(Alliance News) - Interdealer broker TP ICAP on Friday said it has reached a settlement with the UK Financial Conduct Authority, which had been looking into trades made between 2008 and 2011.
The regulator found former managers at TP ICAP "failed to act with due skill, care and diligence", and also said inadequate controls permitted "improper" broker conduct.
TP ICAP will pay GBP15.4 million, which will be booked as an exceptional item in 2019 results.
"We are pleased to put this historical matter behind us. None of the individuals involved in the relevant broking activities remain with our firm, which has long since taken the opportunity to significantly enhance its systems and controls to comply with regulatory expectations," said TP ICAP Chief Executive Nicolas Breteau.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.3% at 7,161.76
----------
Hang Seng: up 2.3% at 26,304.56
Nikkei 225: closed up 1.2% at 21,798.87
DJIA: closed up 150.66 points, 0.6%, at 26,496.67
S&P 500: closed up 0.6% at 2,938.13
----------
GBP: up at USD1.2455 (USD1.2306)
EUR: up at USD1.1022 (USD1.1004)
Gold: up at USD1,499.10 per ounce (USD1,493.91)
Oil (Brent): up at USD60.06 a barrel (USD58.75)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Friday's Key Economic Events still to come
1000 CEST France IEA oil market report
0830 EDT US import and export price indices
1000 EDT US University of Michigan survey of consumers
----------
UK Brexit Secretary Stephen Barclay is holding key talks with the EU's chief negotiator Michel Barnier on Friday as the chance of a breakthrough on securing a withdrawal deal appeared to rise. The Brussels meeting comes in the wake of discussions between Prime Minister Boris Johnson and Irish Taoiseach Leo Varadkar after which both leaders declared they could "see a pathway" to a possible agreement. Barclay's talks look likely to give the clearest indication of whether there has been a significant thawing of relations between London and the EU after a week of abrupt exchanges. Such a move could lead to the start of so-called intensive "tunnel" negotiations in the coming days ahead of the crunch EU heads of government summit on October 17 and 18. The unexpectedly cordial atmosphere of the meeting between the two prime ministers led to speculation of a possible compromise on the contentious issue of the Northern Ireland border backstop.
----------
Ireland could see more than 70,000 job losses over the next two years if faced with a "disorderly, no deal Brexit," the Central Bank of Ireland warned. In its Quarterly Bulletin, the Central Bank provided a forecast for the Irish economy based on the two possible Brexit scenarios. "In the event of a disorderly, no deal Brexit, the key channels through which the economy will be affected will be through shocks to the exchange rate, trade, consumption and investment, leading to a marked deterioration in economic conditions," the bank said. If Britain and the EU can reach an agreement, it predicted that the GDP will be at 5% in 2019, 4.3% in 2020 and 3.9% in 2021.
----------
Germany's consumer price inflation came in at 1.2% in September, Destatis revealed, in line with economist expectations. The 1.2% year-on-year rise in prices compares to a 1.4% rise in August. On a month-on-month basis, the consumer price index was flat, again matching economist forecasts, according to FXStreet. September's harmonised CPI reading was up 0.9% on a yearly basis but down 0.1% from August.
----------
US and Chinese delegations will continue trade talks on Friday at the White House, US President Donald Trump said, claiming that the first day in the latest round of trade negotiations went "really well". Chinese Vice Premier Liu He took part in the first day of talks along with Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. The president earlier indicated he would meet Liu. "Going to see them tomorrow right here," Trump told reporters outside the White House on Thursday. "It's going very well."
----------
Trump said he hopes to be able to mediate between Turkey and the Syrian Kurds, while also reiterating a threat to impose sanctions on Ankara if its military campaign steps over the line. "I hope we can mediate," Trump told reporters outside the White House on Thursday. "We are going to possibly do something very tough with respect to sanctions and other things," he said, after indicating he wants Turkey to "take it easy". The president has not been clear on where his red lines sit, but a senior State Department official told reporters that indiscriminate attacks on civilians and ethnic cleansing of Kurdish areas would not be tolerated.
----------
Japan braced for a powerful typhoon barrelling towards Tokyo that has already forced the cancellation of two Rugby World Cup matches, disrupted the Suzuka Grand Prix and grounded flights. Overnight, Typhoon Hagibis was downgraded slightly from its "super typhoon" status, but was still forecast to be packing maximum gusts of 216 kilometres per hour when it makes landfall late Saturday. Japan's Meteorological Agency warned that areas from the west to the northeast of the country would experience "brutal winds and violent seas". The massive storm is expected to dump up to half a metre (nearly 20 inches) of rain on the Tokyo area in the 24 hours to midday on Sunday, with up to 80 centimetres forecast for the central Tokai area.
