News Column

UK MORNING BRIEFING: Shares Open Lower Ahead Of European CPI

June 3, 2014

Tom Waite



LONDON (Alliance News) - UK shares have opened marginally lower Tuesday ahead of European data seen as having a possible influence on Thursday's European Central Bank meeting.

Wolseley leads the FTSE 100 gainers after reporting a strong third quarter. It is up 2.3%.

Since announcing last week that it was in exclusive negotiations to buy pubs from Orchid Group, Mitchells & Butlers has received Buy ratings from both Citigroup and Numis. Tuesday morning, Citigroup went further, adding the FTSE 250 pub chain to its Key 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: down 0.2% at 6,849.71

FTSE 250: down 0.1% at 16,069.78

AIM ALL-SHARE: down 0.1% at 811.79

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Hang Seng: up 0.7% at 23,232.34

Nikkei 225: closed up 0.7% at 15,034.25

DJIA: closed up 0.2% at 16,743.63

S&P 500: closed up 0.1% at 1,924.97

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GBP-USD: up at USD1.6759

EUR-USD: up at USD1.3605



GOLD: up at USD1,245.07 per ounce

OIL (Brent): up at USD108.83 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 Italy Unemployment

09:30 UK BOE Credit Conditions Survey

09:30 UK PMI Construction

10:00 EU Consumer Price Index

10:00 EU Unemployment Rate

14:45 US ISM New York index

15:00 US Factory Orders

15:00 US IBD/TIPP Economic Optimism

16:30 US 4-Week Bill Auction

21:00 US Total Vehicle Sales

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UK MAY NATIONWIDE HOUSE PRICE INDEX +0.7% M/M; +11.1% Y/Y; MAY NATIONWIDE HOUSE PRICE Y/Y RISE HIGHEST SINCE JUN 2007

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Ireland's manufacturing sector continued to show a sharp improvement in May, driven by robust output and new order growth that led to the fastest employment growth since late 1999, survey figures from Markit Economics showed. The seasonally adjusted Investec purchasing managers' index, or PMI, fell to 55.0 in May from 56.1 in April. Any reading above 50 indicates expansion in the sector.

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China's manufacturing sector contracted marginally in May, as output shrank slightly, while new orders stabilized after a three-month sequence of declines. The HSBC manufacturing Purchasing Managers' Index rose to 49.4 in May from 48.1 in April but down slightly from the earlier flash estimate of 49.7, final survey data from Markit Economics showed Tuesday.

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India's central bank decided to leave its key interest rates unchanged, but reduced the statutory liquidity ratio of banks. The repo rate, the rate at which the Reserve Bank of India lends to banks, was maintained at 8.00%.

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US President Barack Obama was due to arrive in Poland Tuesday, at the start of a four-day European trip that will also take in a G7 summit in Brussels and a visit to France, the White House said. He is set to meet Polish President Bronislaw Komorowski and Prime Minister Donald Tusk for talks expected to focus on the crisis in Ukraine, following Russia's annexation of the Crimea region in March. On Wednesday, talks are planned in Warsaw between Obama and the new Ukrainian president, Petro Poroshenko. The G7 summit, which Obama is to attend from Wednesday, was moved to Brussels after a G8 meeting hosted by Russia in Sochi was cancelled in the wake of events in Ukraine. The final leg of Obama's European trip will be in France, where he and European leaders will commemorate the World War II D-Day landings. Russian President Vladimir Putin is also due to attend the ceremonies, but the White House said no bilateral meeting was planned between the two leaders.

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The heads of the Russian energy company Gazprom and Ukraine's Naftogas reach a tentative deal in a row over gas supplies, EU Energy Commissioner Oettinger says, adding that a final round of negotiations would take place this week or next. "The two chief executives have a shared proposal for a bulk deal: for the resolution of unpaid invoices through a redemption plan and for an acceptable price for both sides to be charged in future," Oettinger says after three hours of talks in Brussels. The deal, reached in bilateral talks between the Russian and Ukrainian chief executives, would now be evaluated on a legal, financial and economic basis and in talks with both countries' governments, Oettinger says.

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Heavy fighting broke out Monday in the eastern Ukrainian city of Luhansk as NATO diplomats held talks in Brussels with Russia on the crisis. Pro-Russian separatists said at least five people were killed and at least 10 injured in an airstrike on their headquarters in the regional government building in central Luhansk, Russia's Interfax news agency reported.

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Syrian voters will head to polling stations Tuesday in areas under the control of government forces to vote for a president amid an ongoing war that has killed more than 162,000 people. The polls open at 7 am (0400 GMT) and close at 7 pm. An estimated 15.8 million Syrians are eligible to vote at 9,601 polling stations in the country, according to official figures. But not all the registered voters are likely to show up. According to UN agencies, more than 40% of Syria's pre-war population of 22.4 million has been displaced by the conflict.

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The US Justice Department announced a major initiative Monday in conjunction with global law enforcement partners, shutting down a massive spybot network that gleaned more than USD100 million from victims. While the Gameover Zeus network and the Cryptolocker malware scheme have been disabled for now, the alleged mastermind behind them, identified as Russian fugitive Evgeniy Bogachev, could reconstitute his system in a matter of weeks, the Justice Department said.

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The release of the US government's plan to reduce carbon emissions from electric utilities provoked condemnation Monday from business groups and Republicans in Congress who warned of the economic cost. The far-reaching plan aims to reduce carbon emissions from power plants by 30% below 2005 levels, by the year 2030. Each state or consortium of states would develop reduction plans that best suit their needs, the Environmental Protection Agency said. Power plants account for about one-third of US domestic greenhouse gas emissions, which are blamed for global warming.

