News Column

UK MORNING BRIEFING: Admiral And Glencore Weigh On FTSE 100

August 13, 2014

Tom Waite



LONDON (Alliance News) - UK shares have opened mostly lower Wednesday ahead of some key UK and international data and the Bank of England's Inflation Report.



Admiral Group andGlencore are leading FTSE 100 losers at the open.



Insurer Admiral said Chief Financial Officer Kevin Chidwick is handing his duties over to his deputy in order to focus on his role in the US as chief executive of the group's Elephant Auto Insurance business, while also reporting higher interim profit.



Metals giant Glencore reported higher copper, ferrochrome and oil production in the first half of the year as it ramped up output at some mines and oil facilities, although zinc and nickel production was down on the year as other mines depleted reserves or were placed on care and maintenance.



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

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MARKETS

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FTSE 100: down 0.1% at 6,627.37

FTSE 250: down 0.2% at 15,429.94

AIM ALL-SHARE: flat at 755.65

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Hang Seng: up 0.2% at 24,744.51

Nikkei 225: closed up 0.4% at 15,213.63

DJIA: closed down 0.1% at 16,560.54

S&P 500: closed down 0.2% at 1,933.75

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GBP-USD: up at USD1.6820

EUR-USD: down at USD1.3352



GOLD: flat at USD1,308.50 per ounce

OIL (Brent): down at USD102.58 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)



09:30 UK ILO Unemployment Rate and Claimant Count

10:00 EU Industrial Production

10:00 Switzerland ZEW Survey

10:30 UK Bank of England Quarterly Inflation Report and Governor Carney speech

12:00 US MBA Mortgage Applications

13:30 US Retail Sales

14:05 US Federal Reserve's William Dudley speech

14:20 US Federal Reserve Bank of Boston President Rosengren Speech

15:00 US Business Inventories

15:30 US EIA Crude Oil Stocks change

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A convoy of Russian aid was due to reach embattled eastern Ukraine early Wednesday, amid requests from Kiev that the 280 trucks be searched for military gear and threats to block the delivery. The Ukrainian government has said it fears the Russians could be supplying arms to separatists, under the guise of supplying 2,000 tons of food and medicine to civilians in the areas held by the rebels. Kiev has requested that the trucks be unloaded at the border, and the goods transferred to vehicles of the International Committee of the Red Cross.

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Iraq's outgoing Prime Minister Nuri al-Maliki moved Tuesday to quell worries that he would use the armed forces to hold onto power. The Shiite strongman, who has insisted he is entitled to form the next government, told army officers that they should not intervene in Iraq's political crisis, according to a report of the meeting on his office's website. Rival politician Haidar al-Abadi was asked Monday to form a new government by the new President Fouad Massoum. Al-Maliki, who has served two terms as prime minister since 2006, is widely blamed for failing to unite Iraq's religious and ethnic groups. That failure, critics say, opened the way for Islamic State (IS) jihadists to take over much of northern Iraq.

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Indirect negotiations between Israeli and Palestinian officials on a comprehensive and lasting ceasefire agreement resumed in Cairo on Tuesday, the second day of a 72-hour truce in the Gaza Strip. Israeli Defence Minister Moshe Yaalon warned that if no agreement was reached by Wednesday the ceasefire would have to be extended or fighting would resume.

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German inflation eased as estimated to its lowest level since early 2010, final data from Destatis showed. The overall consumer price index went up 0.8% yearly in July, after the 1.0% increase in the previous month. The rate came in line with the flash estimate. Food prices grew 0.1% annually in July and that of clothing and footwear rose by 0.8%. Household energy costs dipped by 0.7%. Month-on-month, consumer prices increased 0.3% in July as expected, same as in the previous month.

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Germany's wholesale prices declined at a slower rate in July, a report from the statistical office Destatis showed. Wholesale prices fell 0.7% year-over-year in July following the 0.8% drop in June. This was the slowest rate of decrease since July 2013.

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China's industrial production and retail sales grew at slower pace in July, data from the National Bureau of Statistics showed. Industrial production grew 9% in July from last year. The annual rate was forecast to ease marginally to 9.1% from 9.2% in June. Retail sales growth slowed for the second straight month in July. Retail sales advanced 12.2% on a yearly basis in July, following June's 12.4% increase. The rate was also below expectations of 12.5%. Another report showed that fixed asset investment in China increased 17% from January to July compared to 17.3% in January to June period.

