LONDON BRIEFING: Gold Miners Sparkle Amid Weak Open

LONDON (Alliance News) - Randgold Resources and Fresnillo shares were among just a handful of risers in the FTSE 100 Friday, up 2.3% and 2% respectively, after the US Federal Reserve opted to keep interest rates on hold, citing global economic headwinds and volatility in the stock market.

The vote to leave US interest rates unchanged at 0-0.25% was 9-1, with the sole dissenting vote coming from Richmond Fed President Jeffrey M. Lacker, who preferred to raise the target range for the federal funds rate by 25 basis points at this meeting.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the FOMC statement read. For the first time, the Fed added the phrase that it was "monitoring developments abroad."

The price of gold rose sharply in the aftermath of the decision, peaking at a two week high of USD1,134.20 per ounce, but has since given back some of these gains.

Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.7% at 6,143.77
FTSE 250: down 0.4% at 16,980.54
AIM ALL-SHARE: down 0.1% at 740.26
----------
Hang Seng: up 0.3% at 21,919.18
Nikkei 225: closed down 2.0% at 18,070.21
DJIA: closed down 0.4% at 16,674.74
S&P 500: closed down 0.3% at 1,990.20
----------
GBP: flat at USD1.5588
EUR: flat at USD1.1412

GOLD: down at USD1,128.52 per ounce
OIL (Brent): down at USD48.74 a barrel

(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
Friday's Key Economic Events still to come
(all times in BST)

