28th Jun 2021 11:42
(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Glencore said it has agreed to buy out its Cerrejon coal mine joint venture partners, Anglo American and BHP Group, for USD588 million. For Anglo American, the sale will mark the wide-ranging miner's exit from thermal coal. Anglo will be selling its 33% stake in the Colombian mine for USD294 million. Melbourne-based BHP's 33% stake will be bought for around USD294 million as well. BHP said there will be a further impairment charge of around USD80 million after tax, recognised as an exceptional item in the miner's second half results, which are due on August 17. Baar, Switzerland-based Glencore said it "strongly believes" that acquiring full ownership of Cerrejon is the right decision and the progressive expiry of the current mining concessions by 2034 is in line with its commitment to a responsible managed decline of the company's coal portfolio. Glencore said production volumes are expected to "decline materially" from 2030. "Disposing of fossil fuel assets and making them someone else's issue is not the solution, and it won't reduce absolute emissions," said Glencore CEO Ivan Glasenberg. "We are confident we can manage the decline of our fossil fuel portfolio in a responsible manner that is also consistent with meeting the goals of the Paris Agreement, as demonstrated by our strengthened total emission reduction targets."
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Johnson & Johnson, one of the pharmaceutical firms accused of fuelling the deadly US opioid crisis, has reached a settlement with the state of New York for USD230 million and confirmed it will stop making or selling opioids in the US. The agreement announced Saturday allows Johnson & Johnson to resolve litigation over its role in the epidemic, which has killed more than half a million people since 1999, according to a statement from New York attorney general Letitia James. For its part, in a separate statement J&J said the settlement allowed it to avoid a trial that was scheduled to begin Monday, and said the group had "made the business decision in 2020 to discontinue all of its prescription pain medications in the US". The settlement "is not an admission of liability or wrongdoing by the company", it said, noting that other nationwide legal proceedings are underway, including a trial in California.
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Burberry said Marco Gobbetti will step down as chief executive officer and leave the company at the end of 2021, while Italian fashion firm Salvatore Ferragamo said it has hired Gobbetti as CEO and general manager. Burberry explained that Gobbetti - who it said has led a transformation of the British luxury brand and business - will be stepping down to take up "another opportunity that will enable him to return to Italy and be closer to his family". Ferragamo said Gobbetti will take up his position as soon as he is released from his contractual obligations at Burberry. Gobbetti was appointed as CEO of Burberry in 2016 and, alongside Chief Creative Officer Riccardo Tisci, was tasked with turning the business around after investors lost confidence in previous CEO Christopher Bailey. Gobbetti took over from Bailey in November 2017. The UK luxury retailer, famed for its trench coats, will now begin the search for a successor.
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NatWest Group confirmed it has agreed to sell the majority of subsidiary Ulster Bank's commercial lending to AIB Group. As part of its planned exit from the Republic of Ireland, NatWest agreed a non-binding memorandum of understanding with Dublin-headquartered Allied Irish Banks to offload an EUR4.2 billion Irish loan book. NatWest agreed to sell EUR4.2 billion gross in performing commercial lending and associated undrawn exposures of about EUR2.8 billion to AIB. AIB said it will pay EUR4.1 billion - 97.63% of par value - for the portfolio in cash, funded from existing resources.
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JD Sports Fashion said Iberian Sports Retail Group, the retailer's existing 50% intermediate holding company in Spain, has entered into a conditional agreement to acquire 80% of the shares of Deporvillage. JD said Iberian Sports Retail is to pay maximum of EUR140.4 million for the Spain-based online retailer focused on specialist sports equipment. Chair Peter Cowgill said: "Deporvillage has a strong consumer-centric approach and is the market leader in its categories in Spain with significant potential for further international development."
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GlaxoSmithKline has hired two investment banks to advise on plans to list its consumer unit next year and defend against the influence of activist investor, Elliott Investment Management, Bloomberg reported late Friday. Bloomberg said that the FTSE 100 pharmaceutical firm has hired Goldman Sachs and Citigroup to assist with its planned spinoff. On Wednesday last week, GlaxoSmithKline confirmed plans to separate its Consumer Healthcare arm, which includes products such as Aquafresh toothpaste and Nicorette gum. GlaxoSmithKline said it aims to list the division on the London Stock Exchange by mid-2022, but will continue to hold up to 20% of the business to sell at a later time. The separation and an accompanying 30% dividend reduction are designed to enhance GSK's focus on its drugs for cancer, HIV and other diseases.
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The UK's financial watchdog has banned leading cryptocurrency exchange Binance from all regulated activities in the UK. In another sign of an international crackdown on the cryptocurrency industry, the UK Financial Conduct Authority announced its move against Binance Markets – part of the wider Binance Group – late on Sunday. "Binance Markets Ltd is not permitted to undertake any regulated activity in the UK," the FCA said.
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MARKETS
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Stock markets were weaker and major currencies were hardly moved on Monday in a directionless start to the new week. Among companies in the news, Burberry was down 6.8% in London, while Glencore was down 1.1%. Investors are awaiting key events later in the week, including an OPEC+ meeting on Thursday and US nonfarm payrolls for June on Friday.
