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RBS: UK Government Announces Shares Sell Off

The chancellor George Osbourne this morning announced plans to begin the sell off of troubled part state owned bank RBS (RBS.L). The UK government provided RBS with a £45.5bn bailout in 2008 taking an 80% stake in the company.

Plans announced this morning for a phased sell off of the governments holding have sparked criticism by Unite the workers union whos members also include bank workers saying the sell off will “short change the public”. Currently the share price of RBS (RBS.L) is around 355p where as the UK government stake was bought at 500p per share.

Although George Osborne countered these claims saying that the sale must be seen as a whole and that a better price would be gained in subsequent share sales as confidence grows. Commenting the chancellor said ”It’s the right thing to do for British businesses and British taxpayers. Yes, we may get a lower price than that was paid for it – but we will get the best price possible. For the longer we wait, the higher the price the whole economy will pay.”

The Chancellor is trying to reassure the public that they will not be short changed and is pinning his hopes on the fact that he thinks the bank will do better when not under state ownership and will eventually make higher profits and pay more tax and support the economy more than it would with the state owning 80%.

The Sell off will take place over the next five years and even if the share price did not move at all during this time the treasury would still receive £32Bln and taking into account the sale of bank assets and fees already received a review by investment bank Rothschild Investments states the taxpayer would still receive £14Bln more than the cost of the bailout.

RBS (RBS.L) share price is trading slightly higher this morning off the back of the news at 360p (+2%).

Vedanta Resource Up after Merger Rumours

Miner Vedanta Resources (VED.L) is boosted this morning after reports emerged of a possible merger of its Indian subsidiary company Vedanta Resources India with Cairn India. According to reports this morning the two companies are in final discussions on the merger which could be completed by next march 2016.

Vedanta Resources (VED.L) said earlier today that “it is committed to maintaining its premium listing on the London Stock Exchange and will make appropriate disclosures as and when required”.

Vedanta Resources (VED.L) holds approximately a 60% stake in Cairn India  already and  the deal could be completed to access further cash and reduce debt with analysts and Societe General bank speculating that the deal could give Vedanta access to approximately $2.7Bln held in net cash at Cairn India.

Commented on the reports Societe General said “If confirmed, today’s media reports would indicate that Vedanta is once again endeavouring to simplify the group’s corporate structure and ease its debt concerns. With Cairn India now also held liable for the disputed capital gains tax on Cairn Energy, this makes resolution of the tax dispute a common cause for both parties. We think that while the Indian tax dispute is ongoing, Vedanta is the only potential acquirer that would still see material value in Cairn Energy’s stake in Cairn India”

Vedanta Resources (VED.L) is trading up around 5% this morning on the back of the reports at 569.50p

 

Citigroup Upgrade Boosts Weir

Engineering group Weir Group (WEIR.L) was boosted this morning by news from Citigroup of a upgrade on the stock. Moving its rating from NEUTRAL to  BUY and raising the target price on the share  from 1,750p to 2,200p.

Citigroup says that the risk reward balance on Weir Group (WEIR.L) is now “tilted to the upside in our view” and in a note to investors this morning added “We see scope for a move to earnings upgrades through 1H 2016E or even 2H 2015E as the rate of downgrades slows significantly and the negative EPS momentum could turn as the North American Rig count troughs in coming weeks on our forecasts. The economics of North American Shale remain second quartile on the cost curve and therefore should remain competitive as supply from higher break-even sources is reined in. We view this as structurally supportive of Weir’s position in oil and gas.”

Shares in Weir Group (WEIR.L) are up around 3% this morning currently trading around 1960p.

888 Confirms Interest in Bwin.Party

Online gaming firm BWin.Party (BPTY.L) has confirmed it has received an offer in cash and shares from peer 888 holdings. In a statement from 888 the company said it saw “significant industrial logic” in the merger of the two companies, with its shareholders voting 59% in favour of the move.

This comes after news last week that BWin.Party (BPTY.L) has received other offers from companies including GVC Holdings and todays news could now trigger a bidding war over BWin.Party (BPTY.L)

BWin.Party (BPTY.L) Shares were up around 10% this morning at around 110p.

888 Holdings is holding firm around 164.50p.

 

Bwin.Party confirms potential takeover talks

Online gaming firm BWin.Party (BPTY.L) has confirmed it has recently received several merger proposals including to many peoples surprise an attempt at takeover from AIM listed GVC Holdings to merge with its much bigger brother.

Spokesman from BWin.Party (BPTY.L) confirmed that negotiations were continuing with “a number of third parties on a variety of possible business combinations”. Although the comment did come with the note of caution that none of the current discussions may result in a solid offer for the company.

