LONDON (Alliance News) - Share prices in London opened firm Wednesday, taking back some of their recent losses caused by growing concern about a possible Brexit.
Miners Glencore and Anglo American led blue-chip gainers, both up about 3%. Builders Taylor Wimpey, Barratt Developments and Berkeley Group were lagging, after Berkeley warned the high-end London property market has slowed some 20% in the five months to May 2016 as the EU referendum approaches, with no new London launches in this period.
In some good news for the London market, Hollywood Bowl Group, the UK's largest 10-pin bowling operator, confirmed plans to float on the Main Market in July. The company, with 54 bowling centres under the Hollywood Bowl, AMF and Bowlplex brands, recorded revenue of GBP86 million in financial 2015. A report in the Times newspaper said the company will be valued around GBP280 million.
US stock index provider MSCI Inc again delayed the inclusion of China's mainland domestic shares in its emerging markets index. MSCI cited regulatory concerns and accessibility for global investors as some of the reasons behind its decision.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 5,964.85
FTSE 250: up 0.7% at 16,346.88
AIM ALL-SHARE: up 0.2% at 716.12
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Hang Seng: up 0.3% at 20,443.26
Nikkei 225: closed up 0.4% at 15,919.58
DJIA: closed down 0.3% at 17,674.82
S&P 500: closed down 0.2% at 2,075.32
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GBP: up at USD1.4161 (USD1.4108)
EUR: firm at USD1.1225 (USD1.1207)
GOLD: flat at USD1,285.74 per ounce (USD1,285.77)
OIL (Brent): soft at USD49.30 a barrel (USD49.65)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in BST)
0930 UK ILO unemployment rate and average earnings
1000 EU trade balance
1200 US MBA mortgage applications
1330 US NY Empire State manufacturing index
1330 US producer price index
1330 Canada manufacturing shipments
1415 US industrial production and capacity utilization
1500 Germany Buba President Weidmann speech
1530 US EIA crude oil stocks
1900 US Fed interest rate decision, monetary policy statement, and economic projections
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Tax hikes and spending cuts totalling GBP30 billion will need to be forced through in an emergency "Brexit Budget" if Britain votes to quit the EU, Chancellor of the Exchequer George Osborne is warning. Osborne and Labour former chancellor Alistair Darling are insisting schools, hospitals and the armed forces would all see funding slashed after a win for the Leave side on June 23. The basic rate of income tax would increase by 10%, climbing to 22p in the pound, the top rate would rise 3p to 43p, and inheritance tax would go up 5p to 45p in the pound, to plug a predicted GBP30 billion "black hole" in national finances triggered by Brexit, Osborne is saying.
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Britain's financial services sector and London's place as a global business hub would see a severe negative impact if the UK votes to leave the EU, an economic think tank has warned. The stark forecast from the Economist Intelligence Unit outlines a series of doomsday scenarios in the event of Brexit. For the City, these include financial volatility, job losses, vastly reduced access to European markets and the prospect of a brain drain from the Square Mile. The report says: "London has for decades been one of two global financial hubs, alongside New York. A Brexit vote on June 23 would put that position at risk, almost certainly depriving UK-based financial firms of their passport to conduct business anywhere in the EU."
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Russia's further participation at Euro 2016 now depends on the conduct of their fans after UEFA ruled the team would be disqualified if its supporters were involved in further stadium crowd disturbances. The Russian Football Union was given a suspended disqualification until the end of the tournament and fined EUR150,000 by UEFA's disciplinary committee. England's Football Association meanwhile said it had "serious concerns" about security in Lille amid the prospect of further confrontations between England and Russia fans. Russia's match against Slovakia in Lille on Wednesday will be followed by England against Wales in Lens on Thursday. The two northern French cities are just 40 kilometres apart, and most England fans gathering for the game are expected to stay in the much bigger city of Lille.
