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LONDON (Alliance News) - June has gotten underway Monday with a firm start for UK shares and with mergers and acquisitions once again the fore.
British American Tobacco said it has stuck a EUR550 million deal to acquire a set of central European assets. Its shares are up 1.2%.
In the FTSE 250, Playtech said it has reached an agreement to acquire troubled online contracts-for-difference trading platform Plus500 in a GBP459.6 million deal.
Under the deal, Playtech will pay 400 pence per share for Plus500, which has seen its revenue take a hit in recent weeks after it suspended some of its UK accounts as part of actions on its anti-money laundering processes.
Shares in Plus500 closed at 370 pence on Friday, having dropped by nearly 50% over the course of May owing to the concerns about the account suspensions. They are up 6.8% at 395.00p at the open Monday, following the announcement.
Playtech shares are trading down 3.9% at 798.00p.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.8% at 7,037.45
FTSE 250: up 0.5% at 18,241.89
AIM ALL-SHARE: up 0.3% at 775.04
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Hang Seng: up 0.9% at 27,678.72
Nikkei 225: closed flat at 20,569.87
DJIA: closed down 0.6% at 18,010.68
S&P 500: closed down 0.6% at 2,107.39
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GBP: down at USD1.5274
EUR: down at USD1.0938
GOLD: down at USD1,188.22 per ounce
OIL (Brent): down at USD64.98 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in BST)
Ireland June Holiday
08:45 Italy Markit Manufacturing PMI
08:50 France Markit Manufacturing PMI
08:55 Germany Markit Manufacturing PMI
09:00 EU Markit Manufacturing PMI
09:30 UK Markit Manufacturing PMI
13:00 Germany Consumer Price Index
13:30 US Personal Income, Spending and Consumption Expenditures
14:05 US Fed Boston President Rosengren Speech
14:30 Canada RBC Manufacturing PMI
14:45 US Markit Manufacturing PMI
15:00 US ISM Manufacturing PMI and Prices Paid
15:00 US Construction Spending
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Manufacturing body the EEF said the UK manufacturing industry is expected to grow at a slower than expected pace this year. Manufacturing growth is expected to be 1.5% in 2015 instead of the 1.7% projected three months ago. The sector is still in positive territory, but the ground is looking a lot less firm beneath its feet, EEF Chief Economist Lee Hopley said. The weakening trend looks set to continue, he added.
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The Confederation of British Industry said economic growth raced ahead in the three months to May at its strongest pace for a year. The growth indicator rose to +33% in three months to May, sharply up from 19% seen in three months to April. The indicator logged its highest balance since May 2014.
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The manufacturing sector in China continued to contract in May, the latest report from HSBC Bank showed on Monday, with a manufacturing PMI score of 49.2. That was in line with expectations, and it represented a slight upward revision from last month's flash estimate reading of 49.1. It was up from 49.9 in April, although it remains beneath the line of 50 that separates expansion from contraction in a sector. "The headline PMI signaled a further deterioration in the health of China's manufacturing sector in May. A solid fall in new export work contributed to fewer new orders, which in turn led to the first contraction of output in 2015 so far," said Annabel Fiddes, economist at Markit Economics.
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The manufacturing sector in Japan turned to expansion in May, the latest survey from Markit Economics showed, with a manufacturing PMI score of 50.9. That's unrevised from last month's flash estimate, and it's also up from the 49.9 reading in April.
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European officials expressed criticism on Saturday of a Russian blacklist of 89 people who have reportedly been banned from entering the country. Moscow has prevented several European politicians from travelling to Russia in recent months, citing a confidential blacklist of banned individuals, but without releasing information about the list. But details began to emerge on Friday, days after Russia turned away conservative German lawmaker Karl-Georg Wellmann, who chairs the German-Ukrainian group in parliament and has criticized Moscow over the conflict in eastern Ukraine.
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More than 5,000 migrants have been rescued from drowning in the Mediterranean Sea over the past three days, the EU border agency Frontex said. "This is the biggest wave of migrants we have seen in 2015," said Frontex Executive Director Fabrice Leggeri in a statement. The rescue operations began Friday, when 25 boats filled with people trying to escape conflict-torn Libya departed for Europe.
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The US Department of State spokesperson said Secretary John Kerry broke his right femur in a bicycling accident Sunday in Scionzier, France. Given the injury is near the site of his prior hip surgery, he will return to Bostonto seek treatment at Massachusetts General Hospital with his doctor who did the prior surgery. The Secretary is stable and never lost consciousness, his injury is not life-threatening, and he is expected to make a full recovery.
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The US Senate failed to extend key parts of anti-terrorism legislation during a rare session late Sunday, following a dispute over intelligence services reform and a controversial telephone metadata collection programme. Earlier Sunday, the National Security Agency (NSA) began the process of shutting down the phone metadata programme established under the Patriot Act.
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Re-elected FIFA president Joseph Blatter faces a long and difficult road to restore the credibility of football's ruling body amid European dissent and possibly more action against officials in connection with a US-led corruption probe. Many questions remain as to whether FIFA can reform itself at all now that Blatter has earned a fifth term in office at Friday's ballot at the FIFA congress in Zurich. FIFA was rocked by indictments on 14 people, including senior FIFA officials, on bribery and racketeering charges by authorities in the US. To date, seven have been arrested in Switzerland and one in Trinidad-Tobago. Separate from those indictments, another four defendants have pleaded guilty to US charges in connection with FIFA corruption. Prince William joined the debate as well in his function as president of the English FA around the FA Cup final Saturday. "Those backing FIFA, such as sponsors and the regional confederations, must do their bit to press these reforms - we are doing football and its fans no favours if we do not," he was quoted as saying.
