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LONDON (Alliance News) - Shares opened flat in London Tuesday after a long holiday weekend in both the UK and US, with EU inflation and unemployment figures due later in the morning.
FTSE 250 investment trust RIT Capital Partners said Tuesday more "analysis and discussion" is required to determine whether a combination with Alliance Trust is in the best interests of shareholders.
The Financial Times had reported over the weekend that RIT, which is chaired by Jacob Rothschild, had approached Alliance Trust about a tie-up. A deal would create a company with a value by market capitalisation of more than GBP5.0 billion.
"The possibility of combining the two companies for the benefit of both sets of shareholders is at a very preliminary stage of consideration," RIT said in a statement prior to the open Tuesday.
In a separate statement, Alliance Trust confirmed that RIT had approached it with an "informal proposal" for a merger. Alliance Trust said it will incorporate any formal proposal received from RIT into its strategic review.
Alliance Trust shares topped the mid-cap index, up 3.2%, while RIT shares were down 1.5%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 6,284.06
FTSE 250: up 0.1% at 17,252.30
AIM ALL-SHARE: down 0.1% at 734.88
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Hang Seng: up 1.4% at 20,913.33
Nikkei 225: closed up 1.0% at 17,234.98
DJIA: closed up 0.3% at 17,873.22 on Friday
S&P 500: closed up 0.4% at 2,099.06 on Friday
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GBP: firm at USD1.4642 (USD1.4629)
EUR: flat at USD1.1129 (USD1.1130)
GOLD: flat at USD1,212.41 per ounce (USD1,212.68)
OIL (Brent): up at USD50.17 a barrel (USD49.36)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)
0855 Germany unemployment rate
0900 Italy unemployment
0900 EU private loans and M3 money supply
1000 EU unemployment rate
1000 EU consumer price index preliminary
1000 Italy consumer price index preliminary
1100 Italy gross domestic product
1330 US personal income and spending
1330 US personal consumption expenditures - price index
1330 Canada gross domestic product
1400 US S&P/Case-Shiller home price indices
1445 US Chicago purchasing managers' index
1500 US consumer confidence
2130 US API crude oil stocks
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US Federal Reserve Chair Janet Yellen indicated Friday an interest rate hike is coming soon if economic data continues to show improvement in the US economy. The economy is continuing to improve, Yellen said, although she acknowledged weak annualized growth of under 1% early in 2016. Since the end of the first quarter in March however growth has picked up, she told an audience at Harvard University. "If that continues and if the labour market continues to improve, and I expect those things will occur," Yellen said, "it's appropriate...for the Fed to gradually and cautiously increase our overnight interest rate over time, and probably in the coming months such a move would be appropriate." The Federal Reserve's next opportunity to raise interest rates is on June 15, when the Fed's Open Market Committee holds a scheduled meeting.
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UK Prime Minister David Cameron hailed the "extraordinary coalition" rallied behind Britain remaining in the European Union as he campaigned alongside Labour's Sadiq Khan. The Prime Minister shook hands with the London Mayor and hailed the election of the "proud Muslim and proud Brit" just weeks after being accused of racist slurs against him. They joined forces to launch a five-point "guarantee" card and a campaign battle bus as the PM sought to refocus attention away from increasingly public Tory dissent against his leadership.
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EU leaders will be asked at their June summit to recommit to controversial free trade negotiations being conducted with the US, the bloc's executive said. The EU and the US have held negotiations for almost three years on the so-called Transatlantic Trade and Investment Partnership, which would create the world's largest free trade area with 800 million people. Proponents of the free trade deal say that it will boost economic growth and jobs. But the plan also has many critics, who worry that it will water down consumer protection provisions and allow corporations to block undesirable regulation. The negotiators, who are trying to conclude the deal before the end of this year, are entering a "crucial phase," European Commission spokesman Daniel Rosario told journalists in Brussels.
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Top EU official Jean-Claude Juncker plans to travel to Russia next month to attend an economic forum despite enduring tensions over sanctions that the West has imposed on Moscow for its actions in Ukraine. "I think it is important that we try, at least on economic issues, to get closer to Russia again," the European Commission chief told dpa on Monday in Luxembourg. "But it will not come to any softening of European positions in St Petersburg," he added.
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Germany's consumer prices rose slightly in May, reversing a similar size decline in the previous month, preliminary data from Destatis showed. The consumer price index edged up 0.1% year-on-year following a 0.1% fall in April. The increase was in line with economists' expectations. Compared to the previous month, the CPI climbed 0.3%, matching economists' expectations. In April, prices fell 0.4%.