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BROKER RATING CHANGES

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CITIGROUP ADDS MITCHELLS & BUTLERS TO 'KEY BUY LIST'

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GOLDMAN RAISES AB FOODS PRICE TARGET TO 2590 (1820) PENCE - 'SELL'

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GOLDMAN RAISES BRITISH AMERICAN TOBACCO PRICE TARGET TO 3630 (3470) PENCE

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BERENBERG RAISES BEAZLEY GROUP TO 'BUY' ('HOLD') - TARGET 278 (271) PENCE

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COMPANIES - FTSE 100

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AstraZeneca PLC announced that its investigational drug AZD0914 for the treatment of uncomplicated gonorrhoea had been granted 'fast track' status by the US Food and Drug Administration, while also providing details of the development of its oncology pipeline. The treatment has been granted fast tracked as gonorrhoea is becoming "increasingly resistant to existing antibiotics and poses a serious global public health threat", AstraZeneca said. This means that the drug will be eligible for priority review from the FDA, and a five-year extension on its market exclusivity if it is approved. After successfully rejecting a USD69.3 million takeover bid from US drugmaker Pfizer Inc, AstraZeneca has been presenting information on its oncology pipeline at the 50th American Society of Clinical Oncology Meeting in Chicago.

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Plumbing and heating products distributor Wolseley PLC reported higher trading profit for its fiscal third quarter, driven by strong growth in the US and Nordic countries, but adverse currency movements knocked GBP200 million off its revenue and GBP12 million off its profit. Wolseley reported trading profit of GBP153 million for the three months to April 30, up from GBP150 million a year earlier, as margin improvements offset a slight decrease in revenue to GBP3.12 billion, from GBP3.23 billion. However, profit from ongoing businesses would have been up 9.1% at constant currencies on a 6.0% rise in revenue.

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Wm Morrison Supermarkets PLC has fallen foul of the adjudicator of the groceries code after overcharging suppliers, the Financial Times reported. According to the FT, the Groceries Code Adjudicator stepped in after the supermarket debited 67 suppliers without their permission. The newspaper quoted a spokesman for Wm Morrison saying: "We mistakenly took payments from a small number of suppliers as we rolled out the programme and these were paid back as soon as we discovered the error. We made these refunds without any prompting."

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COMPANIES - FTSE 250

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John Wood Group PLC said it has been awarded a GBP36 million contract for the Stage 2 subsea development of BP PLC'sShah Deniz site, offshore Azerbaijan. The oil and gas engineering and services company said its subsidiary Wood Group Kenny was awarded the contract, which will cover engineering and project management services, by BP Azerbaijan under a 2007 agreement by the two companies.

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LondonMetric Property FY Pretax Profit GBP126.7M Vs GBP9M Loss; NAV Per Share 121P Vs 108P; FY Dividend Kept At 7.0P After Final Dividend Of 3.5P; Announces Three Disposals With Total Value Of GBP44.8M, Acquisition For GBP10.3M

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Pennon Group FY Pretax Profit GBP158.7M Vs Restated GBP13.6M; Revenue GBP1.32B Vs GBP1.20B; Total Dividend 30.31p Vs 28.46p

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Foxtons Group CEO Michael Brown Stepping Down For Personal Reasons, COO Nic Budden To Take Over

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DCC Buys Williams Medical For Cash, Enterprise Value GBP45 Million

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Tullett Prebon PLC is in advanced talks to appoint a successor to Chief Executive Terry Smith, the Financial Times reports, with former Nomura and Lehman Brothers executive John Phizackerley emerging as the leading contender to succeed him. Citing two people familiar with the situation, the FT said the nine month search, conducted by headhunters Spencer Stuart, is partially due to regulators requiring financial services companies to improve their succession plans.

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COMPANIES - ALL-SHARE AND AIM

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Porvair Expects To Report Interim Profit "Well Ahead" Of 2013, With Revenue Up 33% On Year; Says Underlying Revenue Expected To Be 8% Ahead At Interim, 11% At Constant Currency; Says Order Book For Second Half Is Healthy

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WYG Consortium Wins UK Government Contract In Libya; Contract Could Lead To Work Worth About GBP28 Million; FY Adjusted Pretax Profit GBP4.2M, Up From GBP0.7M; Revenue GBP126.9M, Up From GBP125.7M; Says Order Book Up 12% At GBP86.8M At March From GBP77.6M Year Earlier; Says Revenue And Profit Since FY End In Line With Expectations Amid Improving Trading Environment; Resumes Dividend Payments With 0.5p Final Dividend

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Severfield FY Underlying Pretax Profit GBP4.0M Vs GBP21.5M Loss; FY Revenue GBP231.3M Vs GBP231.3M; UK Order Book GBP168M On May 1, Was GBP172M On Nov 1; FY Dividend Nil Vs 1.5p

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Iofina Says Profitable In May For EBITDA And Net Profit; Says It Produced 40.5mt Of Iodine Compared With 21.8mt During April

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Punch Taverns Sells 5 Central London Pubs To Manica Properties For GBP9.7M Total Cash

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London Mining PLC said late on Monday that it has evacuated "non-essential" staff from its operations in Sierra Leone in response to a deadly outbreak of the Ebola virus. The exploration and development mining company said production at its Marampa mine had not been affected and it is working with local and international agencies to monitor the dangerous situation in west Africa.

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Tuesday's Scheduled AGMs/EGMs



Oxford Biomedica

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