UK MORNING BRIEFING: Babcock Leads FTSE 100 Lower On Rights Issue

LONDON (Alliance News) - Shares have opened lower Thursday following a weak close in NY on Wednesday.

Babcock International is leading the FTSE 100 lower after announcing a GBP1.10 billion rights issue to fund the GBP920 million acquisition of helicopter firm Avincis. Babcock is off 5.3% at the open.

FTSE 250-constituent Cairn Energy is receiving attention from brokers Thursday morning. Goldman Sachs has raised the oil and gas independent to Buy from Neutral, while traders say Investec also has raised Cairn to Buy. Barclays has cut its price target to 210p from 255p, rating it Equal Weight.

At the open Thursday, Cairn Energy is quoted up 2.9% at 172.00p.

Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.6% at 6,566.64
FTSE 250: down 0.3% at 16,204.15
AIM ALL-SHARE: down 0.3% at 847.96
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Hang Seng: down 0.2% at 21,834.45
Nikkei 225: closed up 1.0% at 14,622.89
DJIA: closed down 0.6% at 16,268.99
S&P 500: closed down 0.7% at 1,852.56
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GBP-USD: down at USD1.6557
EUR-USD: down at USD1.3757

GOLD: down at USD1,299.13 per ounce
OIL (Brent): down at USD106.91 a barrel

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

09:00 Italy Business Confidence
09:00 EU M3 Money Supply and Private Loans
09:30 UK Retail Sales
12:30 US Personal Consumption Expenditures
12:30 US FOMC Member Pianalto Speech
12:30 US Gross Domestic Product
12:30 US Jobless Claims
14:00 US Pending Home Sales
14:30 US EIA Natural Gas Storage change
15:00 US Kansas Fed manufacturing activity
17:00 US 7-Year Note Auction
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FRANCE MAR CONSUMER CONFIDENCE 88 VS. 85 IN FEB, CONSENSUS 85
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The US and the EU jointly pledged Wednesday to impose stronger sanctions if Russia further destabilizes Ukraine, hours after Moscow announced its intention to boost its military presence in Crimea. "If there is further escalation, we Europeans and Americans are ready to intensify sanctions," said EU President Herman Van Rompuy. "The goal is a negotiated solution, in respect of Ukraine's sovereignty and of international law." "We are united in our commitment to Europe's security," added US President Barack Obama during a visit to EU institutions in Brussels. "We are united in our determination to isolate Russia and impose costs for Russia's actions."
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Egyptian Army chief Abdel-Fattah al-Sissi has resigned to run for the presidency, he said Wednesday in a recorded address on state television. "Today I speak to you for the last time in military uniform. ... Today I leave behind this uniform, again to protect the nation," said al-Sissi, 59. The former military intelligence chief, who overthrew Egypt's first freely elected president, Islamist Mohammed Morsi, in July, is widely favoured to win the upcoming presidential race.
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Egypt's prosecutor general on Wednesday referred 715 alleged supporters of Morsi to trial on capital charges, local media reported. The defendants - of whom only 160 are in custody - have been charged with rioting and murder during the violence that gripped the southern province of Minya in the wake of a deadly police raid on pro-Morsi protest camps in August in Cairo.
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A Malaysia Airlines official said the firm was ready for a possible lawsuit against it in connection with missing flight MH370, as the search for the plane was called off temporarily due to bad weather in the southern Indian Ocean. "We will face this lawsuit when it comes," the official said, requesting not to be named. "I have not heard of relatives of Malaysian passengers and crew talking about a lawsuit, but that is their right if they want to sue us," she added. On Wednesday, a US firm said it expected to represent relatives of passengers in a lawsuit against Malaysia Airlines and Boeing over the disappearance of the Boeing 777-200 on March 8, according to media reports.
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South Korea and the US began a large-scale amphibious landing drill on Thursday, the Yonhap News agency reported, amid heightened tensions on the peninsula. The Ssang Yong (double dragon) exercise involves more than 10,000 naval and marine troops from both countries. It is the largest joint marine drill between the two nations since 1993, and is taking place on the south-eastern coast of the peninsular until April 7. North Korea's state-run Rodong Sinmun newspaper on Monday denounced the drill and a joint aerial training exercise, accusing Washington of raising tensions, Yonhap said. Pyongyang test-fired two missiles into the sea early Wednesday, reports said, prompting international condemnation.
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BROKER RATING CHANGES
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TRADERS: JPMORGAN STARTS ASOS WITH 'OVERWEIGHT' - TARGET 6600 PENCE
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TRADERS: INVESTEC RAISES CAIRN ENERGY TO 'BUY'
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GOLDMAN RAISES CAIRN ENERGY TO 'BUY' ('NEUTRAL') - TARGET 250 (285) PENCE
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BARCLAYS CUTS CAIRN ENERGY PRICE TARGET TO 210 (255) PENCE - 'EQUAL WEIGHT'
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SOCGEN CUTS BRITISH LAND TO 'HOLD' ('BUY')
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BERENBERG RAISES STANDARD CHARTERED TO 'HOLD' ('SELL') - PRICE TARGET 1200 PENCE
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COMPANIES - FTSE 100
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The US Federal Reserve on Wednesday rejected Citigroup's capital plan and those put forth by four other banks as part of its annual stress test. The Fed said in a statement it based its decision to veto the capital plans of Citigroup, the US units of Royal Bank of Scotland Group, HSBC Holdings and Banco Santander on qualitative concerns. Its decision to fail the fifth bank, Zions Bancorporation, was based on the bank's inability to meet a minimum post-stress capital requirement. Two other major US banks, Goldman Sachs Group and Bank of America, passed the stress test only after reducing their requests for buybacks and dividends. The Fed approved the plans of 25 other banks.
