LONDON (Alliance News) - UK shares have continued to rally early Tuesday on optimism for a Greek debt deal.
"I'm convinced that we will come to a final agreement in the course of this week, for the simple reason that we have to find an agreement this week," said European Commission President Jean-Claude Juncker, following an emergency summit in Brussels on Monday.
Betting firm Ladbrokes leads FTSE 250 gainers, up 11%, after it confirmed it is holding talks with unlisted rival Gala Coral Group on a possible merger of businesses.
Oil-field services firm Petrofac is just behind, up 5.6%, after providing a positive pre-market trading update.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 6,837.80
FTSE 250: up 0.5% at 17,993.00
AIM ALL-SHARE: up 0.1% at 770.55
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Hang Seng: up 0.9% at 27,317.70
Nikkei 225: closed up 1.9% at 20,809.42
DJIA: closed up 0.6% at 18,119.78
S&P 500: closed up 0.6% at 2,122.85
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GBP: down at USD1.5806
EUR: down at USD1.1270
GOLD: flat at USD1,186.20 per ounce
OIL (Brent): up at USD63.42 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)
08:30 Germany Markit PMI Composite, Services and Manufacturing Preliminary
09:00 Italy Industrial Orders and Sales
09:00 EU Markit PMI Composite, Services and Manufacturing Preliminary
10:00 Italy Retail Sales
10:00 UK Inflation Report Hearings
11:00 UK CBI Industrial Trends Survey
13:00 US FOMC Member Powell Speech
13:30 US Durable Goods Orders
13:55 US Redbook index
14:00 US Housing Price Index
14:45 US Markit Manufacturing PMI Preliminary
15:00 US Richmond Fed Manufacturing Index
15:00 US New Home Sales
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Eurozone leaders sought to jump-start stalled bailout negotiations with Greece, but warned that still more efforts are needed to bridge differences with Athens and pull it back from the brink of bankruptcy. "I'm convinced that we will come to a final agreement in the course of this week, for the simple reason that we have to find an agreement this week," said European Commission President Jean-Claude Juncker, following an emergency summit in Brussels. A new reform proposal, submitted by Athens just hours before Monday's talks, has managed to "inject new dynamism into the negotiations," said EU President Donald Tusk.
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Russia will continue to ban numerous categories of food from Western countries for another six months because the EU has prolonged its sanctions against Russia, Prime Minister Dmitry Medvedev said. He ordered the government to prepare a decree in the name of President Vladimir Putin to inform the EU of the prolongation. The EU earlier in the day extended its economic sanctions against Russia by six months. The measure followed deadly fighting in eastern Ukraine over the weekend.
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The Chinese manufacturing sector continued to contract in June, albeit at a slower pace, HSBC Bank said, with a preliminary PMI score of 49.6. That marked a three-month high for the index, and it also topped expectations for a score of 49.4 and was up from 49.2. It also remained barely beneath the line of 50 that separates expansion from contraction. "The latest Flash China Manufacturing PMI survey provided a mixed bag of data in June. On the one hand, the sector shows signs of improvement as output stabilized amid a slight pick-up in total new work, while purchasing activity also rose slightly over the month," Markit economist Annabel Fiddes said. "The data add to evidence that the sector has lost growth momentum in Q2 as a whole, and suggests that the authorities may step up their efforts to stimulate growth and job creation in the second half of the year."
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The manufacturing sector in Japan slipped to contraction in June, Markit Economics said on Tuesday with a preliminary PMI score of 49.9. That was below expectations for a score of 50.5 and down from 50.9. "Latest data signaled negligible deterioration in operating conditions at Japanese manufacturers. Production growth slowed to a fractional pace, while new orders contracted for the third time this year so far," said Markit economist Amy Brownbill.
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A US air strike in northern Iraq killed a leading member of the Islamic State militant group, the Department of Defense said. Ali Awni al-Harzi was killed in a June 15 strike in the Iraqi city of Mosul, according to an official statement.
