INS.L Share News (INS)

LONDON (Alliance News) - Royal Bank of Scotland Group was forced to cut the price for the initial public offering of its US arm Citizens Financial Group after meeting muted investor demand amid skepticism about the overall lackluster performance by other large financial sector IPOs and a mixed performance of bank stocks in 2014.

The British lender priced the Citizens IPO at USD21.50 a share, raising gross proceeds of about USD3 billion and valuing Citizens at an initial USD12 billion, but the price was below the company's estimated range of USD23 to USD25 per share.

The Citizens Financial IPO is the largest among US banks since Goldman Sachs Group Inc's market debut in 1999, but its comes just days after the highly successful USD25 billion IPO of Chinese e-commerce giant Alibaba Group, the biggest US IPO of the year so far.

Investors were critical about the prospects of the IPO amid the slow growth of the US economy, including the Northeast and mid-Atlantic region, where Citizens Financial primarily operates.

Still, RBS shares are slightly higher Wednesday.

Old Mutual will be the next FTSE 100 company to spin-off its US arm, having launched the IPO of its US-based institutional asset management business earlier in the week at a price range of between USD15.00 and USD17.00 per share.

Media buying giant WPP has targeted the booming e-commerce sector in China by launching a new joint venture company with former Alibaba employees.

In a statement, the company said the new Polestar Co Ltd joint venture will be led by its main investors, both entrepreneurs with experience of the sector, including with Alibaba, Yahoo! and HP. Founder Figo Yang will serve as chief executive and Allen Liu will be chief operating officer. WPP will have a minority stake in the venture.

Excitement about Chinese growth in internet shopping is at an all-time high after Alibaba listed in New York earlier this week. China's e-commerce market is the world's largest, having surpassed the US in 2013. Chinese online shoppers are forecast to spend CNY3.3 trillion, or about USD540 billion, in 2015, WPP said, citing figures from Bain & Co.

WPP said its companies will work with Polestar to help Chinese and international brands establish and manage all aspects of their Chinese e-commerce operations, from marketing through to purchase, fulfilment and delivery, across consumer platforms such as Alibaba's Taobao and TMall, JD.com and the mobile messaging service WeChat.

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Markets: UK equity indices continue to trade lower while stock futures indicate the three main US indices will open just fractionally higher.

