Last checked at LONDON (Alliance News) - Share prices have opened slightly lower Friday, as European markets prepare for a second tense weekend for the Greek debt crisis, as the country holds a referendum on its bail-out terms on Sunday.
However, trading likely to be light Friday, as US markets are closed for the Independence Day holiday.
Shares in oil giant BP are once again near the top of the FTSE 100, up 1.5% at the open, following its announcement on Thursday afternoon of a USD18.7 billion settlement with US authorities for the Deepwater Horizon spill in the Gulf of Mexico in 2010. The stock added 4.5% on Thursday, and early Friday also was benefiting from rating upgrades from JPMorgan and S&P Capital IQ.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 6,622.60
FTSE 250: down 0.2% at 17,647.29
AIM ALL-SHARE: up 0.3% at 763.86
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Hang Seng: down 0.5% at 26,144.37
Nikkei 225: closed up 0.1% at 20,539.79
DJIA: closed down 0.2% at 17,730.11
S&P 500: closed flat at 2,076.78
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GBP: flat at USD1.5610
EUR: up at USD1.1097
GOLD: up at USD1,167.40 per ounce
OIL (Brent): flat at USD61.71 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 in BST)
holiday US Independence Day
08:45 Italy Markit Services PMI
08:50 France Markit Services and Composite PMI
08:55 Germany Markit Services and Composite PMI
09:00 EU Markit Services and Composite PMI
09:30 UK Markit Services PMI
10:00 EU Retail Sales
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Prime Minister Alexis Tsipras urged Greeks to preserve "national unity" in the face of "temporary" difficulties, while the International Monetary Fund said Athens would be dependent upon bailout aid for years to come. Tsipras has urged Greeks to opt for "no" on Sunday when they vote in a referendum he called on whether the country should accept reforms demanded by its creditors. "The next day we will all be one in our efforts for our country to overcome, as soon as possible, this economic crisis," he said in a Defence Ministry speech. But the IMF warned in a 23-page debt assessment that Greece's problems are far from over, arguing that Athens will need a further EUR50 billion in funding to get through the end of 2018.
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Ireland's service sector expanded at the fastest pace in almost nine years in June, driven by continued gains from improvements in economic conditions, survey figures from Markit Economics and Investec showed. The Investec services Purchasing Managers' Index rose to 63.3 in June from 61.4 in the previous month. A reading above 50 indicates expansion in the sector. The services activity increased at the strongest pace since September 2006.
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China's securities market regulator said it has opened an investigation into suspected market manipulation as stocks opened lower again Friday. The China Securities Regulatory Commission said it has set up a team to look for "clues of illegal manipulation across markets" and irregularities between securities and futures trading. "Those suspected of a crime will be resolutely transferred to the police for investigation," spokesman Zhang Xiaojun said in comments on the regulator's official microblog. The move comes after the benchmark Shanghai Composite Index has tumbled 28% since a peak on June 12.
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The services sector in China continued to expand in June, but at a slower pace, the latest PMI from HSBC Bank showed, with a PMI score of 51.8. That's down from 53.5 in May, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The composite index came in at 50.6, down from 51.2 in the previous month and touching a 13-month low.
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The services sector in Japan continued to expand in June, and at a faster rate, the latest Nikkei Services PMI showed, with an eight-month high score of 51.8. That's up from 51.5 in May.
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Iran sent mixed messages on whether it is ready to accept intrusive nuclear inspections foreseen in a deal with six world powers, following a visit by International Atomic Energy Agency chief Yukiya Amano in Tehran. Amano was expected to report back Friday in Vienna to the group of six, which are negotiating with Iran on scaling back the Islamic republic's nuclear programme and allow deep scrutiny by IAEA inspectors, in return for sanctions relief.
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An airstrike has killed a leading Islamic State fighter in Syria, the Pentagon said. Tunisian militant Tarik bin Tahar al-Awni al-Harzi was killed in Syria near the border with Iraq on June 16. His death would make it harder for Islamic State to move weapons and fighters in and out of Iraq and Syria, Pentagon spokesman Jeff Davis said in a statement.
