UK TOP NEWS SUMMARY: Coronavirus Spread Outside China Accelerates

(Alliance News) - The following is a summary of top news stories ...

Alliance News 21 February, 2020 | 11:06AM
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(Alliance News) - The following is a summary of top news stories Friday.

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COMPANIES

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Pearson sales decreased by 6% in headline terms in 2019 to GBP3.87 billion from GBP4.13 billion a year earlier. Stripping out the impact of portfolio and currency movements, revenue was flat in underlying terms, the company noted. Pretax profit was lower, at GBP232 million compared to GBP498 million a year ago, hurt by the reduced gains on disposals and higher restructuring charges. The FTSE 100-listed company believes that "the future of learning will be increasingly digital" and, therefore, it is restructuring to meet its clients needs. Looking ahead, Pearson said it expects to deliver 2020 adjusted operating profit of between GBP410 million to GBP490 million, excluding the recently sold 25% stake in Penguin Random House. The disposal generated USD675 million net proceeds. In 2019, adjusted operating profit totalled GBP581 million, up from GBP546 million in 2018.

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Kingspan reported an increase in revenue in 2019, but warned that macro instability resulted in weaker second half and this has continued into the current year. The building materials company said revenue in 2019 rose 7.0% to EUR4.7 billion from EUR4.4 billion in 2018, while pretax profit increased 12% to EUR454.4 million from to EUR404.9 million. As a result, the Kingscourt, Ireland-based company proposed a final dividend of 33.5 cents share, up 12% from 30.0 cents in 2018. Combined with the interim dividend of 13.0 cents per share, the total dividend for the year increased 11% to 46.5 cents from 42.0 cents. Kingspan said that, despite significant macro instability in a number of its key markets, it performed well in the first half, but trading was weaker towards the end of the year.

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NMC Health reiterated that it continues to seek clarity from major investors, including co-founder and former joint chair Bavaguthu Raghuram Shetty, in respect to their holdings in the company. The UAE-focused hospital operator added that it has received shareholding notifications from former vice-chair Khaleefa Butti Omair Al Muhairi and Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi, though these have not been independently verified. As per the shareholding notifications received by NMC, Al Muhairi owned just shy of a 20% stake between the period from May 31, 2017, to February 17, 2020. Al Qebaisi had just over an 11% stake during the same period. NMC said the shareholding notifications are being published in the form it received them and the company is not able to independently verify the information.

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HSBC has singled out Jean Pierre Mustier, head of Italian bank UniCredit SpA, as a potential successor of former chief executive John Flint, the Financial Times reported Thursday. The FT said, citing two people familiar with the matter, the choice is now a two-horse race between HSBC's interim chief Noel Quinn and Mustier for the permanent role. The Asian-focused lender could make its final decision in the coming weeks, the newspaper said.

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MARKETS

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London shares were mixed as investors were cautious about coronavirus impact on both individual companies and the wider economy. "The travel sector could really bear the brunt of the coronavirus impact, as people stay at home rather than taking on a perceived greater risk of infection by going on holiday," said Russ Mould, investment director at AJ Bell. In the US, Wall Street was called for a lower open, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite seen 0.3%, 0.4% and 0.5% lower, respectively.

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FTSE 100: down 0.3% at 7,412.92

FTSE 250: flat at 21,873.41

AIM ALL-SHARE: up 0.1% at 976.34

GBP: up at USD1.2912 (USD1.2882)

EUR: firm at USD1.0804 (USD1.0794)

Gold: up at USD1,634.67 per ounce (USD1,621.15)

Oil (Brent): down at USD58.40 a barrel (USD59.75)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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An eruption of new virus cases in South Korea, Iran and Chinese hospitals and prisons rekindled concerns about the spread of a deadly disease that has killed more than 2,200 people. The World Health Organization warned nations they could face a serious problem if they fail to "hit hard now" against the new coronavirus, which has infected more than 75,000 in China and over 1,100 abroad. China pointed to official numbers showing a drop in new cases this week as evidence that its drastic containment measures are working, but fresh cases emerged at two Beijing hospitals and more than 200 other cases in two prisons. South Korea confirmed 52 more cases, taking the country's overall figure to 156, as the number of infections linked to a religious sect spiked, making it the worst-infected country outside China. Iran confirmed three new cases after two elderly men died from the virus in the city of Qom, prompting Iraq to ban travel to and from its neighbour.

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The UK private sector stabilised in February, figures showed, as supply chain disruptions were offset by growth in manufacturing. The seasonally adjusted IHS Markit/CIPS UK composite output index was unchanged month-on-month in February at 53.3, pointing to the joint-fastest expansion of private sector output since September 2018. Any reading below 50 indicates contraction, while one above expansion. The latest reading signalled higher business activity and greater willingness to spend among clients. IHS Markit highlighted reduced political uncertainty following the December general election as a main driver for growth. However, the overall rate of new order growth eased from the 19-month peak seen in January as the COVID-19 outbreak had weighed on overseas bookings and resulted in the cancellation of some orders from clients in Asia, IHS Markit said. Looking ahead, IHS Markit said optimism remained high despite "backdrop of extreme events".

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Inflation in the eurozone rose in January on an annual basis, but declined month-on-month, data from Eurostat showed. The eurozone's annual inflation rate, measured by the consumer price index, was 1.4% in January, up from 1.3% in December. The eurozone flash estimate for January, released last month, was 1.4%. On a monthly basis, inflation fell 1.0% in January, from a 0.3% rise in December.

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The eurozone saw business activity increase to a six-month high in February, flash estimates from IHS Markit showed. The IHS Markit flash eurozone purchasing managers' index rose slightly to 51.6 points in February from 51.3 in January. Any reading over 50 indicates expansion. Despite the only modest increase, February's reading marked a six-month high. February also marked the third straight month of accelerated expansion, IHS noted, despite the signs of demand weakening and production suffering from the coronavirus outbreak in China. Subdued business growth held the expansion back.

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Japan's private sector output in February saw its worst rate of decline since early 2014, Jibun Bank flash PMI estimates showed Friday, as the country desperately looks to avoid a technical recession. The Jibun Bank flash composite purchasing managers' index for Japan fell to 47.0 points in February from a final reading of 50.1 in January. A reading above 50 indicates expansion in the sector and one below contraction. IHS Markit Economist Hoe Hayes said: "Latest PMI data dash any hopes of a first quarter recovery in Japan and significantly raise the prospect of a technical recession in the world's third largest economy." The flash services PMI sank to 46.7 in February from 51.0 in January. Jibun Bank said the sector had seen a "solid fall" in February, with output seeing its sharpest decline since April 2014. The deadly outbreak of the coronavirus in neighbouring China hit tourism in Japan, which drove down footfall and new business.

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