LONDON (Alliance News) - Stock markets fell in Asia and are down in Europe Monday after the latest failure of talks between Greece and its creditors failed to deliver progress on "significant gaps" in reform plans for the cash-strapped country.
Greece's prime minister Monday urged the country's creditors to get "realistic", a day after weekend negotiations failed to bridge major differences, setting the stage for eurozone finance ministers to make a final push to reach a deal to avert a default.
Prime Minister Alexis Tsipras accused the institutions involved in the country's bailout negotiations of "political expediency" regarding their insistence on pension cuts. He said: "We do not have the right to bury European democracy at the place where it was born."
Speaking to Greece's Efimerida ton Syntakton newspaper after the breakdown in bailout talks, Tsipras emphasised that the Greek government has submitted counter-proposals.
He said the Greek government would wait "patiently" until the country's creditors - the European Commission, the European Central Bank and the International Monetary Fund - become "realistic."
Meanwhile, Greece's finance minister Yanis Varoufakis told Sto Kokkino radio: "What happened yesterday was that Greece said thus far and no further."
Yet he also seemed optimistic about the negotations and added: "Let's see it from a positive perspective, realistically, today is a good day, things are more crystal clear."
The comments came ahead of a crucial meeting of eurozone finance ministers on Thursday, where further talks on Greece's finances are to take place and just two weeks before an IMF debt repayment deadline and the expiry of the European part of the country's bailout.
Fears are mounting that Greece will soon run out of money, with no agreement yet on reforms that the country would have to implement in exchange for access to EUR7.2 billion in remaining bailout funds.
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Markets: London's stock indices are lower as European markets start a week that is expected to be decisive for the Greek debt negotiations, with the European Commission saying there are "significant gaps" between the two sides. The pound is also down against the dollar amid general risk aversion in light of the Greek talks.
Futures point to a lower open for US stock indices, with the DJIA and S&P 500 both currently indicated down 0.3% and the Nasdaq 100 down 0.4%.
FTSE 100: down 0.7% at 6,738.69
FTSE 250: down 0.9% at 17,782.11
AIM ALL-SHARE: down 0.3% at 772.44
GBP: down at USD1.5494
EUR: down at USD1.1218
GOLD: down at USD1,175.46 an ounce
OIL (Brent): down at USD63.77 a barrel
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Top Corporate News
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Rolls-Royce Holdings said it has won services contracts valued at up to USD224 million to support US military branches and global air forces supplied by the US Department of Defense. The contracts will support Rolls-Royce AE 2100, Adour (F405) and T56 engines across a variety of fleets, the company said. Services to be supplied by Rolls-Royce include logistics support, engineering, parts, repairs, field services and design modifications.
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Aberdeen Asset Management revealed plans to launch new investment funds after raising additional tier 1 capital by agreeing to issue GBP100 million of non-voting preference shares to top shareholder Mitsubishi UFJ Trust and Banking Corp. Aberdeen Asset Management said it is issuing the perpetual redeemable preference shares to Mitsubishi UFJ Trust and Banking Corp, which owns about 17% of the asset manager, with a view to providing seed capital for the new funds.
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Old Mutual is set to sell 11 million shares in OM Asset Management, the boutique asset manager it spun off in a float on the New York Stock Exchange in the autumn of 2014.
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Thomas Cook Group said it will establish a joint venture with Fosun International to develop domestic, inbound and outbound tourism activities for the Chinese market under Thomas Cook brands, a move that comes after the two companies in March formed a strategic partnership to look for opportunities in the Chinese market. The joint venture will be 51% owned by Fosun and 49% by Thomas Cook. The two companies will put a total of GBP1.6 million into the venture to support its start-up, roughly half each. Fosun International, chaired by Chinese billionaire Guo Guangchang, in March bought a 5% stake in the UK travel operator and said it plans to increase its stake to 10% by buying shares in the open market over time.
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Vedanta Resources said it is merging two Indian subsidiaries as it looks to simplify its structure. The move results in the combination of Vedanta Ltd and Cairn India. Minority shareholders in Cairn India will receive one equity share in Vedanta Ltd, as well as one redeemable preference share in Vedanta Ltd with a face value of INR10, implying a premium of 7.3% to the previous closing price. Chief Executive Tom Albanese said the combination of Vedanta Ltd and Cairn India will help to "unlock" India's energy and mineral resources. Following completion of the transaction, Vedanta Resource's ownership in Vedanta Ltd is expected to decrease to 50.1% from its current 62.9% shareholding. Cairn India minority shareholders will own 20.2% and Vedanta Ltd minority shareholders will own a 29.7% stake in the enlarged entity. Prior to the transaction, London-listed Cairn Energy holds a 9.8% stake in Cairn India.
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NMC Health said it has agreed to acquire United Arab Emirates-based long-term medical care provider ProVita International Medical Center LLC for USD160.6 million in cash. The acquisition adds 120 beds to NMC's expected 2015 licensed bed capacity of 720, NMC said.
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Unite Group said the Unite UK Student Accommodation Fund, in which it has a 22% stake, has exchanged contracts to acquire a 2,100 bed student accommodation portfolio for GBP271 million. The student accommodation developer and manager said the fund will pay for the deal using the proceeds of last month's equity raise.
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Emirates National Oil Co said it has reached a recommended deal to buy Dragon Oil for 750 pence a share in cash, valuing the whole of Dragon at GBP3.7 billion, an improvement on its initial approach. Emirates, which is owned by the government of Dubai, is already Dragon Oil's majority shareholder, and the offer for the stake it doesn't own is worth about GBP1.7 billion in total. It said its offer is 47.2% above Dragon Oil's share price on March 13, the day before it first approached Dragon Oil. The company first approached Dragon about a possible acquisition of the stake it didn't already own in March, and last month it put forward a 735 pence a share potential offer.
