North Korea Follows Up Threat With New Missile Launch

LONDON (Alliance News) - The United Nations Security Council plans an emergency meeting on Friday in the wake of North Korea's firing of a second missile over Japan.

The closed-door meeting was called at the request of the US and Japan, said the Ethiopian UN mission, which holds the council presidency this month.

The meeting will be held after North Korea launched from Pyongyang on Friday a missile that flew over northern Japan before plunging into the Pacific, officials in Tokyo and Seoul said, in a move that Japanese Prime Minister Shinzo Abe condemned as "outrageous."

"North Korea fired an unidentified missile eastward from the vicinity of Pyongyang this morning," South Korea's Joint Chiefs of Staff said, noting that South Korea and the US were analysing additional information. The missile flew about 3,700 kilometres, reaching a maximum altitude of 770 kilometres, according to the JCS.

The launch came less than two weeks after North Korea carried out its sixth and most powerful nuclear test, prompting worldwide condemnation, and a day after North Korea made threats against the US and its allies, including Japan.

In late August, Pyongyang fired a Hwasong-12 intermediate-range ballistic missile over Japan.

The Japanese government also confirmed the launch. A ballistic missile was fired at 6:57 am local time, and it flew over the northern Japanese island of Hokkaido and fell into the Pacific Ocean 2,200 kilometres east of Cape Erimo on the island, Japanese government spokesman Yoshihide Suga told a news conference.

The United Nations Security Council imposed fresh sanctions on North Korea on Monday over its nuclear and ballistic missile programmes, on top of sanctions issued five weeks ago that were expected to cut roughly USD1 billion from the regime's USD3 billion in annual export revenue.

On Thursday, a North Korean foreign relations committee issued a new round of threats against the US and its allies in the wake of the sanctions, warning that Japanese islands should be "sunken into the sea" and the US reduced to "ashes and darkness".

Here is what you need to know at the London market open:

 

MARKETS

FTSE 100: down 0.3% at 7,271.97

Hang Seng: flat at 27,785.14
Nikkei 225: closed up 0.5% at 19,909.50
DJIA: closed up 0.2% at 22,203.48
S&P 500: closed down 0.1% at 2,495.62

GBP: up at USD1.3420 (USD1.3394)
EUR: up at USD1.1922 (USD1.1882)

GOLD: up at USD1,330.64 per ounce (USD1,325.50)
OIL (Brent): down at USD55.16 a barrel (USD55.84)

(changes since previous London equities close)

 

ECONOMICS AND GENERAL

Friday's Key Economic Events still to come
(all times in BST)

All Day EU Eurogroup meeting

0915 ECB's Sabine Lautenschlaeger speech
1100 Ireland gross domestic product
1100 EU trade balance
1100 EU labour cost
1200 UK BoE Quarterly Bulletin
1330 US NY Empire State manufacturing index
1330 US retail sales
1415 US industrial production and capacity utilization
1500 US Michigan consumer sentiment index preliminary
1500 US business inventories
1800 US Baker Hughes US oil rig count

US President Donald Trump says he and opposition Democrats in Congress are nearing an agreement to shield young, non-legal migrants from deportation. Leaving the White House by helicopter, he told reporters Thursday that "we're working on a plan" for the high-profile Deferred Action for Childhood Arrivals programme, which his administration had vowed to scrap. "I think we're fairly close, but we have to get massive border security," he said. Trump said that congressional leaders of his Republican Party, which holds majorities in both chambers, are "very much on board" with a deal that would address DACA. Trump told reporters at the White House that his plans were "DACA now and the wall very soon - but the wall will happen."

Trump confirmed he will visit multiple Asian countries on a multi-nations tour in November. Trump said he will stop in South Korea, China and Japan in November during a trip that is expected to coincide with a series of regional summits. The US president is expected to attend the Association of South East Asian Nations and East Asia summits in the Philippines and the Asia Pacific Economic Cooperation summit in Vietnam. Vice President Mike Pence had announced Trump's participation during his own Asia trip earlier this year.

Hundreds of Islamic State militants and family members have arrived in Syria's eastern province of Deir al-Zour after being evacuated from a Syrian-Lebanese border area, a monitoring group reported. The evacuation of the extremist group members and their families took place under a deal with the Lebanese Shiite Hezbollah movement, which has been fighting alongside the forces of Syrian President Bashar al-Assad.

 

BROKER RATING CHANGES

HSBC CUTS RYANAIR TO 'REDUCE' (BUY) - PRICE TARGET 16.00 (19.50) EUR

GOLDMAN CUTS DCC TO 'NEUTRAL' ('BUY') - TARGET 8600 (8200) PENCE

RBC RAISES PETROFAC TO 'SECTOR PERFORM' ('UNDERPERFORM') - TARGET 500 (420) PENCE

COMPANIES - FTSE 100

Coca-Cola HBC announced Chief Executive Officer Dimitris Lois will take a temporary leave of absence to undergo treatment for a medical condition. Lois is expected to be on leave for around four months. During his leave, Coca-Cola HBC said he will stay involved in the business and remain a member of the board of directors. Michalis Imellos, Coca-Cola HBC's chief financial officer, will service as interim CEO whilst Lois is undergoing treatment. Imellos joined the soft drinks bottler in 2008 a region finance director and was appointed CFO in 2012.

