(An item published at 1234 GMT misstated the ECB interest rate. The correct version follows.)
LONDON (Alliance News) - The Bank of England and European Central Bank have again kept their monetary policies and interest rates unchanged, just as events to the east continue to threaten the influence and expansion potential of the European Union.
As expected, the BoE has kept its record-low 0.50% interest rate unchanged, marking the fifth anniversary of when the rate was first introduced. The bank also kept its quantitative easing programme unchanged at GBP375 billion.
The ECB, meanwhile, maintained its key interest rate at 0.25% for the fourth consecutive month, also meeting economists' expectations, after seeing further encouraging economic data in recent weeks.
As always, ECB President Mario Draghi's press conference will provide more details on the central bank's thoughts, and he's likely to be asked about the potential impact of the crisis in Ukraine. Draghi has already said he doesn't expect much of an impact on the eurozone's economy, but he's keeping a close eye on the situation. One of the biggest risks is that critical gas supplies from Russia are interrupted or that prices rise.
However, the EU is facing an embarrassing political kick from the crisis, after Crimean authorities said Thursday that they will hold a referendum next week on whether to join Russia, just as EU leaders gathered to consider punishing Moscow over its military intervention in the Ukrainian region.
The referendum is being brought forward from March 30 to March 16, Crimea's deputy prime minister, Rustam Temirgaliyev, told reporters in Simferopol, according to Russian news agencies, after the Crimean parliament passed a resolution to join the Russian Federation.
Temirgaliyev said voters will have two options: Either to vote for Crimea becoming part of the Russian Federation, or to vote for the return of the region's 1992 constitution, which laid down Crimea as an autonomous region within Ukraine.
The EU has imposed sanctions against those suspected of embezzling Ukrainian state funds, with deposed president Viktor Yanukovych and former prime minister Mykola Azarov among 18 people who were hit early Thursday with asset freezes. However, the bloc's leaders are divided on how aggressive their action against Russia should be.
London's stock markets have risen modestly Thursday, and are about flat for the week as a whole after Monday's shock caused by the escalation of the Ukraine crisis was followed by a rally Tuesday.
In another busy day of 2013 earnings reports, the financial services industry has again been busy.
Life insurer Aviva is the biggest gainer on the FTSE 100 after it reported a rise in annual operating profit and it swung to a net profit compared with 2012's loss, prompting Chief Executive Mark Wilson to declare that its turnaround is intensifying. The company's shares soared as it also made better progress on paying down it so-called inter-company loan.
The loan, a result of previous restructuring exercises, was cut by GBP1.7 billion to GBP4.1 billion by the end of February, and the company said it plans to reduce it to GBP2.2 billion by the end of 2015, using cash from various sources including potential asset sales.
"Following our exit from a number of low margin, underperforming or non-strategic businesses, Aviva is simpler, more focused and better managed. We have significantly improved our capital surplus, increased our liquidity and have a stronger leadership team," Wilson said.
Asset manager Schroders reported a 24% increase in pretax profit for 2013 as management and performance fees swelled on the back of strong net inflows, reinforced by the acquisition of Cazenove Capital.
Meanwhile, Vedanta Resources has appointed Tom Albanese as its new Chief Executive from April 1, marking his return to the helm of a major mining company just a year after he quit Rio Tinto when the mining giant swung to net loss amid an industry-wide downturn.
Albanese, who was one a several high-profile victims of the downturn that struck the mining industry in late 2012 and early 2013, will join Vedanta's board in April after taking over from outgoing CEO, M.S. Mehta, who is retiring at the end of March.
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FTSE 100: Up 0.2% at 6,787.80
FTSE 250: Up 0.2% at 16,643.89
AIM ALL-SHARE: Up 0.6% at 898.15
GBP-USD: 1.6718
EUR-USD: 1.3801
GOLD: USD1,335.60 an ounce
OIL (Brent): USD107.42 a barrel
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KEY UK CORPORATE NEWS:
FTSE 100: Aggreko has reported slightly lower 2013 pretax profits and revenues, as expected, after 2012 was buoyed by its contracts to power the London Olympics. The company, which had Chief Executive Rupert Soames poached by Serco last week, still raised its dividend 10%, even though it expects trading in 2014 to be on a par with 2013. Its shares have soared. IMI, meanwhile, reported an increase in profit and revenue for 2013, reflecting a strong performance across the continuing businesses, but saw its shares slide as it warned of pressures on profit margins in the first half of 2014. EasyJet said it carried 4.2 million passengers in February, up 2.9% from 4.1 million a year earlier, bringing its total for the rolling 12 month period to 61.6 million, up 3.5% from 59.5 million. Its load factor for February rose to 90.7%, from 90.5%. Ryanair, meanwhile, aid it flew 4.5 million customers in February, up 7% from 4.2 million a year earlier, bringing the total number of people it has carried in the year to the end of February to 81.9 million, up 3% on the previous 12 months.
