LONDON (Alliance News) - Two profit warnings and continued worries about Ukraine and Russia have depressed UK share prices at the open Friday.
Both Petrofac and Drax Group issued profit warnings prior to the open. Petrofac is down 15% at the open, while Drax is off 2.9%.
Meanwhile, there was mixed news for Rolls-Royce shares. The company said it has won orders from a variety of international customers for its offshore ship designs and equipment worth more than GBP60 million, but Barclays analysts have cut the stock straight to Underweight from Overweight, reducing its price target to 930 pence from 1,225p.
Rolls-Royce was quoted at 996.50p early Friday, down 1.6%.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.3% at 6,820.20
FTSE 250: down 0.4% at 15,909.85
AIM ALL-SHARE: down 0.3% at 808.49
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Hang Seng: down 0.2% at 21,800.81
Nikkei 225: closed up 0.3% at 14,199.59
DJIA: closed up 0.2% at 16,550.97
S&P 500: closed down 0.1% at 1,875.63
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GBP-USD: down at USD1.6930
EUR-USD: down at USD1.3830
GOLD: down at USD1,290.36 per ounce
OIL (Brent): up at USD108.28 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times British Summer Time)
09:00 Italy Industrial Output
09:30 UK Industrial Production
09:30 UK Trade Balance
09:30 UK Goods Trade Balance
13:30 Canada Unemployment Rate
15:00 UK NIESR GDP Estimate
15:00 US Wholesale Inventories
23:00 US Fed Minneapolis's Narayana Kocherlakota speech
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China's consumer price inflation slowed to 1.8% year-on-year in April, down from 2.4% in March, the government said. The fall was mainly driven by slower growth in food prices, which climbed 2.3% year-on-year last month, compared with 4.1% in March, the National Bureau of Statistics reported. Food prices account for nearly one-third of China's consumer price index. The index rose 2.2% year-on-year in the first four months of this year, the bureau said, well within the government's target of keeping annual inflation to a maximum of 3.5%.
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German exports declined for the second straight month in March, data from Destatis showed. Defying expectations, exports fell 1.8% month-on-month in March, sharper than the 1.3% fall seen in February. Shipments were expected to rise by 1.3%. At the same time, imports declined 0.9%, reversing a 0.4% rise in February. Economists had forecast 0.6% increase for March. As a result, the trade surplus declined to seasonally adjusted EUR 14.8 billion from 15.8 billion in February. The surplus was forecast to rise to EUR 17.4 billion.
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Russia was marking the Soviet victory over Nazi Germany in World War II with a parade featuring military hardware on Friday, one day after missile-testing drills showcasing its might raised tensions with Ukraine. President Vladimir Putin, who is overseeing the parade on Red Square, might also visit Crimea, the Black Sea peninsula that Russia annexed from Ukraine in March.
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The Ukrainian leadership is calling on all political forces in the country to take part in a national dialogue. The government in Kiev says it will not negotiate with pro-Russian armed rebels in eastern Ukraine. The goal of the dialogue would be national consensus decentralization of power, protection of minorities and reforms of security and justice structures. The Organization for Security and Cooperation in Europe should supervise the process, the government under interim Prime Minister Arseniy Yatsenyuk says in a joint declaration late Thursday.
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Russian Energy Minister Alexander Novak says that crisis-stricken Ukraine will have to pay in advance for its gas needs because of billions of dollars in outstanding debt. The minister said in a statement late Thursday that Ukraine has missed its May 7 deadline to repay approximately USD3.5 billion owed, and that the pre-payment regime is set to take effect in June.
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Bangkok braced for more rallies from Friday in the wake of a court's decision to dismiss the caretaker Prime Minister Yingluck Shinawatra and several cabinet members this week. "The time is now to take back our country," protest leader Suthep Thuagsuban told anti-government protesters late Thursday. "This is the final battle, brothers and sisters." The Constitutional Court Wednesday removed Yingluck from office, ruling that her transfer of a top security official in 2011 in favour of her brother in law breached the constitution.