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Syrian opposition rebels launched a large-scale attack on regime strongholds in the northern province of Aleppo, killing and wounding some 80 people, a monitoring group said. "This is the heaviest attack by rebel forces Aleppo has witnessed since two years, as more than 400 shells fell on regime-held areas in Aleppo," Rami Abdel Rahman, head of the Syrian Observatory for Human Rights, told dpa.
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US President Barack Obama traveled to Wisconsin to tout his recently announced plan to provide more overtime pay for US workers. In remarks from the University of Wisconsin at La Crosse, Obama argued that recent upbeat jobs data is a sign that middle-class economics works. Obama highlighted the proposal he announced earlier this week that would increase the threshold for receiving overtime pay from USD23,660 to USD50,440, affecting nearly 5 million workers.
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BROKER RATING CHANGES
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UBS RAISES BAE SYSTEMS TO 'BUY' ('NEUTRAL') - TARGET 510 (540) PENCE
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JPMORGAN RAISES BP TO 'OVERWEIGHT' ('NEUTRAL') - PRICE TARGET 475 (450) PENCE
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S&P CAPITAL IQ RAISES BP TO 'HOLD' ('SELL') - PRICE TARGET 460 (430) PENCE
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JPMORGAN RAISES COBHAM TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 295 (305) PENCE
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COMPANIES - FTSE 100
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The Royal Bank of Scotland Group could face a penalty of as much as USD13 billion depending on the outcome of a US mortgage securities lawsuit, Bloomberg News reported. According to the report the US Federal Housing Finance Agency, which is suing on behalf of Fannie Mae and Freddie Mac, estimated that amount in a court filing in a related case.
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Anglo-Dutch consumer goods giant Unilever said it has agreed to buy US skincare company Murad. Terms of the deal were not disclosed. Founded in 1989 in Los Angeles, Murad, which had a turnover of USD115m in 2014, will be incorporated into Unilever's Prestige division. The Murad deal follows Unilever's recent acquisitions of Dermalogica, Kate Somerville and REN.
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Ofcom has fined mobile operator EE GBP1 million for failing to comply with rules on handling customer complaints, the UK media and communications regulator said. EE is currently in the process of being acquired by telecoms company BT Group. The Ofcom investigation found EE did not provide certain customers with accurate or adequate information about their right to take their complaint to an alternative dispute resolution during the period under review, which covered July 22, 2011 to April 8, 2014.
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GlaxoSmithKline's ViiV Healthcare signed a strategic manufacturing agreement with Desano Pharmaceuticals on Thursday for the manufacturing of dolutegravir, ViiV's HIV medicine. The agreement will offer an additional source of the dolutegravir active pharmaceutical ingredient and will allow ViiV to offer a competitive supply of the finished product, marketed under the name Tivicay, for China and a number of developing countries, subject to national approvals.
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COMPANIES - FTSE 250
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Ferrexpo said pellet production rose in the second quarter and in the first half as the company continues to produce more high-quality pellets. The iron ore miner operating in Ukraine said total pellet production in the second quarter experienced a small lift to 2.9 million tonnes, bringing total first half production to 5.8 million tonnes, which is up 8.3% from 5.4 million tonnes a year earlier.
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Polar Capital Technology Trust's chairman referred to an episode of British motoring television programme Top Gear from 2007 as he said the equity market has morphed into a "stretched bull market" from a "stealth bull market". The chairman's comments came as the trust said its performance was superior to that of the benchmark in its last financial year ended April 30, with its net asset value rising by 30.7% on a total return basis.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Regeneration and strategic land company MJ Gleeson said it expects profit to rise significantly in both its Gleeson Homes and Gleeson Strategic Land businesses following robust trading in the two divisions. Gleeson Homes, its low-cost homes business, sold 751 homes in the year to the end of June, up 34% year-on-year. In combination with an improvement in its gross margin and the sale of land at Stamford Bridge in Yorkshire, the division has seen a significant increase in profitability. Gleeson Strategic Land sold five interests over the course of the year, which will also drive a significant rise in divisional profit, it said.
