UK MORNING BRIEFING: Shares Higher; Lloyds And BG Group Profits Down

LONDON (Alliance News) - UK shares have opened higher Thursday amid holidays across Asia and Europe. The US Federal Reserve late Wednesday continued to taper its bond-buying programme, showing confidence in the US economic recovery despite a weak GDP reading earlier in the day.

Lloyds and BG Group both reported lower first quarter profits prior to the open Thursday, while Schroders reported higher profits. BSkyB affirmed the outlook for its financial year.

Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.3% at 6,799.36
FTSE 250: up 0.7% at 15,933.78
AIM ALL-SHARE: up 0.4% at 825.56
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Hang Seng: closed for Labour Day holiday
Nikkei 225: closed up 1.3% at 14,485.13
DJIA: closed up 0.3% at 16,580.84
S&P 500: closed up 0.3% at 1,883.95
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GBP-USD: up at USD1.6885
EUR-USD: up at USD1.3886

GOLD: down at USD1,283.40 per ounce
OIL (Brent): down at USD107.73 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
(all times British Summer Time)

Labour Day in Switzerland, China, Germany, Russia, France and Italy
09:30 UK M4 Money Supply
09:30 UK Markit Manufacturing PMI
09:30 UK Net Lending to Individuals, Consumer Credit and Mortgage Approvals
12:30 US Challenger Job Cuts
13:30 US Jobless Claims
13:30 US Personal Income and Spending
13:30 US Fed's Yellen Speech
14:45 US Markit Manufacturing PMI
15:00 US Construction Spending
15:00 US ISM Manufacturing PMI
15:00 US ISM Prices Paid
15:30 US EIA Natural Gas Storage change
21:00 US Total Vehicle Sales
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UK house prices recorded a faster-than-expected double-digit growth in April, survey data showed. House prices increased 10.9% year-on-year in April, faster than the 9.5% rise seen in March, mortgage lender Nationwide reported. The rate was forecast to rise to 9.8%. Month-on-month, house price growth more than doubled to 1.2% from 0.5%.
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China's monthly index of manufacturing activity edged up to 50.4% in April, officials said Thursday, 0.1% above the March figure. It was the second consecutive rise in the widely watched purchasing managers' index, released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. The index began to climb in March after hitting an eight-month low of 50.2 in February, a drop from January's 50.5.
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The Federal Reserve is continuing to pare back its infusion of cash into the US economy, even after the government reported Wednesday that growth screeched to a halt in the first quarter of 2014. Gross domestic product in the US grew at an annualized rate of 0.1% in the January-March period, according to an initial estimate by the Commerce Department's Bureau of Economic Analysis. The slowdown was attributed to the unusually severe winter in the eastern US and to slowdowns in business investment, exports and inventory growth. After meeting in Washington, hours after the GDP report, the Fed said it would cut its monthly purchases of government-linked bonds by another 10 billion dollars to 45 billion dollars in May. "There is sufficient underlying strength in the broader economy to support ongoing improvement in labour market conditions," the Fed said.
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The International Monetary Fund approved a USD17.01 billion economic package for Ukraine to restore macroeconomic stability amid heightened tensions in the region. The Washington-based lender will make USD3.2 billion immediate payment to Ukraine. In exchange for the loan, Ukraine is committed to maintain flexible exchange rate, and meet near-term fiscal obligations. The IMF loan will also unlock another USD15 billion funds, including loans and other funding from the US, Europe and the World Bank.
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The armed insurgency in eastern Ukraine widened Wednesday, as Germany raised the possibility of new sanctions against Moscow despite Russian President Vladimir Putin's threats of retaliatory measures against Western firms. Pro-Russian separatists seized city administrations in Alchevsk and Horlivka, where they hoisted Russian flags. Alchevsk Mayor Volodymyr Kosyuga said he supports a referendum on the status of the industrial city in the Luhansk region on May 11, local media reported. Earlier, armed insurgents took over police headquarters in the regional capital, Luhansk, following a standoff.
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Global press freedom has fallen to its lowest level in over a decade, driven in part by major regression in the Mideast, according to a Freedom House report. Only one in six people in the world, or 14% of the total population, live in a place where the media is rated free. A far larger share - 44% - live where the media is not free. Som 42% live where the media is partly free, the Freedom House report said.
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BROKER RATING CHANGES
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TRADERS: JPMORGAN RESUMES CINEWORLD WITH 'OVERWEIGHT' - TARGET 400 PENCE
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TRADERS: JEFFERIES CUTS MICHAEL PAGE TO 'HOLD' ('BUY')
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COMPANIES - FTSE 100
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Lloyds Banking Group PLC said its first-quarter pretax profit fell to GBP1.37 billion from GBP2.04 billion a year earlier, when results were boosted by gains on the sale of government securities totalling GBP776.0 million, while the bank also upgraded its net interest margin guidance for the full-year. In a statement for the three months ended March 31, Lloyds said net interest income increased to GBP2.72 billion, compared with GBP457.0 million a year earlier, boosted by improving margins. But total income net of insurance claims - which also includes net fee and commission income, net trading income, and insurance premium income - fell to GBP4.63 billion from GBP5.90 billion.
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BG Group PLC reported lower first-quarter profit as the situation in Egypt continued to weigh, and it reaffirmed that production in 2014 as a whole is likely to be at the lower end of its guidance due to the issues in the country and the hit is likely to continue into 2015. The company's earnings come just days after BG Group Chief Executive Chris Finlayson resigned with immediate effect for personal reasons. Non-executive Chairman Andrew Gould has taken over as interim executive chairman while the company looks for a new CEO.
