LONDON MORNING BRIEFING: Updates From TUI And Bellway Cheer Market

LONDON (Alliance News) - UK shares have confounded expectations and opened on the front foot Wednesday, following some positive company announcements.

Travel operator TUI leads FTSE 100 gainers, up 1.9%, after saying it is on track to deliver first-half results that are up on the year on a like-for-like basis.

In the FTSE 250, Hunting is up 4.5% after Goldman Sachs raised its rating on the stock to Buy from Neutral. Bellway shares are just behind, up 3.8%, after the housebuilder reported surging pretax profit and revenue for the first half, boosted by a rise in completions on the back of resilient London property market.

On AIM, shares in Monitise are down 18% after taking itself off the market and saying Founder and Co-Chief Executive Alastair Lukies will step down from the board.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 7,028.31
FTSE 250: up 0.1% at 17,598.32
AIM ALL-SHARE: down 0.2% at 719.91
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Hang Seng: closed up 0.5% at 24,528.23
Nikkei 225: closed up 0.2% at 19,746.20
DJIA: closed down 0.6% at 18,011.14
S&P 500: closed down 0.6% at 2,091.50
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GBP-USD: up at USD1.4888
EUR-USD: up at USD1.0960

GOLD: up at USD1,192.88 per ounce
OIL (Brent): down at USD54.91 a barrel

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

09:00 Germany IFO
09:00 Italy Trade Balance
09:30 UK BBA Mortgage Approvals
10:30 US Fed's Evans Speech
11:00 US MBA Mortgage Applications
12:30 US Durable Goods Orders
14:30 US EIA Crude Oil Stocks
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Rescuers were set to restart their search for the remains of victims of a German airliner which crashed in the French Alps, as well as for clues as to why the plane carrying 150 people went down. The crash, killing everyone on board, occurred in apparent good weather Tuesday near the town of Prads-Haute-Bleone, after the plane made a steep eight-minute descent. A black box had been recovered from the site, officials said. German Chancellor Angela Merkel, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy were later Wednesday due to visit the site where Germanwings flight 4U 9525 hit the ground.
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Greece will present a list of economic reforms by next week, a government spokesman said. "We will present the reforms at the latest by Monday," Gabriel Sakellaridis told private Mega television. The proposed reforms will not include measures that hamper growth and will focus on structural changes, Sakellaridis said. The announcement came after German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras held a five-hour meeting on Monday in Berlin which led to no apparent breakthrough on the disbursement of Greece's bailout loans.
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The US will keep 9,800 troops in Afghanistan through the end of the year in a slowdown of a planned military exit, US President Barack Obama said. As the US works to reduce its presence in Afghanistan, 2016 troop levels will be decided later this year, with the goal of only a small troop contingent based at the US embassy by the end of next year, Obama said following talks with Afghan leaders.
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Israel denied that it spied on the US-led international negotiations on Iran's nuclear programme. "These allegations are utterly false," a senior official in Prime Minister Benjamin Netanyahu's office said on condition of anonymity. "The state of Israel does not conduct espionage against the US or Israel's other allies." The Wall Street Journal reported that the White House learned about the espionage soon after the US and other major powers began the negotiations last year. Netanyahu used the information to help build a case against the emerging terms of the deal, the paper quoted current and former US officials as saying.
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BROKER RATING CHANGES
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TRADERS: MERRILL LYNCH CUTS TRAVIS PERKINS TO 'NEUTRAL' ('BUY')
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TRADERS: NUMIS RAISES SENIOR PLC TO 'ADD' ('HOLD')
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GOLDMAN RAISES HUNTING TO 'BUY' ('NEUTRAL') - TARGET 622 (432) PENCE
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COMPANIES - FTSE 100
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TUI Group said its winter season is closing out as expected, with average selling prices up by about 1%, while bookings and average selling prices for the key summer season are currently up by about the same amount, meaning it is on track to deliver first-half results that are up on the year on a like-for-like basis. It said it is also confident of delivering underlying operating profit growth of 10% to 15% for the year as a whole.
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United Utilities said trading in the current financial year is in line with expectations and said revenue and operating profit will be "slightly higher" than last year. The FTSE 100 water and sewage service provider said revenue is expected to increase in the year, which ends on March 31, due to the regulated price allowance for 2014 to 2015, partly offset by the impact of a previously announced one-off special customer discount of around GBP20 million. Operating profit is also expected to rise and United Utilities said it is tightly managing its cost base "despite the increase in depreciation and other cost pressures, including bad debts", United Utilities said in a statement.
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COMPANIES - FTSE 250
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Roadside assistance company AA outlined its refinancing plans, including a GBP200 million share issue, as it said its pretax profit fell in the financial year to the end of January due to continued investment in its IT functions and restructuring costs. AA PLC said it will seek to raise a total of GBP935 million in aggregate via an equity issue and the issue of Class B notes. It will raise GBP200 million via a share placing of 51.9 million new shares at 385 pence per share, and will raise the further GBP735 million via the Class B notes issue.
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Balfour Beatty reported a wider loss for 2014 as it booked another writedown against its struggling construction business, and it moved further to shore up its balance sheet by scrapping its dividend as Chief Executive Leo Quinn admitted it will take another two years to turn the business around. The construction and infrastructure investments company reported a pretax loss from continuing operations of GBP304 million for 2014, compared with the GBP49 million loss it reported for 2013, as it booked a further GBP118 million write-down against its UK construction business and a GBP53 million impairment in its German rail business.
