIL (Brent): down at USD50.25 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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British services growth unexpectedly slowed for second straight month in August to its weakest rate in over two years as new business growth eased, survey results from Markit Economics and the Chartered Institute of Procurement & Supply showed. The Markit/CIPS services purchasing managers' index dropped to 55.6, which was the weakest score since May 2013. That was in contrast to economists' expectation for a modest improvement in the reading to 57.7 from 57.4 in July.
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The European Central Bank is expected to announce that it kept interest rates on hold at an historic low as it sizes up the impact on the eurozone of the recent round of global market and economic uncertainties. The ECB's 25-member governing council will say that it left its benchmark refinancing rate unchanged at 0.05%, analysts predict. However, weak inflation, renewed economic and market tensions have increased the pressure on the ECB to consider more action to shore up the eurozone economy and head off the threat of deflation. Many analysts believe the eurozone's subdued inflationary outlook could lead ECB President Mario Draghi to use his press conference on Thursday to prepare financial markets for new emergency measures.
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The EU expects to register more than 500,000 irregular arrivals at its outer borders this year, its president said of the migration surge challenging the bloc. "It is safe to assume that we will see over half a million irregular arrivals at Europe's external border this year, who are in part genuine asylum seekers from Syria and elsewhere," European Council President Donald Tusk told EU ambassadors at a conference in Brussels. The 28-country bloc will meet its responsibilities under the UN Refugee Convention, but "that cannot be done if we sacrifice public order in the process," Tusk warned.
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The International Monetary Fund said strong mutual policy action is needed to lift growth, as transition in China and lower commodity prices pose downside risks to global economic outlook. "Risks are tilted to the downside, and a simultaneous realization of some of these risks would imply a much weaker outlook," the lender said in a note prepared ahead of the G-20 finance ministers and central bank governors meeting in Turkey. Downside risks to the outlook have risen due to financial market volatility, declining commodity prices, weaker capital inflows, depreciating emerging market currencies, and lower growth in China.
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In another sign that the jobs market is improving, the Federal Reserve's Beige Book reported increased wage pressures in a number of districts around the US. "Several" of the 12 district banks "reported increasing wage pressures caused by labor market tightening," according to the Beige Book, a collection of anecdotal information on economic conditions. It's the first time in years that respondents reported wage pressures. Taken with Wednesday's relatively strong ADP jobs report, the Fed may be compelled to raise interest rates later this month. An upbeat August jobs report may seal the deal on Friday, but policy makers will also be mindful of falling stocks and headwinds from China.
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Brazil's central bank decided to leave its key interest rate unchanged at a nine-year high. Policymakers of the central bank unanimously voted to maintain its key Selic rate at 14.25%. The bank had raised its rates at the previous seven straight meetings.
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China will reduce its military ranks by around 300,000 personnel, President Xi Jinping said. The country's military is currently the largest in the world with an estimated 2.3 million troops. "Justice will prevail. Peace will prevail. The people will prevail," Xi said, at the inauguration of a large-scale military parade through the capital to mark the 70th anniversary of the end of World War II.
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US President Barack Obama secured enough votes in the US Senate to ensure the nuclear deal with Iran cannot be blocked by Congress. Senator Barbara Mikulski's decision to back the deal came as the Obama administration continued a major push to win support for the deal in Congress and from the public. Mikulski became the 34th senator to back the deal, giving Obama the support he needs to push it through.
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Ireland's service sector activity continued to expand strongly in August, survey figures from Markit Economics showed. The Investec services purchasing managers' index fell to 62.1 in August from 63.4 in the previous month. However, any reading above 50 indicates expansion in the sector. New orders increased for the thirty-seventh successive month in August, underpinned by a general improvement in business conditions. But the rate of expansion slowed.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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