Old Mutual Profit Soars 76% Amid Restructuring

LONDON (Alliance News) - Stocks are seen opening lower on Friday, following US and Asian markets as tension between the US and North Korea continue to escalate, with Old Mutual taking the spotlight in early corporate news as it reported a large rise in interim profit.

US President Donald Trump doubled down on his harsh words against North Korea on Thursday, saying his "fire and fury" warning against the Pyongyang regime earlier this week "wasn't tough enough."

North Korea has threatened to attack the US territory of Guam in the western Pacific amid an escalating war of words over its nuclear programme and a series of recent missile tests.

On the corporate front, blue-chip investment, savings, insurance, and banking group Old Mutual reported a 76% jump in pretax profit in the first half of the year, boosted by asset disposals. The dividend was bumped up, but the firm said it will take a "conservative approach" towards setting its full-year dividend.

Meanwhile, Domino's Pizza Group said it has formed a partnership with its largest franchisee in London, paying GBP24.0 million to take a 75% stake in 25 London stores.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: seen to open 41.06 points lower at 7,348.88
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Hang Seng: down 1.8% at 26,952.86
Nikkei 225: closed down 0.1% at 19,729.24
DJIA: closed down 0.9% at 21,844.01
S&P 500: closed down 1.5% at 2,438.21
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GBP:  firm at USD1.2980 ( USD1.2982)
EUR: up at USD1.1761 (USD1.1749)

GOLD: flat at USD1,285.04 per ounce (USD1,285.32)
OIL (Brent): down at USD51.57 a barrel (USD52.46)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
(all times in BST)

