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LONDON (Alliance News) - Babcock International Group is leading the FTSE 100 higher Monday after its Cavendish Fluor Partnership joint venture was selected as the preferred bidder for a GBP7 billion nuclear plant decommissioning contract.
The joint venture with Flour Corp of the US was named preferred bidder for a deal to manage and decommission 12 nuclear sites in the UK. The joint venture has agreed with the UK's Nuclear Decommissioning Authority to provide savings of more than GBP1 billion on the programme.
The 12 sites, which include the UK's 10 Magnox reactor sites built in the 1950s and 1960s, are into the final stages of decommissioning.
Meanwhile, the Life Insurance sector is rebounding from the heavy selling seen on Friday after the Financial Conduct Authority re-iterated its plans for the insurance industry in the year ahead. Shares in life insurers fell heavily Friday after a senior official told The Daily Telegraph about plans to probe how closed-book products are being serviced by insurance companies. The regulator late Friday said it will appoint a law firm to help it look into how it handled the issue amid criticism from the industry.
Legal & General Friday had requested the FCA bring forward the publication of the business plan, describing the market in the wake of The Daily Telegraph article as disorderly.
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FTSE 100: up 0.3% at 6,634.25
FTSE 250: up 0.4% at 16,250.97
AIM ALL-SHARE: down 0.02% at 850.56
GBP-USD: flat at 1.6644
EUR-USD: up at 1.3792
GOLD: up at USD1,295.23 an ounce
OIL (Brent): down at USD107.86 a barrel
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Key UK Corporate News
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FTSE 100: Rolls-Royce Holdings said it had won a deal worth more than USD50 million to support the US Marines Corps' fleet of KC-130J air-to-air refuelling tankers. GlaxoSmithKline has announced a series of new investments in sub-Saharan Africa of up to GBP130 million over the next five years to increase access to medicines, build its capacity and contribute to its long-term business growth. GSK also said that its Phase III STABILITY study for darapladib in the treatment of patients with chronic coronary heart disease failed to meet its primary endpoint, although it said that the effects of the drug on the reduction of coronary events was of potential interest. The drugs giant also withdrew its marketing authorisation application for advanced ovarian cancer maintenance therapy Votrient in the EU after it got poor data from an analysis of data from a phase III trial. WPP said its Hill+Knowlton Strategies communications consultancy has struck a deal to buy digital creative agency Rice5. ITV said that the deficit on its pension scheme has been reduced by GBP50 million immediately after if concluded an agreement with the trustee of the scheme on a payment schedule, backed by its London Television Centre property.
FTSE 250: Lonmin said former Anglo American executive Brian Beamish will become the interim chairman of its board from May 1, after Roger Phillimore stands down the previous day. Carillion has been selected as preferred bidder on a GBP200 million support services contract by the Nottingham University Hospitals NHS Trust. Polymetal International swung to a net loss in 2013 as gold prices, impairments and cash costs hit the company. Entertainment One has appointed Allan Leighton as its new Chairman. Synergy Health has postponed the previously announced changes to its board due to potential opportunities in the US, meaning Chief Executive Dr Steeves will remain in his role. UNITE Group said that the UNITE Student Accommodation Fund successfully raised GBP106 million of new equity last week, which it will use to reduce leverage and as well as fund potential future acquisitions.
AIM: Shares in Kea Petroleum are higher after it said it has reached a commercial agreement on the proposed farm-out of an interest in its PEP 51153 site, which includes the Puka discovery, in New Zealand. Alexander David Investments is also higher after it resumed trading. It is proposing to acquire Tiziana Pharma Ltd in a reverse takeover, a move which would transform the investing company into a development stage biotechnology company. Shares in Daily Internet are up after it said newly acquired internet infrastructure service provider Netplan Internet Solutions has won a new contract with an existing US-based customer worth around GBP160,000 per year. Blue Star Capital is another gainer after it said investee company Oak Media has entered an agreement with Nektan for money gaming services in the UK. e-Therapeutics is doing well on the back of positive interim results from a UK study evaluating the safety, dosing and anti-tumour activity of its ETS2101 drug in patients with advanced solid cancer tumours. Regenersis is another gainer after it agreed to acquire Finland's Blancco Oy Ltd for EUR60 million and raised GBP100.0 million gross in an over-subscribed share placing. Kibo Mining is a big faller after it raised GBP750,000 in a share placing, money it will use to help it advance its Imweru gold project. African Potash is also down after it swung to a pretax loss in its first half as it spent money ramping up operations in the Republic of Congo. Petards Group is another big decliner after it reported that it swung to a loss in 2013 due to a sharp fall in revenues, even though its performance is set to improve in 2014 and the chairman said the company was no longer in "retrenchment mode." Zambeef Products is down after it warned that it will report a pretax loss for the first half of the financial year due to increased competition in its markets that is pushing down prices, as well as the impact of disease control measures in the Zambian pig market. Shares in Red Rock Resources have dropped after the company said its pretax loss narrowed in its first-half but the sale process of a part interest in its Greenland operations is continuing slowly. The TEG Group is down after it said its loss widened in 2013 as it was hit by exceptional provisions and a contract delay.
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Top Economics And General
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UK Mortgage approvals in February came in at 70,309, according to the Bank of England, below economists' forecasts for 75,000. UK net consumer credit in February was up GBP0.6 billion to GBP159.0 billion. Consensus was for an increase of GBP0.7 billion.