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French Prime Minister Manuel Valls vowed there would be no withdrawal of controversial labour reforms in an interview published Saturday just hours before he began meeting representatives of the petroleum and transport industries. The meeting was convened by Interior Minister Bernard Cazeneuve and Secretary of Transport Alain Vidalies with industry representatives in order to take stock of the country's fuel supply. Strikes organized against the disputed reforms hit the French energy sector this week, with fuel shortages at the pump caused by refinery worker strikes and blockades at fuel depots. But the number of stations affected declined by the end of the week, as police cleared protesters blocking depots and released strategic reserves.
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Germany's unemployment rate held steady in April, after falling slightly in the previous month, preliminary figures from Destatis showed. The adjusted jobless rate came in at 4.2% in April, the same rate as in the previous month. In the corresponding month last year, the unemployment rate was 4.7%.
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Japan's industrial production increased for the second straight month in April, defying economists' expectations for a decrease, preliminary figures published by the Ministry of Economy, Trade and Industry showed. Industrial production rose a seasonally adjusted 0.3% month-over-month in April, but much slower than the 3.8% gain in March. Meanwhile, it was expected to fall by 1.5%.
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BROKER RATING CHANGES
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BARCLAYS ADDS NEXT TO EUROPEAN RECOMMENDED PORTFOLIO - REMAINS 'OVERWEIGHT'
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TRADERS: SHORE CAPITAL RAISES BREWIN DOLPHIN HLDGS TO 'BUY' ('HOLD')
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CREDIT SUISSE RAISES B&M EUROPEAN RETAIL TARGET TO 360 (350)P - 'OUTPERFORM'
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COMPANIES - FTSE 100
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Stuart Gulliver, the chief executive of HSBC Holdings, is the European bank chief executive who investors would most like to be replaced, the Financial Times reported, citing a poll by Autonomous Research. According to the report, the poll asked 74 institutional investors to each name three banks in Europe "most in need of a change in CEO".
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Royal Bank of Scotland Group is cutting at least 450 more jobs, the Financial Times reported on Sunday, meaning the state-backed bank will have axed more than 2,600 jobs in total over the past few months. About 200 roles have been cut from the bank’s services team across the UK, according to the FT. Those roles support several divisions. A total of 43 of the positions will be moved to India. RBS also is removing about 250 roles from its retail bank support team, the report said.
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COMPANIES - FTSE 250
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IG Group Holdings, the online trading company, said it now expects its full-year earnings to be slightly ahead of previous expectations. In a trading update for the final quarter of the financial year ending Tuesday, IG said it performed "well" during what turned out to be a "relatively quiet" fourth quarter of the year in financial markets. All key operating and financial metrics remained strong, IG said.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Secure Trust Bank is planning major acquisitions, the Telegraph reported, with Chief Executive Paul Lynam hoping that Arbuthnot Banking Group's move to sell down its majority stake will leave it more able to fund such moves. "The reality it that Arbuthnot would not be able to support such a transaction, so diversifying the shareholder register opens up a broad range of strategic opportunities that aren’t on the table at the moment," Lynam told the newspaper. "There are assets on the market such as Williams & Glyn and perhaps the Co-op Bank, and we may be interested in giving those serious consideration."
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COMPANIES - INTERNATIONAL
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Total announced the acquisition of Gulf Africa Petroleum Corp's assets in Kenya, Uganda and Tanzania. The transaction is subject to the authorities' approval in the three countries. The principal assets being acquired are two logistical terminals in Mombasa, Kenya and Dar es Salaam, Tanzania, as well as a retail network of around one hundred service stations.
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Germany's largest airline, Lufthansa, said it will suspend service to Venezuela from next month due to the country's severe economic crisis. The carrier said demand for its route between Frankfurt and the Venezuelan capital Caracas had declined over the past year. Lufthansa also said it has been hurt by the country's currency controls, which are meant to stem capital flight.
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Tuesday's Scheduled AGMs/EGMs
Parity Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
28 Feb 2023 10:36
IN BRIEF: RIT Capital lifts payout but 2022 net asset value falls
RIT Capital Partners PLC - invests across various asset classes, industries and currencies - Net asset value per share at 2022 year-end falls 15% to 2,388 pence from 2,794p in 2021. NAV share price return is negative 13%, largely in line MSCI All Country World Index. Lifts annual dividend by 5.0% to 37.0p per share from 35.250p. "2022 was one of the most difficult years for financial markets for more than a decade, and the first one in 150 years where US equities and government bonds both lost more than 10%," RIT says. "While these are challenging markets, we have managed through them before, and we remain confident that our approach is the right one for RIT's long-term performance and for our shareholders."
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