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LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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HSBC Holdings said that its pretax profit increased by 10% in the first half, as a strong showing in Asia more than offset a USD1.14 billion charge for settlements and provisions in connection to legal matters, and that it has agreed to sell its Brazilian operations to Banco Bradesco for USD5.2 billion. HSBC reported a USD13.63 billion pretax profit for the six months to the end of June, up from the USD12.34 billion reported for the first half of 2014. HSBC's interim dividend remained at USD0.20 per share.
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The UK government has cut its stake further in Lloyds Banking Group, meaning it now owns 13.99% of the FTSE 100 bank, according to a stock exchange filing on Monday. The government had previously owned 14.98% of the bank, which it is returning to full private ownership after taking a 43% stake in the lender through a GBP20 billion bailout in the global financial crisis of 2007-09. The share sale means the government has sold about 10% of the bank's shares since February.
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The UK government could begin the process to start selling its 80% stake in Royal Bank of Scotland Group from Monday, the BBC reported on Sunday. Citing sources, the report said that a stake worth billions of pounds could be sold if investors in the City show enough appetite. The report said the move is "tentative" and could be pushed back a month or more.
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AstraZeneca said it has agreed a collaboration with Isis Pharmaceuticals to discover and develop antisense drugs for cardiovascular, metabolic and renal diseases. Antisense drugs are small compounds that are similar to DNA or ribonucleic acid that are chemically modified to create drugs. The collaboration builds on a broad existing relationship between the two companies, AstraZenca said, and AstraZeneca will pay an upfront fee of USD65 million to Isis Pharmaceuticals plus development and regulatory milestones for each programme AstraZeneca advances to clinical development. Isis Pharmaceuticals also will be eligible to earn tiered double-digit royalties on annual net sales for each programme.
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Intertek Group said its pretax profit rose in the first half of 2015 on the back of margin improvements and better revenue. The company, which provides inspection, testing and certification services, said its pretax profit for the six months to the end of June was GBP139.1 million, up from GBP119.8 million a year earlier, driven by its revenue edging up to GBP1.06 billion from GBP1.02 billion and by an improvement in its margins, with its operating margin up to 14.5% from 12.8% in the half. Despite weakness in its industry services arm, Intertek said it is on track to meet its full-year expectations. Intertek said it will pay an interim dividend of 17 pence per share, up from 16p a year earlier.
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BG Group said it has generated the first oil from the Cidade de Itaguaí floating production, storage and offloading vessel in the Santos Basin, offshore Brazil. The oil and gas producer, which is being acquired by bigger rival Royal Dutch Shell, said the vessel is the sixth unit to start production from its Santos Basin discoveries. It will produce from the Iracema North area of the Lula field in the Petrobras-operated BM-S-11 block, BG said. BG has a 25% interest in the Block, with Petrobras, the Brazilian state oil company, owning 65% and Petrogal Brasil owning the other 10%.
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Irish building materials company CRH said its deal to acquire assets from French and Swiss merger partners Lafarge and Holcim has been completed. The only exception are the assets it is acquiring in the Philippines, for which it expects to receive regulatory approval this quarter. CRH agreed a EUR6.5 billion deal back in February to acquire assets in Europe, Canada, Brazil and the Philippines from Lafarge and Holcim, which have now completed their USD41 billion merger.
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InterContinental Hotels Group is weighing bids for rival hotel chains Fairmont and Mövenpick after saying Thursday it is not in talks with US hotel group Starwood Hotels & Resorts Worldwide about a merger, The Sunday Times reported. Citing "senior City sources", The Sunday Times said IHG and Starwood — which runs the Sheraton and Westin brands — discussed a deal earlier this year but “talks never got off the ground” because of regulatory hurdles. Both Canadian operator Fairmont, which manages the Raffles hotel in Singapore and is majority owned by the government of Qatar, and Mövenpick, a Swiss-based hotel management firm controlled by the von Finck family of Germany, are being advised about potential sale options by Deutsche Bank, The Sunday Times said.
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Fidessa Group said the additional investment it is making in new opportunities is having a "small impact" on its operating margin, and said there may be greater pressure arising going into 2016 from potential consolidation activity amongst its customers. The trading, investment and information company said it made a GBP19.4 million pretax profit in the first half of 2015, down slightly from the GBP19.7 million reported for the first six months of 2014. Revenue was up by 7% to GBP145.9 million, and expenses before amortisation of acquired intangible assets increased by 8% to GBP126.5 million. Fidessa said its interim dividend payment to shareholders will remain at 13.1 pence per share.
