LONDON (Alliance News) - UK shares have opened flat to lower Thursday, after German officials punctured optimism for a Greek debt deal.
Miners lead FTSE 100 decliners following some downbeat comments about the Chinese economy by the country's central bank. In Hong Kong, the Hang Seng index is down 3.0%.
Shares in British Airways owner IAG are up 0.7% after it said it will not raise its takeover offer for Irish flag carrier Aer Lingus, whose shares are unchanged early Thursday. Shares in Ryanair, a large shareholder in Aer Lingus, are down 1.2%.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.3% at 7,014.62
FTSE 250: down 0.2% at 18,204.02
AIM ALL-SHARE: flat at 766.03
----------
Hang Seng: down 3.0% at 27,249.85
Nikkei 225: closed up 0.4% at 20,551.46
DJIA: closed up 0.7% at 18,162.99
S&P 500: closed up 0.9% at 2,123.48
----------
GBP: up at USD1.5361
EUR: up at USD1.0930
GOLD: up at USD1,189.86 per ounce
OIL (Brent): up at USD62.36 a barrel
(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
Thursday's Key Economic Events still to come
(all times in BST)
09:00 Italy Consumer Confidence
09:30 UK Gross Domestic Product
09:30 UK BBA Mortgage Approvals
10:00 EU Consumer and Industrial Confidence, Economic Sentiment
11:00 EU Financial Stability Review
13:30 US Initial and Continuing Jobless Claims
13:30 Canada Current Account
13:30 Canada Industrial Product and Raw Material price indices
15:00 US Pending Home Sales
15:30 US EIA Natural Gas Storage and Crude Oil Stocks
19:45 US Fed Minneapolis's Narayana Kocherlakota speech
----------
Germany rejected Athens' claims that it was close to a deal with its international creditors as the world's top financial officials gathered in Dresden for a meeting overshadowed by the Greek debt crisis. Global markets rebounded on Wednesday ahead of a two-day meeting of the world's top financial officials in the eastern German city after Greek Prime Minister Alexis Tsipras said his cash-strapped state was on "the final stretch towards a positive deal". But members of the German delegation in Dresden for the meeting of the Group of Seven finance ministers and central bankers said: "We have not advanced much further on the matter." The German officials went on to express surprise at the statements from Athens saying that cash-strapped Greece was close to reaching a deal with its EU and International Monetary Fund creditors.
----------
The People's Bank of China warned of deflationary pressure on the Chinese economy as it forecast consumer prices will remain subdued for the year and said the growth outlook appears challenging. The Chinese central bank also attempted to allay concerns in the report, published on its website, about the struggling Chinese economy, saying it can expand by around 7% this year, in line with the central government's economic growth target. The annual report by the bank also saw it reiterate that will maintain a prudent monetary policy and will make timely adjustments to ensure that conditions in the domestic economy are "appropriate".
----------
Retail sales in Japan advanced 5.0% on year in April, the Ministry of Economy, Trade and Industry said - coming in at 11.562 trillion yen. That was shy of forecasts for an increase of 5.5% following the 9.7% contraction in March.
----------
Three Chinese coast guard ships on Thursday entered what Japan considers its territorial waters near a group of disputed islets in the East China Sea, Japanese media reported. The Japan Coast Guard spotted the three ships near the Japanese-controlled Senkaku Islands around 10 am (0100 GMT), Kyodo News agency reported. A Japanese patrol ship urged the Chinese ships not to approach Japan's waters, but they responded by saying the Chinese laws should be observed, Kyodo reported, citing Japanese coast guard officials.
----------
Talks on a far-reaching nuclear deal between Iran and six world powers might run past the self-imposed deadline on June 30, a senior Iranian negotiator said in Vienna. "What's important for us is a good agreement, even if it should take longer than the imposed deadline," Deputy Foreign Minister Abbas Araghchi told Iranian state media after arriving for a new round of talks.
----------
Iraqi forces recaptured towns from Islamic State fighters near militant-held Ramadi on Wednesday, a day after the government started an offensive to drive the jihadist militia out of Anbar province, a security official said. The official, a member of the Anbar police command, said security forces backed by Shiite militias and local tribes had regained control of Tash and Hamira south of Ramadi, cutting off Islamic State supply lines in the area. He spoke on condition of anonymity. Meanwhile, a pro-government Shiite militia, known as the Popular Mobilization, announced it had advanced into the area of Nabai near Ramadi, forcing the extremists to retreat.
