Last checked at 
(Alliance News) - Hong Kong Exchanges & Clearing has pulled out of its bid to buy the operator of the London Stock Exchange, it said on Tuesday.
HKEX made a GBP29.6 billion offer, or GBP31.6 billion including debt, for London Stock Exchange Group PLC in mid-September. The bid was rejected later that month.
LSEG said it saw "fundamental flaws" in the approach, and also noted any combination would come under intense scrutiny from a variety of regulators.
"The board of HKEX continues to believe a combination of LSEG and HKEX is strategically compelling and would create a world-leading market infrastructure group," said HKEX on Tuesday.
"Despite engagement with a broad set of regulators and extensive shareholder engagement, the board of HKEX is disappointed it has been unable to engage with the management of LSEG in realising this vision, and as a consequence has decided it is not in the best interests of HKEX shareholders to pursue this proposal."
HKEX shares closed 3.0% higher on Tuesday in Hong Kong, while LSEG shares were down 5.7% in early London trade.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: up 0.2% at 7,211.97
----------
Hang Seng: up 0.7% at 25,993.08
Nikkei 225: closed up 1.0% at 21,587.78
DJIA: closed down 0.4% at 26,478.02
S&P 500: closed down 0.5% at 2,938.79
----------
GBP: down at USD1.2301 (USD1.2321)
EUR: soft at USD1.0982 (USD1.0992)
Gold: down at USD1,490.01 per ounce (USD1,501.30)
Oil (Brent): down at USD58.79 a barrel (USD59.22)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Tuesday's Key Economic Events still to come
0930 BST UK productivity statistics
0600 EDT US NFIB index of small business optimism
0830 EDT US producer price index
1000 EDT US IBD/TIPP economic optimism index
1630 EDT US API weekly statistical bulletin
----------
Chinese business activity expanding at its quickest pace in five months in September, the Caixin general services purchasing managers' index showed. The composite PMI, which covers both manufacturing and services, rose to 51.9 in September from 51.6 in August, its best performance since April. Caixin said the improvement was helped by improved manufacturing output, despite a slighter rise in activity in the services sector. "China's economy showed signs of marginal recovery in September, as the labour market improved and domestic demand increased at a faster pace," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.
----------
The US and Japan formally signed a bilateral trade agreement after US President Donald Trump again complained about Japan's chronic trade surplus with his country. The pact was signed by Japan's ambassador to the US, Shinsuke Sugiyama, and US Trade Representative Robert Lighthizer at the White House on Monday. Washington reached the deal with Tokyo amid its year-long trade war with Beijing. The deal, which was initially announced by Japan and the US last month, includes increased access to Japanese markets for American agricultural producers.
----------
Facing a staunch backlash in the US Congress over his decision to stand back in the face of a Turkish invasion of northern Syria, Trump threatened to destroy the Turkish economy if Ankara takes steps that are "off limits". The previous night, Trump had spoken with Turkish President Recep Tayyip Erdogan by phone and then issued a statement saying Ankara would go ahead with a "long-planned" operation in northern Syria. The Kurdish-led Syrian Democratic Forces, which have been the main partner allied with the US in defeating Islamic State, dominate areas in north-east Syria. Turkey considers the Kurdish People's Protection Units, which lead the SDF, an offshoot of the outlawed Kurdistan Workers' Party, which is waging an insurgency within Turkey.
----------
UK government debt is set to rocket to levels not seen since the 1960s in the event of a no-deal Brexit, a leading economic think tank has warned. The Institute for Fiscal Studies said following last month's spending review, Government borrowing was on course to top GBP50 billion next year, more than double what the Office for Budget Responsibility was forecasting as recently as March. However, in the event of even a "relatively benign" no-deal Brexit, the IFS said that could rise to almost GBP100 billion – while debt would climb to almost 90% of national income for the first time since the mid 1960s.
----------
Trump said he would prefer to strike a comprehensive trade bargain with China, in comments days before top US and Chinese officials are due to resume trade talks in Washington. But with little sign the two sides have made progress in bridging the distance between them, speculation has mounted in recent months they may reach a deal which addresses only some of Washington's extensive grievances. "I think it's not what we prefer at all. My inclination is to get a big deal," Trump told reporters when asked if he could accept a partial agreement. With eight days to go before the next round of punitive tariffs is due to hit, Beijing's top trade envoy Liu He will meet with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin beginning Thursday, Chinese state media reported. The high-level Chinese delegation also includes commerce minister Zhong Shan, central bank governor Yi Gang and vice minister of industry and information technology Wang Zhijun. The vice minister for agriculture Wang Shouwen has also been added to the negotiating team after China last month announced that it had started buying US soybean and pork.
----------
Campaigners are expected to lodge an appeal after a judge dismissed a legal action aimed at forcing the UK prime minister to request a Brexit extension if no withdrawal deal is secured with the EU by October 19. The Outer House of the Court of Session in Edinburgh refused the order sought by SNP MP Joanna Cherry QC and others in a judgment on Monday. Lord Pentland ruled it was not necessary to compel Johnson to comply with the terms of the so-called Benn Act given the "unequivocal assurances" of Boris Johnson and the government made before the court. The court's Inner House is expected to hear an appeal on Tuesday.