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AIM Movers
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Eclectic Bar Group shares have risen by almost a third after it said it is implementing a cost reduction programme as it warned of continued competitive pressures in a number of its locations. It also plans to raise GBP1.65 million in a share subscription and is appointing leisure entrepreneur Luke Johnson as its new executive chairman. Sabien Technology Group has lost a fifth of its value after it warned it will post a widened pretax loss for its current financial year to due some substantial orders being delayed. Management Resource Solutions is down after it said its planned acquisition of D&M Group will not go ahead after the target walked away from the deal, a move that comes after Management Resource struggled to get the funding it needed. Central Rand Gold is another faller after it extended the targeted completion date for the sale of its Central Rand Gold (Netherlands Antilles) NV subsidiary by a month to July 15 at the request of the potential buyers, and narrowed the field of potential acquirers to two, from four.
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Other Top Economics And General
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The average asking price for a house in the UK jumped 3.0% on month in June, property tracking website Rightmove said - coming in at GBP294,351. Analysts figure the jump was the result of last month's election results, which resulted in a Conservative victory - as well as a dwindling pool of available houses. Prices had slipped 0.1% in May. On a yearly basis, prices spiked 4.5% after gaining 2.5% in the previous month.
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Standard & Poor's Ratings Services late Friday downgraded its outlook for UK sovereign debt to negative from stable due to the government's decision to hold a referendum on membership in the European Union by 2017. "We believe that the UK government's decision to hold a referendum on EU membership by 2017 indicates that economic policymaking could be at risk of being more exposed to party politics than we had previously anticipated, similar to the situation in the US when we lowered that sovereign rating in 2011," S&P said. "A possible UK departure from the EU also raises questions about the financing of the economy's large twin deficits and high short-term external debt," the ratings agency added. At the same time as downgrading its outlook on the UK, S&P affirmed its AAA/A-1+ long- and short-term sovereign credit ratings.
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EU rules forcing Italy to look after all the boat migrants who land on its territory and stop them moving elsewhere in the bloc must be changed, Italian Prime Minister Matteo Renzi said in an interview. The so-called Dublin II regulation is criticized for putting undue pressure on countries that serve as entry points for EU-bound migrants, such as Italy and Greece. Its prescriptions are often ignored, as many refugees still find their way to northern Europe. "In Europe we must change the principle set by Dublin II," Renzi told the Corriere della Sera newspaper, adding that he had an unspecified "plan B ready" if an upcoming EU summit does not deliver progress on such issues. Migration is expected to top the agenda at the June 25-26 meeting of EU leaders in Brussels. They are due to consider proposals to relocate 24,000 asylum seekers from Italy and 16,000 from Greece to elsewhere in the bloc, over the course of two years.
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The Eurozone trade surplus increased in April as exports expanded from March amid fall in imports, data from Eurostat showed. The trade surplus rose to a seasonally adjusted EUR24.3 billion from EUR19.9 billion in March. Exports gained 1.1%, while imports decreased 1.6% from the prior month. On an unadjusted basis, the trade surplus totaled EUR24.9 billion in April compared to a EUR14.9 billion surplus seen in the same period of last year.
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The US presidential race is heating up. Former secretary of state Hillary Clinton pledged to fight for the middle class in her first major Democratic campaign rally before thousands of cheering supporters on New York City's Roosevelt Island. But on Monday, the centre-left politician will likely be overshadowed by the long-awaited formal announcement in Miami by Jeb Bush - son of one president, brother to another and former governor of the southern state of Florida.
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The number of people dead due to Middle East Respiratory Syndrome or MERS in South Korea has risen to 16, as the country's Ministry of Health and Welfare reported one more death on Monday, along with five new cases. A 58-year-old patient died while undergoing treatment at a hospital, South Korea's Yonhap news agency reported. Currently, there are 150 people affected by the virus.
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The US launched an airstrike in Libya against al-Qaeda terrorist Mokhtar Belmokhtar, the Pentagon said. Belmokhtar has a long history of leading terrorist activities as a member of al-Qaeda in north-western Africa, and directed the 2013 attacks in Algeria that killed at least 38 people from 10 countries, including three Americans, it said in a statement. The "counterterrorism strike against an al-Qaeda-associated terrorist" was carried out Saturday, Colonel Steve Warren said earlier.
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Afternoon Watchlist (all times in BST)
13:30 US NY Empire State Manufacturing Index
14:15 US Industrial Production
14:30 EU ECB President Draghi's Speech
15:00 US NAHB Housing Market Index
21:00 US Total Net TIC Flows
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Tuesday's UK Corporate Events
Accsys Technologies - Trading Update
Ashtead Group - Full Year Results
Crest Nicholson - Half Year Results
Record - Full Year Results
Consort Medical - Full Year Results
Servoca - Half Year Results
Pressure Technologies - Half Year Results
DJI Holdings - Full Year Results
Trifast - Full Year Results
Whitbread - Q1 Trading Statement
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Tuesday's Key Economic Events (all times in BST)
07:00 Germany Consumer Price Index
09:30 UK Producer Price Index
09:30 UK Retail Price Index
09:30 UK DCLG House Price Index
09:30 UK Consumer Price Index
10:00 Germany ZEW Survey - Economic Sentiment
10:00 EU ZEW Survey - Economic Sentiment
10:00 EU Employment Change
13:30 US Housing Starts
13:55 US Redbook index
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