1st Feb 2021 11:30
(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Hargreaves Lansdown reported a rise in interim earnings and lifted its payout, adding that its second half has started strongly. For the half year ended December 31, net new business rose 40% to GBP3.24 billion from GBP2.31 billion a year ago. Pretax profit was up 10% to GBP188.4 million from GBP171.1 million. Total assets under administration as at December 31 was GBP120.6 million, up 15% from GBP105.2 billion at the same time in 2019. The fund supermarket said it added 1.5 million active clients, which was an increase of 84,000 since June 30. Hargreaves raised its interim dividend by 6% to 11.9 pence per share. "As our client numbers continue to grow, we are finding that younger people are taking a greater interest in investing for the future, with the average age of our clients continuing to fall. Covid-19 has underpinned the importance of financial resilience and Hargreaves Lansdown is well placed to support clients with their saving and investment needs across their lifetimes," said Chief Executive Officer Chris Hill.
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BP said it will sell its 20% interest in Block 61, Oman to PTT Exploration & Production for GBP2.6 billion. PTT Exploration is Thailand's national petroleum company. BP owned a 60% stake in Block 61, while Makarim Gas Development has 30% stake and Petronas unit PC Oman Ventures owns 10%. Following completion of the sale - which is expected to occur in 2021 - BP will remain operator of the block, with a 40% stake. The consideration for the sale comprises USD2.45 billion payable on completion and USD140 million payable dependent on pre-agreed future conditions.‎
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Ryanair Holdings posted a sharp third-quarter swing to loss and the airline again hit out at "unlawful state aid" of European flag carriers as the aviation industry remains mostly grounded by Covid-19. The budget carrier's traffic around the Christmas and New Year period was "severely impacted" by travel restrictions as many governments in Europe imposed curbs on UK arrivals to stem the spread of a more contagious variant of Covid-19. In its financial third quarter ended December 31, Ryanair's revenue plunged 82% year-on-year to EUR341.2 million from EUR1.91 billion. The carrier swung to a EUR362.5 million pretax loss, from a EUR81.6 million profit a year earlier. It also posted a EUR306 million third-quarter net loss, swinging from a EUR88 million profit. The restrictions and flight bans saw third-quarter traffic plunge by 78% to just 8.1 million passengers from 35.9 million a year earlier. In December alone, traffic was down 83%. In January, Ryanair said it expected traffic for the financial year ending in March of between 26 million and 30 million, reduced from its previous guidance of "below 35 million".
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Ferguson said it has completed the GBP308 million sale of heating & plumbing distribution business Wolseley UK to US private equity firm Clayton, Dubilier & Rice. The FTSE 100 plumbing and heating products distributor announced the sale in early January, at the time stating the disposal means it will be able to "focus entirely" on its North American business. In the financial year ended July 31, Wolseley UK generated revenue of USD1.88 billion. At the time, Ferguson also said it intends to return substantially all of the net proceeds of the disposal to shareholders by way of a special dividend
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JD Sports Fashion said it has agreed to buy Baltimore, Maryland-based footwear and apparel streetwear retailer DTLR Villa for USD495 million. DTLR Villa is currently majority owned by BRS & Co and Goode Capital, and operates from 247 stores across 19 states, principally in the north and east of the US. In the year ended February 1, 2020, DTLR deliver earnings before interest, taxes, depreciation and amortisation of USD45.6 million and a pretax profit of USD1.6 million. JD Sports's cash consideration is being funded from cash resources and existing bank facilities.
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ASOS said it has acquired four brands from beleaguered Arcadia Group Ltd, including UK high street staples Topshop and Topman. ASOS will pay GBP265 million for the four brands - including Miss Selfridge and HIIT as well - and also buy GBP30 million in stock upfront. HIIT was a sub-brand of menswear retailer Burton, which ASOS has chosen not to acquire. The online retailer is only buying the stock and the brands, so the physical stores still will close. The deal does mean roughly 300 jobs will be saved "across design, buying and retail partnerships". The AIM-listed firm said the acquisitions represent a "compelling strategic opportunity" to become "the number one destination for fashion loving 20-somethings worldwide".
