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LONDON (Alliance News) - Royal Dutch Shell Monday said it will sell its interests in the Australian Wheatstone gas projects in a USD1.14 billion deal, just a trading day after Friday's profit warning that caused its shares to tumble.

The stock is again near the bottom of the FTSE 100 Monday after Shell said it will sell its 8% equity interest in the Wheatstone-Lago joint venture and a 6.4% interest in the 8.9 million tonnes per year Wheatstone liquefied natural gas project in Western Australia to the Kuwait Foreign Petroleum Exploration Co, an existing Wheatstone joint-venture partner.

"Shell will remain a major player in Australia's energy industry. However, we are refocusing our investment to where we can add the most value with Shell's capital and technology. We are making hard choices in our world-wide portfolio to improve Shell's capital efficiency," Shell Chief Executive Officer Ben van Beurden said in a statement today.

Press reports at the end of December had said Shell would embark on a USD30 billion asset disposal programme in 2014 as a result of its weakening performance.

The company will put out its full 2013 results January 30, having already warned that its net profit would be USD10.3 billion down on 2012, after nearly every part of its business performed below its expectations in the fourth quarter.

FTSE 100-listed UK banks have taken a hit during morning trading trading after Germany's Deutsche Bank announced a fourth quarter loss on the back of hefty legal and restructuring costs. Royal Bank of Scotland and Barclays' shares were down after the German bank posted a pretax loss of EUR1.15 billion in the final three months of 2013 after it was forced to set aside EUR528 million for legal costs - bringing the total bill for the year to EUR2.5 billion.

According to analysts at Shore Capital, the poor trading update may reflect a weak performance from its fixed income, currencies and commodities trading, which saw income fall by 31% year-on-year. The brokerage expects FICC income to represent 20% and 15% of Barclays and RBS's total 2013 income, respectively.

FTSE 250-listed Lonmin has been given notice by the Association of Mineworkers and Construction Union in South Africa that it will start a strike on Thursday, after wage talks between the two sides broke down.

In a statement, the miner said it had met with the union at an arbitration panel on December 10, but had failed to find a resolution to disagreements over wage demands. Striking miners will not be paid while they are out of work, as allowed under South African law, Lonmin said.

"Lonmin remains committed to finding a positive and sustainable resolution to the dispute in the interests of all its stakeholders and management continues to engage at all levels to seek agreement," said the company in a statement.

The housing market in the UK continues to strengthen as the latest Rightmove survey reported that house prices in the UK increased for the first time in three months in January, marking the biggest ever increase for the month.

Average asking prices of a property increased 1% month-on-month to GBP243,861 in January. This followed a 1.9% fall in December and 2.4% decline in November. Year-on-year, prices increased 6.3%, the sharpest rise since November 2007, Rightmove said.

The International Monetary Fund is on the brink of upgrading its growth forecast for the UK more than any other major economy, Sky News reported Monday without attributing a source.

The fund is poised to increase its projection for UK growth in 2014 from 1.9% to 2.4%. Although the fund will also lift its forecasts for world economic growth, the UK upgrade is significantly stronger, Sky News said.

China's economic growth eased in the fourth quarter amid slower gains in industrial production, investment and retail sales, suggesting that the recovery is yet to attain a firm footing, according to data released by the National Bureau of Statistics.

For the fourth quarter and whole of 2013, GDP grew 7.7%, the same pace as in 2012, which was the slowest since 1999.

Separately, the statistical office reported that China's industrial production grew 9.7% year-on-year in December compared with an expected 9.8% gain and slower than a 10% growth reported in November. In 2013 as a whole, industrial production grew 9.7% compared with 2012. China's retail sales grew 13.6% annually last month in line with expectations. In November, sales recorded a 13.7% increase. Retail sales rose 13.1% for the full year of 2013.

Iran has taken the first steps to limit its nuclear programme under a deal with world powers, the International Atomic Energy Agency confirmed, paving the way for the EU and the US to suspend some sanctions. This is the first time that Iran has scaled back its nuclear programme, ten years after its secret activities came to light and prompted Western fears that Tehran was working on a nuclear weapon.

In Tehran, Ali Akbar Salehi, the head of Iran's Atomic Energy Organization, said the country had halted uranium enrichment to 20% and had begun down-blending uranium enriched to higher levels, according to the Fars news agency.

A report by IAEA inspectors confirmed these measures, which Iran had agreed to in its deal with six western powers on November 24, under which several sanctions on Iran will in turn be lifted for six months.

More than 200 people, roughly half them protesters, have been injured in violent clashes with police during the last 24 hours in the Ukrainian capital of Kiev, according to health officials and the Interior Ministry. The city health department said that 103 protesters were treated for injuries, 42 of whom were hospitalized, the Interfax news agency reported. According to the Interior Ministry, about 100 police officers were injured, 61 of whom were hospitalized.

A new interim president is expected to be selected today in the Central African Republic as EU ministers are set to approve a European military intervention to provide backup to peacekeepers already in the strife-torn country.

The African country's transitional council is to elect a new leader after interim president Michel Djotodia and interim prime minister Nicolas Tiangaye resigned January 10 under pressure from regional leaders. Djotodia and Tiangaye had been unable to stop violence between Christians and Muslims that has killed hundreds and displaced a million people. The 135 provisional parliamentarians will vote for a new transitional president from a list of eight candidates, among whom are two sons of former presidents, Desire Kolingba and Sylvain Patasse.

