5th Jul 2021 10:47
(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Apollo Global Management said it is considering making a takeover offer for Wm Morrison Supermarkets after the grocer at the weekend agreed to a GBP6.3 billion buyout by a group including Softbank. Apollo confirmed it is in the preliminary stages of considering a takeover offer for the supermarket chain. "No approach has been made to the board of Morrisons. There can be no certainty that any offer will be made, nor as to the terms on which any such offer might be made," the private equity firm said. This comes after Morrisons on Saturday accepted a takeover offer from a consortium of investment groups following its rejection of a private equity bid last month. Under the GBP6.3 billion deal, the group of investors comprising Softbank Group Corp-owned Fortress, Canada Pension Plan Investment Board and Koch Real Estate Investments will pay 252 pence per share plus a 2p special dividend. The stock was up 11% at 266.27p on Monday in London. The Fortress deal also includes GBP3.2 billion in debt, which makes the total operation worth GBP9.5 billion with debt recovery. The potential takeover battle for the Bradford, West Yorkshire-based supermarket chain follows the chain's rejection of a GBP5.5 billion offer in June from Clayton Dubilier & Rice.
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Glencore said Kalidas Madhavpeddi will take over as chair on July 30. He will succeed Tony Hayward, who was appointed to the board at the time of the miner's IPO in 2011 and was chosen as chair in 2013. "Following consultation with the company's largest institutional shareholders it was agreed that he would retire as chairman within the year after our last AGM, following a second extension of his tenure beyond 9 years on the board," Glencore said. Madhavpeddi has been on the Glencore board since February 2020 and has over 40 years of experience in the international mining industry. He is currently a non-executive director of Novagold Resources, Trilogy Metals and Dundee Precious Metals, which are listed on the Toronto Stock Exchange. "As the world transitions to cleaner forms of energy and mobility, our portfolio of commodities will allow Glencore to play a key role in helping us achieve the goals of Paris and play a key role in the ongoing energy and mobility transition," said Madhavpeddi.
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Standard Life Aberdeen completed its corporate rebranding on Monday, adopting the new name Abrdn. The Edinburgh-based investment and asset management firm first announced the new name, which is pronounced "Aberdeen", back in April. It said the Abrdn brand will be rolled out across its client and customer businesses in the coming months. In February, the firm agreed to sell the 'Standard Life' brand to Phoenix Group Holdings PLC and buy the Wrap SIPP and Wrap Onshore Bond businesses from Phoenix.
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China announced on Monday probes into two more US-listed Chinese companies, a day after banning ride-hailing giant Didi Chuxing from app stores in the wake of its huge US initial public offering. The country's major internet firms wield massive influence among consumers, but have for almost a year had their wings clipped in a regulatory crackdown that scuppered IPOs and hit business as the government seeks to rein in their influence. The latest moves hit newly listed companies Full Truck Alliance – a merger between truck-hailing platforms Yunmanman and Huochebang – as well as Kanzhun, which owns online recruitment platform Boss Zhipin. All three platforms have been told to stop new user registration during the period of investigation – which was to "to prevent security risks to national data, safeguard national security and protect public interest", according to the Cyberspace Administration of China. Just hours earlier, the watchdog ordered the removal of Didi from app stores following a similar investigation, throwing a wrench in the company's growth plans after a bumper New York IPO last week raised more than USD4.4 billion.
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A ransomware attack on a US IT company potentially targeted 1,000 businesses, researchers said Saturday, with one of Sweden's biggest supermarket chains revealing it had to temporarily close around 800 stores after losing access to its checkouts. Russian-based hackers have been blamed for a string of ransomware attacks, and US President Joe Biden recently raised the threat in talks with Russian counterpart Vladimir Putin. Biden ordered a full investigation on Saturday, while adding "the initial thinking was it was not the Russian government, but we're not sure yet."
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MARKETS
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Stock prices were mostly lower in Asia and Europe, though London blue-chips were outperforming amid M&A activity and expectations for a complete lifting of lockdown restrictions in England in two weeks time. Oil prices were firm ahead of a continuation of OPEC+ negotiations over production limits.
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CAC 40: down 0.1% at 6,543.49
DAX 30: down 0.4% at 15,588.48
FTSE 100: up 0.2% at 7,137.42
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Hang Seng: closed down 0.6% at 28,143.50
Nikkei 225: closed down 0.6% at 28,598.19
S&P/ASX 200: closed up 0.1% at 7,315.00
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New York market closed for Independence Day holiday.
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EUR: up at USD1.1870 (USD1.1845)
GBP: up at USD1.3851 (USD1.3791)
USD: down at JPY110.90 (JPY111.31)
GOLD: up at USD1,792.83 per ounce (USD1,783.83)
OIL (Brent): up at USD76.36 a barrel (USD75.97)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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After failing last week, the 23 members of the OPEC+ group of oil producers will try again Monday to reach agreement on how much crude to put on the market. Since May, the group has raised oil output little by little, after slashing it more than a year ago when the coronavirus pandemic crushed demand. The current proposal is to increase output each month from August to December by 400,000 barrels per day, providing oil markets with an additional two million bpd by the end of the year. But it is the suggestion of extending the agreement on incremental increases until the end of 2022 that has caused a hitch. The hold-out is the United Arab Emirates, which on Sunday criticised that extension as unjust. A video conference between OPEC members and their 10 allies has been scheduled for 1300 GMT to try to resolve the impasse. In April 2020, as the coronavirus pandemic took hold, OPEC+ decided to withdraw 9.7 million bpd from the market and to gradually re-introduce it by the end of April 2022.
