UK MIDDAY BRIEFING: IHG, RBS And AstraZeneca Highlight London Trade

LONDON (Alliance News) - InterContinental Hotels Group saw its share price jump Friday after the company declared a USD750 million special dividend and reported strong results for its first quarter.

IHG's dividend comes after the firm completed two asset disposals during the period, in line with the firm's ongoing strategy to reduce the capital intensity of the business, it said.

The company, which owns hotel brands including Crowne Plaza, Holiday Inn, and Intercontinental Hotels & Resorts, said global revenue per available room was up 6% in the first quarter, driven by a 2.4% rise in occupancy and a 1.9% boost in average daily rate.

Royal Bank of Scotland Group led the FTSE 100 for much of morning trading after the bank said first-quarter pretax profit doubled, helped by lower operating expenses and a significant reduction in impairment losses. First-quarter pretax profit increased to GBP1.64 billion from GBP826.0 million in the corresponding quarter a year earlier, even as total income decreased to GBP5.05 billion from GBP5.16 billion.

The 81%-state-owned bank made no further provision for the payment protection insurance mis-selling scandal or for interest-rate hedging products compensation.

In the pharmaceuticals sector, attention has remained fixed on AstraZeneca. The UK drugs maker has rejected Pfizer's latest proposal for the firm, stating that the increased GBP50 per share bid still "significantly undervalue[s]" the company and that the details of the proposal are "inadequate." AstraZeneca received Friday an increased proposal from Pfizer to combine the two firms in a bid that values the FTSE 100 firm at GBP64 billion.
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FTSE 100: up 0.3% at 6,825.87
FTSE 250: up 0.5% at 15,925.47
AIM ALL-SHARE: up 0.2% at 825.69
GBP-USD: down at 1.6870
EUR-USD: down at 1.3863
GOLD: up at USD1,287.17 an ounce
OIL (Brent): up at USD108.40 a barrel
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Key UK Corporate News
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FTSE 100: Beverage can maker Rexam said its overall results for 2014 so far have been in line with expectations, despite mixed trading across its regions. WPP said its media investment management company, GroupM, has acquired a majority stake in Turkish mobile media agency and mobile technology company, aMVG (Aerodeon).

FTSE 250: Property investment and development company Capital & Counties Properties said it has made a "positive" start to the year after launching its new residential development in Fulham, London. Workspace Group said it has acquired Vestry Street Studios in east London from an unnamed vendor in a deal worth GBP12.6 million. Direct Line Insurance Group has reiterated its combined operating ratio target for 2014 but said first-quarter gross written premium for ongoing operations decreased as a result of competition in UK personal lines, partially offset by growth in commercial lines and in Germany. Electronics firm Laird maintained its expectations for the full year, as it saw revenue rise 7% on an organic basis in the quarter to end-March. Dechra Pharmaceuticals has received approvals in the US and UK for one of its products for horses, and marketing approval to re-launch a product in the US. Rentokil Initial said pretax profit in the first quarter 2014 was ahead of the same period in 2013, but said revenue was held back by lower revenues from its Protect and Enhance business, particularity in Benelux, as expected. John Laing Infrastructure Fund said it is reviewing a number of potential investments as it reported a GBP801.7 million net asset value at the end of March after taking into account the GBP24.9 million in dividends to be paid later this month.