----------
Pressure mounted on football's ruling body FIFA as police detained seven football officials in Zurich on US bribery charges, while Swiss prosecutors seized FIFA documents in a separate probe over the 2018 and 2022 World Cup decisions. The separate but coordinated investigations came to light shortly before the expected re-election of FIFA president Joseph Blatter, who seeks a fifth term on Friday. Eleven FIFA members were provisionally suspended. While Blatter is not a suspect in either case, the scandals during his reign since 1998 led to renewed calls for him to step down. European body UEFA said it was "deeply shocked" by the arrests and called for the FIFA Congress and election to be delayed.
----------
BROKER RATING CHANGES
---------
TRADERS: JPMORGAN RAISES DIRECT LINE TO 'OVERWEIGHT' ('NEUTRAL')
----------
COMPANIES - FTSE 100
----------
International Consolidated Airlines Group said its EUR2.55 per share offer for Irish flag carrier Aer Lingus Group is its final offer and will not be raised. IAG moved a step closer to securing a deal to acquire Aer Lingus on Tuesday after the Irish government gave its backing to its EUR1.4 billion offer, though this still needs to be passed through an Irish parliamentary vote. The other step IAG still has to overcome is securing the support of Ryanair Holdings, the budget carrier which holds a 29.8% stake in Aer Lingus.
----------
The UK government said it has asked competition regulators to look at the implications on banking competition of the plans for Royal Bank of Scotland Group to carve out lender Williams & Glyn. The Competition and Markets Authority's work to assess the impact of the planned divestment on banking competition is meant to help the government and RBS to decide whether more could be done. The findings of the assessment will be reported in July, which will enable the government and RBS to consider their next actions. Currently, RBS plans to IPO the Williams & Glyn business in the second half of 2016.
----------
Kingfisher reported a drop in total revenue in the first quarter of its financial year as it was hit by adverse currency movements, but said it is making good progress with its turnaround plans. The retailer reported total sales of GBP2.59 billion for the 13 weeks to May 2, which is a 4.6% decline on the same period the year before, but would have been an increase of 2.7% had exchange rates remained constant. Like-for-like sales were up 0.8% on a constant currency basis. Kingfisher said that retail profit in the period was GBP150 million, down 4.8% after being hit by GBP10 million in adverse foreign exchange movements on the translation of non-sterling profits and GBP7 million in charges for new country development activity. Retail profit was up 1.4% at constant currencies.
----------
Sports Direct International said it will provide an update on its outlook for the financial year to April 26 at its annual conference on Thursday, saying underlying earnings before interest, taxation, depreciation and amortisation will be in line with market expectations, while both underlying pretax profit and earnings per share are set to be ahead. Sports Direct said its underlying Ebitda for the year will be GBP380 million, in line with market expectations, but said its underlying pretax profit and earnings per share will be ahead of the market view, without providing any specific figures.
----------
Sky is understood to have walked away from talks to create a joint venture with Italian broadcaster Mediaset, the company founded by the country's former prime minister, Silvio Berlusconi, The Daily Telegraph reported. City sources told the newspaper the talks had broken down over the valuation of Mediaset Premium, Mediaset's pay-TV rival to Sky's Italian business. The two sides had been in talks over a combination of Mediaset Premium with Sky Italia.
----------
COMPANIES - FTSE 250
----------
Tate & Lyle reported a huge drop in profit in its recently-ended financial year after suffering from issues with its supply chain, a weak performance from its bulk ingredients business, and tough market conditions for its SPLENDA Sucralose product. The FTSE 250-listed sugar and sweeteners company reported a drop in pretax profit in the year to March 31 to GBP51 million from GBP277 million the year before, as sales fell to GBP2.4 billion from GBP2.8 billion. Still, Tate & Lyle said it will increase its dividend for the full year to 28.0 pence from 27.6p, an increase of 1.4%.
----------
The companies involved in the Isobel deep exploration well offshore the Falkland Islands said they have made an oil discovery that has similar properties to the discovery made at the Sea Lion project. Premier Oil is the operator of the well with 36% stake, with Falkland Oil and Gas holding a 40% stake and Rockhopper Exploration holding the balance. The companies said the Isobel well has been drilled to 8,289 feet, where it met the top of the reservoir. The bottom 75 feet of the well consists of oil bearing F3 sands which were at a higher-than-expected reservoir pressure. This resulted in an influx of oil into the well which is of a similar nature to the Sea Lion crude.
