Wood Group (J) Share News (WG.)

LONDON (Alliance News) - Oil companies are amongst the worst-performing stocks in a lower FTSE 100 Friday, after the oil price resumed its slide, while Centrica and SSE are being hit after Labour leader Ed Miliband detailed his party's plans for the sector if he takes power in May, including forcing companies to split out energy generation businesses.

Miliband says an energy bill would be one of the first of a new parliament if it forms a government, setting in stone the price freeze the party already announced by also giving regulator Ofgem a legal duty to review prices by the autumn "and the power to order price reductions in time for the winter". The party's freeze would allow energy bills to fall but not rise until 2017.

Labour quoted consumer group Which? as saying further cuts of up to 10% in gas and electricity bills should be made this year, and said this would save a typical family at least GBP100 next winter.

"We will then reset the market so that it delivers a better deal for working families by forcing energy companies to separate out the parts of the business that generate energy from the parts that sell to homes and businesses; requiring them to trade their energy on a pool; introducing a simple new tariff structure; and creating a tough new energy watchdog with new powers to police the market," it added.

SSE has an energy generation business as well as its supply business. Its shares are down 1.9%. Centrica shares are down 2.0%.

Meanwhile, BG Group, down 2.4%, Royal Dutch Shell 'B', down 1.9%, BP, down 1.6%, and Tullow Oil, down 1.4%, are again under pressure as oil prices drop back gain. Brent oil is trading at USD56.42 a barrel while WTI has fallen even more and is trading at USD46.01 a barrel, its lowest level since January 30.

The International Energy Agency said Friday that oil prices may only have stabilised temporarily because unabated production in the US is worsening the global supply glut.

"Declines in the US rig count have yet to dent North American output growth. Final December and preliminary current-quarter data show higher-than-expected US crude supply, raising the 2015 North American outlook," it said in its monthly report, adding that price are likely to remain volatile.

"On the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however," the report said. "Behind the facade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly."

----------
Markets: UK stocks are trading mixed, with the FTSE 100 down as oil and energy stocks come under renewed pressure. The dollar has resumed its rise against major currencies, with the pound hitting its lowest value against the greenback since June 2013. Sterling fell to a low of USD1.4789, its lowest since June 2010, while the euro hit a low of USD1.0562.

Wall Street is set for a lower start, with stock futures indicating that the DJIA and S&P 500 will open down 0.2% and the Nasdaq 100 down 0.1%.