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Bellway reported surging pretax profit and revenue for the first half, boosted by a rise in completions on the back of resilient London property market, and said it would hike its dividend payout. The FTSE 250-listed housebuilder said its pretax profit rose to GBP158.9 million in the half-year to the end of January, up from GBP103.8 million a year earlier. The rise in profit prompted the company to lift its interim dividend payout by 56% to 25 pence per share from 16p.
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Citigroup Global Markets said Moneysupermarket.com Group founder Simon Nixon has decided against proceeding with a planned share sale which would have raised him around GBP100 million. Citigroup did not provide any reason for the move. Nixon had been set to sell a 6.4% stake in the company via an accelerated bookbuild handled by the investment bank.
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Nostrum Oil and Gas said its pretax profit fell in 2014 due to a slight fall in production combined with the fall in oil prices toward the end of the year. The FTSE 250 listed oil and gas company operating in Kazakhstan reported a pretax profit of USD311.7 million for the year ended December 31, down from USD362.0 million in 2013 as revenue declined on lower oil prices in the second half. Revenue for the year fell by 13% to USD782.0 million from USD895.0 million due to a slight fall in production and lower achieved oil prices, which fell 8.1% year-on-year. Production in 2014 fell to 16.2 million barrels of oil equivalent at an average price of USD100 per barrel from 16.9 million barrels of oil equivalent at an average price of USD108 per barrel in 2013.
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Stagecoach Group said its Stagecoach South Western Trains Ltd subsidiary has signed a deed of amendment with the UK Department for Transport for the South West Trains franchise. Stagecoach said the deed provides for an accelerated investment of around GBP50 million on passenger improvements initiatives between now and February 2017, including more services and seats on the line, improved customer information and easier ticket purchasing. Stagecoach said the current South West Trains franchise will end in February 2017 and it is currently holding talks with the Department of Transport to extend the South West Trains deal to April 2019.
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IP Group said its portfolio company Diurnal's lead product Chronocort for the treatment of congenital adrenal hyperplasia has been granted an orphan drug designation by the US Food and Drug Administration. This designation grants Diurnal seven-years of market exclusivity from when it is awarded marketing authorisation in the US. The treatment has already received two orphan drug designations from the European Medicines Agency, giving the company ten years of market exclusivity in Europe. IP Group has a 51.7% interest in Diurnal, which was spun-out of the University of Sheffield.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Monitise said it is no longer for sale, deciding that its "best prospects" are from remaining independent, and reiterated its target for profitability in 2016 as its Co-Chief Executive Elizabeth Buse was named sole chief executive officer. The mobile banking and payment services company started a formal sales process in January, and said it had received "a number of expressions of interest from various parties". However, it concluded that none of these proposals "fully recognised the longer-term value of Monitise", and were structured in a way that meant there was "considerable uncertainty over their ultimate deliverability". Buse will take the helm, with Founder and Co-Chief Executive Alastair Lukies stepping down from the board with immediate effect.
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COMPANIES - INTERNATIONAL AND OTHER
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Hong Kong billionaire Li Ka-shing's Hutchison Whampoa agreed to acquire Spanish telecom operator Telefonica's UK mobile business O2 for about GBP10.25 billion, including deferred upside interest sharing payments of up to GBP1 billion. The deal is expected to close by the end of June 2016. The deal will see the combining of Britain's second-largest wireless provider O2 with Britain's fourth-largest wireless carrier 3 UK, which is owned by Hutchison. Telefonica owns O2, which it acquired in early 2006. The deal will create the no 1 mobile operator in the UK with almost 33 million customers on a combined basis.
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Private-equity firm 3G Capital Partners is in advanced talks to acquire Kraft Foods Group in a deal likely to be valued at upwards of USD40 billion, the Wall Street Journal reported citing people familiar with the matter. The investment firm would use HJ Heinz Co, which it acquired two years ago, to make the investment, effectively merging the two food companies, the report said. The report indicated that a deal could be announced soon.
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Printer maker and enterprise services provider Lexmark International said it has agreed to buy software maker Kofax for USD11.00 per share in cash for an enterprise value of about USD1 billion. Lexmark said the addition of Kofax immediately enhances its enterprise content management and business process management offerings. The deal is expected to close in the second quarter of 2015 and is contingent on Kofax shareholder approval.
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Apple has acquired FoundationDB, a company that specialises in speedy, durable NoSQL databases, according to reports. Financial terms were not disclosed.
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Airbus Group said it plans to sell about 1.38 million shares that it owns in Dassault Aviation, representing around 15% of the share capital, following a bookbuilt offering ending Thursday at the latest. The French State has elected not to exercise its right of first refusal under the shareholder agreement with Airbus Group with respect to the Shares to be sold in the Placement.
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Wednesday's Scheduled AGMs/EGMs

Beazley
Innovation Group
Guscio
RM
Bluecrest Bluetrend
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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