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Japan's gross domestic product contracted 6.8% on year in the second quarter of 2014, the Cabinet Office said in Wednesday's preliminary reading. The reading marked the country's worst decline since the earthquake and tsunami in 2011, due in large part to a sharp decline in consumer spending following the implementation of a consumption tax hike in April. Still, the headline figure beat forecasts for a decline of 7.1% following the downwardly revised 6.1% gain in the first quarter (originally 6.7%).

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BROKER RATING CHANGES

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PANMURE INITIATES CHEMRING GROUP WITH 'BUY' - TARGET 328 PENCE

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CITIGROUP CUTS INTERNATIONAL PERSONAL FINANCE PRICE TARGET TO 650 (700) PENCE

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GOLDMAN RAISES BELLWAY PRICE TARGET TO 2253 (2160) PENCE - 'BUY'

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COMPANIES - FTSE 100

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Metals giant Glencore PLC reported higher copper, ferrochrome and oil production in the first half of the year as it ramped up output at some mines and oil facilities, although zinc and nickel production was down on the year as other mines depleted reserves or were placed on care and maintenance. The company said own-sourced copper production was up 13% on the year in the six months to June 30 to 741,000 tonnes, driven by a ramp up of its Mutanda mine and improved production at Collahuasi. However, output was down 12% on the second half of 2013 due to lower head grades caused by mine sequencing at Collahuasi and Antamina and planned maintenance shut downs at its Collahuasi, Mount Isa and Mopani mines.

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AstraZeneca PLC said it has seen positive top-line results from Phase III clinical trails of combination treatments of its compound lesinurad with xanthine oxidase inhibitors for the treatment of patients with symptomatic gout. The first two trials investigated the potential of a lesinurad combination with xanthine oxidase inhibitor allopurinol in patients not meeting target levels of serum uric acid. In both of these trials the combination met its primary endpoint at both a 200 milligram and 400 milligram dose.

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Petrofac Ltd said it has won a USD500 million contract from a subsidiary of Malaysia's national oil and gas company for a refinery package in the Pengerang project in Johor, Malaysia. The FTSE 100-listed oil services company said the engineering, procurement, construction and commissioning contract has been awarded by PRPC Refinery & Cracker Sdn Bhd, a subsidiary of Petroliam Nasional Berhad, or Petronas.

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Security company G4S PLC said it swung back to a profit in the first half of the year as revenue rose and it didn't repeat the write offs and impairments that weighed on last year's results, but Chief Executive Ashley Almanza said the company's turnaround remains a work in progress. The company swung to a pretax profit of GBP85 million in the six months to June 30, compared with a loss of GBP94 million a year earlier when it had booked GBP124 million of impairment charges after a review of its operations and a writedown on some unprofitable contracts. Excluding those charges and restructuring charges, its profit before interest, tax and amortisation rose to GBP185 million, from GBP175 million, as revenue rose to GBP3.37 billion, from GBP3.25 billion. The company kept its interim dividend unchanged at 3.42 pence a share.

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Two of London's biggest listed property firms, British LandCompany PLC andLand SecuritiesGroup PLC, said they have reshaped their shopping centre portfolios. Land Securities said it has sold its 50% stake in Cabot Circus Shopping Centres, Friars Quake and surrounding shops in Bristol to AXA Real Estate in a deal worth GBP267.8 million. FTSE 100-listed Hammerson PLC owns the remaining stake. Meanwhile, British Land said it has fully pre-let its new GBP19 million extension at Clifton Moor Shopping Park in York, increasing the occupancy and value of the park.

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Admiral Group PLC said Chief Financial Officer Kevin Chidwick is handing his duties over to his deputy in order to focus on his role in the US as chief executive of the group's Elephant Auto Insurance business, as the insurer looks to build up its international business. News of the change came alongside interim results for the six months ended June 30, in which Admiral reported an increase in pretax profit to GBP183.3 million from GBP181.4 million in the corresponding period a year earlier, helped by an 8% increase to GBP207.7 million in UK car insurance pretax profit. Admiral increased its interim dividend to 49.4 pence per share from 48.9p.

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COMPANIES - FTSE 250

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BetfairGroup PLC said it has sold its 50% stake in Betfair Australasia Pty Ltd to its joint venture partner Crown Resorts Ltd and has signed a deal with Crown to continue providing its betting exchange in the region under a business-to-business model. Crown will pay AUD10 million for Betfair's stake in the joint venture. Under the terms of the B2B agreement, Betfair will receive a share of revenues generated by its betting exchange in Australasia.