The United Nations now estimates that USD550 million is needed to cover humanitarian needs in the Central African Republic, UN humanitarian chief Valerie Amos said at the start of an international donors meeting in Brussels. The UN had initially issued an appeal for USD152 million in December.

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FTSE 100: Down 0.04% at 6,826.99
FTSE 250: Up 0.2% at 16,220.25
AIM ALL-SHARE: Down 0.2% at 882.51
GBP-USD: 1.6444
EUR-USD: 1.3555
GOLD: USD1,254.86 an ounce
OIL (Brent): USD106.26 a barrel

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KEY UK CORPORATE NEWS:

FTSE 100: Vodafone Group and British Sky Broadcasting Group have held high-level talks aimed at curbing BT Group’s growing power in the broadband market, The Sunday Times reported, quoting "senior" sources. It is understood that Sky and Vodafone have discussed striking deals on Sky’s sports and movie channels and collaborating on a high-speed broadband service, the paper said, adding that senior sources said it was unlikely they would build a nationwide fibre network, which would cost several billion pounds. Paul Coyle, group treasurer of Wm Morrison Supermarkets, was arrested in December after an insider-trading investigation by the UK Financial Conduct Authority, The Telegraph reported. The newspaper said Coyle, who also is Morrison's head of tax, was arrested on suspicion of buying shares in Ocado Group PLC before the two company's online partnership was announced in March. Coyle, 49, has not returned to work since the arrest and has yet to be charged. The UK Serious Fraud Office has been given extra funding by the UK Treasury in order to pursue its criminal investigation into alleged bribery by Rolls-Royce Holding in Indonesia and China, the Financial Times reported. The FT said the Treasury has agreed to so-called blockbuster funding "in the low millions" of pounds, citing "people familiar with the arrangement." Tesco is weighing a surprise swoop on Mothercare, the troubled baby products chain, as part of its wider campaign to reinvigorate its British hypermarkets, The Sunday Times reported, citing unnamed sources in London. Tesco examined a bid six months ago, retail sources told the paper, but put the plan on hold. Mothercare’s shares have since collapsed. The sources said it had made no approach.

FTSE 250: Electra Private Equity has bought shoe retailer Hotter Shoes with an investment of GBP85 million, its first investment of the year. The company didn't give a value for the whole deal, but it would be higher including debt. F&C Commercial Property Trust has bought one property and conditionally exchanged contracts on another for GBP10.75 million in total. The property investor has bought a retail warehouse in Solihull for GBP4.5 million that's adjacent to one of its largest current investments. Tenants at the new site include Magnet Ltd and Multiyork Furniture Ltd, with a weighted average unexpired term of 8.4 years. The property provides a total rent passing of £326,784 a year, equating to an average of GBP24.32 per square foot. Amlin has been cleared by regulators to open a branch office and offer insurance products in Germany, in a move that will expand the company's Europe business beyond the Benelux region and France.

AIM: Oilex shares are up after the company reported that the Essar LR-4 drilling rig to drill its Cambay 77H site in India has arrived in Mumbai and been cleared through customs. InternetQ is doing well after revenues increased by nearly 40% to over EUR100 million during 2013 and it said profit margins improved in the second-half. The company said the improved margin had driven annual adjusted EBITDA to over EUR16.1 million, in line with expectations. Shares in EKF Diagnostics Holdings have been boosted by a positive test result using its PointMan technology to analyse blood in cancer patients to identify gene mutations associated with a response to treatment. Ariana Resources is up after the copper, gold and silver exploration and development company said it has received positive results from the 2013 drill programme at the Eldorado Gold Corporation joint venture in Turkey. Ariana also said it found deep high-grade intercepts at the Ardala site. TyraTech is another gainer after the biotechnology company said its head-lice shampoo Vamousse is now listed with the US Food and Drug Administration and will be available for sale in the US from the end of the first quarter of 2014. At the other end of the market, Verdes Management shares are down after the company issued 163.3 million shares to cover the conversion notice it got from Westminster Asset Managament Ltd last week and said it had got a conversion notice from Newick Developments Sunday. The company said Newick had given it notice in relation to the outstanding balance of GBP125,000 on a loan Newick made to the company. Verdes will issue 227.3 million shares Monday January 27 to meet the new notice. Max Petroleum is down after drilling at its SAGW-11 appraisal well failed to encounter sufficient levels of hydrocarbons and the well will now be plugged and abandoned. Ortac Resources shares are also down after the company said it has raised gross proceeds of GBP500,000 by placing 200 million new shares at 0.25 pence each. Ortac said it will use the funds to strengthen its cash position and advance projects in Solvakia and Eritrea.

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AFTERNOON WATCHLIST: Japan Adjusted Merchandise Trade Balance, Japan Exports, Japan Imports, Japan Merchandise Trade Balance Total

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Tuesday's Key UK Corporate Events

Intermediate Capital Group Interim Management Statement
Cairn Energy Operational update
Unilever Full Year Results
Carphone Warehouse Interim Management Statement
PZ Cussons Interim Results
SABmiller Q3 Trading Statement
Hochschild Mining Production Report
African Barrick Gold Q4 Results
Polymetal International Q4 Production Results

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Tuesday's Key Economic Events

n/a Germany - German Constitutional Court Ruling
10:00 Germany ZEW Survey
10:00 EU ZEW Survey
11:00 UK CBI Industrial Trends Survey
13:55 US Redbook index

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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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