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LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Egypt's Commercial International Bank and London-listed Legal & General Group are selling their stakes in Commercial International Life Insurance Co to French insurance and asset management company AXA Group. In a statement dated Sunday, CIB and Legal & General said their stakes in CIL, which was originally established in 1998 and operates in the Egyptian life insurance industry, will be sold for EGP763 million, about GBP63 million. Legal & General owns 55% of CIL, with CIB owning the remainder.
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Barclays's chairman has told executives working on the group's effort to separate its retail bank from its investment bank to either acquire an entity with a banking licence or apply for a new one, according to a Financial Times report. The report said that John McFarlane, who is acting in an executive capacity after the banking group sacked Antony Jenkins as chief executive last week, is planning for new rules that require the establishment of a ringfence by 2019. According to the FT, Barclays is the only bank that requires an extra licence for its ringfenced unit.
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Royal Bank of Scotland Group is winding down its Greek operation and is looking to sell its USD5 billion shipping loans portfolio, Reuters reported on Saturday. Citing finance sources familiar with the plans, Reuters said the move was part of the UK state-backed bank's efforts to shrink its international business.
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Tens of thousands of businesses seeking compensation in relation to BP's 2010 oil spill in the Gulf of Mexico have filed claims that are yet to be fully processed, according to a Financial Times report. Should the past pattern of payments continue, the report said the cost of the claims to BP will be at least USD2 billion more that it has set aside. Earlier in July, BP reached an USD18.7 billion deal to settle all US federal, state and local government claims arising from the spill.
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BG Group said it has begun loading its first liquefied natural gas from the second production train at the Queensland Curtis LNG facility in Australia. An LNG train is a liquefied natural gas plant's liquefaction and purification facility. The two production trains at the project are expected to produce enough LNG to load ten vessels per month combined, exporting around eight million tonnes per year by the time the project reaches plateau production in the middle of 2016, said BG.
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Unilever is working with headhunters at Russell Reynolds Associates as it begins a search to find a new chairman to replace Michael Treschow, who has been in the role since May 2007, Sky News reported. Citing people close to the process, the report said that Unilever is expected to name its next chairman by the end of the year.
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Derwent London said it has struck a GBP132 million deal to acquire the Aldgate Union building in Whitechapel in east London and said it has secured its first lettings at the White Collar Factory in Old Street, also in east London. Derwent will acquire the Aldgate Union building, located on Whitechapel High Street, from Royal Bank of Scotland Group PLC. It will be bought with vacant possession in December. RBS is currently the occupier of the property. The property is located on a one acre site and includes an eight-storey building with a total of 255,000 square feet in total office space.
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International Personal Finance warned there could be financial consequences as a result of potential legal changes in Poland that could result in a cap that covers a broader definition of non-interest costs than previously suggested. International Personal Finance, which provides home credit and digital loans, said it is reviewing draft legislation as it works out whether the structure of its products will be affected by a cap that could affect all non-interest costs in connection with a consumer loan agreement, a change from previous proposals that involved a cap on all mandatory, non-interest costs.
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Polymetal International said it has acquired the entire licence for the Primorskoye silver-gold property located in the Magadan region of Russia from Decamor Investments. The miner said it has paid an initial USD4.5 million to Decamor and will pay a deferred cash consideration later on.
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US-based Platform Specialty Products said it has agreed a GBP1.35 billion takeover of chemicals company Alent. Platform Specialty, a chemicals industry consolidation vehicle, said it will pay 503 pence in cash for Alent shares, a premium of around 49% to Alent's closing price of 337.7 pence on Friday. "The significant premium being offered by Platform recognises the progress Alent has made, the opportunities in front of us and the overall quality of the business, whilst also presenting a clear opportunity for our shareholders to realise the full value of their investment earlier," Alent Chief Executive Andrew Heath said.
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MARKETS
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London stock prices are higher mid-morning, as are European markets, after eurozone leaders and Greece reached an "agreekment" on a new bailout programme for the cash-strapped country.
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FTSE 100: up 0.6% at 6,715.47
FTSE 250: up 0.8% at 17,616.57
AIM ALL-SHARE: up 0.2% at 751.49
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The euro is down against the dollar despite initially rallying on the Greece deal.
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GBP: up at USD1.5570
EUR: down at USD1.1009
GOLD: down at USD1155.70 per ounce
OIL (Brent): down at USD57.73 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Eurozone leaders have agreed in principle to begin talks on a bailout programme for Greece which comes with strict conditions, but places the country on a path of growth and helps to regain trust, European Council President Donald Tusk said. Leaders of 19 euro area countries reached a unanimous agreement on an European Stability Mechanism programme for Greece early on Monday after intensive talks over the weekend in Brussels. "We had only one objective: to reach an agreement. After 17 hours of negotiations, we have finally reached it. One can say that we have 'agreekment'," Tusk said in a press conference following the summit.
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Greece's deal with its creditors keeps the country in the EU, Prime Minister Alexis Tsipras said after eurozone leaders agree to a new bailout programme. "We faced difficult decisions and hard dilemmas," he said, adding that the deal achieved after marathon talks in Brussels is the best possible. "The measures will inevitably create recessionary trends, but the growth package, the restructuring of debt and secured funding for the next three years" will mean that "Grexit is past," he said.
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A final deal on Greece's new bailout is still "weeks" away, the leader of eurozone finance ministers said. An agreement on reforms reached by eurozone leaders has to be approved by several parliaments, including in Athens, before the bailout negotiations can be launched, Jeroen Dijsselbloem said. The Greek parliament also has to quickly legislate on a first set of reform measures. Dijsselbloem says the ministers' Eurogroup panel will later on Monday look at the possibility of short-term "bridge financing" to quickly funnel aid to near-bankrupt Greece.
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The US central bank is likely to begin tightening its benchmark interest rate in 2015 after seven years of unprecedented slack monetary policy, Federal Reserve Chairwoman Janet Yellen said Friday. "Based on my outlook, I expect that it will be appropriate at some point later this year to take the first step to raise the Federal Funds rate and thus begin normalizing monetary policy," Yellen said, according to the text of a speech she gave in Cleveland, Ohio. "But I want to emphasize that the course of the economy and inflation remains highly uncertain, and unanticipated developments could delay or accelerate this first step."
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Chinese exports increased at a faster-than-expected pace in June, while imports fell less-than-expected, official data showed. Exports rose 2.8% year-over-year in June, exceeding economists' expectations for 1.0% growth. Meanwhile, imports slid 6.1% in June from the previous year, much slower than the 15.5% sharp decline expected by economists. The trade surplus of the country came in at USD46.54 billion in June, smaller than the USD56.7 billion surplus expected by economists. In May, the surplus was at USD59.49 billion.
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It was not certain whether a deal to end the controversy over Iran's nuclear programme could be reached on Monday, Iranian Deputy Foreign Minister Abbas Araghchi said in Vienna. "There are still problems we have to overcome. ... I cannot promise whether they will be solved today or tomorrow," he said on the 17th day of talks between Iran and the group of Britain, China, France, Russia, the US and Germany. Araghchi's message was less optimistic than that of his Foreign Minister, Mohammad Javad Zarif, who told reporters the previous day that negotiations would not have to be extended past Monday.
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Iraqi troops, backed by Shiite paramilitaries, started Sunday a major military operation to regain the key western city of Fallujah from the Islamic State extremist militia, military said. "The zero hour for liberating Fallujah from Daesh has started with the participation of 10,000 fighters, an officer at the Anbar command said, using the Arabic acronymn for Islamic State. Fallujah is a main city of the western Anbar province, where Islamic State has consolidated its presence in recent months.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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