FTSE Pares Losses to Trade Virtually Flat

Market News: 
 
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Jasper Lawler at CMC Markets wrote: “Speculation that ITV will mount another offer for Entertainment One but that Rank Group may give up on its joint purchase of William Hill with 888 Holdings has sent both shares to the top of the FTSE 250, helping mid-caps outperform blue chips.

“Oil and Gas firms were the biggest drag on the FTSE 100. Oil prices snapped a four-day winning streak on Tuesday and have extended losses on Wednesday. Saudi Arabia is said to have told OPEC that its output hit new record high in July, adding to concerns of over-supply.”

 
Top Stories: 
 

Bank of England Bond Buying Hits Early Snag

The Bank of England failed to buy as many government bonds as it wanted after it relaunched a multibillion pound bond-buying effort to stimulate the U.K. economy.

Canada’s Entertainment One Rejects ITV’s Takeover Offer

Canadian film and television producer and distributor Entertainment One Ltd. (ETO.LN) Wednesday said it rejected a $1.3 billion offer for the company, following reports UK broadcaster ITV PLC (ITV.LN) made a bid.

Eurostar Faces Disruptions as Workers Announce Strike

Passenger train services using the English Channel Tunnel are set to be disrupted for seven days in August after a U.K. union said Wednesday that Eurostar rail workers will strike because of a dispute over their work-life balance.

 
Companies News: 
 

Midatech Pharma Sees 10-Fold Increase in 1H Revenue

Shares in Midatech Pharma PLC (MTPH.LN) rose on Wednesday after the pharmaceutical company said it expects to report a greater than 10-fold increase in revenue for the six months ended June 30.

Security Company G4S 1H Pretax Profit Rises 9.7%

Security company G4S PLC (GFS.LN) reported on Wednesday a 9.7% rise in half-year profit before interest, tax and amortization, and said over the medium-term it expects demand for its services to grow by 4% or 6% a year.

Interserve Shares Jump After Company Reassures on Outlook Despite Brexit

Shares in support service and construction company Interserve PLC (IRV.LN) jumped Wednesday after it said it is retaining its full-year outlook despite Britain’s vote to leave the European Union.

Share 1H Pretax Profit Rises 34%; Says Trading Since Brexit Positive

Share PLC (SHRE.LN) reported on Wednesday a 34% rise in pretax profit for the first half of 2016 thanks to booking other gains after revenue and despite challenging trading conditions, and said trading has been positive and ahead of the previous year since the U.K. voted to leave the European Union.

Kibo, Lake Victoria Gold To Combine Tanzanian Projects, List JV

Tanzania-focused miner Kibo Mining PLC (KIBO.LN) and Australia-based Lake Victoria Gold Ltd. agreed to combine their respective Tanzanian Imweru and Imwelo gold projects into a joint venture that will be listed on the London and Johannesburg stock exchanges.

Gem Diamonds’ Letseng Mine Hit By Excessive Snowfall, Wind

Southern Africa-focused Gem Diamonds Ltd.(GEMD.LN) said Wednesday that “excessive snow falls and severe winds” in the Lesotho mountains has limited access to its flagship Letseng mine and will affect diamond production, although not materially.

Conroy Gold: Study Confirms Continuity of Gold Lodes at Clontibret

Conroy Gold & Natural Resources PLC (CGNR.LN) Wednesday said a study by a structural consultant has confirmed the continuity of the gold lodes at its Clontibret gold target in Ireland.

Lookers to Sell Automotive Parts Business for GBP120M

Car dealership chain Lookers PLC (LOOK.LN) on Wednesday announced that it had conditionally agreed to sell its automotive parts business to Alliance Automotive U.K. Ltd. for 120 million pounds ($156 million) in cash.

Harvest Minerals’ Fertilizer Project Has Small Costs and Good Production, Study Says

Harvest Minerals Ltd. (HMI.LN) said on Wednesday that its maximus natural fertilizer project went through a scoping study, after which it was found out that the project uses small mining and processing costs and that its production is robust.