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AstraZeneca will increase its coronavirus vaccine deliveries to the EU by 30%, European Commission Chief Ursula von der Leyen said Sunday as the bloc sought to claw back time lost rolling out the jabs. The British-Swedish company had announced last week that it could deliver only a quarter of the doses originally promised to the bloc for the first quarter of the year because of problems at one of its European factories. But AstraZeneca, whose vaccine was authorised for use in the EU on Friday, has now agreed to send nine million additional doses and "will start deliveries one week earlier than scheduled", Von der Leyen said in a tweet. An EU source told AFP the first deliveries would start in the second week of February. AstraZeneca would also extend its production capacity in Europe, Von der Leyen added. The EU leader was tweeting after talks Sunday with the leaders of the drugs companies that have signed vaccine contracts with the EU.
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MARKETS
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London shares were higher with Mexican gold and silver miner Fresnillo the best blue-chip performer, up 18%, boosted by a rally in silver as the metal became the new target of retail investors. Hargreaves was down 1.7%. The pound held onto gains despite disappointing UK PMI data. US stock market futures were pointed to a higher open.
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FTSE 100: up 0.8% at 6,455.85
FTSE 250: up 0.7% at 20,376.63
AIM ALL-SHARE: up 1.2% at 1,174.86
GBP: up at USD1.3720 (USD1.3712)
EUR: down at USD1.2081 (USD1.2135)
GOLD: up at USD1,861.57 per ounce (USD1,857.20)
OIL (Brent): down at USD55.38 a barrel (USD56.00)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK manufacturing sector activity slowed in January as temporary supply-chain disruptions caused by Covid-19 restrictions hurt orders. The seasonally adjusted IHS Markit/CIPS purchasing managers' index fell to a three-month low of 54.1 points in January, down from December's three-year high of 57.5. Still, the latest reading beat the market forecast, cited by FXStreet, of 52.9 points. It was also above the 50.0 mark, which separates growth from decline. Survey responses were collected from January 12 to January 26. Markit highlighted that the upturn in the UK manufacturing sector slowed sharply at the start of 2021.
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Growth in the eurozone's manufacturing economy remained resilient in January, data from IHS Markit showed. After accounting for seasonal factors, the purchasing managers' index recorded 54.8 points in January, down slightly on December's 55.2 and little-changed on the earlier flash reading. A figure above 50.0 points denotes the sector is in growth territory. IHS Markit highlighted that January's figure was amongst the highest seen over the past two-and-a-half years. In Germany, meanwhile, at 57.1 points in January, the headline IHS Markit/BME manufacturing PMI remained firmly inside growth territory, albeit down from December's near three-year high of 58.3.
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Manufacturing activity in China slowed at the start of 2021, with slower increases in output and new orders, and stock shortages and shipping delays hindering supplier performance, data from Caixin and IHS Markit showed. The Caixin China headline seasonally adjusted purchasing managers' index decreased to 51.5 in January from 53.0 in December, but remained above the neutral mark of 50, reflecting continued growth. Chinese good producers noted a sustained rise in output in January, making it the 11th consecutive month of output growth, however it was the slowest rate of growth since April 2020, which was attributed to a drop in export orders due to the Covid-19 pandemic.
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A group of 10 Republican senators have written US President Joe Biden to propose an alternative to his massive Covid-19 relief plan, arguing that their approach - worth USD600 billion, according to reports - could garner the bipartisan support he has said he seeks. Senator Susan Collins, a moderate Republican from Maine, said on Twitter that she had joined the group, which asked the president in a letter Friday for a meeting to discuss their plan. She said the group would release details of their plan on Monday. "We've received the letter and we certainly will be reviewing it," Brian Deese, director of the president's National Economic Council, told CNN's State of the Union on Sunday. He said Biden was "open to ideas" but that action was needed immediately. The president's USD1.9 trillion plan, Deese added, had been "calibrated to the economic crisis that we face". The Republicans' alternative plan, according to reports, would be far smaller than that – around USD600 billion – likely much too small for many Democrats to accept.
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