Last checked at LONDON (Alliance News) - UK shares were taking back some of last week's losses early Monday, with several beaten-down shares, such as Old Mutual and Anglo American, topping the leader board.
Faring less well was Pearson, down 1.0% following a report in The Telegraph that a string of British universities have stopped buying Pearson's teaching materials in a row over charges for ebooks.
In the FTSE 250, Drax Group was up 9.7% after being upgraded straight to Buy from Sell by Goldman Sachs.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 5,986.52
FTSE 250: up 0.3% at 16,926.80
AIM ALL-SHARE: down 0.1% at 724.81
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Hang Seng: closed down 0.7% at 21,309.85
Nikkei 225: closed down 1.8% at 18,883.42
DJIA: closed down 1.8% at 17,265.21
S&P 500: closed down 1.9% at 2,012.37
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GBP: down at USD1.5175 (USD1.5214)
EUR: down at USD1.0964 (USD1.0992)
GOLD: down at USD1,070.10 per ounce (USD1,075.62)
OIL (Brent): down at USD37.78 a barrel (USD38.18)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in GMT)
09:00 Italy Consumer Price Index
10:00 EU Industrial Production
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China's industrial production and retail sales data released over the weekend signalled that economic momentum is picking up in the fourth quarter. Figures from the National Bureau of Statistics showed that industrial production growth accelerated to a 5-month high of 6.2% in November from 5.6% in October, exceeding the consensus estimate of 5.7%. Likewise, retail sales advanced 11.2% annually after rising 11% in the prior month and was better than the 11.1% growth forecast by economists. Fixed asset investment climbed 10.2% in the year-to-date period in November, the same rate of growth as seen in ten months to October.
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British house prices dropped for the second successive month in December, the latest house price balance from property tracking website Rightmove showed. The house price index fell 1.1% month-over-month in December, which was the smallest decrease since 2006. In November, prices had fallen 1.3%. "Whilst a fall is the norm at this time of year, this is December's best post-financial-crash performance, signalling another round of price rises in 2016," Miles Shipside, director of Rightmove, said. On an annual basis, house prices grew 7.4% in December, faster than the 6.2% increase in the preceding month.
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More than 190 countries created history in Paris on Saturday by agreeing on a plan to curb climate change and tackle global warming, ending two weeks of marathon negotiations. The deal requires the world's economies to take concrete steps to regulate the emission of gases linked to global warming. Key sticking points that were seen as obstructing a deal seem to have been resolved. The key points of the deal include a long term goal for limiting the rise in global temperatures to below 2 degrees Celsius, or 3.6 degrees Fahrenheit, with efforts to limit the temperature rise to 1.5 degree Celsius.
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The US House of Representatives passed an extension of a temporary budget in place since October 1, and President Barack Obama immediately signed the measure before a Friday night deadline to keep the federal government running. Still haggling over a budget for the current fiscal year, which runs through September 2016, Congress extended the current measure until Wednesday.
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BROKER RATING CHANGES
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GOLDMAN RAISES FRESNILLO TO 'BUY' ('NEUTRAL') - TARGET 800 (675) PENCE
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TRADERS: GOLDMAN CUTS WHITBREAD TO 'NEUTRAL' ('BUY')
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GOLDMAN RAISES DRAX GROUP TO 'BUY' ('SELL') - TARGET 260 (245) PENCE
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COMPANIES - FTSE 100
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AstraZeneca is in advanced talks to acquire closely-held biotech company Acerta Pharma for more than USD5 billion, the Wall Street Journal reported Friday, citing people familiar with the matter. According to the WSJ report, the two companies plan to announce a deal in December. Acerta does not currently have any drugs on the market, though its lead cancer compound, acalabrutinib, is said to have shown promise in early clinical trials.
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Royal Dutch Shell said its GBP47.0 billion takeover of rival BG Group has been secured approval from regulators in China, providing the final pre-conditional approval required for the merger. The Chinese Ministry of Commerce gave its unconditional clearance for the deal, adding to the approvals the pair already received in Brazil, the European Union and Australia.
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The UK government is consideration nationalising Rolls-Royce Holdings's nuclear submarine business, which provides propulsion for the UK's Trident deterrent, the Financial Times reported. The report said the UK may also decide to merge all or part of Rolls-Royce with BAE Systems, the UK's biggest defence group. The UK prime Minister David Cameron's office has had plans drawn up to protect UK interests as Rolls-Royce seeks to recover from five profit warnings in less than two years. The officials at Cameron's office are concerned that Rolls-Royce's management has no substantial experience of defending against hostile takeovers, the report said, citing people familiar with the matter.
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Meanwhile, a split has emerged among shareholders in Rolls-Royce Holdings, the Sunday Telegraph reported, after another investor expressed unease about the attempt by activist investor ValueAct to get a seat on the engine-maker's board. A major Rolls-Royce investor, unnamed, told the paper that while it would accept a decision by Rolls-Royce to grant ValueAct a seat on the company's board, it did not believe the activist was focused on improving the growth prospects of the company.
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Prosecutors in the US are threatening to punish banks for failing to report suspicious activity on accounts linked to FIFA, world football's governing body, as part of the sprawling corruption probe into the group, according to the Financial Times. People familiar with the case told the FT a series of banks, including HSBC Holdings and Standard Chartered, are holding private talks with prosecutors about what they knew and when as part of the FIFA probe. All the banks involved held accounts for FIFA or FIFA-connected entities and individuals, or which were used as part of money transfers.