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BROKER RATING CHANGES
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NOMURA RAISES DIAGEO TO 'BUY' ('NEUTRAL') - PRICE TARGET 2180 (1930) PENCE
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NOMURA RAISES VODAFONE TO 'BUY' ('NEUTRAL') - PRICE TARGET 290 (235) PENCE
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CITIGROUP RAISES JOHNSON MATTHEY TO 'BUY' ('NEUTRAL') - TP 3600 (3200) PENCE
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CREDIT SUISSE RAISES INTERCONTINENTAL HOTELS TO 'NEUTRAL' ('UNDERPERFORM')
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TRADERS: HSBC RAISES SHELL TO 'HOLD' ('REDUCE'); CUTS BG GROUP TO 'HOLD' ('BUY')
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UBS RAISES SMITH & NEPHEW TO 'BUY' ('NEUTRAL') - TARGET 1275 (1175) PENCE
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COMPANIES - FTSE 100
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The UK government said it has further sold down its stake in Lloyds Banking Group, bringing its stake in the bank below 17%. UK Financial Investments Ltd, which manages the government's stake in bailed-out banks, sold off approximately a further 1% of the bank, cutting its stake from 17.9% to 16.87%.
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International Consolidated Airlines Group said it has secured a bridge facility from Banco Santander to back its EUR1.4 billion takeover offer for Irish flag carrier Aer Lingus Group. The owner of British Airways and Iberia said Banco Santander has agreed to provide the EUR1.4 billion bridge facility to back the bid for Aer Lingus by IAG's AERL Holding subsidiary.
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Bunzl said trading in the first half of the year has been in line with its expectations as it announced the acquisition of four businesses in the US, Colombia, Canada and France. The distribution and outsourcing company said overall trading in the first half of 2015 has been in line with its expectations, with revenue in the first half set to grow by around 6%, including a one-percentage-point benefit from positive exchange rate movements. Organic revenue is set to grow by 1% in the quarter, with the remainder of the total growth driven by acquisitions, it said.
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Glencore is facing a lawsuit from a so-called 'fixer' in Nigeria over claims the FTSE 100-listed miner reneged on a payment of millions of dollars for an intervention made on behalf of Russian sailors who were arrested on suspicion of arms-dealing, The Times reported. Glencore is being sued by Og Amazu, a former Glencore agent in Nigeria, who the company asked to intervene after the Nigerian navy found "a large number of weapons" on board a ship contracted to Glencore's largest Russian client, according to a court filing seen by the paper.
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COMPANIES - FTSE 250
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Ladbrokes confirmed it is holding talks with unlisted rival Gala Coral Group on a possible merger of Ladbrokes and Coral Retail, Eurobet Retail, and Gala Coral's Online businesses. Ladbrokes said the talks are focusing on plans to create an enlarged business which would be traded on the main market of the London Stock Exchange, where the betting firm currently is traded and as a member of the FTSE 250 index. Ladbrokes said there is no certainty a deal will be done between the two or on the timing of any agreement. Ladbrokes also said that, should the deal proceed, it may undertake an equity placing in order to strengthen the balance sheet of the combined business.
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Multi-utility provider Telecom Plus reiterated its guidance for its current year, as it posted a rise in pretax profit for its recently ended financial year driven by the continued take up of its services. For the year to end-March the company posted a pretax profit of GBP42.0 million, up from GBP34.7 million a year before, on revenue of GBP729.2 million, up from GBP659.7 million. Telecom Plus proposed a final dividend of 21 pence, taking its total dividend for the year to 40 pence, increased from 35 pence a year before. The company continues to expect adjusted pretax profit of between GBP54 million and 58 million for its current financial year, and said "in the absence of unforeseen circumstances" it intends to increase the dividend by 15% to 46 pence per share.
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Petrofac said its engineering, construction, operations and maintenance division has had a good start to the year, and the company said its portfolio is performing in line with expectations despite challenges at the Laggan-Tormore project. Petrofac said construction activities at the Laggan-Tormore project north-west of the Shetland Islands are "substantially complete" and the company is focusing on pre-commissioning work to deliver first gas in the third quarter of 2015. Since the start of 2015, Petrofac's engineering, construction, operations and management division has secured an order intake of USD4.70 billion, including the USD900 million Yibal Khuff award in June. At the end of May, the company's backlog stood at "record levels" at USD20.50 billion, which compares to USD18.90 billion at the end of December.
