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Reports UK

UK stock market morning note (September 04, 2014)

September 4, 2014, Thursday, 08:27 GMT | 03:27 EST | 12:57 IST | 15:27 SGT
Contributed by SVS Securities

The FTSE 100 is called to open flat this morning with investors waiting on decisions from the Bank of England and in particular the ECB at lunchtime. The economic diary today also sees the release of US trade balance figures, the latest US weekly jobless claims, ADP non-farm employment change numbers and the ISM non-manufacturing PMI. Overnight we had the CBI reiterate its UK economic growth forecast for this year of 3% and 2.7% in 2015, but it warned about UK businesses facing political uncertainties including the Scottish independence vote, next year's general election and Britain's place in the European Union. The latest FTSE review has also taken place which will see Direct Line and Dixons Carphone promoted to the FTSE 100 at the expense of Barratt and Rexam with effect from 22 September. Commodity prices are mixed and on the foreign exchanges, the key currencies are all trading in narrow ranges ahead of this raft of economic announcements.


Company Announcements

Standard Life

It has announced the disposal of its Canadian operations to Manulife Financial for GBP2.2bn. Both parties have also entered into a global collaboration agreement and following the completion of the transaction, Standard Life expects to return GBP1.75bn or equivalent to 73p per share to shareholders by way of a B/C share scheme. After this return of capital, Standard Life intends to carry out a share consolidation. The disposal is in line with the insurer's strategy and simple business model premise of increasing assets, maximising revenue and lowering unit costs whilst optimising the Balance Sheet.

Balfour Beatty

The company has announced the sale of its US business, Parsons Brinckerhoff to WSP Global for a cash consideration of GBP820m. The deal is subject to shareholder approval and certain anti-trust and other approvals with completion expected in Q4 2014. The proceeds after deducting costs of GBP50m and separation costs of GBP30m will go towards a return to shareholders of up to GBP200m, GBP85m to reduce its pension deficit with the balance to be retained by the company.