News Column

UK MORNING BRIEFING: Shares Down; Land Securities Buys Into Bluewater

June 25, 2014

Tom Waite



LONDON (Alliance News) - UK shares have opened lower Wednesday following weak stock-market performances in the US and Asia, as the Iraq situation continues to smoulder.



Hammerson shares lead FTSE 100 gainers after Land Securities Group said it has acquired a 30% stake in the Bluewater shopping centre near London in Kent from Australian property business Lend Lease Group in a deal worth GBP656 million in cash. Hammerson had been speculated as a possible buyer of the mall, which would have strained its finances. Land Securities is the 7th leading blue-chip gainer.



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

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MARKETS

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FTSE 100: down 0.7% at 6,743.10

FTSE 250: down 0.5% at 15,476.33

AIM ALL-SHARE: down 0.3% at 780.76

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Hang Seng: down 0.1% at 22,854.88

Nikkei 225: closed down 0.7% at 15,266.61

DJIA: closed down 0.7% at 16,818.13

S&P 500: closed down 0.6% at 1,949.98

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GBP-USD: down at USD1.6956

EUR-USD: up at USD1.3613



GOLD: down at USD1,312.00 per ounce

OIL (Brent): down at USD113.65 a barrel



(changes since end of previous GMT day)

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ECONOMICS AND GENERAL

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Wednesday's Key Economic Events still to come

(all times British Summer Time)



11:00 UK CBI Distributive Trades Survey

12:00 US MBA Mortgage Applications

13:30 US Durable Goods Orders

13:30 US Gross Domestic Product

14:45 US Markit PMI Composite Preliminary

15:30 US EIA Crude Oil Stocks

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US Secretary of State John Kerry met with Kurdish leader Massoud Barzani in northern Iraq on Tuesday during his second unannounced visit to the country in two days to urge regional leaders to participate in Baghdad's next government. Kurdistan's Rudaw television reported that Kerry also met with Nechirvan Barzani, prime minister of Kurdistan and a number of Kurdish leaders. Kerry told the US-based ABC News that the Iraqi parliament would convene on July 1 to begin work to form a government. He said that Prime Minister Nouri al-Maliki "says he is committed to the constitutional process, wants to see the parliament convene on the 1st of July, and will work to try to create a government of unity and a government that can bring Iraq together."

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The ceasefire in Ukraine was shaken Tuesday by the downing of a military transport helicopter by eastern Ukraine separatists. Nine soldiers died in the attack. The army said another two soldiers were killed in 35 attacks on government troops. After the latest violence President Petro Poroshenko met with Ukrainian military officers and warned separatists that he could not rule out ending the ceasefire. Just hours before, Russian President Vladimir Putin sent a clear signal of de-escalation. He asked the Russian parliament to revoke its authorization for the use of force in Ukraine in order to back the peace process between government troops and separatists in that country.

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German consumer confidence is set to improve in July, survey data from market research group GfK showed. The forward-looking consumer sentiment index rose to 8.9 in July from a revised 8.6 points in June, as economic expectations rose to a three-year high. Economists had forecast the indicator to rise to 8.6 points from June's original estimate of 8.5. The economic expectations index rose 7.7 points to 46.2 in June. Willingness to buy gained 3.7 points to reach 53.2. Meanwhile, income expectations fell by 0.6 point to 47.2 in June. The survey suggests that private consumption will rise 1.5% in 2014.

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FRANCE JUNE BUSINESS CONFIDENCE 98 VS. 99 IN MAY, CONSENSUS 99

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The French economy is likely to log a meagre growth this year and remain below the government's target, a quarterly report published by the statistical office Insee revealed Tuesday. Gross domestic product is forecast to grow 0.7% in 2014, after rising 0.4% in 2012 and 2013. The government estimate 1% growth this year. The acceleration in activity should be driven in particular by manufacturing, while construction is forecast to shrink for the third consecutive year. Insee predicts 1.2% growth in manufacturing, while a contraction of 2.6% is estimated for construction. It forecast 0.3% GDP growth in each quarter of the second half of 2014.

