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LONDON BRIEFING: RBS To Become NatWest Group From Next Week

Thu, 16th Jul 2020 08:26

(Alliance News) - Royal Bank of Scotland Group said Thursday it will formally change its name to NatWest Group PLC on Wednesday next week, following its announcement of the rebranding back in February, as the lender distances itself from its troubled past and government bailout.

The RBS investment bank already is called NatWest Markets.

RBS bought the larger NatWest bank prior to the financial crisis and just before disgraced former boss Fred Goodwin took charge.

In February of this year, its newest chief executive, Alison Rose, announced a series of plans to turn around the majority state-owned lender, believing it is "still too complicated for our customers".

RBS said it will provide a further update next week, including revised exchange tickers.

The stock was down 0.3% early Thursday.

Here is what you need to know at the London market open:



MARKETS



FTSE 100: down 0.4% at 6,266.04



Hang Seng: down 1.5% at 25,093.49

Nikkei 225: closed down 0.8% at 22,770.36

DJIA: closed up 227.51 points, 0.9%, at 26,870.10

S&P 500: closed up 0.9% at 3,226.56



GBP: down at USD1.2540 (USD1.2604)

EUR: down at USD1.1396 (USD1.1419)

Gold: flat at USD1,806.25 per ounce (USD1,809.00)

Oil (Brent): flat at USD43.46 a barrel (USD43.42)

(changes since previous London equities close)



ECONOMICS AND GENERAL



Thursday's Key Economic Events still to come

0930 BST UK Bank of England credit conditions survey

0930 BST UK BoE quarterly bank liabilities survey

1145 BST UK BoE Chief Economist Andy Haldane speaks at UK Finance webinar

1215 BST UK BoE Governor Andrew Bailey speaks at Money & Me launch webinar

1100 CEST EU foreign trade

1345 CEST EU European Central Bank interest rate decision

1430 CEST EU press conference with ECB President Christine Lagarde

0830 EDT US advance monthly sales for retail & food services

0830 EDT US initial jobless claims

1000 EDT US manufacturing & trade: inventories & sales

1000 EDT US NAHB housing market index

1030 EDT US EIA weekly natural gas storage report



The UK unemployment rate was unchanged in the three months to May, according to figures from the Office for National Statistics. The UK unemployment rate in the three months to May was 3.9%, unchanged from 3.9% in the three months to April, the ONS said. Market consensus forecast, cited by FXStreet, was for a rise to 4.2%. Average earnings including bonuses in May fell 0.3%, following a 1.0% increase in the three months to April. The reading was slightly better than market forecasts for a fall of 0.4%. Average earnings excluding bonuses rose 0.7% in May, slowing from 1.7% growth in April. The figure also beat the consensus estimate for an 0.5% increase.



Almost a third of UK firms plan to lay off staff over the next three months in a further sign of the coronavirus pandemic's devastating impact on Britain's job market, according to a report. The British Chambers of Commerce quarterly recruitment outlook reveals that 29% of 7,400 firms surveyed expect to axe jobs over the third quarter – a record high for the study. The report – compiled in conjunction with Totaljobs – found that 28% of firms polled had already cut roles between April and June. The study also showed that 41% of large companies and 41% of small and medium-sized firms expect to cut staff over the next quarter, with 18% of micro businesses forecasting workforce reductions. Recruitment also ground to a halt, with just 25% of firms looking to take on new hires in another grim record for the report.



Human trials of a potential Covid-19 vaccine being developed by scientists in Oxford are reported to have shown promising results. Researchers believe they have made a breakthrough after discovering the jab could provide "double protection" against the virus, the Daily Telegraph reported. The newspaper said the phase 1 trial in healthy adult volunteers, which began in April, showed the vaccine generated an immune response, with blood samples indicating it stimulated the body to produce both antibodies and "killer T-cells". The combination of the two responses "will hopefully keep people safe", a source told the paper.



The reopening of Ireland's pubs and nightclubs is to be delayed until August 10, PA reports. Plans to allow larger crowds to gather indoors and outdoors from Monday have also been scrapped amid concerns over the spread of coronavirus. The total number of people infected per positive case is now 1.2-1.8, Chief Medical Officer Ronan Glynn said. Taoiseach Micheal Martin said: "It is the right thing to do – to press the pause button." Social visits to people's homes will remain limited to a maximum of 10 visitors from no more than four other households. Restrictions on indoor gatherings to 50 and outdoors to 200 will remain until August 10, Martin said. Face coverings will also become mandatory in shops and other indoor public spaces.



US Secretary of State Mike Pompeo said he will visit Britain and Denmark next week, days after London pleased Washington with a ban on Chinese telecoms giant Huawei. "I leave on Monday for a quick trip to the UK and Denmark, and I'm sure that the Chinese Communist Party and its threat to free peoples around the world will be high on top of that agenda," Pompeo told a news conference. Pompeo recently agreed to start a dialogue with the EU on relations with China, as US President Donald Trump's administration presses for a hard line against Beijing. The Trump administration has been urging all countries to shun Huawei, a leader in fifth-generation internet, calling the company an arm of the Chinese state.



The US is considering a sweeping ban on members of the Chinese Communist Party entering the country, the New York Times reported. The blanket ban would be similar to Immigration & Nationality Act, implemented back in 2017 to halt travel from those in predominantly Muslim countries. The NYT noted that details of the plans are yet to be finalised and US President Donald Trump may yet reject the proposal. The newspaper also noted that the CCP has 92 million members and three million Chinese citizens travelled to the US in 2018. The ban could be difficult to implement, the NYT added, because the US has no knowledge of political party membership of many Chinese citizens that enter the country.