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South Africa's ruling African National Congress has won a resounding victory, despite a slight loss of support, in this week's elections, preliminary results showed with votes counted in more than 94% of voting districts Friday. The ANC had 62.5% of the vote, down from 65.9% in the 2009 elections. The main opposition Democratic Alliance (DA) made strong gains in Wednesday's voting, raising its share of the vote to about 22% from 16.7%.
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Global outrage against the abduction of more than 200 Nigerian girls by Islamist militant sect Boko Haram heated up Thursday, as a social media campaign drew worldwide support. The hashtag #BringBackOurGirls was retweeted more than 1 million times by Thursday, after US First Lady Michelle Obama and Pakistani schoolgirl Malala Yousafzai, who survived a Taliban assassination attempt, joined the campaign.
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A construction worker died Thursday of electrocution while working on the Arena Pantanal stadium in Cuiaba, Brazil, which is to host four matches during the World Cup, Brazilian media reported. Mohamed Ali Maciel Afonso, 32, became the eighth worker killed in stadium construction ahead of the World Cup in Brazil, which starts June 12. Maciel was an employee of the firm ETEL, which is in charge of a portion of telecommunications work at the stadium.
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BROKER RATING CHANGES
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BARCLAYS CUTS ROLLS-ROYCE TO 'UNDERWEIGHT' ('OW') - TARGET 930 (1,225) PENCE
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UBS REMOVES ICAP FROM 'MID CAP KEY CALL LIST' - 'BUY' - TARGET 720 PENCE
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UBS CUTS SERCO TO 'SELL' ('NEUTRAL') - TARGET 300 (400) PENCE
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UBS REMOVES IG FROM 'SMALL + MIDCAP KEY CALL' LIST - STILL 'BUY'
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BARCLAYS RESUMES MONITISE PLC WITH 'OVERWEIGHT' - TARGET 75 PENCE
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CREDIT SUISSE RAISES INTERTEK TO 'OUTPERFORM' ('NEUTRAL'); RAISES PRICE TARGET TO 3,500 (3,200) PENCE
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COMPANIES - FTSE 100
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Rolls-Royce Holdings PLC said it has won orders from a variety of international customers for its offshore ship designs and equipment worth more than GBP60 million. In a statement, the aircraft engine and ship propulsion maker said the deals include five Rolls-Royce UT design vessels and propulsion equipment packages for research and seismic survey vessels.
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Petrofac Ltd said it has achieved good Engineering, Construction, Operations & Maintenance progress in its first quarter, but it warned that net profit will fall in 2014 due to lower-than-expected earnings from its Integrated Energy Services operations, due partly to delays in development of is major Greater Stella Area project. The oil and gas services company said it now expects its net profit to fall to between USD580 million and USD600 million in 2014 from USD650 million in 2013, which it attributed to low earnings from the Integrated Energy Services division.
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International Consolidated Airlines Group predicted that its operating profit will rise in 2014, after its operating loss almost halved in the first quarter as the continued restructuring of Iberia drove down losses at the Spanish airline. The parent of British Airways and Spanish airlines Iberia and Vueling said it now expects its 2014 operating profit to be at least EUR500 million above the EUR770 million it booked in 2013. It reiterated that it expects revenue to remain relatively flat, but cost cutting will push up its profit margin.
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Friends Life Halts Ambition To Grow Value New Business By 10% In 2014; Expects 2014 To Remain Challenging For FPIL, VNB And Lombard; Q1 Group New Business Profitability GBP32M, Down From Restated GBP38M Year Before; Total Assets Under Administration GBP40.3B On Mar 31, Up From GBP39.6B Year Earlier; Says Individual Annuity Business Better Than Expected Following UK Budget; Says 48% Of Individual Annuity Customers Going Ahead With Purchase, 15% Cancelling, 37% Undecided
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British Land PLC said it has completed its first letting at Marble Arch House, London in a deal with Fulcrum Asset Management. The ten-year lease at GBP78.50 per square foot per year comes just a month after British Land launched the building. The site near Marble Arch tube station consists of 61,200 square feet of new office space spread over seven floors, and 15,000 square feet of retail space. Fulcum will occupy the 9,000 square feet fifth floor, making the lease worth GBP706,500 per year. British Land acquired Marble Arch House from the Portman Estate in 2011.