FTSE 100: down 0.3% at 6,744.19
FTSE 250: up 0.2% at 17,091.26
AIM ALL-SHARE: up 0.2% at 717.89
GBP-USD: down at 1.4789
EUR-USD: down at 1.0562
GOLD: up at USD1,155.84 an ounce
OIL (Brent): down at USD56.42 a barrel
----------
Top Corporate News
----------
United Steelworkers announced it has reached a tentative agreement on a new four-year contract with Royal Dutch Shell's Shell Oil as a pattern agreement for the rest of the industry. The agreement accomplishes the major goals as directed by the USW's oil conference in October of last year, it said, and has been approved by union's lead negotiators and National Oil Bargaining Policy Committee. The tentative agreement calls for yearly wages increases as well as maintaining the current health care plan cost-sharing ratio.
----------
US healthcare company Johnson & Johnson has sued UK rival GlaxoSmithKline, alleging Glaxo is attempting to unlawfully win market share with false advertising at the start of the spring allergy season in the US, Reuters reports. Two units of J&J, McNeil-PPC Inc and McNeil Consumer Healthcare, filed the suit in Manhattan, accusing Glaxo of making unsupported claims about its allergy nasal spray Flonase at the expense of McNeil's Benadryl and Zyrtec drugs. A spokeswoman for Glaxo told Reuters the company is reviewing the lawsuit.
----------
JD Wetherspoon reported strong sales growth in the first half of its financial year but a lower operating margin owing to higher rates of pay for pub staff and higher utility costs. The pub chain said revenue was up 9.0% at GBP744.4 million in the 26 weeks to 25 January from GBP683.2 million a year earlier. Like-for-like sales were up 4.5%. However, operating margin narrowed to 7.4% from 8.2%. Pretax profit rose 4.1% to GBP37.5 million in the half year from GBP36.0 million in the same period the year before. Wetherspoon left its interim dividend flat at 4.0 pence per share.
----------
Afren said it has reached an agreement in principle to address its short- and longer-term funding needs and recapitalise its capital structure, but also warned it will be making significant impairments in 2014 followed by significant budget cuts in 2015. The oil company said it has entered into an agreement with some holders of its 2016, 2019 and 2020 notes, and with the majority of its lenders under the company's existing USD300 million Ebok credit facility, to secure interim funding and recapitalise the business. The net funding of the agreement will total USD300 million if approved by shareholders, and Afren is hoping to secure the deal by the end of June.
----------
Vedanta Resources joined Cairn Energy in announcing Cairn India Ltd is facing a substantial tax order from the Indian Income Tax Department in relation to the fiscal year 2006 to 2007. On Tuesday, Cairn Energy, which holds a 10% stake in Cairn India, said it is disputing a draft assessment order from the Indian Income Tax Department calling for it to pay USD1.6 billion plus interest and any penalties for the fiscal year 2006 to 2007 in an effort to "protect its legal position and shareholder interests". Vedanta, which holds a far more significant 59.8% stake in Cairn India, said the subsidiary released a statement on Thursday which confirmed the order from the Income Tax Department for an alleged failure to deduct withholding tax on alleged capital gains arising during 2006 to 2007 "in the hands of Cairn UK Holdings Limited, our erstwhile parent company, a subsidiary of Cairn Energy PLC," it said. Vedanta did not state what it will do regarding the order, or how it will directly affect the company.
----------
Oil services company John Wood Group said it has been awarded a contract by Norwegian oil company Statoil to handle engineering modifications and upgrades to the Kollsnes process plant in Norway. Wood Group said the estimated value of the contract, including options and procurement, is NOK500 million, or GBP41.3 million. Wood Group's Mustang Norway unit started the work earlier this month, and the work is scheduled to finish in 2017.
----------
Diploma said it has struck a deal to buy the Kubo Group for up to CHF39.9 million in cash before acquisition costs. Kubo is a seals, O-Rings, gaskets and moulded rubber parts company with operations in Switzerland and Austria. Diploma is acquiring the business via Rutin AG, the non-trading holding company of Kubo based in Switzerland. Diploma said it will pay the consideration due on the deal in cash from its existing cash resources and revolving debt facility. It expects the deal to be immediately earnings accretive and will integrate the business into its Seals division.
----------
AIM Movers
----------
Dart Group shares are up after it said it expects its underlying operating profit for the year to beat market expectations on the back of lower-than-expected losses over the winter. Canaccord has raised Dart Group's price target to 415p from 285p, keeping its Buy recommendation. Aurasian Minerals is also up after it agreed to sell its interest in the Wamum project in Papua New Guinea for USD750,000 to Newcrest Mining Ltd, though it has surrendered its other project in the country to the government after failing to secure an investor. Kea Petroleum shares are down by a fifth after said it would relinquish its Mercury permit in New Zealand. Kea said it has presented the prospect to a number of potential farm-in partners but, due to the challenging market conditions arising from the fall in the oil price in recent months and a lack of success for exploration projects offshore New Zealand, it was not able to reach a satisfactory agreement to commit to drilling an offshore well at the site.
----------
Top Economics And General
----------
UK construction output declined unexpectedly in January, marking its first annual fall in nearly two years, damped by weaker housing, data from the Office for National Statistics revealed. Construction output dropped 3.1% year-on-year, in contrast to a 5.3% growth in December. Economists had forecast 2.1% gain. This was the first year-on-year decrease since May 2013 when it fell by 2.8%, the ONS said. The contribution of construction to fourth quarter GDP was also revised to show a decline of 2.2% versus the 2.1% fall reported earlier, although this doesn't change the overall GDP growth figure.
----------
Germany's wholesale prices declined at a slower pace in February, data from Destatis showed. Wholesale prices decreased 2.1% year-on-year in February, slower than the 2.6% decline seen in January. Nonetheless, the wholesale price index has been declining since July 2013. The annual decline was largely driven by a 15.7% fall in the wholesale prices of solid fuels and related products.
----------
European Commisison President Jean-Claude Juncker said he is "not satisfied" at efforts to resolve the dispute over Greece's bailout, but expressed hope in finding a solution, ahead of talks with Greek Prime Minister Alexis Tsipras. Greece and its creditors have made little progress in agreeing reforms that Athens must undertake in return for an extension of its rescue package until the end of June, after Tsipras came to power on a pledge to end bailout-related austerity. Earlier this week, technical talks resumed between Greece and the bailout institutions - the commission, the European Central Bank and the International Monetary Fund.
----------
European Central Bank's Benoit Coeure said in a speech that the quantitative easing programme has gotten off to a smooth start and that the bank did not face any problems in finding bonds. The banks have purchased EUR9.8 billion of debt in the first three days of the easing programme with an average maturity of nine years, he said. "QE is working, there is no doubt it will work," he said in his speech in Paris.
----------
The Indian parliament opened the country's insurance sector to greater foreign investment, in the first new business law by the government that came to power in May promising economic reform.
Foreign investors will be able to increase their participation in Indian insurance companies to 49%, up from the previous cap of 26%, under the bill passed by the upper house, Finance Ministry DS Malik said.
----------
The shooting of two police officers early Thursday stirred anew worries in the racially troubled town of Ferguson, Missouri, and drew condemnation from around the country. Tactical police launched a massive manhunt for the shooter and swarmed a house not far from where the shooting occurred, according to the St Louis Post Dispatch newspaper. In the assault, the two officers narrowly escaped serious injury and have been released from hospital. They had been standing guard during a midnight protest in front of the Ferguson police department. Just hours before, Ferguson's controversial police chief, Thomas Jackson, had resigned.
----------
Afternoon Watchlist (all times in GMT)

12:30 US Producer Price Index
13:55 US Reuters/Michigan Consumer Sentiment Index Preliminary
----------
Monday's Key UK Corporate Events

Tribal Group - Full Year Results
Real Estate Investors - Full Year Results
EKF Diagnostics Holdings - Full Year Results
Brady - Full Year Results
Smart Metering Systems - Full Year Results
Petards Group - Full Year Results
---------
Monday's Key Economic Events (all times in GMT)

00:01 UK Rightmove House Price Index
n/a China FDI - Foreign Direct Investment
11:00 Germany German Buba Monthly Report
13:30 US NY Empire State Manufacturing Index
14:15 US Industrial Production
15:00 US NAHB Housing Market Index

---------
Contact: +44 207 199 0340; newsroom@alliancenews.com; @AllNewsTeam

Copyright 2015 Alliance News Limited. All Rights Reserved.