News Column

TOP NEWS: UK Supermarket Shares Tumble On Kantar Figures

July 1, 2014



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

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COMPANIES

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The UK's biggest four supermarket chains continue to struggle to keep hold of their market share and sales, as the pressure from German discounters Aldi and Lidl mounts, according to the latest grocery share figures from Kantar Worldpanel. Among the UK's four biggest supermarket chains, Tesco PLC and Wm Morrison Supermarkets PLC saw drops in both market share and sales in the 12 weeks ended June 22, Kantar said, while US Walmart-owned Asda and J Sainsbury PLC increased both market share and sales. Upmarket supermarket chain Waitrose, part of the John Lewis Partnership, continues to see growth in sales and market share.

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St Modwen Properties PLC reported an increase in profit and revenue for the first-half, underpinned by recovery in the UK property market. The company, which specialises in regenerating brownfield land across the UK, posted pretax profit of GBP61.0 million for the six months ended May 31, up from GB45.6 million a year earlier. Birmingham-based St Modwen said the property market is beginning to pick up outside of London and the South East and confidence has returned. As a result, its housebuilding arm has gone from strength to strength with high interest and visitor levels leading to 121 completions during the period compared with 19 a year earlier.

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OcadoGroup PLC said it swung to a pretax profit in the first half of its financial year, driven by strong sales growth boosted by its tie-up with Wm Morrison Supermarkets PLC. The online retailer posted a pretax profit of GBP7.5 million for the 24 weeks to May 18, compared with a GBP3.8 million loss in recorded a year earlier. Gross retail sales in the first half of the year, rose 16%, with sales growth driven by an increase in average orders per week and in the number of customers, which it said partially offset a slight decline in the average order size. Whilst strong, sales growth slowed in the second quarter from the first quarter.

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VodafoneGroup PLC said its subsidiary Vodafone International Holdings BV has sold its entire shareholding in Vodafone Fiji Ltd for a cash consideration of GBP51 million. The subsidiary has sold its 49% stake in the company to the Fiji National Provident Fund. Vodafone said it expects to continue to have a presence in Fiji through a Partner Market agreement, following the deal.

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Optimal Payments PLC said it has agreed to buy payment processor TK Global Partners LP for USD210 million in cash and shares, while also snapping up online payments company Global Merchant Advisors Inc for up to USD15 million in cash, in two acquisitions that ramp up its US presence. In a statement, Optimal Payments said that it is to pay USD150.0 million in cash and USD60.0 million in shares for TK Global. Optimal Payments said it will pay USD10.0 million up front for Global Merchant Advisors, with the remaining USD5.0 million depending on performance targets. The payments company didn't name the sellers of privately-held Global Merchant Advisors, but said it expects both deals to close early in the third-quarter and said they are conditional on one another.

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MARKETS

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UK and European stocks have started July on the front foot, with stocks trading firmly higher, following the release of a raft of macro-economic data from Asia, Europe, and the UK. Mining stocks are leading following strong PMI readings from China, while UK supermarket shares are among the heaviest fallers, following the release of the Kantar market-share report.

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FTSE 100: up 0.5% at 6774.77

FTSE 250: up 0.4% at 15787.96

AIM ALL-SHARE: up 0.4% at 788.14

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The pound currently trades at a five-year high against the dollar after the release UK manufacturing data showed an expansion in UK manufacturing activity in June.

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GBP-USD: up at USD1.7139

EUR-USD: flat at USD1.3695



GOLD: flat at USD1326.32 per ounce

OIL (Brent): down at USD112.33 a barrel



(changes since end of previous GMT day)

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ECONOMICS AND GENERAL

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The UK manufacturing sector expanded at the second-highest pace in 40 months, survey results from Markit Economics showed. The headline Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index for manufacturing rose unexpectedly to 57.5 in June from 57 in May. It was forecast to fall to 56.8. The PMI has now signaled expansion throughout the past 16 months. The level of incoming new business rose at the fastest pace since November 2013 and to one of the greatest extents since the survey began in 1992.