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A string of British universities have stopped buying Pearson's teaching materials in a row over charges for ebooks, The Telegraph reported, citing publishing industry sources. According to the report, some universities including Imperial College London have sought to purge all Pearson materials from their courses. Pearson's UK higher education unit told universities in August that it would bring in sharp price rices on library purchases of their ebooks, resulting in some library bodies to write to Pearson chief executive John Fallon to appeal for a reverse in policy.
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Diageo said it has appointed its Guinness Nigeria subsidiary as its exclusive spirits distributor. Guinness Nigeria, in which Diageo holds a 54.3% stake, will become the exclusive distributor of Diageo's international premium spirit brands from January 1.
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Anheuser-Busch InBev said it is planning to secure a listing on the Johannesburg Stock Exchange in January, part of the measures being taken to show its commitment to the South African market as it progresses its takeover of SABMiller. AB InBev said it will list in South Africa in mid-January and has already secured approval for a secondary listing in the country.
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WPP said it has agreed to merge its Australian and New Zealand businesses with STW Communications Group Ltd, and increase its shareholding to 61.5% from 23.6%. STW is an Australian Securities Exchange-listed marketing and communications group. WPP will sell its Australian and New Zealand businesses to STW for AUD512 million, through the issue of STW shares at a price of AUD0.915, and a shareholder loan. As a result, WPP will become the majority shareholder of the enlarged company with a 61.5% interest, and STW will be renamed to align it with WPP.
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COMPANIES - FTSE 250
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RPC Group launched a fully underwritten rights issue to raise GBP232.6 million to help fund the acquisition of Global Closure Systems from private equity firm PAI Partners, in a move to strengthen the packaging maker's position in Europe and beyond. RPC, which supplies rigid plastics packaging products and plastic containers, is acquiring the plastic closures and dispensing systems specialist for an enterprise value of EUR650.0 million, equivalent to about GBP470.0 million, on a cash-free, debt-free basis. The cash deal will be funded through a combination of debt and RPC equity, in the form of the one-for-five rights issue, with up to 50.6 million new shares to be issued at 460.0 pence each. RPC shares closed at 764.00p on Friday. The debt component of the financing arrangements means that RPC's revolving credit facility has been increased to GBP770.0 million from GBP490.0 million.
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Man Group said the potential appointment of Lord Livingston as the successor to Chairman Jon Aisbitt is subject to regulatory review. The hedge fund investment manager said in May that Aisbitt planned to step down from his role following the company's annual general meeting of shareholders in May 2016. Man Group's confirmation of the potential appointment of Lord Livingston, the former trade minister and BT Group chief executive, followed a Sky News report which said he was set to become chairman of the group.
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Oil services company Petrofac said it has secured contracts worth around USD400.0 million covering work in the UK Continental Shelf. The company said it has secured a two-year contract extension from Centrica to continue providing services for the company's 8A platform in the Rough field. That extension will start in January. Petrofac has also won a contract with UK-listed oil and gas explorer EnQuest, which will see it provide services to the Kittiwake platform, including engineering modification work.
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Roadside assistance company AA and telematics car data provider Trakm8 Holdings said they have extended their existing relationship. Trakm8 has supplied telematic systems to the AA for its roadside assistance and recovery vehicles for more than four years. The telematics company has now worked with the roadside assistance company to develop a new business-to-business fleet management system, the AA and Trakm8 said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Probes being conducted into the use of agency pilots by Irish budget carrier Ryanair Holdings are intensifying in Europe as the UK seeks payment of GBP47.0 million in allegedly unpaid taxes and social insurance from Brookfield Aviation, The Sunday Times reported. Brookfield, the largest supplier of pilots to Ryanair, has seen its owners accused in a court in Germany of "an especially serious case of tax evasion". German authorities claim Brookfield was responsible for processing the monthly pay for 1,600 pilots and around 300 Irish companies administered by trustees. According to Wolfgang Bohnen, a prosecutor in Koblenz in Germany, where the case against Brookfield has been filed, these companies "mainly serve to conceal an employment relationship with Ryanair".
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COMPANIES - INTERNATIONAL
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Alibaba Group Holding agreed to buy Hong Kong's South China Morning Post and other affiliated media assets for HKD2.06 billion or USD266 million. The deal includes the century-old newspaper, outdoor advertising, digital assets and magazines, SCMP Group Ltd said in a filing. SCMP group said it will pay a special cash dividend to investors once the sale to Alibaba is completed.
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Activist investor Daniel Loeb of hedge fund Third Point has called for the removal of Dow Chemical Co's chief executive officer Andrew Liveris following the company's agreement to merge with EI DuPont De Nemours & Co. or DuPont, the Wall Street Journal reported Sunday. DuPont and Dow Chemical said Friday that their boards of directors have unanimously approved an agreement for an all-stock merger of equals. The combined company will be named DowDuPont. Dow and DuPont shareholders will each own about 50% of the combined company.
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Prominent Chinese investor and businessman Guo Guangchang was back at work Monday, after disappearing late last week to help officials with an investigation, according to his company Fosun International. Guo gave a planned speech at an annual meeting in his Shanghai office, the Hong Kong-based South China Morning Post reported. The chairman and chief executive was uncontactable from Thursday lunchtime while "assisting in certain investigations carried out by mainland judiciary authorities," the company was quoted as saying.
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Monday's Scheduled AGMs/EGMs
Inland Homes
Karelian Diamond Resources
Rockhopper Exploration (re Falkland Oil merger)
LMS Capital (re tender offer)
Gfinity
Hunter Resources
Leed Resources
Conroy Gold & Natural Resources (re capital reorganisation)
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
30 Oct 2014 09:48