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Defence company Ultra Electronics Holdings posted a big fall in pretax profit for the first half of the year, hit by a writedown due to the loss of its contract in Oman and by continued subdued activity in the US and UK defence markets. The company said its pretax profit for the six months to the end of June was GBP14.8 million, significantly lower than the GBP45.8 million it posted a year earlier. Revenue fell to GBP331.7 million from GBP341.0 million. The company said it will pay an interim dividend of 13.8 pence per share, up from 13.2p a year earlier.
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MARKETS
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UK stock indices are lower, weighed down once again by the resource sector, as another set of weak economic data from China hurts commodities prices. Intertek leads blue-chip gainers.
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FTSE 100: down 0.2% at 6,684.60
FTSE 250: down 0.3% at 17,621.10
AIM ALL-SHARE: down 0.2% at 749.50
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The pound is down against the dollar despite data showing the UK manufacturing sector beating expectations in July.
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GBP: down at USD1.5614
EUR: down at USD1.0972

GOLD: down at USD1093.08 per ounce
OIL (Brent): down at USD50.97 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The UK manufacturing sector expanded more than expected in July, data from Markit revealed. The Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index rose to 51.9 in July from a 26-month low of 51.4 in June. It was forecast to rise marginally to 51.5. The expansion of production remained highly dependent on the strong performance of the consumer goods sector. However, the rate of growth in new orders slowed to a 10-month low.
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The downturn in China's manufacturing sector intensified as renewed declines in orders and production took the latest level of operation to the weakest since July 2013. The Caixin Purchasing Managers' Index dropped to a two-year low of 47.8 in July from 49.4 in June and the score was below the neutral 50.0 mark for the fifth successive month, results from Markit revealed. It was also weaker than the flash score of 48.2.
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The euro area manufacturing sector continued to expand in July despite deep contraction in Greece, final data from Markit Economics showed. The manufacturing Purchasing Managers' Index came in at 52.4 in July, slightly above the flash estimate of 52.2, but down from June's 14-month high of 52.5. The PMI has remained in expansion territory since July 2013.
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Britain and France urged other EU nations to help them handle an escalating crisis over thousands of migrants stranded in the French port of Calais. "What we are currently facing is a global migration crisis," British Home Secretary Theresa May and French Interior Minister Bernard Cazeneuve said in a joint commentary in the Sunday Telegraph. "This situation cannot be seen as an issue just for our two countries," they wrote. "It is a priority at both a European and international level."
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US President Barack Obama is to issue on Monday a final, tougher version of rules aimed at limiting carbon emissions from power plants that are expected to seal a key part of his presidential legacy. He signalled his intent in a Facebook posting on Sunday, saying the new rules would be "the biggest, most important step we've ever taken to combat climate change." At issue is a set of rules that have been more than a year in the making. When they were proposed last year, the administration suggested that carbon emissions from power plants would need to be reduced by 30% below 2005 levels by 2030. But the final regulation will require a 32% reduction, according to news reports.
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High-level talks on creating a trade zone among the US and 11 other Pacific nations ended Friday without agreement, dealing a setback to US President Barack Obama's trade agenda. More than a week of meetings on the Hawaiian island of Maui broke off with negotiators having made "significant progress" on the Trans-Pacific Partnership agreement, according to a joint statement by the trade representatives. Work will continue on "resolving a limited number of remaining issues," it said. But the meeting had been meant to complete the ambitious free trade accord, and the brief statement named no concrete results and set no date for future talks.
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Iran's nuclear deal will make the Middle East safer if it is implemented, US Secretary of State John Kerry said Sunday ahead of talks with Gulf allies. "There can be absolutely no question that if the Vienna plan is fully implemented, it will make Egypt and all the countries of this region safer than they otherwise would be or were," Kerry told reporters in Cairo.
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Iran has plans to acquire up to 90 planes annually from Boeing and Airbus upon the lifting of trade sanctions by Western countries, the Islamic nation's state news agency IRNA is reported to have said, quoting an aviation official. The plans to acquire the planes follows last month's landmark nuclear breakthrough between Iran and world powers led by the US that mas increased the possibility of the easing of sanctions by this year. It is reported that Iran would need at least 300 planes spread over a number of years to refurbish its ageing commercial aircraft fleet.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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