FTSE 100: down 0.1% at 6,668.26
FTSE 250: down 0.1% at 15,522.85
AIM ALL-SHARE: down 0.4% at 752.73
GBP-USD: flat at 1.6394
EUR-USD: down at 1.2836
GOLD: flat at USD1,221.21 an ounce
OIL (Brent): down at USD96.43 a barrel
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Other Top UK Corporate News
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The UK Competition and Markets Authority said it has finalised measures it expects to result in increased competition in the car insurance market and reduced premium costs for drivers, but motoring organisation AA, which also acts as a car insurance broker, questioned whether the findings and remedies justified the scale of the enquiry. The CMA's measures include a ban on agreements between price comparison websites and insurers which stop insurers from making their products available more cheaply on other online platforms. Other measures include providing better information for consumers on the costs and benefits of no-claims bonus protection. It also wants the Financial Conduct Authority to look into how insurers inform consumers about other products sold as add-ons to car insurance policies.
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United Utilities Group said it is currently trading in line with internal expectations for the six months ending September 30, while it remains confident of delivering its 2010-15 regulatory outperformance targets. In a trading statement, United Utilities said underlying operating profit for the first half 2014/15 is expected to be similar to the first half of 2013/14. "This principally reflects an allowed regulated price rise offset by the impact of the previously announced special customer discount and the expected increase in depreciation and other cost pressures, including bad debt," the company said.
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The UK Serious Fraud Office is understood to be closely following events at Tesco to consider whether any deliberate manipulation was involved in the GBP250 million overstatement of the supermarket's profits unveiled this week, The Times reported on Wednesday. Insiders at the SFO said the agency was "following developments at Tesco with interest" after the company this week suspended four senior executives and warned that around a quarter of its interim profits had been overstated, the paper said.
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Kennedy Wilson Europe Real Estate said it has completed a GBP184 million asset financing secured against some assets in the Jupiter real estate portfolio it acquired in June, and expects to draw down the facility in full. The facility was arranged with Royal Bank of Scotland Group PLC and has a five-year term. Once the facility is drawn down, Kennedy Wilson's loan-to-value ratio will rise to about 34%, with approximately GBP506 million of debt financing in place at the asset level and a weighted average maturity of approximately 4.6 years, it said.
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Metals miner Kazakhmys said it has awarded the contract to build a sulphide concentrator at Aktogay, the company's second major copper growth project, to Non Ferrous China, allowing it to firm up the expected total capital cost of the project. The sulphide concentrator contract is the largest item in the capital expenditure budget for Aktogay, and Kazakhmys said that it is now able to confirm that the total capital cost for the project is expected to be in the region of USD2.3 billion. Kazakhmys is hoping to produce the first copper from sulphide at Aktogay in 2017.
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AIM Movers
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Ovoca Gold is amongst the best-performing AIM stocks Wednesday after the gold explorer announced that it wants to buy back up to 20% of its shares to cut the discount of its shares compared with its net asset value per share and give shareholders an exit mechanism if they want it. Nanoco Group also trades higher after the company said The Dow Chemical Co will start construction on the first large-scale, cadmium-free quantum-dot manufacturing plant in the world in South Korea, with Nanoco quantum dots set to start commercial production at the plant next year. Shares in Minds + Machines Group are up after it swung to a profit in the half-year to the end of June, boosted by proceeds from auctions for generic top level domains, which offset higher administrative costs. Tangiers Petroelum is the worst-performing stock after the exploration group's shares were restored to trading Wednesday, promptly dropping heavily as the company said it has finalised its financial obligations for the TAO-1 well at USD18.6 million and said it would exit the Tarfaya block in Morocco. Instem shares are lower after the company warned that if it is unable to secure contracts by the year-end it may have a "material impact" on its full-year results, as its first half operating profit was hit by higher operating costs. Judges Scientific saw its shares slide despite posting higher pretax profit and revenue. Ashley House is also down after it posted a pretax loss of GBP4.7 million for the year ended April 30, compared with a GBP400,000 profit a year earlier, as revenue fell to GBP8.3 million from GBP15.8 million. Atlantic Coal is another faller after it swung to a loss in the first half of the year, as revenue declined due to the impact of adverse weather in the US at the start of the year and as it booked a big foreign exchange loss compared with a gain last year.
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Top Economics And General
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German business confidence weakened for the fifth straight month in September, reports said citing survey results from Ifo institute. The Ifo business climate index fell to 104.7 in September. Economists had forecast the indicator to drop to 105.8 from 106.3 in August. The current situation index came in at 110.5, down from 111.1 a month ago. The expected score for September was 110.2.
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Warplanes flying from Turkey have bombarded Islamic State targets in northern Syria, a monitoring group said, a day after a US-led coalition launched its first airstrikes against the radical group. The Syrian Observatory for Human Rights, citing local residents and activists, said the jets had struck supply routes used by Islamic State operatives near the Kurdish town of Kabone in the northern Syrian province of Aleppo. The Britain-based Observatory said that despite the strikes, Islamic State fighters and Kurdish militiamen were still engaged in heavy clashes around 10 kilometres outside of Kabone. The al-Qaeda splinter group has seized dozens of mostly Kurdish villages near Kabone in the past week, prompting a massive exodus into Turkey.
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The US told United Nations Secretary General Ban Ki-moon in a letter that its airstrikes into Syria were requested by Iraq for its own protection. The letter, in keeping with the dictates of the UN charter, explains that Islamic State and other terrorist groups are a threat not only to Iraq but also to the US and its partners in the region.
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Ed Miliband, leader of the UK opposition Labour party, has threatened to fund new investment in the National Health Service by cracking down on tax loopholes used by hedge funds and other financial services firms, raising money through a tax on homes worth more than GBP2 million, and by requiring tobacco firms to contribute to the cost of treating smoking-related diseases, the BBC reported. The so-called mansion tax would raise GBP1.2 billion a year, the crackdown on tax loopholes used by hedge funds would raise GBP1.1 billion, and the tobacco company requirements would raise about GBP150 million, the BBC quoted Miliband as saying in a speech to the Labour party annual conference ahead of next year's general election.
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Pro-Russian separatists in eastern Ukraine said Tuesday they will hold their own elections in November, a week after voting for a new Ukrainian parliament. "We will elect our Supreme Soviet and head of the republic on November 2," Alexander Zakharchenko, the leader of the self-declared Donetsk People's Republic, told Russia's Interfax news agency. The neighbouring "Luhansk People's Republic" will hold elections on the same day, local separatist leader Alexei Karyakin told the Itar-Tass news agency. The separatists were adamant that they won't allow next month's Ukrainian parliamentary elections to go ahead in their territories. President Petro Poroshenko has announced snap elections for October 26.
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The manufacturing sector in Japan continued to grow in September, albeit at a slower pace, preliminary survey results from Markit Economics revealed, with a PMI score of 51.7. That's down from 52.2 in August, although it remains above the line of 50 that separates expansion from contraction.
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Afternoon Watchlist (all times British Summer Time)

12:00 US MBA Mortgage Applications
15:00 US New Home Sales
15:30 US EIA Crude Oil Stocks change

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Thursday's Key UK Corporate Events

Hansard Global - Full Year Results
Inditherm - Half Year Results
Toumaz - Half Year Results
SyQic - Half Year Results
Gulfsands Petroleum - Half Year Results
DJI Holdings - Half Year Results
Haynes Publishing - Full Year Results
Mitchells & Butlers - Trading Statement

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Thursday's Key Economic Events (all times British Summer Time)

00:50 Japan Corporate Service Price
09:00 EU M3 Money Supply
09:00 EU Private loans
11:00 UK CBI Distributive Trades Survey
13:30 US Durable Goods Orders
13:30 US Jobless Claims
13:40 UK BOE's Governor Carney speech
14:45 US Markit Services PMI Preliminary
14:45 US Markit PMI Composite Preliminary
15:30 US EIA Natural Gas Storage change
16:00 US Kansas Fed manufacturing activity

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