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An index measuring corporate service prices in Japan was up 3.6% on year in May, the Bank of Japan said on Wednesday, standing at 102.5. That topped forecasts for an increase of 3.2% following the 3.4% increase in April. On a monthly basis, prices added 0.2% after surging 2.6% in April.

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Libyans go to the polls Wednesday to elect a new parliament for the oil-rich North African country, which remains prey to turmoil three years after a revolution drove long-term leader Moamer Gadafi from power. Citizens will vote for 200 members of a successor assembly to the General National Congress, the interim parliament elected in 2012. Thirty-two seats are reserved for women. Candidates are required to run as individuals rather than as nominees of political parties.

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EU leaders will dust off their ceremonial pens Friday to sign off on closer ties with Ukraine, Georgia and Moldova - closing ranks in defiance of Russian misgivings. But that is where unity is likely to end at their summer Brussels summit. The EU is struggling to agree on who should manage the bloc in the future as EU Commission president and the political showdown is expected to come to a head this week.

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Italy's Prime Minister Matteo Renzi scored an unprecedented victory in last month's European Parliament elections, campaigning with the slogan "Let's change course." As his country takes over the EU's six-month rotating presidency on July 1, Rome's young, brash and ambitious leader is pledging to export the same motto to Brussels. "We want a change of mentality, a leap forward for the entire Union," the 39-year-old said Friday. Renzi is the rising star on Europe's political scene. His Democratic Party took more than 40% of the votes in May's poll, becoming one of the few ruling parties in Europe that could claim victory over eurosceptic and populist rivals.

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A tea party upstart Tuesday narrowly failed to oust a long-time Republican Senator for the party's nomination in a key battle over the future direction of the centre-right party. Thad Cochran, 76, the second-most senior Republican in the Senate, scraped to victory in Mississippi with 51% over tea party rebel Chris McDaniel, 41, who took 49% in the primary run-off, according to the southern state's Clarion Ledger newspaper. The win ensures that Cochran will be returned to the Senate in mid-term elections in November, since Mississippi is a heavily Republican state.

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BROKER RATING CHANGES

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TRADERS: MORGAN STANLEY RAISES SHELL TO 'OVERWEIGHT' ('EQUAL-WEIGHT')

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DEUTSCHE BANK RAISES CARPETRIGHT TO 'HOLD' ('SELL') - TARGET 510 (545) PENCE

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COMPANIES - FTSE 100

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Land Securities Group PLC said it has acquired a 30% stake in the Bluewater shopping centre near London in Kent from Australian property business Lend Lease Group in a deal worth GBP656 million in cash. FTSE 100-listed Land Securities also acquired the full asset-management rights for the centre and 110 acres of surrounding land for GBP40 million. The overall net initial yield after expiry of rent free periods is 4.1%. The deal comes after UK press reports that rivalsBritish Land PLC and Hammerson PLC also were looking to buy the stake in the shopping destination which attracts around 27 million visitors a year. The centre totals 1.8 million square feet and is home to over 330 retailers, including House of Fraser and John Lewis. It also includes 13,000 parking spaces.

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Babcock InternationalGroup PLC and Balfour Beatty PLC said their joint venture has been given the green light for the third phase of a contract to construct a new maintenance facility for Sellafield Ltd in a deal worth a total of GBP160.0 million, which will be used to retrieve radioactive waste from silos. The joint venture, 55% owned by Babcock International's nuclear support services organisation, Cavendish Nuclear, with the remaining 45% owned by Balfour Beatty, will begin work on the third phase of the third phase immediately.

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Shire PLC said the US District Court for the District of New Jersey has granted the company's summary judgement motion in a patent infringement lawsuit, holding that certain claims of the patents protecting Vyvanse or lisdexamfetamine dimesylate were both infringed and valid. Shire said that the ruling prevents the five pharmaceutical manufacturers - the ANDA- Defendants - which have filed Abbreviated New Drug Applications from launching generic versions of Vyvanse until the earlier of either a successful appeal to the US Court of Appeals for the Federal Circuit, or the expiration of these patents in 2023.

