LONDON BRIEFING: Shares Firm On Chinese Stability; Intu Properties Cut

LONDON (Alliance News) - UK shares opened firmly Friday, after a volatile, mostly negative first week of 2016, as Chinese stock markets stabilized following further official measures.

Shares in supermarket Tesco were near the top of the FTSE 100, up 3.3%, after being raised to Overweight from Equal Weight by Barclays. Shopping mall operator Intu Properties was the biggest blue-chip faller, down 2.2%, after having its rating cut by French banks SocGen and Exane BNP.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 5,980.89
FTSE 250: up 0.2% at 16,826.82
AIM ALL-SHARE: flat at 725.97
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Hang Seng: closed up 0.6% at 20,453.71
Nikkei 225: closed down 0.4% at 17,697.96
DJIA: closed down 2.3% at 16,514.10
S&P 500: closed down 2.4% at 1,943.09
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GBP: up at USD1.4622 (USD1.4563)
EUR: up at USD1.0887 (USD1.0845)

GOLD: down at USD1,101.06 per ounce (USD1,103.80)
OIL (Brent): firm at USD34.45 a barrel (USD34.23)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in GMT)

09:30 UK Trade Balance
11:00 US NFIB Business Optimism Index
13:30 US Nonfarm Payrolls, Unemployment Rate, Average Earnings
13:30 Canada Unemployment Rate
13:30 Canada Building Permits
15:00 US Wholesale Inventories
20:00 US Consumer Credit
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The People's Bank of China raised its guidance rate for the yuan for the first time in nine trading days, Reuters reported Friday, after the central bank allowed the currency's biggest fall in five months on Thursday, sending shivers through regional currencies and global stock markets as investors feared it will trigger competitive devaluations. The PBOC set its daily midpoint rate for the yuan at 6.5636 per dollar prior to the market open, Reuters said. The central bank had fixed Thursday's central parity rate of the yuan at 6.5646 per dollar, weaker than Wednesday's reference rate of 6.5314.
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Permanent job placements in the UK climbed further in December, though at a slower pace than in the prior month, the Report on Jobs produced by Markit Economics on behalf of the Recruitment and Employment Confederation and KPMG showed. The number of people placed in permanent jobs continued to rise in December, but the pace of growth moderated from November's seven-month high. Similarly, temporary and contract staff billings grew at a slower pace.
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Germany's industrial production decreased unexpectedly in November, preliminary figures from Destatis showed. Industrial production fell a seasonally and working-day-adjusted 0.3% month-over-month in November, confounding economists' expectations for a 0.5% rise. In October, production grew the same 0.5%, which was revised up from a 0.2% increase reported earlier.
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Germany's exports and imports recovered in November from October, data from Destatis showed. Exports rose 0.4% in November from October, when it fell 1.3%. Likewise, imports grew 1.6% reversing a 3.2% drop in October. Economists had forecast exports to grow 0.5% and imports to improve 1%. As growth in imports outpaced export growth, the trade surplus dropped to a seasonally adjusted EUR19.7 billion from EUR20.5 billion.
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The leading index for Japan, which measures the future economic activity, decreased as expected in November, preliminary figures from the Cabinet Office showed. The leading index fell to 103.9 in November from 104.2 in the previous month. This was also came in line with consensus estimate. In September, the score was 102.4.
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The US, South Korea and Japan are pushing for stronger international sanctions on North Korea, the three countries said, after Pyongyang carried out a suspected fourth nuclear test. US President Barack Obama and South Korean President Park Geun Hye agreed to cooperate on a new UN resolution for strong sanctions, the president's office in Seoul said. Speaking separately with Japanese Prime Minister Shinzo Abe, Obama "reaffirmed the unshakeable US commitment" to the security of both allies and underscored the need for a strong, unified response.
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Iran said Saudi jets struck near its embassy in the Yemeni capital Sana'a, revising a previous statement from Tehran implying that the building had been directly hit. Deputy Foreign Minister Hossein Amir-Abdollahian said a rocket had struck "near the Iranian embassy". Earlier, Iranian Foreign Ministry spokesman Jaber Ansari sharply criticized the strike, which seriously injured one security official, as "a conscious and deliberate attack from Saudi Arabia," according to ISNA news agency.
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BROKER RATING CHANGES
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SOCGEN CUTS INTU PROPERTIES TO 'SELL' ('HOLD')

