LONDON (Alliance News) - Shares have opened higher Monday at the start of a week expected to be dominated by news from central banks, including the conclusion of the US Fed's monthly policy-setting meeting, as well as by the UK government budget, both set for Wednesday.
Also on Wednesday will be the minutes of the most recent Bank of England monetary policy committee meeting.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.3% at 6,759.22
FTSE 250: up 0.3% at 17,154.97
AIM ALL-SHARE: up 0.4% at 720.58
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Hang Seng: closed up 0.5% at 23,949.55
Nikkei 225: closed flat at 19,246.06
DJIA: closed down 0.8% at 17,749.31
S&P 500: closed down 0.6% at 2,053.40
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GBP-USD: up at USD1.4775
EUR-USD: up at USD1.0541
GOLD: up at USD1,162.34 per ounce
OIL (Brent): down at USD54.41 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in GMT)
11:00 Germany Buba Monthly Report
13:30 US NY Empire State Manufacturing Index
14:15 US Industrial Production
15:00 US NAHB Housing Market Index
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The UK government said it is to begin a process of consultation into creating a market through which annuities can be traded, signifying an extension of new freedoms being introduced into pensions and retirement rules. The move to allow people who have already bought annuities to sell them in exchange for a lump sum or place it into drawdown is the latest step being taken by Chancellor of the Exchequer George Osborne to reform retirement rules since using his 2014 budget to abolish an effective requirement on individuals to buy annuities.
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The UK government has launched a review of the business rates system, Chief Secretary to the Treasury Danny Alexander announced. The review, which is set to report back by the government budget in 2016, will examine the structure of the current system, a business property tax which is currently paid on an annual basis on 1.8 million properties in England. The review will consider how businesses use property, what the UK can learn from the systems in use in other countries, and how the system could be modernised to better reflect changes in the value of property, the Treasury said in a statement.
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UK Chancellor of the Exchequer George Osborne is expected to announce tax breaks for the North Sea in the government budget on Wednesday, along with incentives to encourage investment in the sector, The Daily Mail reported. Oil revenues are subject to a higher rate of tax than other corporate levies in order to prevent business from profiteering from a national asset, the newspaper said, but the rate on some upstream profits can hit 80% in some cases, which the industry argues is too high.
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The average asking price for a house in the UK was up 1.0% on month in March, property tracking website Rightmove said. That missed forecasts for an increase of 1.9%, and it was down from the 2.1% gain in February. On a yearly basis, prices climbed 5.4% - also below expectations for 6.5% and down from 6.6% in the previous month. A decline in prices in the London market weighed on the overall index.
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China still has more tools to bolster its economic growth, Premier Li Keqiang said. "The good news is that in the past couple of years we did not resort to massive stimulus measures for economic growth," Li said at a press conference after the conclusion of the annual parliamentary session. But the government has more policy measures at its disposal, he added. If the slowdown in growth affects employment and income, then the government would resort to more measures, he said.
The government lowered its 2015 growth target to about 7% last week and Li said achieving even this target will not be easy.
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China's annual parliament closed an 11-day session on Sunday with voting on the Communist Party's policies for more stringent government regulations and economic reforms. Some 3,000 delegates to the National People's Congress, the ruling party's nominal parliament, voted early Sunday to endorse Premier Li Keqiang's state-of-the-nation economic report and other reports in quick-fire voting. Some 86% voted in favour of the annual budget, which includes a rise of 10.1% in China's annual military spending. The government says the increase is needed to fund ongoing modernization of the People's Liberation Army.
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German Chancellor Angela Merkel should present an economic growth plan for Europe, Greek Finance Minister Yanis Varoufakis said, calling for "a new doctrine to unite Europe". His appeal on the Greek television network ANT1 was made at a time of heightening tensions between Greece and Germany over Greek financial aid. "Before she leaves office, Mrs Merkel could leave behind a legacy for Europe, which all could remember as the 'Merkel Plan," as we today remember the Marshall Plan," Varoufakis said.
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Anti-government rallies in cities across Brazil on Sunday drew tens of thousands of people into the streets to protest the administration of President Dilma Rousseff. Rousseff, who started her second four-year term in January, is facing criticism over Brazil's stagnating economy, rising energy costs and a corruption scandal enveloping the state-controlled oil giant Petrobras. Thousands gathered on the sands of Rio de Janeiro's Copacabana Beach, while in the capital Brasilia protesters waving flags and holding signs that read "Impeach Rousseff!" and "Corruption: How much longer are you going to be here?" marched to the National Congress building.
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The US and Iran aim to make tangible progress in a new round of negotiations on Tehran's nuclear programme, both countries' chief diplomats said before the start of a new round of talks in Switzerland. "The coming days will not about proposals, but about concrete results," Iranian Foreign Minister Mohammad Javad Zarif said after arriving in Lausanne for meetings with senior US Secretary of State John Kerry and other senior officials.
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Officials in St Louis County in the US state of Missouri announced they had arrested a suspect in the shootings last week of two police officers during a protest in the city of Ferguson. Jeffrey Williams, 20, faces several charges in connection with the Thursday shooting, in which one officer was shot in the face and a second in the shoulder. Both are out of hospital and recovering, police said.
