20th Aug 2021 10:54
(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Fortress Investment Group hasn't abandoned yet its effort to buy Wm Morrison Supermarkets, after the UK grocer late Thursday accepted a raised offer from rival bidder Clayton, Dubilier & Rice worth GBP7.0 billion. Shares in Morrisons surged above the 285 pence-per-share offer price, up 4.4% to 291.42 pence in London on Friday. Fortress asked Morrisons shareholders to take no action on the new CD&R bid, saying it is "considering its options" with respect to the all-cash offer it made at the start of July and increased at the start of August. The Softbank Group Corp-owned private equity firm said it will make a further announcement "in due course". The new CD&R offer has been unanimously accepted by the board of the Bradford-based grocer, and directors said shareholders should vote in favour of the takeover at a meeting due in early October. If they do, the deal is expected to complete in the same month. As a result, Morrisons withdrew its recommendation for investors to accept a previous 272p-per-share takeover bid from a consortium led by Fortress, worth GBP6.7 billion.
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AstraZeneca reported good results from its Covid-19 prevention trial, though less positively said that subsidiary Alexion has halted its amyotrophic lateral sclerosis drug trial due to lack of efficacy. The pharmaceutical firm noted "positive" results from its Provent Phase III trial of Covid-19 treatment, AZD7442. The company said AZD7442 "achieved a statistically significant reduction in the incidence of symptomatic Covid-19, the trial's primary endpoint." AZD7442 is a combination of two long-acting antibodies, Astra said. Separately, Alexion halted its Champion-Als Phase III trial of a potential treatment for amyotrophic lateral sclerosis due to lack of efficacy.
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UK retailer Marks & Spencer said it has made a strong start to its financial year that began on April 4, with improving sales and profit. M&S said the easing of restrictions has led to an "encouraging" performance. In the 19 weeks to August 14, total revenue was up 29% from a year ago, and up 4.4% on the same period in financial 2020, meaning two years ago and before the pandemic began. This has been led by an outperformance in Food sales, which are up 11% on a year ago and up 9.6% on two years ago, with retail park locations trading strongly. Clothing & Home sales are up 92% year-on-year, but are still 2.6% below financial 2020. "The change in our approach to trading, including more focused ranges, fewer promotions and a substantially smaller summer sale, has resulted in full price sales up about 9% on financial 2020," M&S explained. Looking ahead, M&S expects adjusted pretax profit at the upper end of its guided range of GBP300 million to GBP350 million. "Although there has likely been an element of pent-up consumer demand in trading to date, we believe this performance provides strong confirmation of the beneficial effects of the last 18 months' 'Never the Same Again' changes," the retailer added.
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US regulators on Thursday filed a new lawsuit accusing Facebook of maintaining an illegal monopoly in social networking, reviving the case two months after it was dismissed by a federal judge. In the amended complaint, the Federal Trade Commission said Facebook's dominance "is protected by high barriers to entry," and that "even an entrant with a superior product cannot succeed against the overwhelming network effects enjoyed by an incumbent personal social network." The lawsuit filed in federal court in the US capital said Facebook used "anticompetitive acquisitions" of potential rivals such as Instagram and WhatsApp to protect its dominance. FTC officials said the deals amounted to "illegal buy-or-bury" schemes. "Facebook lacked the business acumen and technical talent to survive the transition to mobile. After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat," said acting FTC competition bureau chief Holly Vedova in a statement. The lawsuit, which could take years to go through the courts without a settlement, calls for the court to order "divestiture of assets," including WhatsApp and Instagram, to restore competition.
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Aiming for a bigger presence in US brick-and-mortar retail, Amazon.com plans to open "several" multi-purpose shopping venues similar to department stores, the Wall Street Journal reported Thursday. The stores will sell household items, electronics and apparel, showcasing Amazon's private-label merchandise, the newspaper said, citing people familiar with the matter. Some of the first stores are expected in California and Ohio, according to the report. The move would come on the heels of Amazon's 2017 acquisition of the Whole Foods Market grocery chain for USD13.7 billion, which significantly expanded the e-commerce firm's presence in physical retail.
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Alex Gorsky will step down as chief executive of Johnson & Johnson in January, ceding the role to longtime company executive Joaquin Duato, the health care giant announced Thursday. Gorsky, the CEO since 2012, is stepping aside "due to family health reasons," according to a company press release, which said he will stay on as executive chair. Gorsky oversaw development of the company's one-shot Covid-19 vaccine. His tenure also coincided with a 60% increase in research and development, the company said. He has also been at the helm during a recent settlement with US states over opioids, agreeing to pay up to USD5 billion over nine years. "As the world continues to face significant health challenges, including the ongoing pandemic, I am inspired by Johnson & Johnson's opportunity to play a key role in meaningfully improving the global trajectory of human health," Duato said.
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MARKETS
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Stock prices globally were heading for a negative end to the week, as traders prepared for the next big risk event, Jackson Hole. The summer meeting of central bankers in the mountain resort in Wyoming is hosted by the US Federal Reserve Bank of Kansas City. Formally called the Economic Policy Symposium, this year's event is being held in-person from August 26 to 28, so starting on Thursday next week. The event has been held every year since 1978, and the Fed chair traditionally gives a policy speech.