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Optimal Payments said it expects its EUR1.1 billion takeover of payments rival Skrill to win approval from UK regulators by the end of July, a move which will enable it to complete the deal, transfer to the London Stock Exchange's Main Market, and seek a place in the FTSE 250 index. The deal for Skrill, which is technically a reverse takeover, requires approval from the UK's Financial Conduct Authority. In a statement, Optimal Payments said that trading to the end of June was "strong and in line with market expectations".
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Drinks company Distil said its current financial year has started well, with sales and volumes higher year-on-year. The company, which owns the Blackwoods Gin and Vodka and RedLeg Spiced Rum brands, said it has been boosted by the increased exposure of its brands across distribution channels in the UK and overseas.
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Assistance products company CPPGroup said it has appointed Roger Canham as its executive chairman, replacing Eric Anstee, effective immediately. Canham is the non-executive chairman of models and collectibles group Hornby and has been chairman of Phoenix Asset Management Partners Ltd, one of CPP's major shareholders, since 2009. His appointment comes after CPP in late June said Chief Financial Officer Craig Parsons is leaving the company.
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Petroceltic International said it has been "consistent" in informing its shareholders about its financing plans after one of its largest shareholders threatened to block a proposed bond issue on Thursday. Worldview Capital Management, which holds a 29% stake in the company, opened a new chapter in its ongoing battle with the management and board of Petroceltic over the company's plans to pledge its "crown jewel" asset as security for a USD175 million bond issue.
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Cloud services company Outsourcery said it has signed an amortising term loan with Vodafone Group Services, a subsidiary of FTSE 100 telecommunications company Vodafone Group. Under the deal, Outsourcery will be given a GBP4 million, four-year loan. In exchange, Vodafone will be granted a warrant over 3 million shares in Outsourcery, exercisable at 30 pence per share. Outsourcery shares closed at 24 pence on Thursday.
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Location intelligence services company Ubisense Group issued a warning on its revenue for the full year on Friday, after saying it has been hit by more contract delays in the first half and said it will restructure its operations to cut costs. Ubisense said that in addition to an anticipated fall in lower-margin Services division revenue and the delays of two contracts into the second half of the year, it has now seen further delays on certain contracts, meaning revenue in its Solutions arm in the first half will be "some way short" of the first half of 2014.
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Payments technology company Eckoh said it has pulled out of its bid for software company Netcall after failing to secure the support of a major shareholder in the target. Eckoh made a bid for Netcall at the end of June, comprising 1.25 Eckoh shares plus 13 pence in cash for each Netcall share, implying a value of around 63.94 pence per Netcall share.
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COMPANIES - INTERNATIONAL
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Health insurers Aetna and Humana said they have entered into a definitive agreement for Aetna to acquire all outstanding shares of Humana for a combination of cash and stock valued at USD37 billion or USD230 per Humana share based on the closing price of Aetna common shares on July 2. Humana stockholders will receive USD125.00 in cash and 0.8375 Aetna common shares for each Humana share. The terms of the agreement have been unanimously approved by the board of directors of each company. Aetna's shareholders will own about 74% of the combined company and Humana's shareholders will own the remaining 26%. Closing of the deal is expected to be in the second half of 2016.
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Bombardier, a manufacturer of planes and trains, said Bombardier Transportation has signed two contracts with Transport for London to build and maintain 45 four-car new electric multiple units. The first contract is a Manufacturing and Supply Agreement covering the design, manufacture, commissioning and entry into service of 180 new vehicles, and the second is a 35-year Train Services Agreement providing maintenance for the new vehicles. Together the contracts are valued at about GBP358 million.
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Tesla saw a sharp second-quarter increase in deliveries of its Model S luxury sedan, the electric car-maker reported. The company said it delivered 11,507 Model S sedans to customers in April-June 2015, a 52% increase over the same period last year and the most vehicles that technology billionaire Elon Musk's company has ever delivered in a quarter.
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Friday's Scheduled AGMs/EGMs
Circle Oil
Industrial Multi Property Trust
Distil
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
29 Aug 2014 05:24
