LONDON (Alliance News) - UK residential and commercial property companies are among the biggest fallers in a declining market Friday, after Bank of England Governor Mark Carney said the interest rates in the UK could rise sooner than investors expect and Chancellor of the Exchequer George Osborne said he would give the central bank more power to curb mortgage lending.
There is already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced, Carney said at the annual Mansion House dinner in London on Thursday evening. Osborne said his move to empower the bank was to limit risk to financial stability from the housing market.
Among the housebuilders, Persimmon was down 6.1%, Barratt Development, down 5.4%, Taylor Wimpey was down 7.1%, Berkeley Group Holdings down 6.1%, Bellway down 5.1% and Bovis Homes was down 4.7%, while Segro, down 4.0%, and Great Portland Estates, down 3.9%, were the worst hit of the real estate investment trusts.
The main London stock indices are again sharply lower due to increasing tensions in Iraq. Oil prices have risen again.
Sunni militants have captured at least one town in eastern Iraq, broadening their domination over portions of the country as they press south toward the capital Baghdad, reports said. Their lightning advances have sparked international fears that Iraq is falling apart, making room for the emergence of a radical enclave.
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FTSE 100: down 1.2% at 6,760.34
FTSE 250: down 2.2% at 15,773.43
AIM ALL-SHARE: down 0.9% at 788.14
GBP-USD: up at 1.6950
EUR-USD: down at 1.3533
GOLD: flat at USD1,272.59 an ounce
OIL (Brent): up at USD112.85 a barrel
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Other Top UK Corporate News
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Petra Diamonds shares jumped to the top of the FTSE 250 index after the company said it has recovered another exceptional 122.52 carat blue diamond at the Cullinan mine in South Africa. The diamond mining company with operations in Tanzania, Botswana and South Africa said the stone will require further analysis in order to assess its potential value, but once this is completed, it will make a decision on a sale plan for the stone. It said that the diamond will therefore not be sold until after the end of the company's current financial year, which ends on June 30.
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Tullow Oil said it has refinanced its USD330 million Norwegian exploration loan facility, increaing the facility to USD500 million and extending the loan availability to the end of 2017. The FTSE 100 oil and gas exploration company said the arrangement replaces a previous facility arranged by Spring Energy before it was acquired by Tullow Oil in January 2013. It was due to expire in December 2014.
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GlaxoSmithKline said a late stage study of its drug eltrombopag for the treatment of chronic immune thrombocytopenia in paediatric patients had met its primary endpoint. Immune thrombocytopenia is a bleeding disorder where the blood does not clot properly. The drug, which its marketed as Promacta in the US and Revolade in Europe, showed a statistically significant improvement in platelet counts compared to a placebo.
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AstraZeneca said late Thursday that the US Food and Drug Administration's Analgesic Drug Products Advisory Committee has recommended the FDA not require cardiovascular outcomes trials for a class of drugs including AstraZeneca's movantix treatment. Movantix is a mu-opioid receptor antagonist for the treatment of opioid-induced constipation in patients with chronic non-cancer pain. Opioids assist with chronic pain relief by binding mu-receptors in the brain, but also bind nu-receptors in the bowel, which means patients taking opioids for chronic pain can develop opioid-induced constipation.
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UK women's clothing retailer Bonmarche Holdings reported strong profit and sales growth in its most recent financial year, driven by market share gains, price increases and growth in its online business. In its maiden results as a listed company, the clothing retailer targeting women over 50 years old reported a pretax profit of GBP11.2 million for the financial year ended March 29, up from GBP6.1 million a year earlier, as the company posted a 12% increase in revenues to GBP164.3 million, from GBP146.8 million. Like-for-like sales also grew strongly, up more than 10%. The retailer declared its first dividend of 2.1 pence per share for the year.
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AIM MOVERS
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SyQic is a big gainer after it said its main mobile streaming business, YooMob, booked revenue of GBP2.0 million in the first quarter to end-March, and had experienced encouraging trading in the two subsequent months, with total revenue of GBP1.6 million in April and May. SyQic expects the "upward trend" in revenue to continue during the rest of the year. Cientifica is also up after it entered into a development agreement with UK based Perpetuus Carbon Group in the hope of speeding up the production of its graphene products. Perpetuus produces nano surface modified graphenes. Under the collaboration Perpetuus will provide technical support for Cientifica's product development to bring them to market quicker. No financial details were disclosed. Tower Resources has lost two-thirds of its value after it failed to find hydrocarbons in early targets at the Welwitschia-1A well on the PEL0010 licence offshore Namibia, and had to stop drilling deeper due to spiralling costs. The well is being plugged and abandoned. ViaLogy is another big faller after it became a molecular diagnostic company by buying Premaitha for GBP10.5 million, although it had to write down the value of the energy services business it is trying to offload because it is taking longer than it hoped to find a "suitable" partner for that business. It said it would pay for Premaitha by issuing 95.5 million new shares at 11 pence each, and that it had raised GBP6.5 million by placing 59.1 million new shares at the same price. It also launched an open offer of up to 6.7 million more new shares at the same price. It is also planning a 100-for-1 share consolidation, because it thinks it will benefit from having fewer shares in issue and trading in pence rather than fractions of a pence. It will change its name to Premaitha Health. Transense Technologies is down after it said it now expects to post a loss before interest, tax, depreciation and amortisation for its current financial year, albeit a narrower loss than last year, after it experienced delays in getting some new orders. It said it expects its revenue in the year to end-June to be no less that GBP3.5 million, up from GBP1.5 million a year earlier, but that is lower that it had expected when it put out its interim results in February. The company had previously expected to breakeven at the Ebitda level in the current financial year, but said the revenue shortfall compared with previous expectations means it will now make a loss.