----------
BROKER RATING CHANGES
----------
JEFFERIES RAISES RIO TINTO TO 'BUY' (HOLD) - PRICE TARGET 4700 PENCE
----------
HSBC REINITIATES LONDON STOCK EXCHANGE WITH 'HOLD' - PRICE TARGET 7000 PENCE
----------
DEUTSCHE BANK INITIATES INTERCONTINENTAL HOTELS WITH 'HOLD' - TARGET 4935 PENCE
----------
COMPANIES - FTSE 250
----------
Jupiter Fund Management reported negative net flows in the third quarter of 2019 of GBP1.32 billion, with assets under management falling 1.7% over the quarter to GBP45.91 billion. Jupiter said much of the outflow came from its European Growth fund.
----------
Man Group said the outlook for flows remains mixed following a decrease in funds under management in the third quarter of 2019. Man Group, a fund manager that focuses on private markets, said funds under management stood at USD112.7 billion at the end of September, down 1.5% from USD114.4 billion on June 30. The decline was driven by net outflows of USD1.1 billion, comprising sales of USD6.6 billion and redemptions of USD7.7 billion, and negative foreign exchange and other movements of USD1.3 billion, Man Group explained. Negative forex and other movements were driven by the US dollar strengthening against the Australian dollar, sterling and the euro, the company said.
----------
Peppa Pig producer Entertainment One reported a 7% drop in first quarter revenue to September to GBP173.1 million. It posted a pretax loss for the period of GBP43.9 million, far wider than the GBP6.8 million reported a year before. Entertainment One also posted a pretax loss on an adjusted basis of GBP100,000, after a GBP8.3 million profit on a similar basis a year before. The company, which has agreed a GBP3.3 billion takeover by Hasbro, said revenue was hurt by fewer scripted television and film deliveries in the quarter. Profitability was hurt by the lower revenue as well as one-off financing costs.
----------
The UK Competition & Markets Authority is considering whether Stonegate Pub Co's GBP1.3 billion acquisition of Ei Group could reduce competition.
----------
COMPANIES - OTHER MAIN MARKET AND AIM
----------
Jet2-owner Dart Group will beat the market's annual profit expectations, it said, in part due to the demise of peer Thomas Cook Group. Debt-ridden Thomas Cook folded in September after failing to secure an extra GBP200 million needed to keep it afloat. Dart has since received increased demand, it said, and it will continue to assess this over the coming months, it added. The company's Leisure Travel unit has continued to receive "encouraging" levels of later season bookings, and demand for both flights and package holidays are "continuing to strengthen". "Given the strengthening booking trend, the board now believes current market expectations for group profit before foreign exchange revaluations and taxation for the year ending March 2020 will be exceeded. The board will provide a further update on publication of its interim results on November 21," said Dart.
----------
COMPANIES - INTERNATIONAL
----------
SAP announced the departure of its chief executive, Bill McDermott, with immediate effect after a decade in the role. He is succeeded by executive board members Jennifer Morgan and Christian Klein, who will be co-CEOs. SAP said McDermott was "activating the company's long-term succession plan" but otherwise gave no reason for the CEO's departure. The change at the top came as the German enterprise software firm posted solid revenue growth from its Cloud business in the third quarter of 2019, prompting it to reiterate guidance. SAP a 13% rise in total revenue for the three months ended September 30 to EUR6.79 billion from EUR6.02 billion, pushed up by a 37% increase in Cloud revenue to EUR1.79 billion from EUR1.30 billion. Profit after tax rose 30% to EUR1.26 billion from EUR970 million, while basic earnings per share rose 28% to EUR1.04 from EUR0.81.
----------
US retailer Walmart named the head of its Sam's Club division, John Furner, as the new chief executive of Walmart US. Sam's Club is a members-only warehouse club with revenue of USD59 billion in 2018. Furner was executive vice president and chief merchandising officer of Sam's Club before becoming its chief executive. Furner will take over Walmart US from Greg Foran, who headed the segment for five years and is to take on a new role as CEO of Air New Zealand.
----------
Apple Chief Executive Tim Cook on Thursday defended the decision to pull an app used by protesters in Hong Kong to track police, according to a leaked email to employees obtained by a tech news site. Apple removed the HKmap.live mobile application from the App Store after criticism by Beijing, which is stepping up pressure on foreign companies deemed to be providing support to the pro-democracy movement. Critics blasted the tech giant's move as putting its business interests in China above human rights.
----------
Indonesia's Lion Air is set to launch an initial public offering, according to a company spokesman, in a listing that could reportedly raise up to USD1.0 billion – one of the country's biggest-ever share sales. The fundraising by Southeast Asia's largest airline comes after it suffered a recent customer data leak and a nearly one year after a high-profile crash that killed 189 people. "It is true that Lion Air will proceed with an IPO," spokesman Danang Prihantoro told AFP. "The funds will be used to strengthen the company's financial structure." He declined to comment on a timeline for the listing or how much the firm planned to raise. Citing an unnamed sourced, Bloomberg News reported Thursday that Lion – which has postponed a public listing several times in the past – could raise as much as USD1.0 billion.
----------
Friday's Shareholder Meetings
no events scheduled
----------
By Tom Waite; thomaslwaite@alliancenews.com
London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
InterContinental Hotels (IHG)
Rio Tinto (RIO)
TP ICAP (TCAP)