EXANE BNP CUTS INTU PROPERTIES TO 'UNDERPERFORM' (NEUTRAL) - TARGET 320 (360) PENCE

BERENBERG CUTS MARKS & SPENCER TO 'SELL' ('HOLD') - TARGET 380 (560) PENCE
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S&P CAPITAL IQ RAISES MARKS & SPENCER TO 'BUY' ('HOLD') - TARGET 570 PENCE
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BARCLAYS RAISES TESCO TO 'OVERWEIGHT' ('EQUAL WEIGHT') - PRICE TARGET 190 (225) P
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TRADERS: MACQUARIE CUTS BHP BILLITON TO 'NEUTRAL' ('OUTPERFORM')
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BARCLAYS CUTS PAYPOINT TO 'UNDERWEIGHT' ('EQUAL WEIGHT') - TARGET 850 PENCE
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BARCLAYS RAISES COMPUTACENTER TO 'EQUAL WEIGHT' (UNDERWEIGHT) - TARGET 800 (715) P
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COMPANIES - FTSE 100
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Irish drugmaker Shire is preparing to announce an agreed USD32.0 billion takeover of US peer Baxalta Inc as early as Monday, according to Reuters. Citing sources familiar with the matter, Reuters said both parties are confident the tax concerns around Baxalta's spin-out from Baxter International will not impede the agreement, but are waiting for a formal legal opinion on the matter before announcing the merger. The talks between the two had hinged on how much cash Shire would be able to offer as part of a cash and shares takeover offer without triggering extra taxes for Baxalta.
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Irish building materials CRH said it made a total of EUR8.0 billion in acquisitions in 2015. Over the course of the year, the group completed 20 bolt-on acquisitions, in addition to the purchase of assets from recently merged rival LafargeHolcim and of CR Laurence, the US glazing group it bought in August for USD1.3 billion. On the other side, the group generated around EUR1.0 billion from disposals, including the sale of its clay and concrete products unit in the UK and its clay business in the US.
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Property developer Hammerson said it has sold the Villebon-2 retail park in the south of Paris to a consortium of French institutional investors for EUR159.0 million. The retail park, which Hammerson acquired in 2005, has 46 tenants and generates an annual passing rent of EUR8.5 million. It is currently 99% occupied.
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Prominent fund manager Neil Woodford said GlaxoSmithKline should be broken up, arguing the pharmaceutical giant needs a radical restructuring, the BBC reported. Speaking in an interview with BBC Radio 5 Live's "Wake Up To Money", Woodford said the complexity of Glaxo was equivalent to having four FTSE 100 companies "bolted together" and said the company does not "do a particularly good job of managing all the constituent parts".
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COMPANIES - FTSE 250
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Spire Healthcare Group reiterated its guidance for 2015, and forecast revenue growth for 2016, saying it expects a boost from a proposed rise in the National Health Service tariff. The private hospital group had previously cut its guidance for 2015 for a second time in November, and on Friday it reiterated this guidance, continuing to expect revenue of between GBP882 million and GBP888 million for 2015, with an earnings before interest, tax, depreciation and amortisation margin of 18.0% for the year as a whole.
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Wealth manager Brewin Dolphin Holdings outlined a number of changes made to its executive committee as part of a push for organic growth in its funds under management. Brewin said Charlie Ferry will take responsibility for the private client business in the south east of England, while Stephen Jones will handle the private client unit outside the south east. The group said the changes will create a broader management structure in the business and will result in Stephen Ford, the head of investment management, leaving the company.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Online payments company Paysafe Group said revenue and adjusted earnings for 2015 are set to come in ahead of expectations following strong growth in its product lines. The company said its revenue for the year to the end of December is expected to hit around USD600.0 million, with USD380.0 million of that generated in the second half thanks to good growth across product lines, particularly in its North American processing arm. Paysafe also expects adjusted earnings before interest, taxation, depreciation and amortisation for the year to be around USD150.0 million, with USD100.0 million coming from the second half.
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Venn Life Sciences Holdings announced the resignation of Non-Executive Chairman David Evans, as it said it expects to report revenue "at least" doubled from the previous year for 2015. Venn Life Sciences provides services including drug development and clinical trial management for the pharmaceutical, biotechnology and medical device spaces. Chief Executive Officer Tony Richardson will act as executive chairman in the interim period until a suitable replacement is found.
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Insurance technology company Watchstone Group said its Brand Extension (UK) subsidiary has agreed a deal to sell BE Insulated (UK) and Carbon Reduction Co (UK) to The BE Smart Group for a nominal consideration of GBP1.00. Watchstone said the sale of the property insulation supply and property maintenance businesses should cut its costs by GBP1.5 million to GBP2.0 million a year. It said both business have been performing below expectations and have been loss-making.
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COMPANIES - INTERNATIONAL
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Apple purchased Emotient, a startup that uses artificial-intelligence technology to read people's emotions by analyzing facial expressions, The Wall Street Journal reported. It isn't clear what Apple plans to do with Emotient's technology, which was primarily sold to advertisers to help assess viewer reactions to their ads. Doctors also have tested it to interpret signs of pain among patients unable to express themselves, and a retailer used it to monitor shoppers' facial expressions in store aisles, the report said.
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South Korean conglomerate Samsung Electronics said it expects operating profit for the fourth quarter to increase about 15% year-over year and sales to rise less than 1%. However, operating profit is projected to decline sequentially, while sales are expected to increase from the preceding quarter. The operating profit forecast is below analysts' expectations. The company is scheduled to report its financial results for the fourth quarter in late January.
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Lenovo announced the development of the first consumer mobile device with Project Tango in collaboration with Google. Available in summer 2016, the new smartphone, powered by the Qualcomm Snapdragon processor, turns the screen into a window that can overlay digital information and objects onto the real world.
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Renault-Nissan Alliance said it will launch more than 10 vehicles with autonomous drive technology in the next four years. The global car group confirmed that it will launch a range of vehicles with autonomous capabilities in the US, Europe, Japan and China through 2020. The technology will be installed on mainstream, mass-market cars at affordable prices. In addition, Renault-Nissan will launch a suite of new connectivity applications that will make it easier for people to stay connected to work, entertainment and social networks.
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Saudi Arabia is reportedly considering listing shares in state-owned oil producer Saudi Aramco, probably the world's most valuable company, The Economist reported Thursday. Muhammad bin Salman, the kingdom's deputy crown prince and seen as the power behind the throne of his father, King Salman, told The Economist that a decision will be taken in the next few months. Saudi officials say Saudi Aramco is worth "trillions of dollars", The Economist reported. The listing of an initial "perhaps 5%" stake in Aramco could be done on the Riyadh stock exchange, Tadawul, the business news magazine said.
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Friday's Scheduled AGMs/EGMs

Newriver Retail (re share placing)
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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