09:00 EU Current Account
09:30 UK Public Sector Net Borrowing
13:30 Canada Consumer Price Index
15:00 US Conference Board Leading Indicator
----------
The US Federal Reserve has hinted since last year at a gradual tightening of monetary policy, but the central bank kept its benchmark interest rate at an unprecedented near-zero range Thursday. The decision followed last month's Chinese stock correction, which played havoc on global financial markets and drove up the dollar as panicked investors fled to US assets. The Fed's monetary policy committee decided to wait for more evidence of US economic strength "in light of the heightened uncertainties abroad and a slightly softer expected path for inflation," Chair Janet Yellen said. "We want to take a little bit more time to evaluate the likely impacts on the US," she said. A survey released by the 17-person monetary policy committee showed 13 members still expect an interest-rate hike this year, down from 15 of 17 members in the Fed's last survey in June.
----------
The members of the Bank of Japan's monetary policy board felt that the country's economic recovery continued, minutes from the central bank's meeting on August 6 and 7 have revealed. Private consumption was resilient and housing investment was also making progress, the board noted, while inflation expectations appear to be rising. At the meeting, the BoJ decided to keep its monetary policy unchanged and also maintained its inflation and economic growth outlook. It also held its benchmark lending rate steady at 0 to 0.10%. By an 8-1 vote, the policy board decided to maintain its target of raising the monetary base at an annual pace of about JPY80 trillion.
----------
Japan's opposition party has introduced a censure motion against the premier to block military reform bills Friday, a day after the proposal sparked disorder and disruption in the upper house. The Democratic Party of Japan is opposed to the bills that would for the first time since World War II allow the use of military force in support of allies attacked overseas. The ruling Liberal Democratic Party has been trying to vote on the bills since Wednesday, but the procedure has been stalled by opposition lawmakers, who at one point blocked a corridor in the Diet building.
----------
BROKER RATING CHANGES
---------
EXANE BNP CUTS KAZ MINERALS TO UNDERPERFORM (NEUTRAL) - TARGET 120 (210)P
----------
COMPANIES - FTSE 100
----------
The chairman of HSBC Holdings has suggested the bank may retain its domicile in the UK amid continued speculation that it could decide to move to Asia, The Daily Telegraph reported. Douglas Flint warned he expected the so-called 'Black Monday' stock market crash, sparked by conditions in China, would be repeated and said the regulatory system in Britain was better-suited to its operations.
----------
Sky has accused rival BT Group of damaging broadband customer service and reliability through a failure to invest in the upkeep of the national network, The Daily Telegraph has reported. In a column publishing in the Telegraph, Mai Fyfield, Sky's chief strategy officer, claimed BT had cut spending on maintenance and this had caused "unacceptable levels of faults and service problems that continue to impact consumers and businesses." Sky and TalkTalk Telecom Group PLC have both called on Ofcom, the media and communications regulator, to recommend that BT be forced to spin-off its Openreach infrastructure division.
----------
COMPANIES - FTSE 250
----------
Pace PLC Friday said that revenue growth in 2015 will be lower than in 2014 due to a challenging economic environment and delays with some of its customers, although it said that its profit forecasts will stay the same. The technology company for PayTV and broadband services said that it expects revenue for the full year to be around USD2.55 billion, lower than the USD2.62 billion it made last year, as although it expects strong revenue growth in the second half compared with the first half, it said it has faced challenging economic conditions in certain regions, phasing delays at major customers in North America and delayed decisions by customers. However, Pace said that due to an improved product mix, improving supply chain effectiveness and increased operational efficiencies, there will be no change to its profit forecasts. Adjusted earnings before interest, tax, depreciation and amortisation is still expected to be around USD255 million, up from USD241.1 million the year before, while free cash flow will still be in the range of USD185 million to USD195 million, down from USD204 million in 2014.
----------
A weaker diamond market and a reliance on mature mining areas has caused Petra Diamonds to post a decline in full-year profit, as the group's revenue fell despite its production edging higher in line with its guidance. Petra said its pretax profit for the year to the end of June was USD85.0 million, compared to a USD124.4 million profit a year earlier, as its revenue declined 10% to USD425.0 million from USD471.8 million. The group said it will pay a dividend for the year of 3.0 cents per share, its maiden payout. Petra said is results were hit by its underground production being heavily reliant on mature, diluted mining areas and by a weak diamond market over the year, though this was partially offset by a beneficial impact of the depreciation of the South African rand.
----------
The UK Competition and Markets Authority said it has cleared Poundland Group's acquisition of 99p Stores Ltd. Earlier this year, Poundland agreed a GBP55 million cash and shares deal to buy its smaller - and slightly keener priced - rival 99p Stores, paying GBP47.5 million in cash and a further GBP7.5 million in shares. In April, the CMA referred the acquisition for an in-depth phase 2 investigation following an initial investigation which found a realistic prospect that the merger would result in a substantial lessening of competition in certain areas through a possible reduction in quality, fewer promotions or closure of stores. On Friday, the CMA said it has concluded that the merger will not result in a substantial lessening of competition and consequently customers would not face a reduction in choice, value or quality of a service as a result. In a separate statement, Poundland said it welcomes the CMA's decision and will now move to complete the acquisition of 99p Stores by the end of September.
----------
Private equity investor Electra Private Equity said it has received a requisition to hold a general meeting from activist investor Sherborne Investors, under which the investor is seeking to appoint two people to Electra's board. Sherborne is seeking to appoint Edward Bramson, the founder of the vehicle, and Ian Brindle, a longtime associate of Bramson and the vehicle's former chairman, to the board of Electra. Sherborne has a stake of just under 30% in the company. It is the second time Sherborne has sought board representation at Electra, having done so a year ago when it launched a campaign for Electra to make changes to improve its overall performance.
----------
COMPANIES - LONDON MAIN MARKET AND AIM
----------
Newmark Security said its Grosvenor Technology Ltd subsidiary has secured a major workforce management deal with an unnamed partner to develop, manufacture and supply its security terminals. Newmark said the deal is for ten years and will offer guaranteed revenue of USD6.0 million in the first five years.
----------
Financing provider Private & Commercial Finance Group said it is trading ahead of expectations in its current financial year. Scott Maybury, its chief executive, said in a statement to be given at its annual general meeting that the company has continued to outperform its targets on portfolio growth, quality and profitability. The group said it is trading ahead of its expectations for the six months to the end of September. Maybury also said the group is still intending to start paying a dividend and shareholders at the AGM will vote on proposals which will allow this to happen.
----------
UK Oil & Gas Investments said it has appointed Matt Cartwright as its chief operating officer. He has been working as a consultant to the company since 2014 and has more than 20 years of experience in the oil and gas industry, including time working for majors BP and Total SA. "We are delighted to confirm Matt as our chief operating officer. He has made an important contribution to the company's growth over the last year during an extremely active and exciting period for the company," said Stephen Sanderson, UK Oil & Gas Investments' executive chairman and chief executive.
----------
COMPANIES - INTERNATIONAL
----------
Verizon Communications said that starting next week, its customers can connect through talk, messaging and data while in Cuba, through the company's Pay-As-You-Go International Travel option. Verizon said it is the first US-based wireless company to offer roaming in Cuba.
According to the company, Customers using a World Device who are traveling to Cuba can opt-in to add the Pay-As-You-Go International Travel option.
----------
Swiss drugmaker Novartis AG said Swissmedic has approved Entresto (sacubitril/valsartan), previously known as LCZ696, to reduce the risk of cardiovascular mortality and morbidity in patients with heart failure with reduced ejection fraction or HfrEF. Entresto will be available on prescription for adult patients whose condition is classified NYHA class II-IV and with an ejection fraction of 40% or less.
----------
Attorney General of the State of California Kamala Harris announced Thursday that the California Department of Justice, along with the California Public Utilities Commission, has reached a USD33 million settlement with Comcast Corp over allegations that the company posted online the names, phone numbers and addresses of tens of thousands of customers who had paid for unlisted voice over internet protocol or "VOIP" phone service.
As part of the settlement, Comcast must pay USD25 million in penalties and investigative costs to the California Department of Justice and the California Public Utilities Commission. Comcast will also pay approximately USD8 million in additional restitution to customers whose numbers were improperly disclosed.
----------
Friday's Scheduled AGMs/EGMs

Legendary Investments
City of London Group
Frontline
Eco Aminal Health
Imagination Technologies Group
Private & Commercial Finance
Kuala Limited
Petroneft Resources
----------
By James Kemp; jameskemp@alliancenews.com; @jamespkemp

Copyright 2015 Alliance News Limited. All Rights Reserved.