TOP NEWS: UK Government Blocks RBS On Bonus Payout Ratio

LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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The Royal Bank of Scotland Group PLC warned of commercial risk after it said UK Financial Investments, the entity responsible for the government's stake in the bailed-out bank, has said it will block any proposal allowing the lender to pay bonuses up to 200% of fixed pay. In a statement, the bank, which is 81%-owned by the UK government, said it won't bring any proposals to its annual general meeting, intended to be held on June 25, that would allow it to award variable remuneration up to 200% of fixed pay, or a 2:1 ratio, as the government's majority voting stake in the bank means any such resolution would fail.
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UK bookmaker William Hill PLC said it will close 109 loss-making betting shops before the end of the year, in a bid to maintain profits, in response to the UK government's decision to increase the tax rate on high-speed, high-stake gambling machines next year. William Hill said the shop closures could result in around 420 employees being made redundant. "Whilst every effort will be made to redeploy individuals this may not be possible in every location," it said. UK Chancellor of Exchequer George Osborne said in his annual budget statement last month that the government will raise duty on gambling machines, also known as fixed-odds betting terminals, to 25% from 20%. The new rate will take effect from March 1, 2015.
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Pearson PLC maintained its full year adjusted earnings per share guidance for 2014, as it said it had seen a "solid start to the year" in a statement ahead of its annual general meeting. Pearson continues to expect adjusted earnings per share of between 62 pence and 67 pence in 2014, taking into account continued cyclical and policy-related pressures in the US and UK, its restructuring plans and product investment. The company said that, as it had expected, its first half adjusted operating profit and adjusted earnings per share will be lower than in 2013. This is as a result of the costs of merging its Penguin books unit with Random House Inc, as well as the appreciation of sterling. It expects its profits to be heavily weighted towards the second half.
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The US Federal Housing Finance Agency or FHFA, as conservator of Fannie Mae and Freddie Mac, Thursday announced a settlement with Barclays PLC, related companies and some individuals for USD280 million. The settlement resolves claims, in two lawsuits, alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities purchased by Fannie Mae and Freddie Mac between 2005 and 2007.
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Botox maker Allergan Inc approached Ireland-based pharmaceutical firm Shire PLC about a possible takeover in recent months, but was rebuffed, Reuters reported late Thursday citing people familiar with the matter. The approach did not progress to serious discussions, Reuters said. Shire has a market value of USD33 billion and is a member of the FTSE 100. A spokesperson for Shire told Alliance News the company had "no statement" on the report. The press report is the latest in a flurry of merger and acquisition speculation in the pharmaceutical sector.
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Tullow Oil PLC dropped to the bottom of the FTSE 100 in early trading after the company said it is abandoning its Tapendar-1 exploration well, offshore Mauritania. The independent oil and gas firm said the Tapendar-1 exploration well in the C-10 licence, offshore Mauritania - the second exploration well in its Mauritania campaign - has not encountered hydrocarbons and the well is being plugged and abandoned. The objective of Tapendar-1 was to test two targets of Miocene and Upper Cretaceous age, said Tullow.
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Cable & Wireless Communications PLC said it has agreed to sell Compagnie Monégasque de Communication, the holding company for its 55% stake in Monaco Telecom, in a deal worth EUR321.8 million. Cable & Wireless is selling the business to a private investment vehicle controlled by French entrepreneur Xavier Niel. Monaco Telecom is the incumbent operator in Monaco where it is the market leader and only full service telecommunications provider. CWC acquired its 55% stake in Monaco Telcom in June 2004 for EUR162 million.
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MARKETS
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UK stocks indices are trading in the red, as geopolitical concern weighs on sentiment ahead of a weekend likely to be full of heightened rhetoric over the situation in Ukraine.
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FTSE 100: down 0.2% at 6687.03
FTSE 250: down 0.2% at 15959.40
AIM ALL-SHARE: down 0.5% at 819.88
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The pound spiked to a session high against the dollar following the release of strong UK retail sales data.
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GBP-USD: up at USD1.6818
EUR-USD: up at USD1.3842

GOLD: up at USD1295.25 per ounce
OIL (Brent): down at USD109.09 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK retail sales unexpectedly rose for a second straight month in March, figures from the Office for National Statistics showed. Retail sales including automotive fuel rose 0.1% month-on-month, following a 1.3% gain in February, revised from 1.7%. Economists had forecast a 0.4% decline. Year-on-year, sales grew 4.2% in March, after a 3.3% rise in the previous month, revised from 3.7%. Economists had expected 3.8% growth.
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Mortgage approvals for house purchase in the UK declined for a second straight month in March to its lowest level in four months, defying expectations for an increase, figures from the British Bankers' Association showed. The number of home loan approvals fell to a seasonally adjusted 45,933 from 47,196 in February, revised from 47,550. Economists had forecast 48,950 approvals for March. The latest figure is the lowest since November, when they were 45,033. In January, approvals totaled 48,940, the highest since September 2007.
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Russia will cooperate with the West to reduce tensions in Ukraine but won't accept unilateral demands, Foreign Minister Sergei Lavrov said. "Russia will steadfastly assist in de-escalating the conflict on the basis of the Geneva compromise, but I want to stress there cannot be any one-sided demands that are being presented to us," Lavrov told a diplomats' meeting in Moscow, according to Russian news agencies. The minister was referring to comments by US Secretary of State John Kerry, who threatened fresh sanctions against Russia.
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Ratings agency Standard & Poor's cut Russia's credit rating to 'BBB-' from 'BBB' on Friday, citing the risk of marked deterioration in external financing. The downgrade comes amid the continued escalation in the Ukraine crisis. S&P last lowered Russia's rating in December 2008. The agency said the outlook on the country's ratings remains negative.
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Overall inflation for the Tokyo region, considered a leading indicator for the nationwide trend, spiked 2.9% on year in April, the Ministry of Internal Affairs and Communications said. That was slightly below expectations for 3.0% but up sharply from 1.3% in March - perhaps finally signalling an end to the deflation that has hampered the nation for more than 15 years, although the recently implemented consumption tax hike also is likely a factor.
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Japan and the US were not able to reach agreement on a Pacific trade accord before visiting US President Barack Obama's departure from the country, Japanese media reported. Akira Amari, minister in charge of the Trans-Pacific Partnership (TPP) trade negotiations, told reporters Friday morning that the talks between the two countries have been stalled over agriculture and automobile tariffs, which remained the biggest sticking points, the Kyodo News agency reported.
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US President Barack Obama arrived in South Korea, to meet his counterpart Park Geun Hye and discuss their countries' security alliance and concerns over the North's nuclear weapons programme. South Korea said this week that activity spotted across the border could indicate Pyongyang was preparing a fourth nuclear test explosion some time soon. North Korea in March threatened a "new type" of atomic test. Speaking in Japan Thursday, Obama called for increased international pressure on isolated, communist North Korea. The US president was also due to visit Malaysia and the Philippines.
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The death toll in the sinking of a South Korean ferry rose to 181, a media report said. Another 120 people were still missing, the Yonhap News Agency reported. An emergency task force has sent the largest number of navy, coast guard and civilian divers so far to look for bodies. The ship capsized and sank on April 16 off South Korea's south-west coast on a journey between Incheon near Seoul and the resort island of Jeju.
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