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CAC 40: down 0.4% at 6,599.07
DAX 30: down 0.1% at 15,592.08
FTSE 100: down 0.6% at 7,090.34
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Hang Seng: closed down 0.1% at 29,268.30 in truncated session due to heavy rain in Hong Kong
Nikkei 225: closed down 0.1% at 29,048.02
S&P/ASX 200: closed marginally lower, down 0.70 point at 7,307.30
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DJIA: called down 0.1%
S&P 500: called marginally higher, up 1.50 points
Nasdaq Composite: called up 0.2%
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EUR: flat at USD1.1941 (USD1.1945)
GBP: flat at USD1.3915 (USD1.3910)
USD: flat at JPY110.72 (JPY110.75)
GOLD: down at USD1,776.46 per ounce (USD1,781.20)
OIL (Brent): up at USD76.16 a barrel (USD75.81)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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New coronavirus cases popped up in cities across Australia on Monday, prompting local authorities to impose restrictions in areas not used to living under strict Covid-19 rules. Australia has been broadly successful in containing virus clusters, but is now battling flare-ups in at least four cities across the vast continent nation. Brisbane, Darwin, Perth and Sydney have all reported new cases of the highly contagious Delta variant, which first emerged in India and has spread in Australia after escaping from hotels used to quarantine returning travellers. The largest outbreak is in Sydney, where 130 people have tested positive for Covid-19 since a driver for an international flight crew was diagnosed in mid-June, with the city's residents now under stay-at-home orders for two weeks. A 48-hour lockdown of Darwin and surrounding areas – due to end Tuesday – was extended to Friday after a cluster linked to an outback gold mine grew to seven cases.
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US President Joe Biden ordered airstrikes against Iran-backed militia groups in the Iraq-Syria border region on Sunday. The targeted facilities were used by Iran-backed militias engaged in drone attacks against US personnel and facilities in Iraq, Pentagon press secretary John Kirby said in a statement. Two locations in Syria and one in Iraq - both close to the border between the two countries - were targeted. The Pentagon said the locations were operational and weapons storage facilities used by several Iran-backed groups including Kata'ib Hezbollah and Kata'ib Sayyid al-Shuhada.
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The French far right of Marine Le Pen failed to win any region while the centrist ruling party of President Emmanuel Macron suffered another poll drubbing in the second round of regional elections Sunday, again marked by a woeful turnout. In a confirmation of trends set in the June 20 first round, partial results showed the National Rally of Le Pen was thwarted in its main ambition of winning the Provence-Alpes-Cote d'Azur region that includes Marseille and Nice. Macron's ruling party could not even break into double figures nationwide let alone win any region, in a jolt as the president begins to turn his sights on re-election in 2022. Victory in the Mediterranean region would have given Le Pen control of one of France's 13 mainland regions for the first time and added impetus to her challenge to Macron in the presidential elections. But the outcome marks a boost for the traditional right-wing The Republicans as well as the Socialist Party, who were squeezed after the centrist Macron surged into power in 2017 with his brand-new Republic on the Move party.
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Import prices rose in Germany in May, figures from the Federal Statistics Office showed. The index of import prices increased by 12% in May compared with the year prior. This has been the highest year-on-year-change since October 1981, when import prices jumped by 14%. In April and in March the import price index rose by 10% and 6.9%, respectively. From April to May the index rose by 1.7%.
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Sajid Javid said his "most immediate priority" will be getting the UK through the coronavirus pandemic, as he took up the job of Health secretary. Speaking to the media for the first time since he took over from Matt Hancock on Saturday, Javid said he recognises the "huge responsibility" facing him. Javid's return to the Cabinet came just 90 minutes after Hancock announced his resignation on Saturday evening, following the leaking of video footage showing him breaking social distancing rules by kissing an aide in his ministerial office. Javid, a former chancellor and home secretary, said Hancock had worked "incredibly hard" and "achieved a lot", and he added: "We are still in a pandemic and I want to see that come to an end as soon as possible and that will be my most immediate priority, to see that we can return to normal as soon and as quickly as possible."
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House prices in prime markets outside London have increased by 8.5% year-on-year, marking the strongest growth in a decade. Across Britain, homes with bigger gardens, country houses priced at GBP2 million-plus, and properties by the sea are helping to drive price growth, according to the research from estate agent Savills. It said the 8.5% annual increase was the highest recorded since 2010. The prime property market generally includes the top 5% of homes by value. But there are early signs that some of the urgency is coming out of the market. While it remains a "seller's market" in many areas, greater price sensitivity is expected over the remainder of the year, according to Savills head of residential research Lucian Cook. A stamp duty holiday is due to be tapered from Thursday July 1.
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The Irish government is bringing forward a decision on whether to delay the next planned round of Covid-19 relaxations in Ireland, the Taoiseach has said. Micheal Martin said Cabinet would now deliberate on the scheduled July 5 reopening of indoor hospitality in Ireland early this week. A decision on the return to indoor dining and drinking had initially been expected later in the week, however, ministers have faced intensifying calls from bar and restaurant owners to urgently provide clarity. They have made the point that they need to tell their staff whether or not they will be working on July 5.
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Nearly 140 countries will haggle over key details of a global corporate tax plan in the week ahead, with some concerned about giving up too much and others eager to ensure tech giants pay their fair share. The Group of Seven wealthy democracies approved a proposal to impose a minimum corporate tax rate of at least 15% earlier this month, hoping to stop a "race to the bottom" as nations compete to offer the lowest rates. The deal now goes to the Organisation of Economic Co-operation & Development, which is overseeing two days of talks starting Wednesday to find a consensus among 139 countries. The proposal will then be taken up by the G20 club of wealthy and emerging countries at a meeting of finance ministers in Italy on July 9 and 10.
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By Tom Waite; [email protected]
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