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LONDON (Alliance News) - UK shares have opened flat Thursday, following negative trading in the US and Asia overnight.
AstraZeneca is the third biggest gainer on the FTSE 100. The drugmaker said it has signed a global licence agreement with AIM-listed biotechnology company Synairgen PLC for its SNG001 compound for the treatment of infections that exacerbate asthma.
Irish airline Aer Lingus Group PLC became the second European airline in two days to issue a profit warning, with the country''s flag carrier blamed the threat of further strike action by cabin crew for hitting bookings.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.1% at 6,829.32
FTSE 250: flat at 16,089.71
AIM ALL-SHARE: down 0.2% at 797.60
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Hang Seng: down 0.4% at 23,175.52
Nikkei 225: closed down 0.6% at 14,973.53
DJIA: closed down 0.6% at 16,843.88
S&P 500: closed down 0.4% at 1,943.89
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GBP-USD: up at USD1.6826
EUR-USD: up at USD1.3537
GOLD: up at USD1,261.60 per ounce
OIL (Brent): up at USD110.66 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times British Summer Time)
09:00 EU ECB Monthly Report
10:00 EU Industrial Production
11:00 Ireland Consumer Price Index
13:30 Canada Capacity Utilization
13:30 Canada New Housing Price Index
13:30 US Export and Import Price Indices
13:30 US Jobless Claims
13:30 US Retail Sales
15:00 US Business Inventories
15:30 US EIA Natural Gas Storage change
18:00 US 30-Year Bond Auction
23:00 UK BOE's Governor Carney speech
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House prices in the UK were higher in May, the latest survey from the Royal Institution of Chartered Surveyors revealed on Thursday with an index score of 57%. That's up from 55% in April, and it topped forecasts for 52%. RICS now expected house prices to rise 3.6% in the next year.
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Wholesale prices in Germany declined at a slower year-over-year rate in May, a report from Destatis showed. Wholesale prices fell 0.9% in May over last year, following a 1.3% decline in April. This marked the eleventh consecutive decline in wholesale prices. On a month-over-month basis, wholesale selling prices fell 0.1%, partially reversing the 0.2% rise in April.
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FRANCE MAY CPI 0.0% M/M, 0.7% Y/Y; APR 0.7% Y/Y
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FRANCE APR CURRENT A/C DEFICIT EUR1.6 BLN VS. EUR1.5 BLN IN MARCH
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Core machine orders in Japan tumbled a seasonally adjusted 9.1% on month in April, the Cabinet Office said - worth JPY851.3 billion. The headline figure beat forecasts for a decline of 10.8% following the 19% surge in March. On a yearly basis, core machine orders spiked 18% - also topping expectations for an increase of 13% following the 16% surge in the previous month.
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The world must act to contain the risk of another devastating housing crash, the International Monetary Fund warned as it published new data showing house prices are well above their historical average in many countries, according to the Financial Times on Thursday. The paper quotes Min Zhu, the IMF’s deputy managing director, saying that the tools for containing housing booms were “still being developed” but that “this should not be an excuse for inaction”.
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Iraq has said it would allow the US to launch airstrikes against al Qaeda-linked militants in the north of the country, the Wall Street Journal reported late Wednesday, citing unnamed US officials. The Obama administration was considering a range of options, including airstrikes carried out by drones or manned aircraft, senior US officials said.
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Iraq's air force went into action Wednesday against militants who have seized a swathe of the north including the country's second largest city Mosul, state television reported. Military helicopters strafed militants of the Islamic State in Iraq and the Levant (ISIL) in Salah al-Din province, south of jihadist-held Mosul, wiping out a rebel column on one major route, the broadcaster said. The al-Qaeda splinter group nevertheless pressed its offensive a day after capturing Mosul, with two further provincial capitals reported to have been lost to the central government.
