WPP Share News (WPP)

LONDON (Alliance News) - RSA Insurance Group Tuesday launched a GBP773 million fully-underwritten, discounted rights issue in order to shore up its balance sheet, as Chief Executive Stephen Hester's recovery plan for the troubled FTSE 100 insurer begins to take shape.

RSA, which has battled with increased claims costs and an accounting scandal in its Ireland business, is offering three shares for every eight owned by current shareholders at 56.0 pence each, a 40% discount to Monday's closing price.

Aviva has sold its Turkish general insurance business, Aviva Sigorta AS, to a private equity consortium led by EMF Capital Partners, as the FTSE 100 life insurer continues its strategy of narrowing its focus to businesses with more attractive returns.

London's AIM market lost one of its biggest stocks Tuesday as Gulf Keystone Petroleum Ltd moved to the London Stock Exchange's main market, but the junior market got two new stocks as a resurgence in new listings on both markets continued.

Gulf Keystone Petroleum shares were up 2.4% as it moved to the main market, a move that the company thinks reflects its growth since its initial public offering on AIM back in September 2004. It didn't issue any new equity as part of the move, but could go into the FTSE 250 at the next index review, based on its current market capitalisation.

However, Xeros Technology Group, the company that has developed a new cleaning system involving polymer beads, started trading on AIM Tuesday. The company, a spin-out company from the University of Leeds, has developed a patented polymer bead cleaning system and is targeting the product at the laundry market.

It said it raised GBP27.6 million by placing 22.4 million new shares at 123 pence each. It had an initial market capitalisation of about GBP80 million at that price, although its shares were trading slightly lower at 117.725 pence midday Tuesday.

On top of that, healthcare company Venture Life Group raised GBP5.4 million before expenses in its IPO placing at 109 pence each. Its initial market capitalisation is expected to be about GBP26.4 million when its shares start trading on AIM Friday.

Albemarle & Bond Holdings has gone into administration after its lenders withdrew all support for a potential turnaround of the business, the end of a tumultuous few months which included the struggling pawnbroker smelting down jewelry to try and raise funds to save itself.

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FTSE 100: Up 1.2% at 6,594.89
FTSE 250: Up 0.7% at 16,136.48
AIM ALL-SHARE: Up 0.4% at 848.82
GBP-USD: Up at 1.6512
EUR-USD: Down at 1.3787
GOLD: Up at USD1,311.70 an ounce
OIL (Brent): Up at USD107.10 a barrel

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Key UK Corporate News

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FTSE 100: Shares in low-cost airline easyJet have soared after the company said it expects its pretax loss for the first-half to be lower than previous expectations thanks to better-than-forecast revenue per seat growth and as costs excluding fuel rose less then it had expected. It said it was being buoyed by its decision to introduce seat allocation, while cost were lower than expected thanks to the mild winter which meant fewer aircraft had to be de-iced. Kingfisher delivered an increase in profits and revenues for its recent financial year, while announcing the start of a multi-year capital return programme to shareholders this year and plans for a joint venture partner for B&Q China. Royal Mail is to consult unions over a proposal to cut 1,600 jobs and create approximately 300 new or enhanced roles in its head office as part of its continued efficiency programme. Centrica, together with Brookfield Renewable Energy Partners LP and iCON Infrastructure Partners II LP, has agreed to acquire Irish energy company Bord Gais Energy for GBP920 million. Centrica will acquire BGE's gas and electricity supply business in Ireland and the Whitegate gas-fired power station, with the others taking its other assets including gas distribution and renewable energy assets. WPP has acquired Chinese marketing services company XMKT Group. Wolseley pretax profit jumped during its most recent half-year as it recorded good growth in its US and UK businesses, a modest uptick in like-for-like growth in the Nordics, and finance costs fell. BT Group has confirmed that EE will become the mobile virtual network operator for its UK customers and employees, replacing Vodafone.

FTSE 250: 888 Holdings reported a 30% increase in pretax profit in 2013, driven by a continued strong performance from its casino and poker products. AG Barr reported an 8.5% rise in pretax profit for its last financial year, driven by a 6.9% rise in revenues and higher margins, and it said it was cautiously optimistic for the current year even though the consumer environment remains tough. ITE Group said Director Edward Strachan will step down from the board from March 31. Unite Group has succeeded in raising gross proceeds of about GBP100 million through a share placing and open offer, money it will use to increase its stake in the the Unite UK Student Accommodation Fund to 22%, from 16%, and to fund future development activity. KCOM Group says that it is trading in line with expectations for the year ending on March 31. The communications company said it had also reached an agreement with the trustees of its defined benefit pension schemes to provide further funding to the scheme through an asset backed partnership, which it established during the previous year.

AIM: ProPhotonix is a big gainer after it said its losses more than halved in 2013, driven by a 12% revenues increase and cost savings. It said it has begun 2014 with the "strongest ever" backlog at its business units, and gave a confident outlook for the year ahead, saying it expects first-half revenue to be between USD7.8 million and USD8.2 million, up from USD7.4 million a year earlier. Horizonte Minerals is doing well after it said it prefers a single-line 15,000 tonnes of nickel per year base case for its Araguaia development in Brazil, following a Pre-Feasibility Study at the site. Symphony Environmental Technologies is up after it reported a narrowed pretax loss for 2013 as revenue rose 46%. Billing Services Group is a big faller after it reported a narrowed annual pretax loss but warned that it expects both its revenue and its earnings before interest, tax, depreciation and amortisation to fall in 2014, hit by the secular decline in the volume of billable long distance and operator service calls initiated on landline phones. Sovereign Mines of Africa is also down after it raised GBP625,000 through a subscription of 62.5 million shares at a price of 1.0 pence each, money it will use to seek out key acquisitions as well as strategic partners for its Mandiana-Magana property, along with providing working capital for the company for at least the next 12 months.