Genedrive Assay Used in STOP-HCV-1 Clinical Trial

Genedrive PLC (EHP.LN), a molecular diagnostics company, on Wednesday announced that its Genedrive point of care IL28B human genotyping test will be used in the STOP-HCV-1 clinical trial being run by STOP-HCV, a consortium designed to use stratified medicine to optimize the treatment of patients with Hepatitis C Virus infection.

Andalas Energy Proof Of Work Program Approved

Oil and gas explorer Andalas Energy & Power PLC (ADL.LN) Wednesday said Indonesia’s national energy company has approved its proof of concept work program for a gas field.

 
Market Talk: 
 

ITV Takes on U.K. Media Competition

0853 GMT ITV is competing in a highly competitive U.K. media market, as operators from divergent sectors battle for subscribers. Telecommunication companies like Vodafone and BT through pay-television, as well as over-the-top streaming platforms like Netflix and Amazon, have invaded the share of viewing for terrestrial broadcasters like ITV. Producing as well as owning key content and potentially licensing those programs gives a competitive edge, differentiates a consumer offer and provides a clear revenue path. ITV Studios, the company’s expanding production arm, has driven sales and is at the epicenter of this trend for the company. “ITV Studios revenues have doubled in scale since 2011 following 15 acquisitions of independent production companies,” says Enders Analysis. ITV has made a takeover bid for Entertainment One, the Canadian film and television producer and distributor said in a statement. ITV shares rise 0.6% to 200p.

Asian Refiners Cut Back On Light Crude Imports

0840 GMT Refiners in South Korea and China are importing less sweet light crude from the North Sea and switching to medium and heavy grades from the Middle East and Russia, according to the London-based Howe Robinson. In a note, the ship-brokers say that typically the two countries take two tankers of the crude each month, but this has been halved in August. Weaker regional margins for light distillate products such as gasoline and naphtha is behind the fall with refineries instead concentrating on other products such as diesel.

GBP Edges Up Versus Weak USD After BOE Statement

0840 GMT GBP/USD trades up 0.3% at $1.3042, benefiting from a broadly weaker U.S. dollar and marginally extending gains after the Bank of England’s response to Tuesday’s failure to buy back sufficient long-dated gilts as part of its quantitative easing program. The BOE said it will incorporate the GBP52 million shortfall from Tuesday’s reverse auction in the second half of its six-month bond purchase program. GBP/USD was trading at around $1.3034 prior to the announcement. Analysts cite the main reasons behind sterling’s gains, however, as Tuesday’s weak U.S. productivity data weighing on the dollar and covering of sterling short positions.

Jefferies Sees 20% Chance of Imagination Technologies Takeover

0822 GMT The ‘For Sale’ sign has been up on U.K. tech for two years, so it wouldn’t be surprising if Imagination Technologies Group was bought, says Jefferies, lifting its target price to 219p from 199p. That said, the recent acquisition of Imagination’s much bigger fellow chip designer ARM Holdings was unique in many ways so relevance for Imagination is limited, it says, offering a 20% chance of a takeover. Imagination’s share price has been rising lately, but there is scope for more upside if they can win back market share and benefit from customer Apple’s 2017 iPhone, Jefferies says. Keeps a buy stance. Imagination shares unchanged at 200p. Shares down 0.9% at 198p.

BOE To Cover Shortfall in Second Half of QE

0819 GMT The Bank of England says it will make up a GBP52 million shortfall in its bond-buying efforts in the second half of the six-month program. The central bank failed to attract enough bids in an auction Tuesday for 15-year government bonds, scooping up GBP1.12 billion of the GBP1.17 billion it was aiming for. Economists and investors say the snafu suggests the central bank will need to pay more to price such bonds from the pension funds that hoard them to meet their liabilities.

G4S Jumps as Results Soothe Investor Fears

0815 GMT Shares in outsourcing firm G4S rise by almost 13% to 219p following the release of its 1H 2016 results. Jefferies analyst Kean Marden highlights the company’s improved organic revenue, which is up to 5.5% in 2Q from 4.5% in 1Q. Mr. Marden also notes G4S’s more disciplined approach to bidding sees its bid pipeline slightly shrink. Disposals of GBP5 million have helped the company’s bid to shed dead wood, he adds, although says net debt is still high. It’s this high debt-level which had caused investors to fear a dividend cut or a rights issue – neither of which have materialised.

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