FTSE 250: Inmarsat lifted its full-year dividend and expressed confidence for 2014, although pretax profit fell in 2013 due to lower revenues and impairment charges. Betfair Group said customer numbers, revenues and profits all rose in its fiscal third quarter and it gave a positive outlook, partly thanks to soaring growth in mobile betting. Man Group says Goldman Sachs will run its USD115 million share buy back programme. Kentz Corporation has been awarded Phase 2 of the Moatize Coal Mining Project by Brazil's Vale SA in the Tete Province of Mozambique. Cobham's 2013 pretax profit tumbled 38% due to the well-flagged challenging trading conditions in the defence and security markets. The company kept its guidance for 2014 and 2015 unchanged, suggesting the worst is over. Imagination Technologies Group has lowered its guidance for its royalty units and licensing revenue for the full year, blaming a slower rate of smartphone market growth and a lower market share in the entry-level segment of the smartphone market. Balfour Beatty reported a sharp drop in profit for 2013 as it was hurt by the reorganisation of its UK construction business and a significant downturn in the Australian natural resources sector. Unite Group reported a fall in pretax profit and revenue for the full year, due to a reduction in planned sales of completed property. Spirax-Sarco Engineering reported an increase in profit and revenue for the full year, reflecting a strong performance across its two main businesses, Steam Specialties and Watson-Marlow Pumps. DS Smith says its outlook for the rest of the financial year remains positive after it continued to perform well in the third-quarter. Hunting said its 2013 pretax profit increased as improvements in North America and Asia offset a difficult market environment for the company in Canada. Bank of Georgia Holdings' healthcare subsidiary is now by far the biggest healthcare provider in Georgia after it took full control of nearest rival Avante Management Group. Shaftesbury plans to place up to 25.3 million new shares, equating to 9.99% of its current share capital, to fund a property purchase and ongoing redevelopment schemes. RIT Capital Partners reported an 18.6% net asset value total return in 2013, after continuing its focus on the US and Japan, investing in the technology sector, and taking an active approach to currency exposure.
AIM: Crawshaw Group is a big gainer after the meat retailer said its full-year results will now be further ahead of market expectations than it previously thought after it saw particularly strong trading in January. The company had said in early January that its results for the financial year to January 31 would be ahead of market expectations thanks to strong trading over the key Christmas period. IndigoVision Group is another big gainer after it increased its interim dividend after profits and revenues jumped in the first half of the year, driven by sales of new cameras it has launched in the last two years. It also said the second half has got off to a good start. Quadrise Fuels International is doing well after it raised USD10.7 million by placing 33.4 million new shares at a price of 32 pence per share, money it will use to advance each of its currently active programmes as well as pursuing new projects and strengthening its balance sheet. Faroe Petroleum is up after it discovered oil and gas at its Pil exploration well in the Norwegian Sea. It will now conduct a drill stem test once total vertical depth has been reached. Ferrex is another gainer after drilling at its Mebaga Iron Ore Project found an additional high grade iron ore space in the eastern half of the licence. 32Red is down despite it raising its full-year dividend 29% after it reported double-digit growth in 2013 profits and revenues and gave a positive outlook for 2014. Analysts put the move down to profit taking after the stock performed strongly over the last year of exceptional growth. The group's share price jumped more than 70% in 2013.
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AFTERNOON WATCHLIST: ECB Press Conference, US Initial Jobless Claims, US Factory Orders. EIA Natural Gas Storage Change
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Friday's Key UK Corporate Events
Alpha UK Multi Property Trust Full Year Results
AGA Rangemaster Group Full Year Results
Alliance Trust Full Year Results
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Friday's Key Economic Events
07:00 Germany Wholesale Price Index
07:45 France Budget
07:45 France Trade Balance
09:00 Italy Producer Price Index
11:00 Germany Industrial Production
13:30 US Nonfarm Payrolls
13:30 US Trade Balance
13:30 US Unemployment Rate
17:00 US Fed's William Dudley speech
20:00 US Consumer Credit Change
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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1
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