Fed Chair Jerome Powell "could, of course, mention timing around the next round of tapering, but will probably defer to the next FOMC, on 22nd September, stating this will be the official and formal moment to announce the details of their policy, including tapering," commented Eric Vanraes, portfolio manager of the Strategic Bond Opportunities Fund at Eric Sturdza Investments. "He could mention something important: that the tapering will include both Treasuries and mortgage-backed securities."
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CAC 40: down 0.2% at 6,594.73
DAX 30: down 0.3% at 15,720.87
FTSE 100: down 0.3% at 7,044.69
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Hang Seng: closed down 1.8% at 24,849.72
Nikkei 225: closed down 1.0% at 27,013.25
S&P/ASX 200: closed down 0.1% at 7,460.90
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DJIA: called down 0.5%
S&P 500: called down 0.5%
Nasdaq Composite: called down 0.4%
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EUR: down at USD1.1672 (USD1.1685)
GBP: down at USD1.3620 (USD1.3666)
USD: soft at JPY109.70 (JPY109.75)
Gold: firm at USD1,782.00 per ounce (USD1,781.65)
Oil (Brent): firm at USD66.32 a barrel (USD66.10)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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German producer prices surged at the fastest pace in almost 50 years in July, data from the Federal Statistical Office showed. In July, producer prices for industrial products increased by 10% compared with July 2020. That inflation was slightly above the market consensus of 9.2%, as cited by FXStreet. Destatis noted this was the fastest annual increase in producer prices since January 1975, when prices rose almost 11% during the first oil crisis. Compared with the preceding month of June, the overall index rose by 1.9% in July, slightly above the market consensus compiled by FXStreet of 0.8%.
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Japan's consumer price index slipped in July, the Statistics Bureau of Japan said, confounding expectations of an increase in prices. Consumer prices fell by 0.3% in July from the year before, well wide of market consensus, according to FXStreet, of a 0.6% rise, and reversing June's 0.2% rise. Excluding fresh food and energy, the annual deflation rate was 0.6%, widened from 0.2% in June, while consensus had predicted a core price decline in July of just 0.2%. On a monthly basis, the consumer price index rose 0.2% following June's 0.3% rise.
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Retail sales unexpectedly declined in the UK in July, data from the Office of National Statistics showed. Retail sales volumes fell by 2.5% in July from June, which is significantly below the market consensus cited by FXStreet of a 0.4% gain. On the year before, July's sales rose 2.4%, again well short of market consensus, which had predicted a 6% rise. The ONS also noted July's sales are up 5.8% on the pre-coronavirus pandemic level in February 2020. Food store sales volumes fell by 1.5% in July, following an increase in the previous month, when sales had been boosted by the start of the Euro 2020 football championship. Non-food stores saw a fall of 4.4% in sales in July from June, driven by falls in second-hand goods stores and computer and telecoms equipment stores.
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UK consumer confidence edged down in August but remains above pre-pandemic levels, according to an index. GfK's UK consumer confidence barometer measures how households feel about their own financial situation and the wider economy. The overall index score in August was minus 8, dropping from minus 7 in July but above the minus 9 score in June. Attitudes towards making major purchases were the biggest driver for the fall, with sentiment turning negative, having been in positive territory a month earlier. The major purchase index scored minus 3 in August, compared with a positive score of 2 in July – although the latest data is still far higher than the minus 25 scored in August 2020.
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China passed a sweeping privacy law aimed at preventing businesses from collecting sensitive personal data Friday, as the country faces an uptick in internet scams, leaks and concerns about tech giants abusing clients' personal information. Under the new rules passed by China's top legislative body, state-run and private companies handling personal information will be required to reduce data collection and obtain user consent. The new rules are also expected to further rattle China's tech sector, with companies like ride hailing giant Didi and gaming behemoth Tencent in regulators' crosshairs in recent months over misuse of personal data. The law aims to protect those who "feel strongly about personal data being used for user profiling" and aims to prevent companies from setting different prices for the same service based on clients' shopping history, a common practice among Chinese online businesses.
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Sydney extended its two-month-old lockdown for another month and introduced a partial curfew Friday, as Australia's largest city struggled to contain a fast-spreading coronavirus outbreak. New South Wales premier Gladys Berejiklian announced the "difficult" decision, telling the city's population of five million it was time to "bunker down". "Unfortunately the case numbers continue to grow," she said. For much of the pandemic, Sydney saw very few virus cases. But the city is now reporting more than 600 cases each day – straining contact tracing efforts – and that number shows little sign of shrinking. Stay-at-home orders will now remain in place across the city until the end of September and residents in virus hotspots will also be subject to a nighttime curfew and limited to one hour of outdoor exercise a day. With the number of deaths rising steadily and the virus spreading to regional areas, Australia is racing to get jabs in arms. Just 30% of the population is currently fully vaccinated.
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By Tom Waite; [email protected]
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