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China's services sector expanded for the 14th month in-a-row in June, though numbers showed slowed considerably. Caixin's headline seasonally adjusted services business activity index weakened to 50.3 points in June, from May's tally of 55.1. Sitting above the 50.0 neutral mark, IHS Markit noted this represented a 14th successive monthly expansion of the sector. "However, the rate of growth was the softest seen over this period and only marginal," IHS Markit added. The composite output index - a weighted average of the services and manufacturing scores - fell to 50.6 points in June, from 53.8 in May. It was also the softest growth in the current 14-month sequence of expansion.
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Japan's services economy remained in negative territory, though IHS Markit noted it saw only a "modest" decline in June. The seasonally adjusted Japan services business activity index rose to 48.0 points in June from 46.5 in May, showing the rate of decline slowed. The sector continued to be hurt by virus curbs in June. Optimism rose to the highest level since March, however. The au Jibun Bank Japan composite PMI output index inched up fractionally to 48.9 points in June, from 48.8 in May.
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The city of Tokyo elected a new assembly on Sunday, amid concerns about a rise in Covid-19 cases, less than three weeks before the Japanese capital hosts the Olympic Games. Japan's ruling coalition parties - the Liberal Democratic Party of Prime Minister Yoshihide Suga and Komeito - appeared unlikely to win a combined majority, according to early returns and projections by Kyodo News, the agency reported. This outcome would deal a blow to Suga's coalition ahead of national parliamentary elections later this year. The LDP has come under fire for Suga's policies on Covid-19. Key election issues included the handling of the coronavirus pandemic and the question of how to hold the Olympic Games amid a new rise in cases. The 16-day event, postponed from last year, is due to start on July 23.
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Australia's services economy grew at a slower pace in June, as virus curbs in the state of Victoria kept a lid on the sector's expansion. The seasonally adjusted services business activity index eased to 56.8 points in June from 58.0 in May. "Price pressures meanwhile sustained with selling charges accelerating at a record rate in June," IHS Markit added. The composite index meanwhile, eased to 56.7 in June from 58.0 in May. Markit explained: "Both the manufacturing and service sectors witnessed slower output growth in June."
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The eurozone's private sector grew at a faster pace than first estimated in June, numbers on Monday showed, helped by particularly strong showings in Spain and Germany. June marked the eurozone private economy's fastest growth in 15 years. The IHS Markit composite output index rose to 59.5 points in June, from 57.1 in May. The June number also topped the flash estimate of 59.2 points. Germany's composite score reached a 123-month-high, while Spain's surged to a 256-month best figure. The eurozone's services purchasing managers' index rose to 58.3 points in June, from May's 55.2, the third successive month of growth as Europe's vaccination programme progresses.
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The UK service sector was stronger than expected in June even if the rate of growth eased off May's 24-year high, survey results showed. The IHS Markit/Chartered Institute of Procurement & Supply UK services business activity index registered 62.4 points in June, down from 62.9 in May but still marking the second-highest reading since October 2013. The reading beat the flash figure of 61.7. When combined with last week's data showing the UK's manufacturing purchasing manager's index eased to 63.9 in June from May's record level of 65.6, the country's composite PMI edged down to 62.2 from 62.9 in May. However, this marked the second-highest reading since the series began in January 1998 and beat the flash figure of 61.7.
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UK Prime Minister Boris Johnson is expected to tell people in England that it will be left to their "judgment" to manage coronavirus risks as he prepares to restore freedoms on July 19. Johnson will lead a Downing Street press conference on Monday where he will tell the public that the country must "begin to learn to live with this virus" in the clearest indication yet that he is preparing to do away with a swathe of restrictions on daily life. Johnson will update the nation on the future of the one metre-plus rule in hospitality venues, the use of face coverings and work from home guidance, with multiple reports suggesting they will all be scrapped. It has been suggested that from so-called "freedom day" on July 19 mask wearing will become voluntary, while social distancing in pubs and bars will end – along with needing to use a QR code to check-in – meaning a return to drinking at the bar without the requirement for table service.
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Ireland's private sector expanded at a near record pace in June, with the services sector enjoying its best month of growth in roughly five-and-a-half years, IHS Markit said. As the private sector forged ahead with its bounceback from virus curbs, accelerating inflation became a recurring theme too. Price inflation reached a near 13-year high. The AIB services business activity index surged to 63.1 points in June, from May's tally of 62.1. The June figure indicated the fastest service sector growth since January 2016. The composite output index - a wider reading of the whole private sector using both the services and manufacturing PMIs - inched down to 63.4 points in June, from May's record of 63.5.
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By Tom Waite; [email protected]
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