0900 Italy consumer price index
1330 US consumer price index
1630 US FOMC member Kashkari speech
1800 US Baker Hughes US oil rig count
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US President Donald Trump doubled down on his harsh words against North Korea on Thursday, saying his "fire and fury" warning against the Pyongyang regime earlier this week "wasn't tough enough." "It's about time somebody stuck up for the people of this country and the people of other countries, so if anything, maybe that statement wasn't tough enough," Trump told reporters at his golf resort in Bedminster, New Jersey, where he is on vacation. North Korea has threatened to attack the US territory of Guam in the western Pacific amid an escalating war of words over its nuclear programme and a series of recent missile tests. US Defence Secretary James Mattis, meanwhile, warned that a war would be "catastrophic," and that a "diplomatically-led effort to get this under control" was "gaining traction." Trump declined to say whether the US might consider a pre-emptive strike against North Korea, but said he was still open to negotiation.
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President Donald Trump has downplayed a move by Moscow to oust US diplomats and force the downsizing of the US mission in Russia, claiming it would save Washington money. "I want to thank [Russian President Vladimir Putin] because we're trying to cut down our payroll," Trump told reporters at his Bedminster, New Jersey golf club. Putin said in an interview last month that the US must cut 755 personnel from its diplomatic institutions in Russia by September 1 after the US Congress overwhelming approved new sanctions on Moscow. The forced cuts will likely have an outsized impact on locally hired Russian staff who work for the US.
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President Donald Trump implied Thursday that the leader of his Republicans in the US Senate should step aside if the upper chamber fails to support pass the conservative party's agenda. The right-wing populist Trump has pressured Republican legislators, who hold majorities in Congress, since the Senate last month failed to pass changes to the so-called Obamacare health insurance programme. Trump in recent days has focused his wrath on Senate majority leader Mitch McConnell. "Mitch, get to work and let's get it done," Trump told reporters Thursday in Bedminster. The president reiterated his legislative demands including a measure to "repeal and replace" Obamacare, tax reform and "very big" infrastructure spending. Asked if McConnell should step down as Senate majority leader, Trump replied: "I'll tell you what: If he doesn't get repeal and replace done, if he doesn't get taxes done, meaning cuts and reform, and if he doesn't get a very easy one to get done - infrastructure - if he doesn't get that done, then you should ask me that question."
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Beijing protested on Friday after a US Navy warship passed close to an artificial reef created by China in the South China Sea, the official Xinhua news agency reported. The USS John S McCain entered waters near the Meiji Reef in the disputed Spratly Islands on Thursday. The operation was illegal and carried out without permission from Beijing, Chinese Foreign Ministry spokesperson Geng Shuang said, adding that the Chinese Navy identified the warship, warned and expelled it. "Such a move severely undermines China's sovereignty and security and severely endangers the safety of frontline personnel of both sides," he said. Nicole Schwegman, spokeswoman for the US Pacific Fleet, said that US forces operated in the Asia Pacific region on a daily basis.
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South Africa's main opposition party has filed a motion asking for parliament to be dissolved and early elections to be held, two days after its no-confidence motion against President Jacob Zuma was defeated. The new motion has been submitted to the speaker of parliament, who will decide if it will go before the assembly, said Graham Charters, a spokesman for the Democratic Alliance. Charters said he expected the speaker to approve the motion, which would then go before parliament within a few weeks. The 75-year-old president, whose second and last term expires in 2019, has survived several no-confidence motions over accusations of corruption and mismanagement. Tuesday's vote was held on a secret ballot for the first time, allowing more than 20 members of Zuma's African National Congress to break the party discipline and to vote against him.
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Kenya's opposition disputed preliminary election results showing incumbent Uhuru Kenyatta the winner, saying they were false and that opposition leader Raila Odinga should be declared president. Preliminary results from the electoral commission put Kenyatta at 54.2% of the vote and Odinga at 44.9%, with 40,262 out of 40,883 polling stations counted. But Odinga's National Super Alliance said the "actual" results contained in the electoral commission's database gave Odinga the win with about 8 million votes to Kenyatta's 7.6 million. The results showing Kenyatta in the lead "are a fraud and based on a hacked system that is intended to publish a predetermined outcome," an opposition statement said Thursday. Odinga had earlier alleged that hackers had manipulated the voting system. Electoral commission chairman Wafula Chebukati admitted that hackers had tried to enter its database, but said they did not succeed. International election observers have found few irregularities.
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Germany's consumer price inflation accelerated to a three-month high in July, final data from Destatis showed early Friday. Inflation, based on consumer prices, grew 1.7% annually, slightly faster than the 1.6% increase registered in June. This was the fastest since April and came in line with the flash estimate published on July 28. Excluding food and energy prices, the inflation rate came in at 1.7%. Food prices rose 2.7%, slower than the 2.8% rise in June. Meanwhile, energy prices climbed 0.9% after stabilizing a month ago. On a monthly basis, inflation doubled to 0.4%, as estimated, from 0.2% in June. Prices have increased for the second straight month.
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China's fiscal spending increased at a slower pace in July, the Ministry of Finance reportedly said Friday. Fiscal spending grew 5.4% from a year ago in July. This was much slower than the 19.1% increase seen in June. At the same time, fiscal revenues climbed 11.1% in July. During January to July, fiscal expenditure advanced 14.5% from the corresponding period of the previous year.
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BROKER RATING CHANGES
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*GOLDMAN STARTS BAT WITH 'NEUTRAL' - PRICE TARGET 5400 PENCE
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*GOLDMAN RAISES G4S PRICE TARGET TO 320 (256) PENCE - 'NEUTRAL'
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*GOLDMAN RAISES HSBC PRICE TARGET TO 790 (770) PENCE - 'NEUTRAL'
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*GOLDMAN RAISES RBS PRICE TARGET TO 290 (285) PENCE - 'NEUTRAL'