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Interserve said it has been named preferred bidder for the GBP200 million defence portion of the Defence and Rehabilitation Centre near Loughborough. The project will involve the construction of a 37,000 square metre specialist clinical facility along with the refurbishment of the Stanford Hall building. The new facility is expected to be operational by 2018.
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Travel operator Thomas Cook Group said it has repaid its EUR400 million in 2015 bonds in full. Thomas Cook said the repayment has been made at the maturity date of the bonds and said the repayment is in line with the plans it outlined in may to reduce debt and improve its capital structure.
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Tullow Oil late Monday said it did not encounter any hydrocarbons whilst drilling the Zumba exploration well in the Norwegian Sea, which will now be plugged and abandoned. The oil company drilled the Zumba well to try to find hydrocarbons in the Upper Jurassic Rogn Formation with a secondary target in the Mid-Jurassic Garn Formation of the Fangst Group.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Renewable energy company Infinis Energy said it has struck a deal to acquire an 18.5 megawatt consented onshore wind farm project in Northumberland. Infinis said it has acquired the project from Peel Group and said it neighbours the 8 megawatt Sisters Wind Farm project, which was developed by Infinis. Both the new wind farm and the Sisters project are at an advanced stage of pre-construction, Infinis said, and it expects grid energisation to take place in June 2016.
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Online printing and digital marketing company Tangent Communications said it expects its full-year outcome to be below expectation, as it has lowered its forecasts for the remainder of the year due to an anticipated under-performance by its Tangent Snowball business. Tangent Snowball has not developed a pipeline of new business, and management expects profits from Tangent Snowball to be around GBP500,000 below expectation, it said in a statement ahead of its annual general meeting. As a result Steve Grout, chief executive of Tangent Snowball, has been dismissed, and Tangent Chief Executive Tim Green has taken over day-to-day responsibility for the digital marketing business.
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Roxi Petroleum said its "sole objective" in 2015 is to achieve 4,000 barrels of oil per day from its flagship asset, as it said it swung to a substantial pretax profit in 2014 after reversing a previous impairment. The oil and gas company operating in Kazakhstan reported a USD20.1 million pretax profit in 2014, swinging from a USD9.0 million loss in 2013 on the back of the reversal of a USD25.0 million impairment.
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COMPANIES - INTERNATIONAL
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The chairman of Swiss crop chemicals firm Syngenta's board of directors Michel Demaré reaffirmed the company's position on Monsanto's recent approach, which was rejected for not being in the best interests of Syngenta, its shareholders and its stakeholders. Demaré was speaking in a video interview. Syngenta received an unsolicited proposal from Monsanto to acquire the company at a price of CHF449 per Syngenta share with around 45% in cash. The offer was unanimously rejected by Syngenta's board of directors. Monsanto reaffirmed its offer for Syngenta on June 6 and was again rejected two days later.
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Toshiba Corp's accounting irregularities affected not only infrastructure operations, but also semiconductors and personal computers, Nikkei reported citing a source close to the company. The report said that the Japanese electronics giant now expects to downgrade profit by about JPY55 billion, an amount that may rise further.
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Chinese e-commerce giant Alibaba Group Holding and its financial affiliate Ant Financial Services Group said they will form a joint venture to tap opportunities within China's fast-growing local services market. The two companies will each invest CNY3 billion, as well as their resources into the joint venture. The joint venture, Koubei, will combine the convenient aspects of mobile commerce with big data to transform and upgrade China's local services sector, offering consumers enhanced dining and shopping experiences, they said.
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Tuesday's Scheduled AGMs/EGMs
Coca-Cola HBC
Velocys
Blackrock Emerging Europe
Royal Bank of Scotland Group
Scottish Mortgage Investment Trust
Universe Group
Saga
Bellzone Mining
Edenville Energy
Norcon
Tangent Communications
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
24 Jun 2014 10:34
