TOP NEWS SUMMARY: HSBC Delays Headquarters Decision As Profit Rises

LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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HSBC Holdings reported higher third-quarter pretax profit, and offered reassurance over its Asian credit quality amid fears about China's economic slowdown and market volatility in the region. Pretax profit rose to USD6.10 billion in the three months to September 30, from a USD4.61 billion pretax profit in the corresponding quarter the prior year. Adjusted for currency translation and significant items, pretax profit was down to USD5.51 billion from USD6.42 billion. Impairment charges for bad loans and other credit risk provisions, after being adjusted for currency translation, were up 15% to USD638 million. HSBC said its ongoing review of whether to shift its headquarters from London to a new location could take longer than previously expected. "Whilst the target for completion of the review was initially set as by the end of 2015, this is a self-imposed deadline that can be moved should the board require further work to be performed," HSBC said.
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Hikma Pharmaceuticals said trading across the majority of the business has been solid in 2015 but said its Generics division is performing below expectations due to slower-than-expected colchicine sales growth. Hikma said it has seen continued strong demand for its legacy products within the Generics business, with any declines in line with its expectations due to greater competition. But colchicine, its gout treatment, has suffered due to Hikma having to sell the drug under both the Mitigare brand name and as an authorised generic version. This 'hybrid' brand strategy has meant growth in sales of the drug has been "more gradual" than expected, Hikma said, and it has cut its revenue guidance in the Generics business to USD150.0 million for the full year, down from USD175.0 million to USD200.0 million previous.
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Telecoms giant Vodafone Group said Saturday that 1,827 Vodafone UK customers' accounts had been accessed, potentially leaving them open to fraud or 'phishing' attempts. In a statement Vodafone said it had been "subject to an attempt to access some customers' account details between midnight on Wednesday 28 October and midday on Thursday 29 October." The company said it had been informed the National Crime Agency, the Information Commissioner's Office and UK telecoms regulator Ofcom of the issue on Friday evening.
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A third person has been arrested in relation to alleged data theft from TalkTalk Telecom Group, the Metropolitan Police said in a statement Saturday. A 20-year-old from Staffordshire was arrested on suspicion of Computer Misuse Act offences. A search of the address remains ongoing, the Met said. Metropolitan Police Cyber Crime Unit and officers from the National Crime Agency are continuing enquiries related to the data breach. This was the third in a string of arrests related to the alleged data theft, following the arrest of a 16-year-old boy from Feltham, west London, and a 15-year-old from County Antrim, Northern Ireland.
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Ryanair Holdings said it expects its full-year net profit to be at the top end of its expectations, as it raised its passenger traffic target following increases in revenue, post-tax profit and customer numbers in the first half. Ryanair said after-tax profit for the half year to the end of September was EUR1.09 billion, up from EUR795.00 billion a year earlier. The profit excludes a one-off gain made from the sale of its stake in Irish flag carrier Aer Lingus Group to IAG. Revenue for Ryanair rose to EUR4.04 billion, up from EUR3.54 billion, as total customer traffic in the half rose to 58.1 million customers from 51.3 million a year earlier. In addition to the rise in customer numbers, the company's load factor improved to 93.0%, up 4 percentage points from the year before.
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Ryanair and International Consolidated Airlines Group, are close to signing a collaboration agreement, The Times reported. IAG Chief Executive Willie Walsh revealed that meetings had taken place with Ryanair executives to come to an agreement whereby the budget airline’s extensive European network would feed passengers into Aer Lingus’s transatlantic services out of Dublin, the newspaper reported. IAG acquired Irish flag carrier Aer Lingus this year, with Ryanair's agreement in August to sell to IAG its own 29.8% stake in Aer Lingus being the final piece of the puzzle that got the deal done.
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Defence contractor BAE Systems has agreed to buy a 20% stake in Reaction Engines, the company responsible for an engine which could propel aircraft into outer space and back at five times the speed of sound, the Financial Times reported. BAE will become a strategic investor in Reaction, whose Sabre engine could radically cut the cost of launching satellites and which has the potential to allow passengers to fly across the world in around four hours. BAE will pay GBP20.6 million for the stake as part of a funding round for Reaction which, according to the UK Space Agency's David Parker, will unlock a GBP60.0 million grant package from the UK government.
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Anglo-South African paper and packaging company Mondi said it has bought a 95% stake in KSP Co for an undisclosed amount. KSP is a flexible packaging company focused on the food, pet food and drinks industry, Mondi said. It has its main manufacturing facility in Korea and has an interest in another plant in Thailand. Mondi said the acquisition will complement its stand-up pouch packaging operations in Austria and the US and will allow the company to better serve its customers in the US and Asia.
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Sports Direct International is being investigated by UK competition regulators over allegations it blocked negative reviews of products on its website in a bid to increase sales, The Daily Mail reported.The Competition and Markets Authority is investigating Sports Direct and a couple of other retailers as part of an investigation launched in June to examine the alleged abuse of online reviews, the newspaper said. The Daily Mail said an investigation it recently conducted found Sports Direct "weeds out" even mild criticism of its products.
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Public transport operator Go-Ahead Group said it has appointed Patrick Butcher as chief financial officer. Butcher joins the group from infrastructure manager Network Rail, where he has been group finance director since 2009. Butcher will start his new role in May 2016. In the meantime, Financial Controller Paul Edwards will become interim group finance director following Keith Down's departure on November 13.
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Ophir Energy said it has plugged and abandoned the G5/50-10 exploration well at the Soy Siam prospect in Thailand. FTSE 250-listed Ophir said the well was drilled to depth, but all reservoirs encountered were dry, with no hydrocarbon shows. The drilling rig will now be moved to the Parichat South West prospect, which is independent of Soy Siam and which will test a different petroleum system, Ophir said.
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Irish drinks company C&C Group is understood to be running the rule over acquiring assets likely to be sold should the merger of beer giants Anheuser-Busch InBev and SABMiller go through, The Sunday Times reported. C&C, which mainly focuses on cider brands like Magners, Bulmers and Gaymers, is thought to be considering bidding for the Bass and Boddington's beer brands, both of which are currently owned by AB InBev and which would likely go for around GBP30.0 million apiece, City sources told the newspaper.
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MARKETS
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Shares are mixed in London, with Hikma Pharmaceuticals leading FTSE 100 decliners following its warning about its Generics business.
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FTSE 100: down 0.3% at 6,340.04
FTSE 250: up 0.1% at 17,136.34
AIM ALL-SHARE: up 0.4% at 740.77

