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UK TOP NEWS SUMMARY: UK PM Names October 15 Deadline For Brexit Deal

Mon, 7th Sep 2020 10:56

(Alliance News) - The following is a summary of top news stories Monday.



COMPANIES



Associated British Foods said trading in the final quarter of financial 2020 "exceeded" management's expectations but earnings for the year as a whole will be below last year because of the temporary shuttering of Primark stores due to Covid-19. "Trading in the fourth quarter in both our food businesses and Primark exceeded our expectations," the company said. Grocery benefited from a continued rise in retail sales volumes in key markets of the US, Europe and Australia, AB Foods explained. Increased demand for yeast and bakery ingredients, particularly across the Americas and China, delivered higher sales for the Ingredients business, while the Sugar unit, as expected, will deliver a "much improved" profit year-on-year. "All Primark stores reopened during May, June and July and trading during the fourth-quarter has been strong. In the latest four-week UK market data for sales in all channels, Primark achieved our highest ever value and volume shares for this time of year," AB Foods added. Adjusted operating profit for Primark, excluding exceptional charges, is now expected to be "at least at the top end" of the GBP300 million to GBP350 million range previously advised for the financial year ending September 12, down by two thirds from GBP913 million the year before.



Future said it expects its annual results to be materially ahead of market expectations, as the magazine publisher continues to shift to digital media. Future is a FTSE 250-listed media company that publishes more than 50 magazines in fields such as video games, technology, films, music, photography, home, and knowledge. Since its last update in July, the company said it has continued to benefit from the trend toward digital media. In August, organic unique online visitors in the UK and US were up 25% and 40%, respectively, compared to the prior year. Combined with a better than expected performance of TI Media in the second half, full-year adjusted operating profit is now expected to be materially ahead of current market expectations, Future highlighted. The current consensus range for adjusted operating profit for the year ending September 30 is between GBP78.2 million to GBP83.2 million. A year ago, adjusted operating profit was GBP52.2 million.



National Grid said the UK energy regulator's draft determinations are "unacceptable, not being in the interests of consumers, and not reflecting the views of our stakeholders". The power grid operator said it submitted its responses to Ofgem's RIIO-2 draft determinations on Friday. National Grid said it complained about "the combination of the proposed low base level of total expenditure, the uncertainty around the approval process for additional [total expenditure] and the low allowed baseline return", and it said it proposed remedies. On July 9, Ofgem published its draft determinations for the RIIO-2 price controls for the UK electricity transmission, gas transmission, and gas distribution sectors, and the electricity system operator. The price controls are due to start in April 2021 and run for five years, until the end of March 2026. The outcome of the draft determinations is different from companies' business plan proposals across many elements of the price control.



AstraZeneca said new analyses has showed a consistent benefit of Breztri Aerosphere in reducing chronic obstructive pulmonary disease exacerbations across all seasons compared with Bevespi Aerosphere. Chronic obstructive pulmonary disease is the name for a group of lung conditions that cause breathing difficulties. A analysis of the Phase III Ethos trial showed a consistent benefit of Breztri Aerosphere - budesonide/glycopyrronium/formoterol fumarate - in reducing the rate of moderate or severe chronic obstructive pulmonary disease exacerbations across all seasons compared with Bevespi Aerosphere - glycopyrronium/formoterol fumarate - in patients with moderate to very severe disease, Astra said.



South Korean tech giant Samsung Electronics said it has signed a network equipment supply deal with US carrier Verizon Communications. The radio network supply contract between Samsung Electronics America and Verizon Sourcing is worth KRW7.898 trillion, about USD6.6 billion, Samsung said. The tech firm noted the contract is 3.4% of its sales in financial 2019, which came in at KRW230.400 trillion. The contract will end on December 31, 2025.



MARKETS



The FTSE 100 raced ahead on Monday, helped by share price gains for Primark parent Associated British Foods, which said fourth-quarter trading exceeded expectations, and housebuilders, which rose on upbeat UK house price data from Halifax. The pound, meanwhile, slumped as Brexit worries came to the fore after a Financial Times report claimed UK Prime Minister Boris Johnson wants to revise agreements with the EU on Northern Ireland and state aid. Markets in the US are closed on Monday for Labor Day.



FTSE 100: up 1.5% at 5,883.15

FTSE 250: up 1.4% at 17,604.01

AIM ALL-SHARE: up 1.1% at 956.91

GBP: lower at USD1.3181 (USD1.3230)

EUR: higher at USD1.1831(USD1.1809)

GOLD: higher at USD1,927.53 per ounce (USD1,919.60)

OIL (Brent): lower at USD42.02 a barrel (USD42.74)

(changes since previous London equities close)



ECONOMICS AND GENERAL



The Brexit terms that the UK agreed to before formally exiting the EU "must be respected", chief EU negotiator Michel Barnier said, after reports that London might seek legislation to override key parts of the deal. "Everything that has been signed must be respected," Barnier told France Inter radio, in response to a Financial Times report claiming UK Prime Minister Johnson wanted to revise agreements on Northern Ireland and state aid. Barnier said he would discuss the report with his UK counterpart David Frost during an eighth round of negotiations on a future trade deal this week. Johnson on Sunday gave an October 15 deadline for a post-Brexit trade agreement with the EU, brushing off fears about "no-deal" chaos if talks fail. The eighth round of negotiations resume in London this week, with both sides talking increasingly tough, amid accusations of intransigence and political brinkmanship.



UK house prices hit a record high in August, data from Halifax showed, as prices rose month-on-month and the annual pace of growth picked up. On an annual basis, UK house prices were 5.2% higher in August versus the same month a year earlier, picking up pace from the 3.8% annual growth seen in July. Halifax noted August's year-on-year price rise is the strongest since late 2016. On a monthly basis, prices were 1.6% higher in August, which is flat on July's monthly growth - matching the highest ever monthly increase. "House prices continued to beat expectations in August," Halifax Managing Director Russell Galley said. The average price of a house in the UK was GBP245,747 in August versus GBP241,604 in July. Galley said this is the first time the average house price has exceeded GBP245,000.



German industrial production came in short of expectations in July, data from the Federal Statistical Office showed. In July, production in industry was up by 1.2% on the previous month on a price, seasonally and calendar adjusted basis, which follows a restated monthly rise of 9.3% in June. Market consensus, according to FXStreet, guided for a 4.8% month-on-month rise in July. On an annual basis, industrial production in Germany was down 10% in July, while the market was expecting a more manageable 4.3% drop, according to FXStreet. Looking ahead, German industry expects industrial production to increase slightly over the coming months.



Eurozone investor confidence continued to rebound in September, data from Sentix showed. The overall index came in at minus 8.0 in September, an improvement from minus 13.4 in August and well off the lows of minus 42.9 in April. September's print was the highest since February, Sentix noted. The index had started 2020 in positive territory, with January's reading being 7.6. The latest result came in ahead of market expectations. FXStreet consensus had pencilled in a reading of minus 10.5 for September. The current situations index improved to minus 33.0 in September from minus 41.3 in August, having slumped as low as minus 73.0 in May. The expectations index also strengthened, to 20.8 from 19.3 in August.



Copyright 2020 Alliance News Limited. All Rights Reserved.

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