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Top Economics And General

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UK inflation slowed as expected to a four-year low on transport prices in February, official data revealed. Consumer prices rose 1.7% year-on-year after increasing 1.9% in January, the Office for National Statistics said. The rate came in line with economists' expectations. The decline in January took the rate below the 2% target for the first time since November 2009. Inflation has slowed for the fifth month in a row in February.
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Mortgage approvals for house purchase in the UK unexpectedly declined in February from its highest level in nearly six-and-a-half years, latest figures from the British Bankers' Association (BBA) revealed. The number of home loan approvals decreased to a seasonally adjusted 47,550 from 49,341 in January, which was revised from 49,972. Economists had forecast an increase in the figure to 50,000. The January level is the highest since September 2007, when it was 54,148. In February 2013, approvals totaled 31,073. Total number of approvals, which includes re-mortgages and other secured borrowing, was 78,424 in February versus 81,047 in the previous month.
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UK house prices increased the most since August 2010 with prices in London again showing the highest annual growth. House prices were up 6.8% year-on-year in January, faster than the 5.5% rise seen in December, the Office for National Statistics said. January's growth was the fastest since August 2010, when the increase was 8.1%. On a seasonally adjusted basis, average house prices increased 0.6% between December and January.
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Germany's business confidence declined by more than expected in March, reports said citing a monthly survey from Ifo institute. The business sentiment index dropped to 110.7 from 111.3 in February, when the score was expected to fall to 110.9.
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Leaders of the Group of Seven decided Monday to hold a June summit in Brussels, instead of attending a Group of Eight summit hosted by Russia. The decision by G7 leaders, at an emergency meeting to discuss Moscow's actions in Crimea, came hours after Ukraine ordered the complete withdrawal of its troops from the peninsula, which Russia annexed last week.
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An aid package that would provide USD1 billion in loan guarantees for Ukraine cleared its first hurdle in the Senate despite threats by some opposition Republicans to block it. The 78-17 vote to close debate in the Democratic-controlled Senate signalled the measure would sail through final passage this week in the 100-member upper chamber. The aid legislation faces a stronger resistance in the lower House of Representatives, where Republicans hold the majority.
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Standard & Poor's downgraded the credit ratings of Brazil, citing fiscal slippage and subdued growth prospects over the coming years. The long-term bond rating was lowered by one notch to 'BBB-', the lowest investment grade, from 'BBB'. The outlook on the rating remains 'stable' as institutions and balance sheet remain strong.
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Angry relatives of passengers from the lost Malaysia Airlines flight demonstrated in Beijing Tuesday, as bad weather suspended the search for debris in the Indian Ocean that could help explain what happened to flight MH370. The Malaysian government announced late Monday that the plane went down in the southern Indian Ocean with all 239 lives lost, mostly Chinese. Hundreds of relatives of those aboard the flight marched through Beijing demanding a fuller account from the Malaysian authorities of how they died, state media reported. Heavy rain, gale-force winds and low clouds stopped the hunt for the plane in an area 2,500 kilometres south-west of Perth, the Australian Maritime Safety Authority said.
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An Egyptian court began trying 683 alleged supporters of ousted Egyptian president Mohammed Morsi on capital charges in the southern city of Minya, media reported. Security was strict and police sealed off streets, the independent newspaper al-Shorouk said. Judge Saeed Youssef, who sentenced 529 people to death on Monday, was also in charge of the trial of the 683. They are accused of storming a police station and killing officers in the town of Udwa last August.
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Afternoon Watchlist

14:00 US Consumer Confidence
14:00 US New Home Sales
14:00 US Richmond Fed Manufacturing Index
20:00 US Fed's Lockhart speech
23:00 US Philadelphia Fed's Plosser speech

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Wednesday's Key UK Corporate Events

Chime Communications Full Year Results
Marshalls Full Year Results
Dolphin Capital Investors Full Year Results
IQE Full Year Results
Apr Energy Full Year Results
Lamprell Full Year Results
Euromoney Institutional Investor Trading Statement
Homeserve Trading Statement
Moss Bros Full Year Results
Phoenix Group Holdings Full Year Results
Bellway Full Year Results
TUI Travel Trading Update
EnQuest Full Year Results
Alliance Pharma Full Year Results
Paragon Entertainment Full Year Results
Leaf Clean Energy Half Year Results
Vislink Full Year Results

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Wednesday's Key Economic Events

06:00 US Fed's Bullard speech
07:00 Germany Gfk Consumer Confidence Survey
07:00 UK Nationwide Housing Prices
09:00 Italy Retail Sales
10:00 Italy Consumer Price Index
11:00 US MBA Mortgage Applications
13:30 US Durable Goods Orders
13:58 US Markit Services PMI Preliminary
14:30 US EIA Crude Oil Stocks change
20:30 US Bank Stress Test Info

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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1

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