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LONDON (Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Centrica PLC-owned British Gas has been forced to make GBP5.6 million in payments following errors in its switching and renewal process. The UK energy regulator Ofgem found that the energy supplier wrongly blocked businesses from switching and failed to give some businesses notice that their contract was due to end. Ofgem said that British Gas has already paid back nearly GBP1.3 million to affected customers and will now pay back a further GBP3.5 million into an energy efficiency fund and a GBP800,000 penalty. It also said that British Gas did not properly communicate to customers the reasons for their objections to switching and how customers could resolve this.
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British retailer Marks and Spencer Group PLC said group sales rose 1.9% in the last quarter of its financial year, as sales continue to be driven by its successful food business and improvements online, while general merchandise and clothing sales also picked up in the quarter. The retailer said it remains cautious about the outlook, given the competitive and promotional pricing environment in the UK, despite some improvement in consumer confidence.
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Royal Bank of Scotland Group PLC late Wednesday said it has reached an agreement with the UK government over the future retirement of the dividend access share, in a move that marks an important step for the bailed out bank to one day resume paying dividends and return to private ownership. Under the agreement, RBS will pay the Treasury an initial GBP320 million in 2014 in order to remove the dividend access share, a key part of the government's GBP25.5 billion capital injection in 2009. A further GBP1.18 billion payment will be required to retire the dividend access share, RBS said. It will be payable in one or more dividends.
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Resolution Ltd said insurance and pensions provider Friends Life is scrapping active member discounts (AMDs), just two weeks after the UK Department for Work & Pensions described the charges as "unfair" to deferred members. In a statement, Resolution said Friends Life will offer all its AMD schemes the chance to move to a single charge at the current active member rate, with immediate effect.
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Vedanta Resources PLC said it failed to reach its revised mined metal production estimate at Zinc India, but posted strong full year production of oil and gas due to the ramp-up of operations at its Rajasthan Block. In January, the India-focused oil and metals company warned that it expected mined metal production at its Zinc India operations in the full year ending March 31 to be about 900,000 tonnes due to a slower-than-expected ramp up of its underground mining project and a change in mining sequence that is giving preference to primary mine development. However on Thursday the company said it had failed to meet this revised estimate, achieving 880,000 tonnes, a 1% increase on its 870,000 tonnes the previous year. In contrast Vedanta achieved strong production from its Oil & Gas operations, where average daily gross operated production increased 6% to 218,651 barrels of oil equivalent per day from 205,323 barrels.
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Cairn Energy PLC said Deputy Chief Executive Mike Watts and Chief Financial Officer Jann Brown will not seek re-election to the board at its AGM in May. The company said that the decisions come as part of its "long term succession planning". The outgoing directors have "agreed, during their notice periods, to continue in senior roles and dedicate their time to seeking to resolve the tax position in India," said Cairn. James Smith will take over the role of finance director and will join the Cairn board.
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Greene King PLC said its Chief Financial Officer, Matthew Fearn, has taken a temporary leave of absence to undergo urgent and important medical treatment. Fearn's responsibilities will be taken on by corporate finance director, David Brown in his absence, reporting to Rooney Anand, Chief Executive. Brown will not join the board but will attend all board meetings until Fearn's return, said the firm.
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John Wood Group PLC said new Chairman Ian Marchant will be succeeded by David Woodward as Senior Independent Non-Executive Director. Wood Group also said Jann Brown will join as a non-executive director and will chair the Board's Audit Committee and join the Nomination Committee. Brown joins from Cairn Energy.
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MARKETS
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The FTSE 100 is marginally lower ahead of the Bank of England's interest rate announcement at midday.
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FTSE 100: down 0.02% at 6634.25
FTSE 250: up 0.3% at 16208.01
AIM ALL-SHARE: up 0.1% at 847.49
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The euro is trading at a near a three-week high against the dollar after meeting minutes published Wednesday showed the US Federal Reserve is in no rush to raise interest rates.
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GBP-USD: down at USD1.6783
EUR-USD: up at USD1.3873
GOLD: up at USD1323.00 per ounce
OIL (Brent): down at USD107.52 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The Federal Reserve held a special meeting on March 4, according to the minutes of the regularly scheduled meeting held a few weeks later. At the first meeting, policy makers discussed whether to change its communication on forward guidance, including its unemployment threshold. Then on March 19, the Fed officially voted to drop its 6.5% unemployment target for tightening monetary policy, calling the metric "outdated."
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The house price balance in the UK climbed to 57% in March, the Royal Institution of Chartered Surveyors said. That was well above forecasts for 44%, and it was up from the upwardly revised 47% in February (originally 45%). Sales touched a six-year high in March, the data showed, while house prices moved higher in every region of the country - led by sharp gains in London and the South East.
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House prices in the euro area sustained their falling trend in the final three months of 2014, data from Eurostat showed. The house price index for the 18-nation bloc dropped 1.4% year-on-year, after a 1.3% decline in the third quarter. In the June quarter of 2013, prices fell 2.2%
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EU harmonized inflation in France slowed in March largely due to a fall in petroleum prices, data from the statistical office Insee showed. The harmonized inflation rate fell more-than-expected to 0.7% in March from 1.1% in February. The rate was seen at 0.8%. Similarly, consumer price annual inflation eased to 0.6% from 0.9% in the prior month and stayed below the expected 0.7%.
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China's exports and imports declined unexpectedly in March, adding to evidence that suggests that the economy is struggling to achieve its targeted growth. Shipments dropped 6.6% year-over-year in March, confounding expectations for a 4.8% increase. However, the rate of decline slowed from the 18% slump in February, figures from the General Administration of Customs showed.
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Ukrainian interim President Oleksandr Turchynov offered pro-Russian protesters in the east amnesty from prosecution and more regional autonomy. Turchynov added that any amnesty would be conditional on the protesters laying down arms and vacating occupied buildings. "We will guarantee that the there will be no criminal investigation into those who hand over arms and give up buildings. I am ready to carry this out as a presidential decree," Turchynov told the parliament in Kiev, the Interfax Ukraine news agency reported.
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The landmark free trade deal being negotiated between the EU and the US has strong general support in the US and Germany, according to a poll released Wednesday. But when asked about specifics, such as adopting common regulatory standards on food and other products across the Atlantic, there was a strong difference of opinion, according to the poll conducted by the Pew Research Center in association with Germany's Bertelsmann Foundation. The Transatlantic Trade & Investment Partnership enjoyed strong general support among Germans (55% to 25%) and Americans (53% to 20%) in the poll. But only 45% of Germans agreed to bringing regulatory standards onto one page, while 76% of Americans thought that was a good idea.
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The Basel Committee published a final standard for calculating regulatory capital for banks’ exposures to central counterparties, moving to replace the interim capital requirements published in July 2012. The Basel Committee, a group of central banks, worked with the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions in developing the final standard. It had a target of simplifying the underlying policy framework when developing the changes.
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A car bomb exploded outside the Bank of Greece in central Athens, causing damage to nearby buildings but no injuries, hours before the country planned to make a landmark return to bond markets. No group claimed responsibility for the early morning attack, but phone calls warning of the explosion outside the central bank building were made to a Greek newspaper and a news website.
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