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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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The Bank of England said it wants banks that expect to be subject to ring-fencing requirements by 2019 to submit a preliminary plan of their anticipated legal and operating structures by the end of 2014. The Prudential Regulation Authority, an arm of the Bank of England, is consulting on three areas of ringfencing policy ahead of new rules that will require banks with more than GBP25 billion of core deposits - broadly those from individuals and small businesses - to ring-fence their core activities from other activities like investment banking from the start of 2019.
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Lloyds Banking Group is set to cut thousands of jobs and close more branches as it shifts towards a "digitisation" strategy and automates its business, The Times reported. Jobs are expected to be cut in areas such as mortgage processing and new account opening, as work currently completed manually is moved to computer systems in order to cut costs and improve customer service, the newspaper said, citing City sources. The strategy is set to be unveiled by the bank as part of a three-year plan included in its third-quarter results announcement on October 28, The Times said.
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Tesco moved to bolster its board, adding the chief executive of food services company Compass and a former CEO of furniture and household goods retailer IKEA Group as non-executive directors. Compass CEO Richard Cousins and former IKEA CEO and President Mikael Ohlsson will join Tesco's board on November 1.
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Oil company BG Group said it has received a USD350 million payment from the Egyptian government, meaning its domestic receivables balance in the country has fallen to about USD1.2 billion. The Egyptian government has raised funds to help repay debts that it owes to the oil and gas sector in the wake of the disruption and turmoil caused by the so-called Arab Spring, when Egypt's previous rulers were thrown out.
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BT Group's return to the mobile market may be delayed into the next financial year due to technical problems which could undermine its plan to undercut rivals, The Daily Telegraph reported on Sunday. The newspaper said sources have suggested the company is struggling with technology designed to ensure as much voice call and data traffic as possible is carried over Wi-Fi networks rather than via a 4G mobile network. Having this technology working is an essential component of BT's plan to keep the cost of providing its mobile service low in order to undercut traditional mobile operators, the paper said.
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Mining giant BHP Billiton announced Sunday plans to cut unit costs at Western Australia Iron Ore or WAIO by at least 25% in a move which will make it the iron ore producer with the lowest cost in Australia. BHP expects to reduce unit cash costs by 25% to less than USD20 per tonne in the medium term to be achieved in the 2014 financial year.
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Used car trader BCA Marketplace, best known for its webuyanycar.com consumer operation, said it intends to list on the London Stock Exchange's main market, raising gross proceeds of about GBP200 million that it will use to reduce its debt pile. The company's main operation is to match-up wholesale buyers and sellers of used cars. It has over 200 physical sites across Europe, and claims to be two-and-half-time bigger than its nearest competitor by number of vehicles sold. It sold over 900,000 vehicles in 2013, while webuyanycar.com bought more than 120,000.
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BTG strengthened its expectations for its full year, saying it now expects its revenues to be around the top end of its guidance range of GBP330 million to GBP345 million, despite adverse foreign exchange movements, as a result of a strong first half. The specialist healthcare group said it had continued to see good growth in the products it acquired in July 2013, TheraSphere for the treatment of liver cancer and EKOS for blood clots.
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Dragon Oil made a 230 pence per share offer for Petroceltic International. The offer would value the Dublin-based oil and gas explorer at GBP491.56 million and represents a 29% premium on Petroceltic's closing price Friday of 177.92p. Petroceltic said in a statement that Dragon has completed due diligence and has submitted the bid to its board. It said any takeover of the company would be subject to standard Irish takeover rules and to approval by authorities in Algeria in relation to the Algerian assets owned by Petroceltic. Petroceltic said it has told Dragon Oil that it would be willing to recommend a firm offer at the current bid price.
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Cranswick said trading in the first half of the year has been in line with its expectations, with revenue in line with the year-earlier period as growth across most of its product categories offset lower sales of fresh pork. In a trading update, the food and pet products producer said its markets remain competitive and operating margins in the six months to September 30 are expected to have been similar to the previous year as a whole.
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Aer Lingus Group said traffic rose in September, bolstered particularly by growth in its long-haul operations. In a statement, the Irish flag carrier said traffic measured in revenue passenger kilometres rose 13.7% in September compared with a year earlier, greater than the 11.5% increase in available seat kilomtres, meaning its load factor - a measure of how full its planes are - rose to 83.3%, from 81.7%.