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Environmental utility infrastructure company PennonGroup PLC said full year earnings before interest, taxation, depreciation and amortisation for its struggling waste business Viridor will exceed the previous year, despite the unit's earnings in the first half being affected by the decline of the landfill business. In an interim management statement for the period since March 31, the company said it expects Viridor's earnings before interest, taxation, depreciation and amortisation in the second half to increase significantly with five energy-recovery facilities scheduled to come on stream.

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Evraz PLC said it has signed a USD425 million syndicated pre-export credit facility with a syndicate of banks to refinance its existing debt pile. The Russian steel maker said the five-year deal has been secured for its Consolidated West Siberian Metallurgical Plant and Nizhny Tagil Metallurgical Plant operations. It will pay interest of LIBOR plus a margin calculated to Evraz's net leverage ratio, currently set at 3.5 percentage points.

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EnQuest H1 Pretax Profit USD284M, Revenue USD503.8M; H1 Production Up 18% To 25,292 BOEPD; Maintains FY Average Production Guidance

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Michael Page H1 Pretax Profit GBP35.6M Vs GBP32.0M; Revenue GBP512.2M Vs GBP503.2M; Interim Dividend 3.42p V 3.25p; Says Currency Movements Wiped GBP19M Off Gross Profit; Expects FY To Be In Line With Market Expectations

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Brit PLC H1 Gross Written Premiums GBP701.2M Vs GBP671.2M; Combined Ratio 88.3% Vs 86.2%; Interim Dividend 6.25p

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COMPANIES - LONDON MAIN MARKET AND AIM

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The proposed merger of Irish banana distributor Fyffes PLC with Chiquita is under threat after Brazilian orange producer Cutrale made a cash counter-offer for the US company, the Financial Times reported. The all-share merger proposed by Fyffes would create a global fruit operator with combined sales of around USD4.5 billion. Cutrale's cash bid of USD611 million throws that deal into doubt and could force Fyffes to reconsider its strategy. The merger of Chiquita and Fyffes, unveiled in March, would allow the pair to battle against narrowing profit margins for fruit distributors, caused by price wars among supermarkets. The collapse of the tie-up would force Fyffes to reconsider its plans.

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West African-focused gold miner Amara Mining PLC saw its shares push higher in early trade on after the group reported exceptional drilling results from the Yaoure Gold Project in CÔte d'Ivoire. The company said the latest 15 diamond drill results showed exceptional intercepts, demonstrating high-grade areas in the Yaoure central zone and the presence of mineralisation in 'information gaps'.

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Hutchinson China MediTech Ltd said an independent data safety and monitoring committee had recommended that a Phase III trial of its HMPL-004 treatment for ulcerative colitis be terminated following an interim analysis of the trial. The trial is being conducted by Hutchinson's joint venture with NestlÉ Health Science SA, Nutrition Science Partners. The independent committee evaluated the data of two doses of the compound compared to a placebo. Hutchinson said that no meaningful safety signals or risks for patients were identified, and further analysis and review of the data will be conducted.

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DaisyGroup PLC said it has received a preliminary takeover approach from a consortium consisting of Toscafund Asset Management LLP, Penta Capital LLP and Daisy Chief Executive Matthew Riley. The communications company said it received an approach of 190 pence per share from the consortium July 27. Daisy said that it has convened an independent committee of the board to engage in preliminary discussions with the consortium.

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Coalfield Resources Swings To Pretax Profit Of GBP3.2M Vs GBP0.1M Loss

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Lookers H1 Pretax Profit GBP37.7M Vs GBP27.4M, Up 38%; Revenue GBP1.6B Vs GBP1.24B, Up 29%; Interim Dividend Up 10% To 0.97P Vs 0.88P; Confident Of Delivering Improved FY Results

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Eckoh CEO: Current Trading In Line With Market Expectations; 'Significant' Rise In Revenue, Margins In First Half

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UK Oil & Gas Investments Buying 12.5% Equity Interest In Horse Hill Development; Acquistion Takes Horse Hill Stake To 20%

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SagaBuys Majority Of Destinology Ltd, With Option To Buy Rest; Funds Online Travel Firm Acquisition From Existing Cash Resources

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Wednesday's Scheduled AGMs/EGMs



African Minerals

Mountview Estates

Real Estate Credit Investments

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Source: Alliance News


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