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The International Energy Agency sees the oil market to be balanced in the second half of 2016. The agency said it saw the "first significant drop" in global oil supply since 2013 last month. The IEA said oil supply was reduced by 800,000 barrels per day in May. Total output was 95.4 million barrels per day, 590,000 barrels per day less than a year ago, which was the first significant drop since early 2013, helped by outages in in OPEC and non-OPEC countries.
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The UN Security Council authorized the EU's naval force in the Mediterranean to cut the illicit flow of arms into Libya by intercepting suspicious vessels in international waters off the country's coast. The resolution, which expands an existing mandate allowing the EU's Operation Sophia to intercept migrant vessels and arrest suspected smugglers on high seas around Libya, aims to enforce a UN arms embargo on Libya meant to stop violence, especially by Islamic State extremists.
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More than 43,000 people have fled the western Iraqi city of Fallujah since government forces launched an offensive to recapture it from the Islamic State extremist militia in mid-May, a UN agency said. Over 10,000 of those fleeing the city left between Saturday and Monday, the International Organization for Migration said.
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Hillary Clinton won the primary in the US capital of Washington, the last vote in the state-by-state presidential nomination process that began in February. The former secretary of state and first lady had 79% of the vote with 75% of precincts counted. The end of the race to become the Democratic standard-bearer came after Clinton had secured enough support to win the left-leaning party's nomination. Rival Bernie Sanders had vowed to fight until the last ballots were cast, though he has backed off pledges to contest the nomination at the party convention next month in Philadelphia.
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US President Barack Obama was highly critical of presumptive Republican presidential nominee Donald Trump's rhetoric in response to the mass shooting in Orlando in remarks on Tuesday, calling the real estate tycoon's mindset "dangerous". After a meeting with his National Security Council, Obama argued that abandoning America's democratic values would make it easier for terrorist groups to radicalize people around the world. Obama specifically targeted Trump's controversial proposal to temporarily ban all Muslim immigration to the US.
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Athletes and fans should travel to the Olympics in Rio de Janeiro as planned despite the Zika outbreak, the World Health Organization said, countering calls for delaying or relocating the Summer Games. The international group of experts on WHO's Zika Emergency Committee discussed the risk of the Rio Games on Tuesday and acknowledged that mass gatherings can amplify outbreaks and can spread diseases around the world. However, in the case of Brazil, the committee considered that the sports event will take place in winter when transmission by mosquitoes decreases, and that authorities are actively fighting the insects in and around the sports venues.
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Venezuela's political opposition warned that if the government thwarts the will of the people and uses the Supreme Court to block a referendum to recall President Nicolas Maduro, the country could enter a "zone of turbulence". Jesus Torrealba, executive secretary of the opposition Democratic Unity Roundtable, made the remarks a day after Maduro's government asked the Supreme Court to stop MUD's efforts to hold a vote to oust him as president.
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BROKER RATING CHANGES
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TRADERS: UBS CUTS LONMIN TO 'SELL' ('NEUTRAL')
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Liberum Ups Jimmy Choo To Buy From Hold, Keeps Target At 135p
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N+1 Cuts Servelec Group To Hold From Buy, Target To 258p From 417p
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COMPANIES - FTSE 100
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Berkeley Group Holdings said both its revenue and pretax profit dipped in its recent financial year, after it sold more homes but at a lower average selling price, due to the higher-end market in the UK being hit by increased transaction taxes and as the country's European Union referendum approaches. The housebuilder, which almost exclusively focuses on more-expensive developments in London and the South East of England, posted revenue of GBP2.05 billion for the year ended April 30, down from GBP2.12 billion the year earlier. Berkeley's pretax profit slipped to GBP530.9 million for the year from GBP539.7 million the year earlier. Berkeley said it was offering a dividend of 190 pence per share for the recent financial year, compared to GBP180p per share for the year earlier.
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COMPANIES - FTSE 250
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AVEVA Group said preliminary talks with Schneider Electric SA about a potential reverse takeover of AVEVA have been terminated, just two days after confirming it had renewed talks with the French industrials group. Shares in AVEVA were suspended from trading Monday after it said it had received a conditional proposal from Schneider for a reverse takeover, following a previous reverse takeover deal between the two had collapsed in December last year.
