News Column

UK MORNING BRIEFING: London Shares Firm Ahead Of Carney Testimony

June 24, 2014

Tom Waite



LONDON (Alliance News) - UK shares are flat to higher Tuesday ahead of testimony before Parliament by Bank of England Governor Mark Carney.



Tullow Oil is the FTSE 100's second leading gainer after it said it has made a further oil find in northern Kenya during exploration drilling. Tullow is up 1.7%, just behind BG Group, up 1.9%.



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 6,822.41

FTSE 250: flat at 15,679.11

AIM ALL-SHARE: flat at 785.56

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Hang Seng: up 0.4% at 22,903.12

Nikkei 225: closed up 0.1% at 15,376.24

DJIA: closed down 0.1% at 16,937.26

S&P 500: closed flat at 1,962.61

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GBP-USD: down at USD1.7021

EUR-USD: up at USD1.3604



GOLD: up at USD1,314.40 per ounce

OIL (Brent): down at USD113.89 a barrel



(changes since end of previous GMT day)

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ECONOMICS AND GENERAL

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Tuesday's Key Economic Events still to come

(all times British Summer Time)



09:00 Germany IFO - Business Climate, Current Assessment and Expectations

09:00 Italy Wage Inflation

09:30 UK BBA Mortgage Approvals

09:30 UK Inflation Report Hearings

10:00 Italy Trade Balance non-EU

13:05 US Philadelphia Fed's Plosser speech

13:55 US Redbook index

14:00 US Housing Price Index

14:00 US S&P/Case-Shiller Home Price Indices

15:00 US Consumer Confidence

15:00 US New Home Sales

15:00 US Richmond Fed Manufacturing Index

15:00 US Treasury Sec Lew Speech

16:30 US 4-Week and 52-Week Bill Auction

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The UK's Labour party will mount an assault on big outsourcing companies if it wins the election, reducing their role in delivering the government's back-to-work programme and exploring a plan to force them to pay all workers above the minimum wage in exchange for Whitehall contracts, the Financial Times reports Tuesday citing an interview with Rachel Reeves, Labour's shadow work and pensions secretary. Reeves told the newspaper that the Labour party would do away with the current system of big centrally commissioned contracts when the current tranche expired in 2015-16. Instead services would be bought at a more local level, perhaps by local authorities or local enterprise partnerships, which she said would understand the specific barriers to work facing people in their areas and already have strong links with local businesses, she said.

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US Secretary of State John Kerry arrived in Iraq's northern autonomous region of Kurdistan on Tuesday, the second unannounced visit to the country in two days, to urge regional leaders to participate in Baghdad's next government, Al Arabiya broadcaster reported. His visit comes after he met with officials in Baghdad on Monday, in what he called "a moment of great urgency" as insurgents expanded their control across Iraq. The US has pushed for an inclusive government, citing charges by minority Kurds and Sunnis that Shiite Prime Minister Nuri al-Maliki has marginalized them during eight years of rule.

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Iraq's Kurdish President Massoud Barzani gives strong support for Kurdish self-determination amidst conflict that is tearing the country apart. "During the last 10 years, we did everything in our ability, we made every effort, and we showed all flexibility in order to build a new, democratic Iraq," Barzani told CNN. "Unfortunately, the experience has not been successful the way that it should have," Barzani said. "...After the recent events in Iraq, it has been proven that the Kurdish people should seize the opportunity." Asked by CNN's Christiane Amanpour if that means he advocates for independence, Barzani said: "Like I said, it is the time now, the time is here for the Kurdistan people to determine their future, and the decision of the people is what we are going to uphold."

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A major separatist faction in eastern Ukraine on Monday said it supported a ceasefire offered by Petro Poroshenko, raising hopes for a peace plan touted by the president and the West. The leadership of the "Donetsk People's Republic is bound to end fighting in response to the ceasefire," Alexander Borodai, the appointed prime minister of the Donetsk separatists, who have declared themselves independent from Ukraine, was quoted as saying by Russia's Interfax news agency. The separatists had hitherto rejected the week-long truce, which Poroshenko declared through Friday, and Borodai said earlier Monday that there would be no talks before government forces withdraw.