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BROKER RATING CHANGES
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UBS CUTS HOMESERVE TO 'NEUTRAL' ('BUY') - TARGET 420 (385) PENCE
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Numis Initiates Lamprell With Buy, Price Target At 219p
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CITIGROUP RAISES LAMPRELL PRICE TARGET TO 155 (110) PENCE - 'NEUTRAL'
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COMPANIES - FTSE 100
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UK Financial Investments said it has extended the trading plan under which it is selling the UK government's stake in Lloyds Banking Group back to the market. The body said the plan will continue to be managed by investment bank Morgan Stanley and will now run until no later than the end of December 2015. The original plan, announced last December, was due to end on June 30. The plan includes a provision that up to 15% of the aggregate total trading volume in the bank be sold over the duration of the plan. So far, 4.2 billion Lloyds shares have been sold under the plan, leaving the UK government with about 13.6 billion shares, or a stake of just under 19%.
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British American Tobacco said it has stuck a EUR550 million deal to acquire TDR and other tobacco and retail assets from Adris Grupa to expand its central European operations. BAT said TDR is the leading independent cigarette manufacturer in central Europe, with a presence in the Croatian, Serbian and Bosnian markets. BAT said that by combining its existing businesses with TDR, it expects to boost its regional leaf-processing capabilities and strengthen its relationships with distributors and retailers in central Europe.
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AstraZeneca announced preliminary efficacy and safety data for AZD9291 in the first-line treatment of epidermal growth factor receptor mutation positive (EGFRm) advanced non-small cell lung cancer, or NSCLC. The company reported that the data showed that 81% of patients on a once daily dose of AZD9291 were progression free at 9 months; overall response rate was 73%. The most common adverse events in both cohorts included rash and diarrhoea.
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COMPANIES - FTSE 250
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SVG Capital said its net asset value per share rose 1% over the course of the first quarter of its financial year, while it received GBP287 million during the three months as it fully sold its remaining stake in fashion brand Hugo Boss and partially sold its stake in Arysta LifeScience. The private equity investor also said it expects to make at least one new investment commitment and further co-investments this year. SVG said its net asset value per share stood at 592 pence, or GBP1.1 billion, on April 30, up 1% compared with January 31 and up 15% compared with a year earlier. It reported a 2% total return on its net investment portfolio over the quarter, or a 4% total return excluding currency exchange rate fluctuations.
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Bank of Georgia Holdings said its healthcare subsidiary has struck a deal to acquire a 50% stake in a Tbilisi hospital. Bank of Georgia did not provide any financial details on the transaction, but said that its Georgia Healthcare Group unit will acquire a 50% equity interest in GNCo, which owns the High Technology Medical Center University Clinic in Tbilisi, the Georgian capital. The 450-bed hospital provides a range of in-patient and out-patient services, including the country's largest oncology radiotherapy department.
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Ultra Electronics Holdings said it has struck a deal to acquire the electronics products division of US-based radio frequency and microwave systems supplier Kratos Defense & Security Solutions for USD265 million. Ultra Electronics said the deal would give it a major presence in the electronic warfare market, in particular in the US, and said the long-term contracts it will take on as part of the deal will boosted its order book visibility.
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Entertainment One has denied reports that it is considering abandoning its London listing following comments made by its chief executive in an interview with The Sunday Telegraph. Darren Throop, the chief executive of the film and television company, which makes the Peppa Pig children's series, told the newspaper that the company is considering shifting its listing to New York in order to court more supportive investors. But a spokesperson for the company said the comments made by Throop did not suggest that a move was planned nor was it imminent.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Gulf Keystone Petroleum said it is in the process of appointing Jón Ferrier as its new chief executive officer. The oil and gas producer said that following a brief transition period, Ferrier will take over from John Gerstenlauer, who will retire after the company's annual general meeting. Ferrier joins from his role as the senior vice-president for business development, strategy and commercial at Danish conglomerate AP Moller–Maersk Group's Maersk Oil subsidiary.
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New World Resources announced numerous changes to its board including the appointment of Dale Ekmark as the company's new chief executive from the start of 2016, as the miner's chief financial officer also resigned. The company, which does not currently have a chief executive, said Ekmark is the Managing Director of OKD, which is a division of the company's NWR Holdings subsidiary focused on the production of coal from four mines in the Czech Republic. Ekmark will remain as managing director of the division.
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SnackTime said Chief Financial Officer Tim James will step down from his role on September 30. The vending machine specialist said it has commenced the search for a replacement for James, who is leaving the company to "pursue other interests".
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Sunrise Resources said it will refocus its drilling programme at the Bay State silver project in the US state of Nevada onto the Chihuahua vein after the latest test results produced "bonanza" silver grades.
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COMPANIES - INTERNATIONAL
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Chip maker Intel is expected to announce a plan Monday to buy programmable chip maker Altera for about USD17 billion, the Wall Street Journal reported. The report said Altera stockholders will receive about USD54 per share, around the price the company rejected in April during an earlier round of talks.
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Citigroup is expected to shut down Banamex USA, a California unit that specializes in moving money across the southern US border and has been battered by accusations of weak money-laundering controls, the Wall Street Journal reported citing people familiar with the matter.
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General Electric launched the bidding process for a USD40 billion portion of its US commercial-lending operation, the Wall Street Journal reported. As part of its continuing effort to sell off the bulk of its USD500 billion financial-services arm, GE Capital, the conglomerate is reportedly seeking buyers for the US portions of its dealer-financing and corporate-finance businesses, which provide loans for equipment purchases and truck vendors, as well as leasing and asset-backed loans for midsize businesses. GE reportedly said the lending units account for slightly more than half the USD74 billion in loans and other assets at its US-based commercial-lending operation.
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Monday's Scheduled AGMs/EGMs
Billington Holdings
Keyword Studios
Silence Therapeutics
CPP Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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