AIM All-Share: Shares in Falcon Oil & Gas jumped after the exploration and development oil and gas company announced that its 98% subsidiary, Falcon Oil & Gas Australia Limited has signed "transformational" agreements for its exploration permits in the Beetaloo Basin in Australia. Premier African Minerals also is trading higher as the firm has negotiated an interest-free USD2.5 million bridge loan from Circum Minerals Ltd, which will allow it to exercise its option to acquire AgriMinco Corp's interest in the Danakil Potash project. Rose Petroleum is up ahead of afternoon trading; the natural resources company has drawn attention to the first-quarter earnings of MDU Resources Group, in which the company said the Paradox Basin in Utah is MDU's "fastest growing" oil producing area. Rose Petroleum recently acquired three-quarters of the working interest in 195,000 acres of the basin and an equal interest in one shut-in well. Trakm8 is up after Direct Line appointed it as sole telematics supplier of self-install devices for the insurer's DrivePlus Plug-in device. At the other end of the market, Redhall Group is trading lower after the firm said it is trading in line with expectations but said further delays are being experienced converting major opportunities into contract awards. SolGold is also down after the gold exploration company said it has terminated Hole 6 at its Cascabel copper-gold porphyry project in northern Ecuador at a depth of 1,401.5 metres.
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Top Economics And General
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UK construction activity expanded slowly in April, its weakest month since October 2013. Data from HSBC and Markit Economics showed that the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index hit 60.8 in April, from 62.5 in the previous month. Analysts had expected a reading of 62.2.
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Eurozone unemployment rate held steady for a third successive month in March, after revisions to data from the previous months, figures from Eurostat showed. The seasonally adjusted unemployment rate was 11.8% in March, unchanged from February. Economists had expected the figure to hold steady at February's original 11.9%. The jobless rate has been at 11.8% since December 2013, Eurostat said. In March last year, the figure was 12%.
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Germany's manufacturing sector grew for the tenth successive month in April, as production increased at the second-fastest rate since May 2011, survey results from Markit Economics showed Friday. The Markit/BME Germany Manufacturing Purchasing Managers' Index rose to 54.1 from 53.7 in March. The final figure came in slightly below the flash estimate of 54.2. A PMI reading above 50 indicates growth in the sector. Output growth in April was driven by intermediate goods where production was boosted by improving economic conditions and increased order intakes.
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The Italian manufacturing sector expanded at the fastest pace in three years in April as output and new order growth improved, leading creation of more jobs, survey data from Markit Economics showed. The headline Markit/ADACI Italy Manufacturing Purchasing Managers' Index climbed to 54 in April from 52.4 in March. Economists had forecast a modest improvement in the figure to 52.9. A PMI reading above 50 indicates expansion in the sector. The latest score is the highest in three years. New order grew at the fastest pace since April 2011. Export order growth was the fastest in just over three years.
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At least three people were killed and several were injured in clashes between Ukrainian forces and pro-Russian separatists in the eastern city of Sloviansk. The Ukraininan Defence Ministry said that two crew members were killed and an unspecified number of soldiers were injured after separatists shot down two Mi-24 assault helicopters with surface-to-air missiles. A third, Mi-8 transport helicopter, was hit by bullets but escaped unharmed, the ministry said. Ukraine's State Security Service said a pilot was taken hostage after rebels downed two aircraft.
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The average of household spending in Japan surged 7.2% on year in March, the Ministry of Internal Affairs and Communications said - coming in at 345,443 yen. The headline figure shattered forecasts for a gain of 2.0% following the 2.5% contraction in February. Analysts believe that the large spike in spending was a precursor to the sales tax that went into effect in April.
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Five more bodies have been recovered from the wreck of a sunken Korean ferry, bringing the death toll up to 226, a news report said. Seventy-six people remained unaccounted for as concerns mounted that the stronger spring tides might make further recovery impossible, the Yonhap News Agency reported.
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Gerry Adams, president of the Irish republican party Sinn Fein, was spending a second day in police custody after being arrested for questioning over one of the most notorious killings to take place during the conflict in Northern Ireland. The 65-year-old politician was detained late Wednesday by Northern Irish police after presenting himself voluntarily for questioning over his alleged involvement in the murder of Jean McConville, a widowed mother of ten. His detention came as one of McConville's daughters said she knew who her mother's killers were and that she was prepared to name them as she no longer feared revenge attacks.
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Afternoon Watchlist (all times British Summer Time)

13:30 US Nonfarm Payrolls
13:30 US Unemployment Rate
14:45 US ISM New York index
15:00 US Factory Orders
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Monday's Key UK Corporate Events - Early May Bank Holiday

No Events Scheduled
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Saturday's Key Economic Events (all times British Summer Time)

02:00 China Non-manufacturing PMI

Monday's Key Economic Events (all times British Summer Time)

All Day UK Early May Bank Holiday
All Day Japan Children's Day
All Day EU Eurogroup meeting
n/a Russia HSBC Manufacturing PMI
n/a EU European Commission Releases Economic Growth Forecasts
02:45 China HSBC Manufacturing PMI
09:30 EU Sentix Investor Confidence
10:00 EU Producer Price Index
14:45 US Markit Services PMI
15:00 US ISM Non-Manufacturing PMI
16:30 US 3-Month Bill Auction
16:30 US 6-Month Bill Auction

Tuesday's Key Economic Events (all times British Summer Time)

All Day Japan Greenery Day (Observed)
06:00 Ireland Purchasing Manager Index Services
n/a UK Halifax House Prices
08:45 Italy Markit Services PMI
08:50 France Markit Services PMI
08:55 Germany Markit Services PMI
09:00 EU Markit Services and Composite PMI
09:30 UK Markit Services PMI
10:00 EU Retail Sales
13:30 US and Canada Trade Balances
13:55 US Redbook index
15:00 US IBD/TIPP Economic Optimism
15:00 Canada Ivey Purchasing Managers Index
16:30 US 4-Week Bill and 3-Year Note Auction
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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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