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Poland's prime minister on Monday called a scandal over leaked recordings a "planned action" intended to hurt the ruling party and weaken the stability of the government during a critical moment in neighbouring Ukraine. Donald Tusk also stressed in a speech in Gdansk that he would not fire those "whose sin is making uncensored remarks during a private meeting." Transcripts of the secretly and illegally made audio recordings began being published last week by the news magazine Wprost. In a recording released this week, Foreign Minister Radoslaw Sikorski disparaged the alliance with the US as "worth nothing" and accused British Prime Minister David Cameron of "incompetence" in European affairs. Another tape was a conversation between central bank Governor Marek Belka and Interior Minister Bartlomiej Sienkiewicz in which the men use expletives to describe cabinet members and central bank colleagues, talk about the government's financial problems and call for the then-finance minister to be forced out of office.

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BROKER RATING CHANGES

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GOLDMAN INITIATES SMITH & NEPHEW WITH 'NEUTRAL'

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GOLDMAN CUTS SEVERN TRENT TO 'NEUTRAL' ('BUY') - TARGET 2122 PENCE

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TRADERS: EXANE BNP CUTS TESCO TO 'NEUTRAL' ('OUTPERFORM')

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UBS CUTS AVIVA TO 'NEUTRAL' ('BUY') - TARGET 524 (570) PENCE

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NOMURA RAISES ASOS TO 'BUY' ('NEUTRAL') - TARGET 3240 (6000) PENCE

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COMPANIES - FTSE 100

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The president of South Africa'sAssociation of Mineworkers and Construction Union Monday declared the end of platinum miners strikes which have crippled the industry, exactly five months after they began, according to Reuters. AMCU president Joseph Mathunjwa addressed thousands of miners at a mass meeting at the Royal Bafokeng Stadium in Rustenburg, saying that they would accept wage offers from the producers on Tuesday and the striking workers should return to work on Wednesday. On June 12, Lonmin PLC, along with Anglo American Platinum PLC, a subsidiary of Anglo American PLC, and Impala Platinum Holding Ltd, had said that the two sides had reached "informal undertakings" in principle on a potential deal.

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Petrofac Ltd said it has seen good performance at its Engineering, Construction, Operations & Maintenance division in the first six months of 2014 and has not been significantly impacted by the ongoing destabilisation in Iraq. The oil and gas services company said it continues to expect net profit for the full year to be in the range of USD580 million to USD600 million after having to put out a profit warning in May due to lower-than-expected earnings from its Integrated Energy Services operations, partly from delays in the development of is major Greater Stella Area project in the North Sea.

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Land SecuritiesGroup PLC said it has exchanged contracts to sell The Bridges shopping centre in Sunderland to clients of AEW Europe for GBP152 million, reflecting a net initial yield of 6.9%. The Bridges totals 550,000 square foot and is anchored by department store Debenhams. It has a further 100 shops including Foot Locker, Superdry and TopShop. Land Securities bought The Bridges in 1993 and extended the centre in 2000.

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Tullow Oil PLC said it has made a further oil find in northern Kenya during exploration drilling, which may have identified a new fault block in the developing Ngamia field area. The FTSE 100 oil and gas exploration company said its Ngamia-2 appraisal well found up to 39 metres of net oil pay and 11 metres of net gas pay, appearing to represent a new fault block area, north of its previous Ngamia-1 discovery. The company said the reservoirs were of high quality, with over 200 metres of net reservoir sands and good permeability.

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COMPANIES - FTSE 250

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Speciality chemicals company CrodaInternational PLC warned it now expects to report lower pretax profit than previously hoped in both its second quarter and in 2014 as a whole, due to the strength of the pound and weakness in its industrial chemicals business. In April, the company had said it expected its performance in the second quarter to end-June to be similar to that of the first quarter when it reported a pretax profit of GBP65.2 million. However, it now expects the second quarter figure to be about 8% below that.