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The average asking price for a house in the UK was up 0.6% on month in March, property tracking website Hometrack said. That's slowing from the 0.7% growth in February - although it marks the 14th straight month that prices have increased, marking the longest streak in seven years. On a yearly basis, house prices jumped 5.7% - accelerating from 5.4% in the previous month.
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Annual eurozone inflation fell to a more-than four-year low in March increasing the pressure on the European Central Bank to act to head off fears of deflation. The region's cost of living slumped to 0.5% in March compared with 0.7% in February, the European Statistics Office Eurostat said. This took consumer prices deeper into what ECB chief Mario Draghi has called the "danger zone" of an inflation rate below 1%. Inflation is now at its lowest level since November 2009.
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Germany's retail sales grew unexpectedly in February from the prior month, official data showed. Retail sales advanced by real 1.3% from January, Destatis said. This was the second consecutive rise in retail turnover. Sales were forecast to fall 0.5% in February after rising 1.7% in January. Year-on-year, retail sales grew 2%, much faster than the 0.9% rise posted in January. The rate also exceeded the 0.8% increase forecast by economists.
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The French economy recovered as initially estimated during the final quarter of 2013, data from the statistical office Insee showed. Gross domestic product expanded 0.3% sequentially in the fourth quarter, following a 0.1% fall in the third quarter. The fourth quarter rate matched preliminary estimate. Over the whole year of 2013, GDP rose 0.3% after a stagnation in 2012.
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The Swiss Competition Commission said it started a formal investigation on Monday against eight banks for possible manipulation of major currency rates. The suspects include Swiss banks UBS and Credit Suisse as well as major foreign lenders. "There is evidence that anti-competitive agreements were made between these banks to manipulate exchange rates in the currency market," the commission said.
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US Secretary of State John Kerry made clear Sunday that a solution to the crisis in Ukraine will be acceptable only in close consultation with the new Ukrainian government. Speaking to reporters in Paris after five hours of talks with Russian Foreign Minister Sergei Lavrov, Kerry said he told Lavrov that Washington still considers Russia's actions in Crimea illegal. He also reiterated Washington's unease over an estimated 40,000 Russian troops gathered on Ukraine's eastern border, saying any real progress in Ukraine must include a pull back of those forces.
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The French government was in full soul-searching mode Sunday after the conservative opposition trounced the governing Socialist Party in a municipal election run-off that also yielded gains for the far-right National Front. Voters across the country used the election for town councils and mayors to vent their frustration with President Francois Hollande's failure to turn around the battered French economy.
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Turkish Prime Minister Recep Tayyip Erdogan declared his Justice and Development Party the winner in Sunday's local election, seen as a referendum on his government. Preliminary results showed the conservative AKP had garnered 45.1% of the overall vote, with more than 90% of ballots counted, while the main rival Republican People's Party (CHP) received 28.7%, according to CNN Turk television. In a speech to thousands of cheering supporters standing in the cold in Ankara, Erdogan lashed out at the opposition, labeling some as "traitors."
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Greece on Sunday secured the next tranche of rescue bailout loans by passing key market and structural reforms demanded by international lenders. The bill, which paves the way for the liberalization of the labour market and structural reforms, received 152 votes in favour and 135 against in the 300-seat parliament.
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North Korea Monday held military exercises near the maritime border with the South, drawing response fire from Southern troops, a news report said. Around 100 artillery shells from the North landed on the other side of the Northern Limit Line, a disputed maritime border off the west of the peninsula, the South's joint chiefs of staff (JCS) were quoted as saying by Yonhap News Agency in Seoul.South Korean fired 300 self-propelled howitzer shells in response, aimed at open water on the North's side, and dispatched F-15 fighter jets to the area, the report said.
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Australian Prime Minister Tony Abbott said Australia owes it to the families of the 239 passengers and crew of the missing Malaysia Airlines flight to keep up the search. "I'm certainly not putting a time limit on it," Abbott said in Perth after breakfasting with air crews involved in the search 1,850 kilometres west of the city. "We owe it to the families, we owe it to everyone who travels by air, we owe it to the governments of the countries who had citizens on that aircraft," Abbott told reporters.
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Afternoon Watchlist (all times British Summer Time)
14:45 US Chicago Purchasing Managers' Index
14:55 US Fed's Yellen Speech
15:30 US Dallas Fed Manufacturing Business Index
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Tuesday's Key UK Corporate Events
Corac Group Full Year Results
Access Intelligence Full Year Results
Applied Graphene Materials Full Year Results
ICAP Trading Statement
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Tuesday's Key Economic Events (all times British Summer Time)
All Day EU EcoFin Meeting
n/a Russia HSBC Manufacturing PMI
02:00 China NBS Manufacturing PMI
02:45 China HSBC Manufacturing PMI
08:50 France Markit Manufacturing PMI
08:55 Germany Markit Manufacturing PMI
08:55 Germany Unemployment Rate
09:00 EU Markit Manufacturing PMI
09:30 UK Markit Manufacturing PMI
10:00 EU Unemployment Rate
13:55 US Redbook index
13:58 US Markit Manufacturing PMI
15:00 US Construction Spending
15:00 US IBD/TIPP Economic Optimism
15:00 US ISM Manufacturing PMI
15:00 US ISM Prices Paid
21:00 US Total Vehicle Sales
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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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