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(An item published at 1224 BST misstated the direction of the markets. The correct version follows)
LONDON (Alliance News) - Pearson leads the FTSE 100 as we head into afternoon trading Friday after the company maintained its full-year adjusted earnings per share guidance for 2014, as it said it had seen a "solid start to the year" in a statement ahead of its annual general meeting.
The publishing and education company has led the blue-chip index for much of the morning, after it said it expects adjusted earnings per share of between 62 pence and 67 pence in 2014, taking into account continued cyclical and policy-related pressures in the US and UK, its restructuring plans and product investment.
Pearson said its first-half adjusted operating profit and adjusted earnings per share will be lower than in 2013, as expected. This is as a result of the costs of merging its Penguin books unit with Random House Inc, as well as the appreciation of sterling, said the firm.
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FTSE 100: down 0.3% at 6,680.07
FTSE 250: down 0.2% at 15,956.26
AIM ALL-SHARE: down 0.5% at 820.19
GBP-USD: up at 1.610
EUR-USD: up at 1.3835
GOLD: up at USD1,300.73 an ounce
OIL (Brent): down at USD109.81 a barrel
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Key UK Corporate News
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FTSE 100: The Royal Bank of Scotland Group has warned of commercial risk after it said UK Financial Investments, the entity responsible for the government's stake in the bailed-out bank, has said it will block any proposal allowing the lender to pay bonuses up to 200% of fixed pay. UK bookmaker William Hill said it will close 109 loss-making betting shops before the end of the year, in a bid to maintain profits, in response to the UK government's decision to increase the tax rate on high-speed, high-stake gambling machines next year. Media buying giant WPP has reiterated its forecasts for 2014, as it saw revenues rise in the first quarter to end-March, although the strengthening of sterling continued to hamper growth. Tullow Oil said it is abandoning its Tapendar-1 exploration well, offshore Mauritania as it has not encountered hydrocarbons. Botox maker Allergan approached Ireland-based pharmaceutical firm Shire about a possible takeover in recent months, but was rebuffed, Reuters reported, citing people familiar with the matter.
FTSE 250: Cable & Wireless Communications has agreed to sell Compagnie Monégasque de Communication, the holding company for its 55% stake in Monaco Telecom, in a deal worth EUR321.8 million. Online gaming firm Bwin.party Digital Entertainment said it has sent a letter to its shareholders advising them to vote against SpringOwl's bid for additional directors. Rotork said order intake fell in its first quarter as the firm faced currency headwinds and a strong 2013 comparative. Spectris expressed confidence for 2014, after it saw sales decline in the first quarter to end-March, hit by the strengthening of sterling. Bank of Georgia Holdings said its insurance and healthcare subsidiary has completed a buy-out of a 49% minority shareholder of healthcare subsidiary My Family Clinic.
AIM All-Share: Sound Oil is trading higher after the oil and gas company said a new institutional investor - Continental Investment Partners SA - is to inject GBP14.0 million into the group, with the funds earmarked for its drill programme for the next year. Iofina is up as the iodine exploration and production company said its pretax loss widened in 2013 due to higher expenses but noted that production has seen a vast increase in its first quarter 2014 helping the company to exceed its revenue targets for the three months. Aukett Swanke Group is trading higher; the architectural and interior design firm said that group revenue and profits for the current financial year will beat expectations, boosted by an improving UK property development sector. 1Spatial shares were boosted as the firm said that its full-year results would be in line with market expectations for the year to end-January, as it saw a "solid" performance over the year. Shares in Straight are higher as the company said that takeover talks with One51, an investment company that owns a portfolio of businesses in environmental services, renewable energy and injection moulding plastics, have been extended until May 2.
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Top Economics And General
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UK retail sales unexpectedly rose for a second straight month in March, figures from the Office for National Statistics showed. Retail sales including automotive fuel rose 0.1% month-on-month, following a 1.3% gain in February, revised from 1.7%. Economists had forecast a 0.4% decline. Year-on-year, sales grew 4.2% in March, after a 3.3% rise in the previous month, revised from 3.7%. Economists had expected 3.8% growth.
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Mortgage approvals for house purchase in the UK declined for a second straight month in March to its lowest level in four months, defying expectations for an increase, figures from the British Bankers' Association showed. The number of home loan approvals fell to a seasonally adjusted 45,933 from 47,196 in February, revised from 47,550. Economists had forecast 48,950 approvals for March. The latest figure is the lowest since November, when they were 45,033. In January, approvals totaled 48,940, the highest since September 2007.
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Russia will cooperate with the West to reduce tensions in Ukraine but won't accept unilateral demands, Foreign Minister Sergei Lavrov said. "Russia will steadfastly assist in de-escalating the conflict on the basis of the Geneva compromise, but I want to stress there cannot be any one-sided demands that are being presented to us," Lavrov told a diplomats' meeting in Moscow, according to Russian news agencies. The minister was referring to comments by US Secretary of State John Kerry, who threatened fresh sanctions against Russia.
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Ratings agency Standard & Poor has cut Russia's credit rating to 'BBB-' from 'BBB' on Friday, citing the risk of marked deterioration in external financing. The downgrade comes amid the continued escalation in the Ukraine crisis. S&P last lowered Russia's rating in December 2008. The agency said the outlook on the country's ratings remains negative.
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Overall inflation for the Tokyo region, considered a leading indicator for the nationwide trend, spiked 2.9% on year in April, the Ministry of Internal Affairs and Communications said. That was slightly below expectations for 3.0% but up sharply from 1.3% in March - perhaps finally signalling an end to the deflation that has hampered the nation for more than 15 years, although the recently implemented consumption tax hike also is likely a factor.
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Japan and the US were not able to reach agreement on a Pacific trade accord before visiting US President Barack Obama's departure from the country, Japanese media reported. Akira Amari, minister in charge of the Trans-Pacific Partnership (TPP) trade negotiations, told reporters Friday morning that the talks between the two countries have been stalled over agriculture and automobile tariffs, which remained the biggest sticking points, the Kyodo News agency reported.
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US President Barack Obama arrived in South Korea, to meet his counterpart Park Geun Hye and discuss their countries' security alliance and concerns over the North's nuclear weapons programme. South Korea said this week that activity spotted across the border could indicate Pyongyang was preparing a fourth nuclear test explosion some time soon. North Korea in March threatened a "new type" of atomic test. Speaking in Japan Thursday, Obama called for increased international pressure on isolated, communist North Korea. The US president was also due to visit Malaysia and the Philippines.
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The death toll in the sinking of a South Korean ferry rose to 181, a media report said. Another 120 people were still missing, the Yonhap News Agency reported. An emergency task force has sent the largest number of navy, coast guard and civilian divers so far to look for bodies. The ship capsized and sank on April 16 off South Korea's south-west coast on a journey between Incheon near Seoul and the resort island of Jeju.
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Afternoon Watchlist (all times British Summer Time)
14:45 US Markit Services PMI Preliminary
14:55 US Reuters/Michigan Consumer Sentiment Index
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Monday's Key UK Corporate Events
No Events Scheduled
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Monday's Key Economic Events (all times British Summer Time)
00:50 Japan Large Retailer's Sales
00:50 Japan Retail Trade
07:00 UK Nationwide Housing Prices
09:00 Italy Consumer Confidence
15:00 US Pending Home Sales
15:30 US Dallas Fed Manufacturing Business Index
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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.