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COMPANIES - FTSE 250
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Closed-ended investment company 3i Infrastructure PLC said its net asset value per share increased for the full year, but its total return dipped slightly as its India Fund was beset by a number of problems. The Jersey-incorporated company, which invests in infrastructure businesses and assets, said its net asset value per share rose to 126.4 pence at March 31, from 125.2 pence in 2013. 3i Infrastructure generated a total return of GBP71 million for the year, or 6.6% on opening net asset value, compared with a total return of GBP89.1 million, or 8.6% on opening net asset value, in 2013.
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Grafton Group Says Trading In First Four Months Of Year Positive; Revenue GBP654M Vs GBP576M In First Four Months
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Drax Group Says Expects 2014 EBITDA And EPS To Be Below Current Market Forecasts; Says Power Prices Have Fallen Further Since Feb 18 Results Statement; Sees Further Weakness In Renewables Obligation Certificate Prices In 2014; Says Legal Advice Confirms Has Good Foundation To Challenge UK Govt CfD Decision, Has Initiated Proceedings; Has Agreed New Private Placement For GBP100M With Funds Managed By M&G Investments
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Morgan Advanced Materials: Revenue Broadly Flat At Constant Currency; FY Trading Expectations Unchanged But For Currency Moves; Trading Conditions In First 4-Mo Year In Line
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Bank of Georgia Holdings Q1 Pretax Profit GEL63.9M Vs GEL50.5M
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Man Group Funds Under Management Rise To USD55.0B From USD54.1B In Q1; Q1 Net Inflows USD2.0B
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Tullett Prebon Acquires PVM Oil Associates Limited In Deal Worth USD160M; Says Financial Markets Activity Remained Subdued Since 2014-Start; Revenue In 4-Mo To April GBP248.0M, 15% Lower
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COMPANIES - ALL-SHARE AND AIM
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Johnston Press Confirms GBP360.0M Capital Refinancing Plan; To Raise GBP2.3M In Placing, GBP137.7M In Share Issue; To Raise GBP220M By Issuing New Bonds; To Get New GBP25M Revolving Credit Facility; Sets Regional Advertising Partnership With Sky; Says Digital Revenue Have Continued To Grow In Line With H2 2013; Says Print Advertising Revenue Decline Slowing; Says Circulation Revenue Continues To Decline In Line With 2013
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Range Resources Decides To Make Partial Withdrawal From Colombia; Relinquishes Investment Obligations On PUT-7 Block In Colombia
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Chemring Acquires Ground Penetrating Radar Tech Firm 3d-Radar For USD3M
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First Quantum Minerals And Petaquilla Minerals Amend Commercial Agreement; First Quantum Minerals Subsidiary To Pay Petaquilla Up To USD60M For Transfer Of Assets
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T Clarke Says Trading In 2014 In Line With Expectations
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Ithaca Energy Says Strong Flow Tests Achieved On 2nd Stella Development Well
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Keywords Studios To Acquire Italian Firm Binari Sonori For EUR13M; Looking To Raise GBP6M In Share Placing
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Metminco Says Not Aware Of Reason For Share Price Move, Increased Volumes
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LMS Capital To Return Up To GBP40M To Shareholders In Third Tender Offer
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TT Electronics: Sales In First 4 Months Of 2014 Were In Line With Expectations
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Friday's Scheduled AGMs/EGMs
Man Group
Communisis
TT Electronics
Tullett Prebon
T Clarke
Clarkson
Morgan Advanced Materials
RSA Insurance Group
Baillie Gifford Shin Nippon
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
3 Feb 2016 12:10