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British Sky Broadcasting PLC said that it was on track to deliver on its expectations for the full year, as it saw revenue rise in the nine months to end-March, although operating profit continued to be hit by higher costs. The broadcaster posted an operating profit of GBP910 million, down from GBP994 million, despite seeing revenue rise to GBP5.67 billion from GBP5.31 billion in the previous year, hit by its continued investment in connected services and the step-up in Premier League football broadcasting costs.
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Schroders PLC reported an increase in first-quarter pretax profit as it reported GBP3.8 billion in net inflows, which further boosted assets under management. In a statement for the three months ended March 31, Schroders said pretax profit rose to GBP118.9 million from GBP115.0 million for the corresponding quarter a year earlier. Net revenue increased to GBP358.8 million from GBP323.0 million, while operating expenses increased to GBP233.5 million from GBP213.5 million.
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ARM Holdings PLC said Chief Financial Officer Tim Score has decided to retire from the position. Score will step down from the role in May 2015 after serving as CFO since 2002. The semiconductor intellectual property supplier said it will shortly appoint search consultants for the appointment of Score's successor.
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Glencore Xstrata Increases Caracal Ownbership To 13.82% Through Subsidiary 8682321 Canada Inc
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Weir Group Q1 Trading In Line With Expectations; Retains FY Guidance; FY Revenue, Profit To Be More Weighted To H2
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Rolls-Royce Still Expects Flat Profit, Revenue In 2014 Excluding Currency Hit, Marine Charge; Says Currency Moves Have Hit Profit By GBP10M, Revenue By GBP300M
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Smith & Nephew Q1 Revenue Flat At USD1.07B; Confirms Review Outcome, Identified Activities To Deliver USD120M Of Yearly Efficiency Savings; Remains Confident Of 2014 Outlook
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COMPANIES - FTSE 250
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RPS Group Says Grew In Early 2014, But Hit By Sterling Strength
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Greene King Sells 275 Non-Core Tenanted, Leased Pubs To Hawthorn Leisure For GBP75.6M; Book Value Of Pubs Was GBP93.8M; Deal To Be Completed By Early June; Now Expects To Reduce Pub Partners Estate To 750 Sites, Vs 1,200 Plan Set In 2010
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Serco To Place 49.9 Million Shares, About 10% Of Share Capital
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Salamander Energy Starts Formal Sale Process; Had Been Mulling Asset Sales; Now Engaged With A Number Of Interested Parties; Expects Sale Review To Be Concluded In Coming Weeks
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Go-Ahead Year-To-Date Revenue Up 4%, Excluding Olympic Comparatives; CEO: Pleased With Overall Bus And Rail Business Performances; CEO: Retains Expectations For FY
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RPC Group Placing Proceeds To Be Used To Acquire ACE Corp Holdings Ltd For USD301M; May Pay Up To USD430M For ACE Corp Holdings Depending On Results; To Raise GBP75M Via Placing Of 13M Shares, 8% Of Total
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Synthomer Board Is Reviewing Dividend Policy Due To Current Low Leverage Position; Remains Cautious But Is Confident For Medium And Long-Term Outlook
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Howden Joinery: Performance Is In Line With Our Expectations, Market Conditions Improving
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N Brown Group FY Pretax Profit, Pre Fair Value Adjustments, GB100.1M, Up 5.3%; FY Revenue GBP834.9M, Up 6.4%; Total Dividend 14.23p, Up 4.0%; Like-For-Like Sales From Store Portfolio Up 35% In FY
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James Fisher Says Trading So Far In 2014 In Line With Management Expectations
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Millennium & Copthorne Hotels Q1 Pretax Profit GBP20.1M, Down 16% From GBP23.8M; Revenue GBP175.3M, Down 0.3% From GBP175.9M; Says Results Hit By Strong Pound, Underlying Trading Stable; Says Group RevPAR At Constant Currencies In 4 Weeks To April 28 Up 4.2%
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Lancashire Holdings Q1 Return On Equity 3.9% Vs 4.7%
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Phoenix Group 3-Mo To March 31 Cash Generation GBP235.0M Vs GBP410.0M; CEO: On Track To Meet FY Cash Target
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COMPANIES - ALL-SHARE AND AIM
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Journey Group Confirms Alison Whittenbury Named To Board As CFO From July 1, Replacing Carl Fry
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Johnson Service Group Remains Confident In Prospects For Full Year; Says It Has Made Encouraging Start To Year
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Picton Property Income To Place 59.3M Shares At 59p Per Share To Raise GBP35M; Says Proceeds Of Placing To Finance Further Property Acquisitions; Also Proposes Placing Programme For Further 170M Shares
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Kingspan Says Off To A Strong Start Overall This Year; Sales Up 8% To EUR561M In First Four Months Of Year; Says Order Backlog Points To Strong First Half
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Aer Lingus Q1 Operating Loss Widens 6.6% To EUR48.5M; Revenue Broadly Flat
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Leni Gas & Oil Encounters Oil At GY-664 Well In Upper Goudron Sands
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Thursday's Scheduled AGMs/EGMs

ARM Holdings
Rolls-Royce Holding
Weir Group
Henderson Group
James Fisher and Sons
AGA Rangemaster Group
GKN
Johnson Service Group
Millennium & Copthorne Hotels
Schroders
Alliance Trust
Greggs
Synthomer
Sinclair IS Pharma
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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