News Column

UK MORNING BRIEFING: Shares Open Higher On Positive Chinese Data

June 2, 2014

Tom Waite



LONDON (Alliance News) - UK shares have opened slightly higher Monday on a good manufacturing PMI reading from China at the weekend and ahead of Thursday's European Central Bank meeting.



Goldman Sachs likes the shares of UK estate agents, raising Countrywide to Buy from Neutral, while adding Rightmove to its Conviction Buy List.



Here is what you need to know at the UK market open:

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MARKETS

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FTSE 100: up 0.2% at 6,857.36

FTSE 250: up 0.4% at 16,077.72

AIM ALL-SHARE: up 0.1% at 816.28

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Hang Seng: closed for Dragon Boat Festival

Nikkei 225: closed up 2.1% at 14,935.92

DJIA: closed up 0.1% at 16,717.17

S&P 500: closed up 0.2% at 1,923.57

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GBP-USD: down at USD1.6751

EUR-USD: down at USD1.3615



GOLD: down at USD1,244.80 per ounce

OIL (Brent): up at USD109.75 a barrel



(changes since end of previous GMT day)

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ECONOMICS AND GENERAL

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Monday's Key Economic Events still to come

(all times British Summer Time)



08:45 Italy Markit Manufacturing PMI

08:50 France Markit Manufacturing PMI

08:55 Germany Markit Manufacturing PMI

09:00 EU Markit Manufacturing PMI

09:30 UK M4 Money Supply

09:30 UK Markit Manufacturing PMI

09:30 UK Mortgage Approvals and Consumer Credit

13:00 Germany Consumer Price Index

14:45 US Markit Manufacturing PMI

15:00 US Construction Spending

15:00 US ISM Manufacturing PMI

21:00 US Total Vehicle Sales

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Showing signs of a stabilizing economy, China's manufacturing sector growth accelerated in May to its highest level this year, data from the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed Sunday. China's purchasing managers' index for May improved to 50.8 from 50.4 in April, showing signs of a pickup in the manufacturing sector and the economy -- the third consecutive monthly growth. The index, a key indicator of how the economy performs, has been on the rise since March after three straight months of decline.

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Japan's manufacturing output declined for the second consecutive month in May, though at a slower rate, a report by Markit Economics showed. The manufacturing purchasing manager's index came in at 49.9 in May, following the 49.4 figure in April.

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RUSSIA MAY MANUFACTURING PMI 48.9 VS. 48.5 IN APRIL, CONSENSUS 49.0

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Jean-Claude Juncker said in interview published Sunday that he is confident he will become the next president of the European Commission, despite British Prime Minister David Cameron reportedly warning it could lead to his country's exit from the bloc. "Europe should not be blackmailed," the former conservative primer minister of Luxembourg told the Bild am Sonntag newspaper. Juncker added that he had "large support" from EU leaders - both conservative and socialist - to assume the top spot in the European Commission, the 28-member union's executive arm, and that he could be in the position by mid-July.

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Portuguese Prime Minister Pedro Passos Coelho said Saturday the country faces a tough road ahead after its top court once again blew a hole in the government's budget by declaring cost-cutting efforts unconstitutional. "It will not be easy to find a way out of this," said Passos Coelho. "The government will not be rushed into a decision." However, he said his administration would respect the ruling, keep Portugal from descending into crisis and find a solution that did not require asking EU allies for aid. But he said he was "deeply concerned." The Friday ruling by Portugal's top court said that about EUR1 billion in benefit cuts for public employees would be discriminatory and, therefore, unlawful.

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At least 60 people were killed Sunday when Islamist extremist sect Boko Haram bombed a bar and brothel near a major military base in northern Nigeria, according to local newspaper Sahara Reporters. A major explosion rocked two buildings in the town of Mubi in Adamawa State at 1700 GMT, in close proximity to a special operations battalion of Nigeria's army, which is focused on fighting Boko Haram, security officials said.