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Top Economics And General
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Sunni militants have captured at least one town in eastern Iraq, broadening their domination over portions of the country as they press south toward the capital Baghdad, reports said. Their lightning advances have sparked international fears that Iraq is falling apart, making room for the emergence of a radical enclave. Fighters from the radical Islamic State in Iraq and the Levant (ISIL), backed by local insurgents, seized the town of Jalula, 125 kilometres north-east of Baghdad, Dubai-based broadcaster Al Arabiya said. However, local officials said Jalula was under the control of Peshmerga - military troops of Kurdistan - after government forces abandoned their outposts in the town.
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The US is not considering sending troops into Iraq to stop advances by Islamist militants, a State Department spokeswoman said. Describing the situation as "alarming" and saying there has been a "clear structural breakdown" in Iraq, spokeswoman Jen Psaki said the US and Iraq "share a commitment to addressing threats from groups such as ISIL." Psaki spoke at a briefing after US President Barack Obama said his administration was "looking at all options" on how to respond to the latest violence in Iraq.
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Bank of England governor Mark Carney signalled that interest rate could rise sooner than forecast, due to strong economic growth. In a speech at the annual Mansion House in the City of London to financial and political leaders on Thursday, the governor said that interest rate "could happen sooner than markets currently expect." "There's already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced. However, the decision would be dependent on data and is not a pre-set course", he added. There remains more spare capacity in the economy that would need to be used up first, he said.
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Fitch Ratings affirmed the sovereign ratings of the UK with 'stable' outlook, citing its favourable macroeconomic trends. The long-term ratings were maintained at 'AA+'. Strong GDP growth, falling unemployment and inflation close to the 2% target continued in the economy since the last review in December 2013, Fitch said.
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Fitch Ratings has also lowered South Africa's credit rating outlook to Negative from Stable, citing deterioration in growth prospects amid rising labor strike activity in the country.
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The Bank of Japan retained its monetary policy unchanged while raising its view on overseas growth. The policy board of the BoJ unanimously decided to increase the monetary base at an annual pace of about JPY60-JPY70 trillion as widely expected by economists. "Overseas economies -- mainly advanced economies -- are recovering, albeit with a lackluster performance still seen in part," the bank said. With regard to the Japan outlook, the bank said the economy is expected to continue a moderate recovery as a trend, while it will be affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike.
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EU Energy Commissioner Guenther Oettinger says he expects gas talks between Russia and Moscow to resume on Saturday. "My hope is that we can continue tomorrow," he told journalists on the margins of an EU energy ministers' meeting in Luxembourg, adding that he expects Ukraine and Russia to be represented by their energy ministers and the chiefs of their respective gas companies. He said he is flexible on the location, whether it be "Brussels or Berlin or Kiev or Moscow."
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Ukraine said late Thursday that separatists in eastern Ukraine had obtained heavy armour from neighbouring Russia. Pro-Russian militants had brought at least three tanks across the border, Interior Minister Arsen Avakov told journalists in Kiev. President Petro Poroshenko had voiced "extreme concern" over the tanks and the wider clashes in eastern Ukraine, in a phone call, said European Commission President Jose Manuel Barroso, speaking at a press conference in Georgia. Moscow made no immediate comment.
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Neymar's two goals, some help from the Japanese referee, and big support from the local fans have given hosts Brazil the perfect start to the World Cup. The 3-1 victory over Croatia in the tournament opener Thursday sparked widespread celebrations in the country, and coach Luiz Felipe Scolari is relieved that his team can book a place in the last 16 as early as Tuesday if they beat Mexico, and other results go their way. "This victory gives us a chance to breathe and another victory gives me room to breathe," Scolari said, describing his players as excellent.
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Afternoon Watchlist (all times British Summer Time)
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13:30 US Producer Price Index
14:55 US Reuters/Michigan Consumer Sentiment Index Preliminary
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Monday's Key UK Corporate Events
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Picton Property Income Full Year Results
F&C Global Smaller Companies Full Year Results
Majestic Wine Full Year Results
RM2 International Full Year Results
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Monday's Key Economic Events (all times British Summer Time)
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00:01 UK BoE Quarterly Bulletin
00:01 UK Rightmove House Price Index
06:00 Japan BoJ Monthly Economic Survey
10:00 EU Consumer Price Index
13:30 US NY Empire State Manufacturing Index
14:15 US Industrial Production
15:00 US NAHB Housing Market Index
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30 Sep 2013 07:54
