LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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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.
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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.
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Anglo-South African packaging company Mondi said it has agreed the EUR54.0 million acquisition of Ascania Nonwoven Germany from private investment group Schloss Neugattersleben Group. FTSE 100-listed Mondi said Ascania makes nonwoven fabrics and nonwoven composites used in personal care products. It supplies nonwovens to Mondi for diaper elastic laminates.
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UDG Healthcare said it has entered into a conditional agreement to sell its United Drug Supply Chain Services and its MASTA unit for EUR407.5 million to McKesson Corp, the US drug distribution company. UDG said it will sell the businesses to McKesson in cash and said the sale is in line with its plan to focus on higher growth, higher margin international healthcare services businesses. The net proceeds from the sale will be used to develop and strengthen its Ashfield Commercial and Medical Services division, its Aquilant laboratory distribution arm and its Sharp Packaging Services unit.
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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.
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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.
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FTSE 250-listed 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.
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MARKETS
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UK indices were trading flat to lower after the US Federal Reserve left its benchmark interest rate unchanged on Thursday, saying that recent global economic and financial developments may restrain economic activity and are likely to put further downward pressure on inflation in the near term. Gold miners also benefited as the price of gold spiked.
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FTSE 100: down 0.7% at 6,141.58
FTSE 250: down 0.3% at 16,989.71
AIM ALL-SHARE: flat at 740.59
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The dollar fell to a 3-week low against the pound in the wake of the Fed's rate decision.
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GBP: up at USD1.5634
EUR: up at USD1.1447
GOLD: up at USD1136.36 per ounce
OIL (Brent): up at USD49.66 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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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.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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HSBC Holdings (HSBA)
Petra Diamonds (PDL)
BT (BT.A)
Mondi (MNDI)