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Jimmy Choo said it has made a good start to 2016 and is trading in line with its expectations, in a statement ahead of its annual general meeting on Wednesday. The luxury shoe and accessories retailer acknowledged "headwinds facing the majority of the sector in 2016" but said the company's "successful growth strategy continues to deliver".
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Warehouse property investor SEGRO said it has sold a portfolio of big box warehouses and development land in Italy, the Czech Republic and Poland to the SEGRO European Logistics Partnership joint venture for EUR89.4 million. SEGRO has a 50% interest in the SEGRO European Logistics Partnership joint venture and acts as asset, property and development manager.
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Restaurant Group said it has appointed Barry Nightingale as chief financial officer. Nightingale will join the board on Monday. He recently held the post of CFO at Monarch Airlines, and prior to that at gaming company Betfred.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Software firm Servelec Group said its operating profit for 2016 is set to significantly miss its expectations amid contract delays in some of its divisions. Servelec said its Social Care and Nuclear & Power businesses have both continued to trade in line, but market challenges facing its Healthcare, Technologies and Oil & Gas divisions will result in operating profit in 2016 being significantly lower year-on-year.
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Daily Mail & General Trust said Executive Director David Dutton will step down from both the board of DMGT and Zoopla Property Group from the end of June. Chief executive officer of DMGT's business to business segment, Suresh Kavan, will be appointed to the company's board from July 1, and Executive Director Kevin Beatty will be appointed to Zoopla's board as one of two of DMGT's nominated directors, from the same date.
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Oxford Instruments reported a swing to a pretax profit for its most recently ended financial year as its cost-savings programme helped offset a fall in revenue. The company, which makes technological tools and systems for industry and research, maintained its full-year dividend at 13.0 pence. For the year to end-March the company reported a pretax profit of GBP13.1 million, swung from a pretax loss of GBP9.6 million the year before, as a fall in revenue to GBP361.6 million from GBP380.1 million was offset by lower exceptional costs.
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COMPANIES - INTERNATIONAL
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Iran is preparing to unveil a historic agreement for Boeing jetliners within days that could be valued at about USD25 billion, according to reports. The transaction would be the first struck by the planemaker since sanctions were lifted in January and would require US government approval.
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French aerospace giant Airbus Group will set up a helicopter final assembly line in China as part of a EUR700 million deal to sell 100 H135 helicopters to a Chinese consortium. The Chinese consortium made up of China Aviation Supplies Holding Co, Qingdao United General Aviation Industrial Development Co and CITIC Offshore Helicopter Co has ordered 100 H135 light-twin helicopters. Airbus will build the H135 final assembly line in Qingdao, Shandong province.
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Private equity suitors TPG, Advent International and a partnership of Sycamore Partners and Vector Capital Management are into the final round of bidding for Yahoo, Bloomberg reported citing people familiar with the matter. The three buyout groups join Verizon Communications, AT&T and Quicken Loans founder Dan Gilbert in the last weeks of the bidding process, with each vying to win Yahoo's core Internet business, as well as some of its intellectual property and real estate assets.
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A US court ruled in favour of regulations to maintain net neutrality, the second time internet providers have failed in their attempts to overturn the rules on broadband speeds. In rejecting arguments brought by such US telecom giants as Comcast and Verizon, judges of the US Appeals Court affirmed 2-1 that the providers must act as neutral transmission platforms and treat all content equally, rather than giving higher paying customers better service. The decision is a success for internet firms such as Google and Netflix, but the matter could still go to the Supreme Court.
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Wednesday's Shareholder Meetings
Christie Group
Mytrah Energy
Kingfisher
Jimmy Choo
HSS Hire Group
Gresham House
UK Commercial Property Trust
Manx Telecom
NetScientific
MayAir Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