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Chinese fighter jets buzzed Japanese military planes in airspace that both countries claim as their identification zone, prompting Tokyo to summon the Chinese ambassador Thursday in protest. A Chinese SU-27 fighter flew to within 30 metres of a Japanese YS-11 EB plane, and an OP-3C reconnaissance plane was also approached by another fighter in the same airspace, Defence Minister Itsunori Onodera told reporters late Wednesday.
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All 32 World Cup teams are now in Brazil after the arrivals Wednesday of the last three squads on the eve of the tournament opener. Ghana, South Korea and Portugal completed the line-up following Nigeria's arrival late Tuesday. The World Cup kicks-off Thursday when hosts Brazil play Croatia in Sao Paulo.
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BROKER RATING CHANGES
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NOMURA CUTS BG GROUP TO 'NEUTRAL' ('BUY') - PRICE TARGET 1350 PENCE
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TRADERS: INVESTEC CUTS RBS TO 'SELL' ('HOLD')
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GOLDMAN CUTS PEARSON TO 'SELL' ('NEUTRAL') - TARGET 1,130 (1,080) PENCE
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TRADERS: MORGAN STANLEY CUTS ANGLO AMERICAN TO 'UNDERWEIGHT' ('EQUAL-WEIGHT')
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JPMORGAN INITIATES OCADO WITH 'OVERWEIGHT' - TARGET 500 PENCE
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CITIGROUP RAISES PROVIDENT FIN. TO 'BUY' ('NEUTRAL') - TARGET 2,530 (1,825) PENCE
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TRADERS: EXANE BNP CUTS OPHIR ENERGY TO 'NEUTRAL' ('OUTPERFORM')
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COMPANIES - FTSE 100
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AstraZeneca PLC said it has signed a global licence agreement with AIM-listed biotechnology company Synairgen PLC for its SNG001 compound for the treatment of infections that exacerbate asthma. The compound is used to treat respiratory tract infections in patients with severe asthma, by correcting a deficiency that makes patients vulnerable to the infections. Under the terms of the deal, AstraZeneca will pay Synairgen an up-front free of USD7.25 million, with potential milestone payments of up to USD225 million possible.
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Separately, AstraZeneca and Amgen Inc said late Wednesday that phase II study results of psoriatic arthritis drug brodalumab showed that the treatment showed significant improvement in clinical symptoms. The results, which were published in the New England Journal of Medicine, and will be presented at the 2014 European League Against Rheumatism congress in June, also showed that many patients continued to improve and saw sustained improvements. The companies said that the encouraging data from the study was why they had opted to continue developing brodalumab as a potential treatment for psoriatic arthritis.
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Home improvement retailer Kingfisher PLC said Philippe Tible, chief executive of its Castorama & Brico Dépôt brands, will step down at the end of July, although he'll stay with the company until the end of the year to assist with the company's exclusive talks to buy Mr Bricolage. The company's Chairman, Daniel Bernard, said the company had decided to change the leadership of its European operation given the changes that are being undertaken in that business. Group Chief Executive Ian Cheshire said he was promoting both Véronique Laury, CEO of Castorama France, and Alain Souillard, CEO of Brico Dépôt brand International, to the company's executive team.
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Imperial Tobacco Group PLC is considering a deal to buy assets that are likely to be sold by US tobacco companies Reynolds American Inc and Lorillard Inc if they go ahead with a proposed merger, Reuters reported Thursday, citing people familiar with the matter. The two US tobacco companies are in advanced talks about a deal and have discussed selling some brands to address antitrust concerns, the report said.
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COMPANIES - FTSE 250
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Argos and Homebase owner Home Retail Group PLC Thursday said sales growth accelerated in both its businesses in the first quarter of the year, driven by strong sales of seasonal and electrical products and of big-ticket items such as kitchens. "At this early stage of the financial year, we expect to deliver full year group benchmark profit in line with current market expectations," said Chief Executive John Walden in a statement. Home Retail said it is now forecasting a benchmark pretax profit for the full year of between GBP122 million and GBP135 million, compared with a market consensus that the company put at GBP129 million. Benchmark pretax profit strips out costs such as amortisation of intangibles, store impairment charges and exceptional items.