----------
BROKER RATING CHANGES
----------
DEUTSCHE BANK RAISES ST JAMES'S PLACE TO BUY (HOLD) - TARGET 1190 (1070) PENCE
----------
RBC RAISES WEIR GROUP TO 'TOP PICK' ('OUTPERFORM') - TARGET 1900 PENCE
----------
RBC CUTS VESUVIUS TO 'OUTPERFORM' ('TOP PICK') - TARGET 640 (700) PENCE
----------
COMPANIES - FTSE 100
----------
Barclays has pledged not to close branches in remote areas of the UK or where it is the last bank in town for the next two years. The bank is also launching a new cashback scheme enabling people to withdraw money at small businesses – but said that from 2020 its customers will no longer have a facility which allows them to withdraw cash over the counter at Post Offices. Barclays said the freeze on remote and 'last bank in town' closures will see more than 100 branches ring-fenced so that they remain until at least October 2021.
----------
Peter Hetherington has been tapped to run the new asset management joint venture between Schroders and Lloyds Banking Group, the Financial Times reported. Hetherington, the former IG Group Holdings chief executive, takes over at Schroders Personal Wealth as the venture ramps up for its launch in November, the newspaper added. He will take over from James Rainbow, who return to Schroders and take up UK head of distribution and Latin America at the FTSE 100-listed asset manager. Schroders Personal Wealth is will begin life with GBP13 billion of assets under management and 30,000 clients.
----------
COMPANIES - FTSE 250
----------
easyJet said it delivered a solid performance in the fourth quarter, with strong customer demand driving outperformance. The airline said it expects to deliver annual pretax profit for financial 2019 in a range between GBP420 million and GBP430 million. This is in the upper half of the company's previously guidance range but down from GBP445 million the year before. In addition, easyJet reported passenger numbers were up 8.6% to 96 million in the year that ended September 30, while the load factor for the year is to decrease by 1.4 percentage points to 91.5%, the company added. Total revenue per seat at constant currency for the second half will increase by 0.8%, which was an outperformance compared to easyJet's previous guidance. The company attributed the performance to "yield optimisation self-help initiatives" in the fourth quarter and increased demand due to strikes at rivals British Airways and Ryanair Holdings. easyJet added that first quarter financial 2020 forward bookings are in line with the first quarter of financial 2019.
----------
Recruiter PageGroup said its third quarter was hurt by political and economic uncertainty in its larger markets, including Greater China, the UK and France. For the quarter ended September 30, gross profit was up 4.2% to GBP216.7 million at constant currency profit was up 2.1%. Third quarter gross profit Europe, the Middle East & Africa was up 7%, the Americas region was up 17%. However in the UK gross profit was down 4.1% and in the Asia Pacific region it was down 4.0%. Chief Executive Steve Ingram said: "Looking ahead, the deterioration in trading conditions seen during Q3 across the majority of our regions is anticipated to continue." PageGroup expects financial 2019 operating profit to be in the range of GBP140 million to GBP150 million. Last year, operating profit was GBP142.5 million.
----------
Electrocomponents reported an improved performance in the first half of its current financial year as it continues to invest in strategic initiatives. The distributor of industrial and electronics products said it expects to report 5% revenue growth in the six months to the end of September, thanks to continued "strong" performance in its Industrial division. The Digital unit, meanwhile, performed broadly in line during the period, Electrocomponents noted.
----------
Aston Martin Lagonda Global Holdings said shareholder group Adeem and Primewagon named two non-executive directors to the board. Mahmoud Samy Mohamed Aly El Sayed and Amr AbouelSeoud are to join immediately. The sports car maker said non-executives Najeeb Al Humaidhi And Saoud Al Humaidhi are to step down.
----------
COMPANIES - INTERNATIONAL
----------
Samsung Electronics guided for a steep decline in quarterly earnings, with sales also set to drop. For the third quarter of 2019, Samsung expects operating profit of approximately KRW7 trillion, or about USD5.85 billion, less than half the KWR17.57 trillion recorded in the same period a year before. Samsung has guided for sales to decline by 5.3% to KRW62 trillion. However, operating profit of KRW7 trillion would be a 6.1% improvement from the second quarter. Sales of KRW62 trillion would represent a 10% quarterly rise.
----------
Drinks and snack food giant PepsiCo unveiled a USD1 billion "green bond" offering to fund work to improve the firm's environmental footprint. In September, PepsiCo outlined a number of environmental goals, including cutting plastic use by 35% by 2025, lowering greenhouse gas emissions by 20% by 2030, and replenishing all water used by 2025 in high-risk water areas. This USD1 billion bond, the company continued, will help it meet those targets. Alongside the bond, Simon Lowden has been appointment chief sustainability officer.
----------
Tuesday's Shareholder Meetings
no events scheduled
----------
By Tom Waite; thomaslwaite@alliancenews.com
London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