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Thousands of soldiers and police were deployed in Bangkok Sunday to thwart an expected rally against the May 22 coup. Troops and riot police were on guard in the central shopping district, where a political activist had vowed to host a "coup party" outside a McDonald's restaurant. The outlet was closed, as were most shopping malls in the district, although cars were allowed on the roads as usual.

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Russia's deputy minister of defence on Sunday decried so-called "colour revolutions" as "a new disaster" that contributes to destabilizing countries. "Under the pretext of democratic transition, internal socioeconomic and political problems of some nations are being exploited to replace unwanted governments with externally controlled regimes," Anatoly Antonov said at the Shangri-La Dialogue in Singapore.

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The US government will introduce new regulations aimed at reducing greenhouse gas emissions by a third by 2030, according to media reports Sunday. At the order of President Barack Obama, the US Environmental Protection Agency will lay out a plan Monday that envisions power plants releasing 30% less carbon dioxide into the atmosphere in 16 years than they did in 2005. The new regulations would go in effect in a year.

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Australia's football chiefs are giving serious consideration to making another bid for the 2022 World Cup if Qatar loses the rights, it was reported. Australia was humiliated in 2010 when it received only one vote to host the cup despite spending 40 million dollars to promote its case. Football Federation Australia is considering a new application to host the 2022 event if the competition is reopened, The Australian newspaper reported.

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BROKER RATING CHANGES

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TRADERS: LIBERUM CUTS HAMMERSON TO 'HOLD' ('BUY')

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TRADERS: MORGAN STANLEY RESUMES WEIR WITH 'EQUAL-WEIGHT' - TARGET 2,440 PENCE

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GOLDMAN INITIATES INVESTEC WITH 'NEUTRAL'

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GOLDMAN RAISES COUNTRYWIDE TO 'BUY' ('NEUTRAL')

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GOLDMAN ADDS RIGHTMOVE TO 'CONVICTION BUY LIST' - TARGET 3,485 (3,607) PENCE

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BERENBERG RAISES MAN GROUP TO 'HOLD' ('SELL') - TARGET 90 (70) PENCE

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COMPANIES - FTSE 100

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Lloyds BankingGroup PLC has given TSB GBP450 million as part of its stock market floatation, the Daily Telegraph reported on Saturday, citing documents sent to investors. Lloyds, which is spinning off TBS in a stock market listing to satisfy European Commission requirements, will pay up to GBP450 million in the case that TSB wants to change its technology platform or if it is taken over, the paper says. The newspaper cited sources saying that the dowry could be viewed as a potential sweetener for any would-be buyer of the new bank.

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GlaxoSmithKline PLC has completed a deal to develop new cancer drugs with a UK biotech company, which could be worth over USD350 million, the Financial Times reports Monday, quoting Adaptimmune Ltd Chief Executive James Noble. Glaxo is expected to announce a deal on Monday in which it will pay Adaptimmune the cash over the next seven years, subject to certain development milestones being met, the FT says. The companies will work together to develop cell-based cancer therapies that involve re-engineering white blood cells to strengthen the body's ability to fight tumours.

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Shire PLC has secured a USD5 billion credit facility from banks including Citigroup to finance its planned takeover offer for the US's NPS Pharmaceuticals, The Times said on Monday, citing insiders. The FTSE 100 listed pharmaceutical company is believed to have arranged the deal to buttress its takeover offer for NPS, a developer of drugs for sufferers of a debilitating bowel condition.

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British supermarket chain Tesco PLC has signed a deal with UK department store chain House of Fraser, which will see Tesco sell the retailer's products through its website, the Mail on Sunday reported without saying where it got the information. The deal will extend the supermarket's reach into more "premium" products, while House of Fraser will benefit from Tesco's large customer base, the Mail on Sunday reported. The Mail on Sunday said the deal is expected to be announced later this week.

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COMPANIES - FTSE 250

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Entertainment One Ltd said it is to acquire the Phase 4 Films group of companies, a Canada and US-based independent film and television distributor, for a total consideration of CAD27 million. The entertainment group said it has agreed to acquire the group of film companies from Phase 4's shareholders, including President and Chief Executive Officer Berne Meyerowitz. The group said Meyerowitz will be appointed president of its film businesses in the US.