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BROKER RATING CHANGES
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TRADERS: HSBC CUTS RIO TINTO TO 'NEUTRAL' ('OVERWEIGHT')
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GOLDMAN CUTS PERSIMMON TO 'NEUTRAL' ('BUY') - TARGET 1910 (2010) PENCE
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TRADERS: HSBC CUTS BHP BILLITON TO 'NEUTRAL' ('OVERWEIGHT')
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CHARLES STANLEY CUTS LEGAL & GENERAL TO 'REDUCE' ('HOLD') - TARGET 260 PENCE
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JEFFERIES CUTS HIKMA PHARMA TO 'HOLD' ('BUY') - TARGET 2134 (2325) PENCE
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JEFFERIES RAISES BALFOUR BEATTY TO 'BUY' ('UNDER-PERFORM') - TARGET 270 (115) PENCE
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COMPANIES - FTSE 100
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AstraZeneca on Saturday announced full results from the PEGASUS-TIMI 54 study, a large-scale outcomes trial that investigated the use of BRILINTA tablets combined with low dose aspirin, compared to placebo combined with low dose aspirin, for the treatment of chronic secondary prevention of atherothrombotic events in patients who had experienced a heart attack one to three years prior to study enrolment. The company noted that Both 90mg and 60mg study doses of ticagrelor with aspirin significantly reduced the primary composite endpoint of cardiovascular death, myocardial infarction or stroke compared to placebo.
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COMPANIES - FTSE 250
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Elliott Advisers said it has nominated three candidates for the board of Alliance Trust, claiming the investment trust has consistently underperformed and continues to make losses via its two operating subsidiaries. Activist investor Elliott, which holds a 12% stake in the company both directly and via funds it advises, said it has nominated Anthony Brooke, Peter Chambers and Rory MacNamara to the board of the trust.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Shares in Haversham Holdings were suspended after the investment vehicle confirmed it is in "very advanced discussions" which could lead to a reverse takeover. Press reports had said Haversham is set to secure a GBP1.2 billion deal to acquire British Car Auctions, the used car dealership and owner of WeBuyAnyCar.com. Haversham did not confirm the identity of the target in its statement. Cenkos Securities, Haversham's nomad and broker, released a statement saying the fundraising associated with the potential acquisition could have a "material impact" on its revenue and profit in 2015.
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PureCircle reported higher operating profits for 2014, as its stevia sweetner was incorporated into Coca-Cola, Pepsi and other carbonated drink products, and started to be adopted in other products like ketchups, driving revenue up by 24%. The maker of high-purity stevia reported a net loss of USD899 million for 2014, compared with a USD1.9 million loss a year earlier, while its closely-watched earnings before interest, tax, depreciation and amortisation rose to USD6.4 million, from USD5.2 million, the same order of magnitude as the revenue increase to USD43.2 million from USD34.9 million.
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Market Tech Holdings said it has acquired a controlling stake in Berlin-based mobile marketing company Glispa GmbH for a total of EUR32 million in cash, plus a commitment to invest another EUR20 million in the business. Market Tech, which owns the main Camden markets in north London, said it will pay an initial consideration of EUR25 million to acquire a 75% stake in the company, along with a EUR7 million working capital payment.
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Petards Group said it swung to a profit in 2014, as revenue more than doubled on the back of orders for its security systems for trains and the defence sector. The company reported a pretax profit of GBP620,000 for 2014, compared with the GBP2.4 million loss it reported in 2013, as revenue jumped to GBP13.5 million from GBP6.3 million.
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Redcentric said it expects both revenue and earnings before interest, tax, depreciation and amortisation for the current financial year to be "comfortably" in line with market expectations, after a "strong performance" was maintained into the second half of the year. Redcentric is expected to report a pretax profit of GBP15.5 million for the current year, earnings per share of 8.30 pence and a dividend of 3.5p, according to a consensus of three analysts on Morningstar.
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COMPANIES - INTERNATIONAL
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Swiss cement maker Holcim is proposing to tweak its share-exchange ratio in its bid to save its merger with French peer Lafarge amid pressure from investors, according to a Bloomberg report. Holcim is also reportedly proposing changes in management. Holcim and Lafarge agreed in April 2014 to combine in a USD40 billion all-stock merger of equals to create LafargeHolcim, which would be the world's largest cement producer with operations in 90 countries. The proposed combination was structured as a public exchange offer initiated by Holcim for all outstanding shares of Lafarge on the basis of a 1 for 1 exchange ratio. The offer is subject to Holcim holding at least 2/3rd of the share capital and voting rights of Lafarge. However, Holcim investors are said to be now pushing for a larger stake in the merged entity as Holcim has outperformed Lafarge on everything from sales to profit.
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Deutsche Bank, Germany's largest bank, and two investment firms are buying the consumer lending business of GE Capital Australia and New Zealand for AUD8.2 billion, the companies said. The operations of the company, which has 3 million customers, will not be changed, said Deutsche Bank and the US-based investment firms Varde Partners and KKR.
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Germany's Siemens has settled a long-running dispute with the Mexican state oil company Pemex over alleged corruption, both companies said in statements. "The agreement ends under the strict observation of the law all existing legal disputes and concentrates on strengthening future co-operation," the joint statement said. The dispute related to the modernization of the Cadereyta refinery.
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Monday's Scheduled AGMs/EGMs
Ecofin Water & Power Opportunities
Electra Private Equity
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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