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Federal Reserve Finds Deficiencies In HSBC And RBS Citizens Practices For Estimating Revenue, Losses Under Stress
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London Stock Exchange Group Says Continuing Momentum In Q4; GBP28.3B In Equity Capital Raised On Its Markets In 11-Mo To Date; 17 New Issues Across UK And Italy In March; Says LCH.Clearnet Recorded Increases In OTC Derivatives Clearing Volumes; Says FTSE Continues To Make Good Progress,
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Babcock International Enters Conditional Agreement To Acquire Avincis For GBP920M, Funded By GBP1.10B Rights Issue
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Low-cost airline easyJet PLC said it has agreed a new seven-year deal with London Gatwick Airport to support growth at the airport and improve customer service for its passengers. The new agreement, which will take affect from April 2014, will "incentivise the airline to grow at the airport and provide the framework for easyJet and GAL to further improve customer experience for easyJet’s passengers," said the airline.
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Centrica Responds To Ofgem Announcement Regarding Competition Review; Says It Is Committed To An Open, Transparent And Competitive British Energy Market; Says It Rejects Any Suggestion Of Tacit Cooperation With Other Market Participants
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Tullow Oil Says Emong-1 Exploration Well Encountered Poorly Developed Oil Bearing Reservoir Sands; Says Sakson PR-5 rig Continuing Drilling On Twiga South-2 Well, Expected To Be Completed In Mid-April
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COMPANIES - FTSE 250
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Thomas Cook: Winter Trading Satisfactory Despite Significant Market Disruption From Egypt; Customer Bookings For Summer 2014 Showing Improving Trend; 50% Of Holidays Already Sold; Margins Expected To Improve More Than Average Selling Prices; Winter 2013/14 Season- 93% Sold, In Line With Booking Pattern Last Year; Winter 2013/14 Season- Excluding Egypt Achieved Higher Average Selling Prices, Bookings; Summer 2014 Season- 50% Already Sold, Overall Booking 2% Higher Than Last Year
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Serco Wins Interim Northern Rail Franchise Agreement; Serco And JV Abellio Have Signed The 22 Month Deal To Operate The Franchise For The UK's DfT Until February 2016
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RPC Group: Trading Performance For FY In Line With Expectations; Revenue In Q4 Expected To Be Ahead Of Last Year
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Afren FY Pretax Profit Down 44% To USD318M Vs USD569M; Revenue Up 5% To USD1.64B Vs USD1.57B
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Riverstone Energy Announces Equity Commitment Of CAD200M To Canadian International Oil Corp
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Ophir Energy Provisionally Awarded Block In Myanmar Offshore Licensing Round; Drilling Operations Started On Affanga Deep-1 And Taachui Well
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COMPANIES - ALL-SHARE AND AIM
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Development Securities Sells Winchester Foodstore Scheme For GBP23.3M
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Hilton Food Group FY Pretax Profit GBP24.9M Vs GBP24.7M; Revenue GBP1.12Bn Vs GBP1.03Bn; FY Dividend Up 6.3% To 12.75P Vs 12.0P
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Henry Boot FY Pretax Profit GBP18.4M Vs GBP13.4M; Revenue GBP153.8M Vs GBP103.1M; Declares Final Dividend Of 3.15 Pence Vs 2.90 Pence
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Daily Mail & General Trust Maintains Full Year Outlook; 5M Underlying Revenue Up 6%; Says Reported FY Results Will Reflect Adverse Impact Of Strengthening Sterling
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Laura Ashley FY Pretax Profit GBP20.5M Vs GBP20.1M; Total Group Sales Down 1.4% To GBP294.5M Vs GBP298.8M; Retail Like-For-Like Sales Down 0.4%; Total Dividend For Year Of 3.5P Vs 2.0P;Challenging First Half, Good Like-For-Like Sales Growth In Second Half; First Two Months Of Current Financial Year Like-For-Like Sales Growth Of 2.0%
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San Leon Energy Signs Farm-In Agreement For Permian/SW Carboniferous Basin In Poland With TransAtlantic; Says TransAtlantic Will Fund 100% Of Six Well Work Programme Valued At USD60M-USD70M; TransAtlantic To Become Operator And Fund 50% Of Costs
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Gulf Keystone Petroleum FY Loss After Tax USD32.0M Vs USD81.8M; Cash, Cash Equivalents, Liquid Investments At USD76.0M As At March 1 2014; To Increase Shaikan Production Capacity To 40,000 Bopd By end Of Q4 2014
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Phorm Corp Raises GBP10M From Placing Of 90.9M Shares At 11p Via Mirabaud Securities
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Mediterranean Oil & Gas Requests Shares To Be Suspended On AIM Pending Announcement
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Qannas Investments Shares To Resume Trading On AIM Friday Following Completion Of Reverse Takeover Of ADCM SPEF, SPE Qannas C
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COMPANIES - OTHER
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Bank of America Corp. Wednesday said it has agreed to pay about USD9.5 billion to settle a litigation with Fannie Mae and Freddie Mac related to mortgage-backed securities.
The Federal Housing Finance Agency (FHFA), the conservator of Fannie Mae and Freddie Mac, had claimed that Bank of America had falsely represented the mortgage loans and had violated federal and state securities laws related to residential mortgage-backed securities sold to Fannie Mae and Freddie Mac between 2005 and 2007.
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Investors soured Wednesday on King Entertainment, sending shares of the maker of the hit mobile game Candy Crush 15% lower in the first day of trading. King sold more than 22.2 million shares at an original price of USD22.50, raising nearly USD500 million from the initial offering.
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Irish Medical Device Firm Mainstay Medical International To IPO On Irish Stock Exchange And Euronext Paris
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Thursday's Scheduled AGMs/EGMs

Electronic Data Processing
Independent Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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