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*GOLDMAN CUTS STANDARD CHARTERED PRICE TARGET TO 950 (970) PENCE - 'BUY'
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*BARCLAYS CUTS SHIRE TO 'EQUAL WEIGHT' ('OVERWEIGHT') - TARGET 4600 (6300) PENCE
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*BARCLAYS RAISES ANGLO AMERICAN TARGET TO 1220 (1130) PENCE - 'EQUAL WEIGHT'
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*HSBC RAISES RBS TO 'HOLD' ('REDUCE') - TARGET 250 (210) PENCE
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*HSBC CUTS GLENCORE PRICE TARGET TO 370 (380) PENCE - 'BUY'
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*CREDIT SUISSE RAISES GLENCORE PRICE TARGET TO 400 (390) PENCE - 'OUTPERFORM'
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*UBS RAISES PRUDENTIAL PRICE TARGET TO 2200 (2000) PENCE - 'BUY'
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HSBC RAISES RBS TO 'HOLD' ('REDUCE') - TARGET 250 (210) PENCE
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*GOLDMAN CUTS VIRGIN MONEY PRICE TARGET TO 325 (330) PENCE - 'NEUTRAL'
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*BERENBERG RAISES JUST EAT PRICE TARGET TO 700 (660) PENCE - 'BUY'
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*HSBC RAISES LANCASHIRE HLDGS PRICE TARGET TO 683 (680) PENCE - 'HOLD'
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BERENBERG RAISES JUST EAT PRICE TARGET TO 700 (660) PENCE - 'BUY'
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*HSBC RAISES PAGEGROUP PRICE TARGET TO 635 (624) PENCE - 'BUY'
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*BARCLAYS RAISES TP ICAP PRICE TARGET TO 430 (400) PENCE - 'UNDERWEIGHT'
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*BARCLAYS CUTS IBSTOCK PRICE TARGET TO 255 (285) PENCE - 'OVERWEIGHT'
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COMPANIES - FTSE 100
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Old Mutual said pretax profit in the first half of 2017 rose to GBP940 million from GBP534 million the year before, boosted by GBP108 million of proceeds from selling OM Asset Management, which is now independent from the London-listed firm, and a GBP71 million gain from goodwill related to UAP-Old Mutual in East Africa. Adjusted operating profit for the half rose 37%, or 6% in constant currencies, to GBP969 million from GBP708 million, with Old Mutual Wealth reporting a 29% increase, Nedbank reporting a 3% increase, and Old Mutual Emerging Markets reporting a 1% rise. The dividend for the half was raised 32% to 3.53 pence, but noted it is taking a "conservative approach" towards setting its full-year dividend due to the need for capital management as it pursues a demerger of its various operations.
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A consortium made up of Mitsui & Co and Grupo Cobra is in exclusive talks with BHP Billiton to build an USD800 million desalination plant at its Spence copper mine in Chile, two sources with knowledge of the process told Reuters. In an article published Thursday, Reuters said the talks mean BHP is advancing the contracting process for a planned USD2.5 billion expansion at Spence, a project that has been on ice for years. A number of other companies bid on constructing the plant, including a consortium of Canada's Brookfield Asset Management and Spain's Acciona, but BHP has selected the Mitsui group to go ahead with bilateral negotiations, said the sources, who requested anonymity because the matter is private, Reuters said.
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COMPANIES - FTSE 250
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Domino's Pizza Group said it has formed a partnership with its largest franchisee in London, paying GBP24.0 million to take a 75% stake in a newly-formed company which will consist of all the franchisee's operations in the capital, a total of 25 existing stores.
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Greene King said it has appointed Richard Smothers as chief financial officer from February next year, as he joins from Mothercare, where he has held the same role since March 2015. He has also previously been a director of Rexam and held senior finance roles at Tesco. He replaces Kirk Davis, who will leave Greene King at the end of January to take up the role of chief financial officer at the Restaurant Group, which confirmed in its own statement that Davis will start "in February". Davis has formerly held the role of finance director at JD Wetherspoon, as well as senior finance roles at Tesco and Marks & Spencer.
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COMPANIES - LONDON MAIN MARKET AND AIM
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A Norwegian investor aims to offer a lifeline to the debt-laden publisher of the 'i' newspaper, Johnston Press, before it falls into hands of US hedge funds, with plans use its online audiences as a launchpad for digital start-ups, the Telegraph reported. Christen Ager-Hanssen, whose private equity firm Custos owns the Metro freesheet in Sweden, bought more than 5% of Johnston Press on Wednesday. In an interview with The Telegraph, he said he plans to increase the stake. He also intends to refinance the GBP220 million bond debt casting a shadow over the future of the 250-year-old publisher. Ager-Hanssen also said he plans to "take the initiative" ahead of US hedge funds that have bought up Johnston Press's bonds at a discount, the Telegraph said.
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COMPANIES - INTERNATIONAL
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Alphabet's Google UK received approval to construct a campus alongside the technology company's existing offices in London's King's Cross district, according to Bloomberg. The report noted that project, which can accommodate as many as 5,000 workers, was approved late Thursday by members of the borough council, with construction to start next year.
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Volkswagen's Skoda Auto arm and Tata Motors have ceased discussions around a potential partnership. Skoda said it has assessed and evaluated a potential strategic collaboration with Tata over recent weeks and months - but concluded that, at present, neither the technical nor the economic synergies are achievable to the extent desired by both parties.
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Credit Suisse Group has banned its traders from buying or selling certain Venezuelan securities that critics of the nation's government say help fund an authoritarian regime, Bloomberg reported citing a company memo. The Zurich-based bank is halting trading in two bonds issued by the state and its oil company, as well as any notes from a Venezuelan entity after June 1. The lender is also restricting business with Venezuelan counterparties, including private individuals and companies. The decision comes after the US began imposing sanctions on some Venezuelan officials in response to the anti-democratic turn of President Nicolas Maduro, who installed a widely criticized assembly to rewrite the country's constitution.
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Friday's Shareholder Meetings

Samuel Heath & Sons
LMS Capital (re tender offer)
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