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Premier Oil PLC said the UK government has approved its development plan for the Catcher oil and gas field area in the North Sea, meaning it can press ahead with developing oil fields within the area for first production, expected in mid-2017. The Premier-operated Catcher area, located in the UK Central North Sea, is expected to produce 96 million barrels of oil equivalent with a peak production rate of around 50,000 barrels of oil per day, the company is forecasting.
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PZ Cusssons Says Sterling FY Profit To Be 6% Higher Than Previous Year; Says Currency Movements Wiped Off Around GBP12M Of FY Profit
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WS Atkins FY Pretax Profit GBP114.2M Vs GBP98.0M; Revenue GBP1.75 BN Vs GBP1.71 BN
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Halma FY Pretax Profit GBP138.7M Vs Restated GBP120.1M; Confident On Further Progress In The Year Ahead
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Carillion and Balfour Beatty Appointed Preferred Bidders For GBP745M Aberdeen Western Peripheral Route
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Premier Farnell Says Current Trading In Line With May 15 Interim Management Statement; To Spend GBP8M On Restructuring, Bringing GBP6-8M Annual Benefits, From FY16 Onward
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Ultra Electronics Wins GBP12.9M Contract With EDF Energy
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COMPANIES - ALL-SHARE AND AIM
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Irish airline Aer Lingus Group PLC became the second European airline in two days to issue a profit warning, with the country''s flag carrier blamed the threat of further strike action by cabin crew for hitting bookings. Airline stocks across Europe fell sharply Wednesday after German flag carrier Deutsche Lufthansa AG reduced its profit expectations for this year and next, warning that it was having to reduce prices on European and US routes due to weak demand, and it had also been hit by a recent pilots strike. Aer Lingus said that the threat of strike action by the Impact union had caused "significant" damage to its trading and forward bookings for several months into the future. The hit had been particularly noticeable in recent days following increased media coverage and commentary, it said. "Aer Lingus now expects that its 2014 operating profits (before net exceptional items) will be 10% to 20% lower than last year. The outcome will depend in part on the speed with which we can win back customer confidence," it said.
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Enegi Oil Says Wood Group PSN To Buy 50% Of ABT Oil And Gas's Engineering Solutions Subsidiary Margin Field Development; Says Wood Group Will Contribute Engineering Services, Working Capital
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Middlewich Ltd Reaches Agreement For Acquisition Of Pochin's; Middlewich Is Vehicle Of Cedric Pochin Concert Party Formed By James Nicholson; Shareholders To Receive 45p Cash Per Share, Valuing Pochin's At GBP9.4M; Cedric Pochin Concert Party Has Received Acceptances From 78.2% Of Pochin's Shareholders
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Boohoo.com FY Pretax Profit GBP10.7M Vs GBP3.1M; Revenue GBP109.8M Vs GBP67.3M; Q1 Revenues Up 24% To GBP30.7M
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Pets At Home FY Pretax Profit Of GBP22.5M Vs GBP26.5M; Underlying Pretax Profit Of GBP52.2M Vs GBP40.0M; Revenue Up 11.2% To GBP665.4M Vs GBP598.3M; Like-For-Like Sales Up 2.4% Vs 2.6%; Says Trading So Far This Year In Line With Management Expectations
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Mulberry FY Pretax Profit Of GBP14.0M Vs GBP26.0M; Total Sales Of GBP163.5M Vs GBP165.1M; Leaves Dividend Unchanged At 5.0P Per Share; Total Retail Sales In 10 Weeks To June 7 Down 9%, Like-For-Like Down 15%; Expects Double Digit Decline In Wholesale Sales For 2014/15
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Laura Ashley Like-For-Like Sales Up 0.7% In 19-Weeks To June 8; Total Retail Sales Down 0.9% In 19-Weeks To June 8
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Thursday's Scheduled AGMs/EGMs
Evraz
Kingfisher
Source BioScience
IQE
Leyshon Energy
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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