GBP: up at USD1.5475 (USD1.5444)
EUR: flat at USD1.1024 (USD1.1028)

GOLD: down at USD1,137.10 per ounce (USD1,141.64)
OIL (Brent): down at USD48.79 a barrel (USD49.18)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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British manufacturing activity expanded at the fastest pace in sixteen months in October, as output and new order growth accelerated, figures from the Chartered Institute of Procurement & Supply and Markit Economics showed. The seasonally adjusted Purchasing Managers' Index, or PMI, climbed notably to 55.5 in October from 51.8 in September, which was revised down from 51.5. Economists had expected the index to fall slightly to 51.3.
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Eurozone manufacturing activity growth exceeded initial estimate in October, final data published by Markit showed. The Purchasing Managers' Index for the manufacturing sector rose to 52.3 in October from 52 in September. The reading was above the flash score of 52. "With factory production lacking vigour, employment growth sagging to an eight-month low and output prices falling at the fastest rate since February, it's easy to see why the ECB are considering additional stimulus," Chris Williamson, chief economist at Markit, said.
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Ireland's manufacturing sector continued to expand at a solid pace in October, survey figures from Markit Economics showed. The seasonally adjusted Investec purchasing managers' index fell slightly to 53.6 in October from 53.8 in September. The rate of growth in manufacturing production eased for the third straight month in October. The latest rise was the weakest since February 2014.
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China's manufacturing sector continued to contract in October but at the slowest pace in four months, survey results published by Caixin and Markit Economics showed. The manufacturing Purchasing Managers' Index rose to 48.3 in October from 47.2 in September. Nonetheless, it was below the expected neutral level of 50. Operating conditions worsened in each of the past eight months, though the latest deterioration was the weakest since June. "The slight upswing shows the manufacturing industry's overall weakening has slowed down, indicating that previous stimulating measures have begun to take effect," He Fan, chief economist at Caixin Insight Group said.
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The Russian airline whose plane crashed in Egypt over the weekend said that the disaster was most likely caused by an external "impact". "The only plausible reason can be a mechanical impact on the plane," the deputy general director of Kogalymavia, a small airline that operates flights under the name Metrojet, told a press conference. "There is no combination of system failures that could cause the plane to be destroyed in the air," Alexander Smirnov said, according to the Interfax news agency. Saturday's crash, in Egypt's Sinai Peninsula, was the deadliest in Russian history, with 224 people killed. The crash happened about 20 minutes after flight 9268 took off on an early morning flight from the popular resort town of Sharm al-Sheikh to Russia's second largest city, St Petersburg.
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Turkey awoke to the certainty of solid single-party government, after months of political instability, with the Islamic-rooted Justice and Development Party (AKP) securing a solid victory in snap elections. The party founded by President Recep Tayyip Erdogan secured about 315 of 550 seats in parliament with about 49.4% of the vote. The snap ballot was called after the AKP failed in June elections to garner enough seats to form a government alone, for the first time since 2002. The victory, which far exceeded pollsters' surveys, is seen as a boon to Erdogan, who is trying to ensure his position as the country's dominant political player.
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The European Central Bank has uncovered a shortfall of up to EUR14.4 billion at Greece's four biggest banks, threatening further hardship if the country fails to regain control of the ongoing debt crisis, the eurozone lender announced. The so-called stress tests, carried out at the Alpha Bank, Eurobank, the National Bank of Greece and Piraeus Bank, assessed the institutions' performance should the economy dip further than expected. The deficit - which shows no improvement on earlier forecasts - is currently filled by emergency funds made available by Greece's third bailout, but the ECB is thought to be looking to the private sector for potential investors to step in.
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Leaders of South Korea, Japan and China met in Seoul on Sunday for their first three-way discussions in more than three years. Relations between the regional powers have been strained by disputes over issues including their World War II past, and more recent friction over territory and resources in the East China Sea.
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