----------
IG Group Holdings said it is on track to deliver against full-year financial expectations. IG Group said it has made "good" strategic progress, citing the extension of its stockbroking offering into the Netherlands and steps taken towards securing full authorisation and the opening of its office in Dubai in the coming weeks.
----------
Outsourcing company Serco Group confirmed media reports overnight by appointing Roy Gardner as its new non-executive chairman. Gardner will take up the role on July 1 and will join the board from June 1 to enable a handover period with existing chairman Alistair Lyons, who will then step down. Gardner is the former chief executive of energy firm Centrica and is the former chairman of catering and outsourcing company Compass Group.
----------
COMPANIES - LONDON MAIN MARKET AND AIM
----------
B&M European Value Retail reported a pretax profit in its recently-ended financial year, as it recovered from a loss in the prior year, and as revenue grew. The company reported a pretax profit in the year to March 28 of GBP61.7 million, compared with a pretax loss of GBP14.3 million the year before. Revenue grew 29.5% to GBP1.65 billion from GBP1.27 billion, driven by a 4.4% rise in UK like-for-like sales and a contribution from new store openings.
----------
Online advertising technology company Marimedia said it anticipates its 2015 results will be materially below market expectations owing to a decision by the company to exit the display advertising sector and focus solely on mobile. Shares in Marimedia were down 40% just after the open.
----------
LED lighting company Dialight said it has appointed Michael Sutsko as its new chief executive. He joins from his role as the president of the performance materials division of FTSE 250-listed electronics company Laird and will join the board on June 1. Sutsko replaces Roy Burton, who stepped down from the role in March due to ill health.
----------
Business services company Hogg Robinson Group said Tony Isaac has informed the company he will no longer be able to take up the role of chairman of the company. Isaac had been due to take over from John Coombe as Hogg Robinson's chairman following its annual general meeting on July 24. But Isaac has said he will no longer be able to take up the role due to personal reasons and will step down as a non-executive director. Hogg said it will undertake the process of appointing a new chairman and said Coombe will remain in the role until a replacement is appointed.
----------
Optimal Payments said it has struck a deal to acquire Montreal, Canada-based mobile platform developer FANS Entertainment Inc for CAD16 million, to be paid for via the indirect issuance of Optimal Payments shares. Optimal Payments will issue 3.2 million shares in the unnamed subsidiary to FANS, with the shares exchangeable on a one-for-one basis to shares in Optimal Payments over three years, with some subject to satisfying certain financial targets.
----------
Oxford Instruments said it has entered into a joint venture with Sweden-based GD Intressenter to make ultra high vacuum surface science products. The joint venture will involve Oxford's Omicron Nanotechnology GmbH unit and GDI's Scienta Scientific AB. In consideration for new shares issued in Scienta, Oxford has transferred all of its shares in the capital of Omicron to Scienta. This will mean Oxford holds a 47% stake in Scienta, to GDI's 53%.
----------
COMPANIES - INTERNATIONAL
----------
Analog semiconductor devices maker Avago Technologiesis in advanced talks to buy rival Broadcom Corp in a deal worth about USD35 billion, the Wall Street Journal reported citing people familiar with the matter. A deal between the companies could be announced as soon as Thursday.
----------
JPMorgan Chase's USD500 million settlement with pension funds over Bear Stearns' sale of mortgage-backed securities was approved by federal judge, the Bloomberg reported. Bear Stearns, acquired by JPMorgan, was accused in the lawsuit of issuing USD17.6 billion in faulty mortgage-backed securities.
----------
Membership warehouses operator Costco Wholesale reported a 9% increase in profit for the third quarter from last year, reflecting higher membership fees and an increase in comparable sales that excludes the negative impacts from gasoline price deflation and a stronger dollar. Adjusted earnings per share for the quarter beat analysts' expectations, while revenue missed their estimates.
----------
Ford Motor Co said it is offering competitors access to its electrified vehicle technology patents in a move to help accelerate industry-wide research and development of electrified vehicles.
----------
Thursday's Scheduled AGMs/EGMs
Allied Minds
Access Intelligence
Electric Word
Galasys
Metminco
North American Investment Trust
Northbridge Industrial Services
JPMorgan Income & Growth Investment Trust
Trap Oil
Fair Oaks
Travis Perkins
Smart Metering Systems
Powerfulte
Alba Mineral Resources
----------
By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