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St Modwen Properties PLC said it still expects to report pretax profit for the first half of its financial year significantly up on the year-earlier period, after it continued to perform "strongly" over the past two months. In a statement, the property company said it expects its asset management and added value activities to be reflected positively in half-year valuations, while initial indications point to a rise in market valuations for the first half of the year compared with November 2013, reflecting improvements in the residential and commercial property markets across the UK.

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Infrastructure company Balfour Beatty PLC said it had sold its interests in two public-private partnership assets for GBP97 million in total, generating total gains on disposal of GBP51 million. In a statement, the company said it had sold its 50% interest in the University Hospital of North Durham PPP project and its 100% interest in the Knowsley Building Schools for the Future project, with both assets bought by Dalmore Capital Ltd.

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COMPANIES - ALL-SHARE AND AIM

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Tribal Group PLC said it has acquired Australia-headquartered Human Edge Software Corp Pty Ltd for AUD15.2 million in cash, boosting its presence in Australia and South East Asia. In a statement, Tribal, which builds education management software to universities, colleges and schools, said it expects the deal for the student management systems provider to add to earnings in its first full year in the group. Human Edge, headquartered in Melbourne, but with a software development centre based in Manila, Philippines, supports about 1,900 schools and education management organisations throughout Australia and South East Asia, Tribal said.

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Bglobal PLC said it had agreed to sell its Utiligroup Ltd subsidiary for GBP16.1 million in cash to private equity company NorthEdge Capital LLP, and plans to return money to shareholders and de-list from AIM once the deal completes. Bglobal said the deal will have to be approved by its shareholders. It said it expects to have cash balances of GBP16.8 million after the deal completes, and is already talking with its advisors about the most effective way of returning this money to its shareholders.

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URU Metals Ltd said it has appointed resource entrepreneur John Zorbas as its non-board chief executive officer with immediate effect. The base metals and uranium explorer and development company said Zorbas has a proven track record in metals exploration and development, which will help in the ongoing progress of its Zebediela Nickel Sulphide Project in South Africa. Zorbas is currently chief executive officer of Mercom Oil Sands PLC.

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Card Factory PLC said it has completed the refinancing of its existing senior bank facilities, which has resulted in a significant reduction in the amount of interest it owes. The UK greetings card retailer joined the growing number of retailers to list on London's main market last month, having raised net proceeds of GBP90 million from its recent IPO to help reduce its net debt, which currently stands at around GBP160 million. Card Factory said Monday the new senior bank facilities, used in part for the refinancing, include a GBP180 million term loan facility and a GBP20 million revolving facility. It said both facilities have a five-year maturity.

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Hyder Consulting PLC Monday said it has appointed Jeffrey Hume to succeed Alan Thomas as non-executive chairman, with effect from the the company's annual general meeting on August 1.

The design and engineering consultancy said Thomas and Hume will work closely on the handover over the coming months.

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Union Jack Oil PLC Monday said that an independent technical report carried out on its PEDL201 licence in the UKMidlands has confirmed significant shale oil and gas potential at the Widmerpool Gulf region of the site. The UK-focused oil and gas exploration and development company said the report, carried out by Molten Ltd, has shown mean gross unrisked estimates of 5.4 billion barrels of oil and over 2.7 trillion standard cubic feet of gas in the region. Union Jack Oil holds a 10% interest in the site while Egdon Resources PLC holds 32.5%.

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Breedon Aggregates Ld said it has acquired Huntsman's Quarries Ltd, an aggregates company based in the North Cotswolds for GBP15.0 million in cash. Following the acquisition, Breedon has 42 active quarries, 22 asphalt plants and 53 ready-mixed concrete and mortar plants stretching from the Hebrides in northern Scotland to Lydney in Gloucestershire, England.

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Monday's Scheduled AGMs/EGMs



Ruspetro

Anglo Eastern Plantations

Acal

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Source: Alliance News


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