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HSBC Holdings PLC andRoyal Bank of ScotlandGroup PLC have been granted extensions for the resubmission of the capital plans for their US units to the Federal Reserve, which means they will not be able to increase their capital distributions to their parent companies until at least 2015. In a statement Tuesday, the Federal Reserve said that the banks, along with the US's Citigroup Inc and Spain'sBanco Santander SA, will not have to re-submit the capital plans until January 5, 2015, the due date for the next round of annual plans, after they requested an extension to the original deadline which had been scheduled for Thursday. "The extensions will give the firms additional time to address the capital planning weaknesses identified by the Federal Reserve. The firms will not be able to increase their capital distributions until a new capital plan is approved," the Federal Reserve said in a statement.

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COMPANIES - FTSE 250

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Stagecoach FY Pretax Profit GBP158.0M, Up From Restated GBP154.3M Year Earlier; Revenue GBP2.93B, Up From Restated GBP2.80B Year Earlier; Full-Year Dividend Up 11% To 9.5p From 8.6p; Says Current Trading In Line With Management Expectations

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Grainger PLC said Ian Coull will join the board as a non-executive director on September 23 and will be proposed as chairman at the company's annual general meeting in February 2015. Robin Broadhurst will retire as a director and as chairman on that day, said the FTSE 250-listed company. Coull has served as chairman of Galliford Try PLC since 2011 and previously served as CEO of Segro PLC from 2003 to 2011.

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Premier Oil PLC said it has appointed Tony Durrant as chief executive officer with immediate effect. Durrant has been with the company since 2005, serving as finance director. Before this, he worked at Lehman Brothers, latterly as managing director and head of the European Natural Resources Group.

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Northgate FY Pretax Profit GBP51.2M Vs GBP11.4M Loss; Northgate FY Revenue GBP571.5M Vs GBP609.9M; Proposes Final Dividend Of 6.8 Pence

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COMPANIES - MAIN MARKET AND AIM

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Stellar Resources PLC said its two tonne per hour gold processing plant has now arrived at the Clogau St David's Gold Mine in North Wales. The company said the plant will now go through the process of being constructed in modified facilities near the entrance to the Clogau mine, a famous site which once provided gold for the British Royal Family, before commissioning. The new treatment plant will allow the start of small scale pilot processing of gold ore and also to help assess underground samples.

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Development Securities PLC said hotels group Accrod UK Business & Leisure Hotels Ltd has signed a lease at 10 Hammersmith Grove to occupy the first and half of the second floor of the building, representing 25,000 square feet of office space. In a joint statement with co-investors the SWIP Property Trust, Development Securities said this is the second office letting at the site. Earlier this year media company UKTV took two floors of the building. The whole of 10 Hammersmith Grove is now let or under offer.

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Horizonte Minerals PLC said its subsidiary, Araguaia Niquel Mineracao, has received a priority status from the state of ParÁ'sDepartment of Industry, Commerce and Mining to help fast-track the development of its Araguaia Nickel Project in Brazil.

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4D Pharma To Raise GBP21.5M Through Issue Of 14.3 Million New Shares At 150 Pence

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European Wealth To Acquire Compass Financial Benefits; Raises GBP674,000 By 749,303 New Shares At 90p Each

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Saga Says It Continues To Trade In Line With Market Expectations

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Gresham House In Discussions Regarding Its Future; Says Discussions Could Provide Attractive Alternative; Current Plan Is Liquidation And Distribution As Agreed In 2011; Says Proposals Would Result In Substantially New Board, Management; Expects Proposals Would See New Share Placing To Raise GBP20.0M And Move To AIM From Main Market

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Gulf Keystone Petroleum Says CEO Todd Kozel To Retire From Role At AGM On July 17; Says Kozel Will Take On New Role Of Executive Director

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Sound Oil Chairman Andrew Hockey To Step Down At AGM; To Remain On Board As Non-Exec Director

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Synectics Says Half And Full FY To Be "Significantly Below Market Expectations"; 2nd Half To Be Very Strong And Well Ahead Of 2nd Half Of Year Before; Events In Iraq Have Caused Contract Delays Worth GBP7M Revenue, GBP2.1M Net Profit Off Full-Year Results

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Wednesday's Scheduled AGMs/EGMs



Gresham House

Royal Bank of Scotland Group

Patagonia Gold

North Atlantic Smaller Companies Investment Trust

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Source: Alliance News


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