Shares in BWin.Party (BPTY.L) have been under pressure this year after 2 potential buyers already pulled out of discussions earlier in the year, and its poker business continues to struggle due to a decline in regulated online poker markets, forcing the company to report a full year loss in March.

It is also reported that company has been fighting several legal battles with potential suitors including William Hill, Ladbrookes and US Firm Apollo Global.

Shares in BWin.Party (BPTY.L) were up  nearly 12% in todays trading finishing around 100p on the day.

 

 

Next Confirms Former Finance Director Leaves

David Keens, formerly the finance director of the company has left Next (NXT.L) has confirmed today. Keen had stepped down from the role of finance director mid march but had agreed to stay with the company until today.

The company announced his departure this morning stating that Keen had no received any compensation from the company on leaving his job.

Next (NXT.L) was trading approximately neutral for the day at around 7325p.

HSBC Beats Estimates and Posts Q1 Profit of $7.1Bln

The recently underfire bank HSBC (HSBA.L) today announced first quarter profits in excess of analysts estimates after a diffcult end to 2014. The bank posted a $7.1Bln profit for the first quarter, up 4% on the same period last year and around a fifth higher than previous estimates.

The bank benefited from reduced write offs compared to the previous year with regulatory provisions of £139m, UK customer redress programmes at £137m and restructuring costs of £43m.

The commercial banking arm of HSBC (HSBA.L) showed good performance particularly in the UK and Hong Kong.

Chief executive Stuart Gulliver said: “Our business recovered well in the first quarter following a difficult fourth quarter of 2014. Global Banking & Markets had its usual strong start to the year, with a notable increase in year-on-year revenue in our markets businesses. Loan impairment charges were significantly lower compared to the same period in 2014, particularly in Europe and North America.”

HSBC (HSBA.L) is trading slightly lower is early trading at 633.6p (-1.98%)

Aussie Dollar On The Rise Even after Rate Cut

This morning the Australian Dollar is on the rise against its major counter parts despite the RBA announcing a 2.0% rate cut. This reflects speculation pre announcement that there maybe an even deeper cut so fx traders have reacted positively to the news with the Australian dollar up 0.45% against the dollar (AUD/USD) and 0.47% against the Yen (AUD/JPY).

You can get deposit bonuses up to £6000 trading FX pairs at Plus500. Find out more here (*Your Capital is at Risk)

 

Tesco Gains Despite Posting Record Loss

Tesco (TSCO.L) the under fire supermarket chain today posted a record £6.4Bln loss to the year ending February. Compared to a £2.26Bln profit record the year before.

The loss is the largest ever suffered by a UK retailer and enters into 6th place in the largest ever losses recorded in this countrys corporate history.

Tesco (TSCO.L) has suffered from a dramatic drop in the value of its property portfolio amid falling footfall in its stores. This accounts for £4.7Bln of the losses. Tesco had said earlier this month it intends to close 43 stores.

Tesco (TSCO.L) is also feeling the pinch from competition with discount retailers and like for like sales excluding fuel are down 3.6% in the last year in the UK. This has hurt Tesco sales even more in the European markets with sales down year on year in Ireland 6.3%.

Chief Executive Dave Lewis commenting said:

“It has been a very difficult year for Tesco. The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years. We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far.

Over the last six months we have put customers back at the centre of everything we do. By focusing on the fundamentals of availability, service and targeted price reductions, we have seen a steady increase in footfall, transactions and, most significantly, volumes. More customers are buying more things at Tesco.

We are making deep changes to the way we organise and run our business, with a simpler, more agile office team, more colleagues serving customers and a new approach to the way we work with suppliers. I do not underestimate how difficult some of these changes have been for the team and I thank everyone for their professionalism and contribution at this time of great change.

The market is still challenging and we are not expecting any let up in the months ahead. When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance. Our clear priority – and the one that will deliver sustainable value for our shareholders – is to improve consistently for customers. The changes we have made and will continue to make put us in a stronger position to do this.”

Investors reacted positively despite the results with the share price of Tesco (TSCO.L) slightly up on the day at 235.7p

 

 

Record Engine Order For Rolls Royce

Rolls Royce (RR.L) has received a record order of $9.2Bln for the supply of engines for 50 Emirates A380 planes. The order represents a milestone for the company as it is the first time Rolls Royce have been asked to supply engines for the Emirates Airline.

Rolls Royce (RR.L) share price has recently been under pressure after a series of profit warnings and the deal announcement has provided an immediate boost.

Emirates president Sir Tim Clark said: “Today’s announcement is significant not only because it cements the partnership between Emirates and Rolls-Royce, but also because of the significant economic impact that this will have on aviation manufacturing in the UK and Europe.”

Rolls Royce (RR.L) shares were up 8p in early trading and currently sitting around 989p. (+1%)