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Tate & Lyle PLC said it has appointed Nick Hampton as chief financial officer, with effect from September 1. The sweeteners and starch company said that Tim Lodge, who has been the company's CFO since 2008, will remain in the role until August 31. Hampton joins Tate & Lyle from US soft drink giant PepsiCo, where he held the role of president of West Europe and senior vice president of commercial Europe.

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CSR PLC narrowed its revenue expectations for its second quarter, and revealed plans to return an additional USD20 million to shareholders through a share buy-back in addition to the USD50 buy-back it announced in February. The chip maker said it now expects its revenue in the second quarter to be between USD190 million to USD200 million, it had previously guided between USD190 million to USD210 million at the time of its first quarter results in April. CSR said it had already returned USD45.9 million of its planned USD50 million share buy-back, and as a result of selling certain intellectual property assets from its camera business, plans to buy-back a further USD20 million.

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Domino Printing Sciences PLC expressed confidence it will meet its expectations for the current full year as it swung into a profit in the half year to end-April, although it cautioned that its results for fiscal 2015 could be broadly similar to 2014. The printing equipment company upped its interim dividend to 7.98 pence from 7.60 pence.

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Imagination Technologies FY Pretax Loss GBP314,000 Vs Pretax Profit GBP12.2M; Revenue GBP170.8M Vs GBP151.5M; Confident It Is On Track To Deliver Continued Progress

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COMPANIES - ALL-SHARE AND AIM

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Carpet and floor coverings retailer Carpetright PLC reported a drop in revenue and a wider loss in the financial year just ended, hit by continued weakness in its Dutch business. Carpetright posted a pretax loss of GBP7.2 million for the year ended April 26, compared with a GBP5.1 million loss the prior year. On an underlying basis, which strips out exceptional items, related tax and an exceptional tax credit, the company recorded a pretax profit of GBP4.6 million, less than half the GBP9.7 million profit it saw a year earlier. The retailer issued three profit warning during the year, and in March cut its full-year profit expectations in half from the guidance it gave in January. In March it issued a statement saying it was expecting to report an underlying pretax profit in the range of GBP3.5 million and GBP5.5 million. Carpetright said Lord Harris of Peckham will remain as non-executive chairman until a new chairman has been appointed. It said he may remain on the board in a non-executive role even when an appointment is found.

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Shares in NWFGroup PLC opened higher Tuesday, after the company said it expects its financial results for the financial year just ended to be at the upper end of market expectations. In a trading update, the specialist agricultural and distribution business said that trading for the year ended May 31 was positive, driven by strong trading in its feeds business, which supplier ruminant animal feed for cows and sheep to farmers up and down the UK.

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Blur Group Says Q1 Continued To Make Progress With High Volume Growth

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James Cropper FY Pretax Profit GBP1.3M, Up From GBP1.2M, After Pension Adjustment; Revenue GBP84.5M, Up From GBP79.2M; Full-Year Dividend 7.9p, Unchanged

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Chemring Appoints Michael Flowers As CEO With Immediate Effect; H1 Pretax Loss GBP72.0M Vs GBP9.2M Loss; Revenue GBP277.4M Vs GBP297.4M; Underlying Pretax Profit GBP18.0M Vs GBP25.2M; Says FY Outlook Broadly Unchanged Excluding Currency Moves

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7digital In Partnership Agreement With ROK Mobile, Launching In US With T-Mobile And Sprint

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Leni Gas & Oil Says Well GY-666 In Goudron Field Intersects 185 Feet Of Net Oil Play; Says Well GY-666 Now At 1,667 Feet, Will Now Be Drilled To Primary Target At 2,050 Feet

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Immunodiagnostic FY Pretax Profit GBP8.3M Vs GBP10.0M; FY Dividend 8.5p Vs 3.0p; Trading In First 2M Of Current Year In Line With Expectations

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Bowleven Sells A 50% Stake In Etinde Permit, Offshore Cameroon, To LUKOIL And NewAge

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Tuesday's Scheduled AGMs/EGMs



InterQuest Group

Gulfsands Petroleum

Huntsworth

BlackRock Emerging Europe

Pacific Assets Trust

blur Group

Standard Life Investments Property Income Trust

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Source: Alliance News


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