Aviva said it has completed the sale of its 50% of its shareholding in its Spanish businesses for EUR475.0 million. The insurer had said in May it agreed to sell its interests in life insurance and pension joint ventures Unicorp Vida and Caja Espana Vida, as well as retail life insurance business Aviva Vida y Pensiones, to Santa Lucia SA. In May, Aviva said the price for the businesses is approximately 1.5 times its share of their 2016 net asset value and 12 times its share of their post-tax 2016 earnings. The sale will result in a gain of approximately GBP120.0 million in Aviva's IFRS net asset value and an increase of around GBP130.0 million in its Solvency II capital surplus. Aviva continues to hold shareholdings in life insurance joint ventures with Caja Granada and Cajamurcia, which are part of Banco Mare Nostrum and Pelayo Grtoup.

GlaxoSmithKline said it has received a "positive opinion" for its Trelegy Ellipta treatment from the European Medical Authority's Committee for Medicinal Products for Human Use. A "positive opinion" from the CHMP is "one of the final steps before marketing authorisation is granted by the European Commission", the company explained. A final decision is expected around the end of 2017. GlaxoSmithKline added that "regulatory applications have been submitted and are undergoing assessment" in several countries including the US, Australia and Canada.

 

COMPANIES - FTSE 250

Pub chain JD Wetherspoon said pretax profit increased in its financial year and has experienced a "positive start" to its current year. Pretax profit was up 16% in the year ended July 30 to GBP76.4 million from GBP66.0 million a year earlier as revenue rose 4.1% to GBP1.66 billion from GBP1.60 billion. Like-for-like bar sales increased by 3.1%, while food sales increased by 5.7%. The pub chain proposed a final dividend of 8.0 pence, in line with the year before, bringing its total dividend for the year to 12.0p, similarly in line with a year earlier. Wetherspoons said like-for-like sales have "continued to be encouraging" since the year end, up 6.1%. "This is a positive start, but is for a few weeks only - and is very unlikely to continue for the rest of the year. Comparisons will become more stretching - and sales, which were very strong in the summer holidays, are likely to return to more modest levels," said Chairman Tim Martin. Wetherspoons said it anticipates like-for-like sales of around 3% to 4% will be required in order to match the recent year's pretax profit tax, adding that it expects trading for its current financial year to be in line with expectations.

Specialty pharmaceutical company Indivior said it has filed patent lawsuits against several pharmaceutical companies for infringement of US patent 9,687,454 relating to Indivior's SUBOXONE sublingual film product. Dr Reddy's Laboratories, Actavis Generics, Par, Alvogen, Teva Pharmaceutical Industries Ltd and Mylan NV have all received lawsuits for the infringing of the patent of the product, which is an oral film containing buprenorphine and naloxone. The patent was first issued on June 27, and Indivior has been involved in other infringement litigation involving earlier issued patents covering SUBOXONE with the same companies.

 

COMPANIES - INTERNATIONAL

Asset management company BlackRock is to pay for external research out of its own pocket, putting pressure on rivals to follow suit, the Financial Times reported. European investment houses have been weighing up whether to absorb the cost of research or pass it to investors ahead of the EU's so-called 'Mifid II' rules coming into force in January. The FT said the rules will require asset managers to make it clear to investors how much they are being charged for research, ending a system in which fund managers received free analyst reports in return for placing trades with banks and brokers.

French insurer AXA is reviewing options for its European asset management unit, Bloomberg reported, citing people familiar with the matter. Axa is considering a merger or joint venture for the business, the report said. Potential partners could include Natixis, the news agency added.

Three former female Google employees have filed a class action lawsuit against the search giant for gender pay discrimination. The suit was filed on Thursday in San Francisco Superior Court. It follows a US federal investigation that made a preliminary finding of alleged "extreme" pay discrimination against women at Google's headquarters in Mountain View, California. Google, part of Alphabet, disputes those findings and says its analysis shows no gender pay gap.

Alphabet has held talks with Lyft about a potential USD1 billion investment in the company, according to media reports, citing people familiar with the matter. The investment in Lyft may come from Google or from CapitalG, Alphabet's private-equity arm, reports said, citing some of the people, who asked not to be identified because the discussions are private. Alphabet is an investor in Uber Technologies, Lyft's largest rival, but its self-driving car unit, Waymo, is currently involved in a legal battle with Uber.

Oracle Corp reported earnings for its first quarter that increased 14% compared to the same period last year. The US business software company said its bottom line totalled USD2.66 billion, or USD0.62 per share. This was up from USD2.34 billion, or USD0.55 per share, in last year's first quarter. Oracle said revenue for the quarter rose 7.0% to USD9.21 billion from USD8.61 billion last year.

 

Friday's Shareholder Meetings

INVESCO Income Growth Trust
SVM UK Emerging Fund
Tungsten