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MARKETS
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UK stock indices are trading higher, following on from a positive Asian session amid easing concerns over the pro-democracy protests in Hong Kong.
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FTSE 100: up 0.1% at 6,536.75
FTSE 250: up 0.1% at 15,246.07
AIM ALL-SHARE: up 0.3% at 742.07
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Investor confidence in the eurozone continues to fall, with the Sentix index dropping faster than expected in October. Although the data pressures the European Central Bank to do more to support growth, the single currency is a little higher against the dollar, due to some broad dollar weakness following Friday's strong dollar rally, which was sparked by a strong US jobs report.
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GBP-USD: up at USD1.5982
EUR-USD: up at USD1.2542
GOLD: up at USD1193.44 per ounce
OIL (Brent): up at USD92.97 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Financial services firms in the UK recorded the fastest growth in business volume since 2007 in the three months to September, a survey by the Confederation of British Industry and PricewaterhouseCoopers showed. According to the 100th survey, 60% of the firms said that business volumes had increased while 11% said that business was down. This led to a balance of 49%, which was the highest since the 51% logged in 2007. Firms were also optimistic about the business volume growth in the upcoming quarter as the corresponding index came in at 55%. This was the highest since June 2010.
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Eurozone investor confidence declined for the third straight month to the lowest since May 2013, survey figures from the think-tank Sentix showed. The investor confidence index fell to -13.7 in October from -9.8 in September. The score was forecast to drop moderately to -10.8 in October. The index measuring current situation declined to -20 in October from -16.8 in September. The reading was the lowest since August 2013.
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Germany's factory orders declined more than expected in August, figures from the Federal Statistical Office showed. Factory orders fell 5.7% month-over-month in August following the 4.9% rise in July. This was more than the 2.5% drop expected by economists. Domestic orders slid 2% and foreign orders plunged 8.4% in August.
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The number of activists dwindled at protest sites in Hong Kong on Monday morning, as government employees were able to return to work unobstructed and middle schools reopened. Protestors agreed to allow access to the central government complex in the Admiralty district and avoid confrontation. The government promised to enter into negotiations if protesters lifted at least some of their blockades around government offices.
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The World Bank downgraded its growth estimates for developing East Asia citing moderation in China's economic expansion caused by structural reforms. Developing East Asia is forecast to expand 6.9% this year and the next, the Washington-based lender said in its East Asia Pacific Economic Update, released Monday. In April, the bank projected 7.1% growth each for 2014 and 2015.
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Brazilian President Dilma Rousseff led Sunday's presidential election but will have to face conservative candidate Aecio Neves in a runoff October 26, according to official preliminary results.
With more than 99% of the ballots counted, Rousseff had 41.6% of the votes to 33.6% for Senator Neves, of the Party of Brazilian Social Democracy (PSDB). Environmental activist Marina Silva, 56, of the Brazilian Socialist Party, was garnered 21.3% of the vote.
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Islamic State militants captured part of a strategic hill overlooking the southern entrance to the besieged Kurdish town of Kobane on Syria's border with Turkey, a monitoring group said Sunday. The jihadists managed to take the southern side of Mishte Nur hill in fierce overnight clashes with the Kurdish People's Protection Units (YPG) and Syrian rebels, who maintain control of the hill's northern side nearer the town, said the Syrian Observatory for Human Rights, which compiles information from a network of local activists across Syria. The Islamic State's reported advance came despite what appeared to be the most intense airstrikes yet on jihadist forces around the town by a US-led coalition that formed to fight the militants.
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Those who executed Alan Henning will be hunted down, Prime Minister David Cameron said Saturday after huddling with security chiefs to thrash out a response to the murder of the British aid worker. A video of Henning's beheading by Islamic State militants was posted on the internet Friday. Henning was held by the group for nine months after being captured while travelling on an aid convoy to Syria. A week ago Britain's parliament voted overwhelmingly to participate in airstrikes against the militants. The video of the beheading opened with footage from a news report on the vote.
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Twelve separatist rebels were killed trying to capture the airport in their stronghold of Donetsk, the Interfax Ukraine news agency reported citing the National Security Council in Kiev. Ukrainian troops fought off the assaults on the biggest airport in eastern Ukraine, council spokesman Andriy Lysenko said. He added that two government soldiers were killed in the fighting in the past 24 hours. The airport is a strategic prize that has been the subject of fighting for days, despite a ceasefire that took effect between the pro-Russian rebels and the government on September 5.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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