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The Eurozone unemployment rate remained unchanged in May, latest figures from Eurostat showed. The jobless rate held steady at seasonally adjusted 11.6% in May after April's figure was revised down from 11.7%. Economists had forecast the unemployment rate to remain at 11.7%. The number of unemployed decreased by 28,000 from April to 18.55 million. Compared to last May, unemployment declined by 636,000

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The Chinese manufacturing purchasing managers' index, or PMI, rose to a six-month high in June after a weak start to the year, the results of a survey by the China Federation Of Logistics And Purchasing and the National Bureau of Statistics showed. The manufacturing PMI rose to 51 in June, in-line with economists' expectations, from 50.8 in May.

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Meanwhile, results of a survey by Markit Economics and HSBC Bank showed China's manufacturing activity rose for the first time in six months in June. The HSBC manufacturing purchasing managers' index, or PMI, rose to 50.7 in June, slightly below the consensus estimate of 50.8, from 49.4 in May. This marked the first signs of improvement since December 2013. New orders rose at its fastest rate in 15 months in June, partially due to the notable improvement in the health sector, and improved market conditions boosted sales. Output grew for the first time since January and the rate of growth was quickest since November 2013.

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Japan manufacturing activity rebounded in June on account of increases in output and new orders, results of a survey by Markit Economics and the Japan Materials Management Association (JMMA) revealed. The Markit/JMMA manufacturing purchasing managers' index increased to 51.5 in June, more than the flash estimate of 51.1, from 49.9 in May. This was the first expansion in three months.

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Business sentiment among large Japanese manufacturers weakened in June, the results of the Bank of Japan's quarterly Tankan survey showed Tuesday. The business confidence index for large manufacturers fell to 12 in three months ended June from 17 in the three months ended March. The index was forecast to come in at 15.

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The European Parliament began its new term, following polls in May, with the legislature expected to re-elect Socialist EU lawmaker Martin Schulz as president. The 58-year-old German had campaigned in the European elections as the Socialists' choice of European Commission president - a post that is now set to go to former Luxembourg premier Jean-Claude Juncker of the conservative European People's Party (EPP). Schulz is running for the parliament presidency against Syed Kamall of the European Conservatives and Reformists (ECR), Pablo Iglesias of the far-left GUE party and Ulrike Lunacek of the Greens. He also has the backing of the EPP, which remains the largest in parliament.

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Former French president Nicolas Sarkozy has been taken into custody by an anti-corruption police unit, reported AFP, citing investigators. There have been long-running investigations surrounding Sarkozy, focusing on possible illegal financing of his election campaign. Sarkozy's detention could last up to 24 hours.

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Ukrainian President Petro Poroshenko announced the resumption of a military offensive against pro-Russian separatists in eastern Ukraine after allowing a ceasefire to expire late Monday. In in a television address following a meeting with top security advisors, the pro-Western president said that Ukraine had spent 10 days showing the world "that we want to peacefully settle this foreign-provoked conflict." Poroshenko accused rebel forces of engaging in "criminal acts" to undermine the "unique opportunity" to implement his peace plan. Poroshenko did not rule out further negotiations with separatists, saying Ukraine was "open to a cease fire on a moment's notice" as soon as all sides show compliance with a peace agreement.

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The US has sent another 200 soldiers to Baghdad to secure the US embassy, its facilities and the international airport against rising instability in Iraq, the Pentagon said Monday. Since jihadist Islamic State in Iraq and the Levant (ISIL) insurgents took over an estimated third of the country in the north in early June, the US has been bolstering its embassy protection. The 200 soldiers, who arrived Sunday and Monday, are in addition to a force of 170 sent in recent weeks to shore up embassy security and the airport, with helicopters and a mobile medical team.

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Turkey's ruling Justice and Development Party (AKP) is expected to name Prime Minister Recep Tayyip Erdogan as its candidate for president in the August poll. The party will hold a lavish event in the capital Ankara to make the announcement. Erdogan has been premier since 2003. Under his leadership, the party he helped found has not lost an election.

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Source: Alliance News


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