The Organization of the Petroleum Exporting Countries and Russia are set to start rolling back record supply cuts agreed earlier in 2020, the Financial Times reported. The oil cartel and its allies are set to scale back the cuts of 9.7 million barrels a day that took effect in May to 7.7 million barrels from August, the newspaper reported citing OPEC delegates. OPEC is expected to taper further to cuts of 5.8 million barrels a day between January 2021 and April 2022, according to the FT. The OPEC Joint Ministerial Monitoring Committee has been meeting this week.



BROKER RATING CHANGES



JEFFERIES RAISES BP TO 'BUY' (HOLD) - PRICE TARGET 350 (320) PENCE



JEFFERIES RAISES SHELL PRICE TARGET TO 1,360 (1,150) PENCE - 'HOLD'



JPMORGAN CUTS FEVERTREE DRINKS TO 'UNDERWEIGHT' ('NEUTRAL') - TARGET 1,900 (1,260) PENCE



COMPANIES - FTSE 100



SSE said it expects the economic damage caused by the coronavirus on the wider economy to have adverse, albeit temporary, effects on several of its businesses during financial 2021, with the greater hit likely to be experienced in the first six months of the year, which began on April 1. The power supplier expects the hit to operating profit for the first three months to be in line with expectations, with the damage to financial 2021 still anticipated to be in the range of GBP150 million to GBP250 million. SSE said it continues to keep this assessment under review and will provide guidance on adjusted earnings per share later in the financial year. SSE added that it continues to target the delivery of the five-year dividend plan to financial 2023, including an 80 pence full-year dividend for 2021. SSE intends to declare a 24.4p interim dividend in November.



Anglo American reported second-quarter production falls with Covid-19 lockdowns a particular pain for its De Beers and Kumba units. The blue-chip miner added that it is "building up" from a production level of just 60% in April, amid lockdowns, to about 90% at the end of June. The company has held most of its 2020 guidance, but did lower it for both thermal and metallurgical coal. During the quarter to June 30, Anglo American's overall production was down 18%, with its Minas-Rio iron ore asset in Brazil and Collahuasi copper operation in Chile stopping steeper declines. Diamonds output was down 54% annually to 3.5 million carats, the largest decline by commodity. Platinum fared slightly better, output slumped 41% to 307,000 ounces. Palladium and thermal coal were both 34% at 228,000 ounces and 4.4 million tonnes, respectively. Metallurgical coal production dropped 32% year-on-year to 4.0 million tonnes meanwhile and manganese ore was down 4% to 796,000 tonnes.



Bookmaker GVC Holdings said it made an encouraging start to the year, despite the effects of Covid-19, which saw its shops shuttered during the lockdown. For the six months to June 30, net gaming revenue fell 11%, while online net gaming revenue was up 19% despite overall performance being hindered by the cancellation of sporting events due to the coronavirus. UK retail like-for-like net gaming revenue was down 86%, having been heavily hit due to closures. GVC expects interim earnings before interest, tax, depreciation and amortisation to be in the range of GBP340 million to GBP350 million. It reported interim Ebitda of GBP376.8 million in 2019. Separately, the Ladbrokes and Coral owner said Chief Executive Kenneth Alexander will retire from the role and will be replaced by Chief Operating Officer Shay Segev from Friday.



Aviva confirmed the sale of Friends Provident International business to RL360 Holding Co, a subsidiary of International Financial Group. Under revised terms, Aviva has sold a 76% shareholding in FPIL to IFGL for GBP259 million, of which GBP209 million is in cash and GBP50 million in deferred cash consideration. Aviva said it entered into a shareholders' agreement with IFGL, under which Aviva has "certain ongoing commitments and customary rights" given the minority shareholding. Aviva had previously announced the sale of 100% shareholding in FPIL for a total consideration of GBP340 million.



COMPANIES - GLOBAL



The official Twitter accounts of Apple, Elon Musk, Jeff Bezos and others were hijacked on Wednesday by scammers trying to dupe people into sending cryptocurrency bitcoin, in a massive hack. The list of accounts commandeered grew rapidly to include Joe Biden, Barack Obama, Uber, Microsoft co-founder Bill Gates, bitcoin specialty firms and many others. "Tough day for us at Twitter," Twitter Chief Executive Jack Dorsey said in a tweet. "We all feel terrible this happened. We're diagnosing and will share everything we can when we have a more complete understanding of exactly what happened." The Biden campaign told AFP that Twitter locked down the hacked account quickly and removed the bogus tweet.



Home-sharing platform Airbnb has restarted its IPO efforts, Chief Executive Brian Chesky told employees on Wednesday, the New York Times reported. Airbnb had planned to file in March for an initial public offering of shares, the newspaper said, but shelved these plans as Covid-19 hit, halting international travel and freezing the holiday market. On a videoconference with employees, Chesky indicated that the company's gross bookings - which includes money paid to hosts - had rebounded in recent weeks. "We're not committing to going public this year, but we're not ruling it out, either," he said, adding that: "When the market is ready, we will be ready."



Thursday's Shareholder Meetings

BT Group

DCC

Electrocomponents

Marshall Motors

Evgen Pharma

Renewi

Tiziana Life Sciences

Foresight Solar Fund

Trackwise Designs

Instem

Biffa



By Tom Waite; thomaslwaite@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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