15th Dec 2021 10:49
(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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International Consolidated Airlines Group is on the verge of scrapping a planned EUR500 million takeover of Spanish airline Air Europa, weeks after a UK watchdog opened a probe on the deal. The airline group, which owns British Airways, Iberia and Aer Lingus, said it is at an "advanced stage" of talks to terminate the agreement. IAG said a "further update will be made in the future". Air Europa is a Spanish airline that operates domestic and international flights in Europe, as well as long-haul routes to Latin America, the US, the Caribbean and North Africa. It is owned by Globalia. IAG first announced plans for its Iberia arm to buy the carrier in 2019 for EUR1 billion, although the price was slashed after the Covid-19 pandemic knocked the entire sector by grounding planes.
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Movie house operator Cineworld said a Canadian court has ruled against it in the case brought by jilted takeover target Cineplex. The court has ordered Cineworld to pay to Cineplex CAD1.23 billion, about GBP720 million, in lost synergies and CAD5.5 million in transaction costs. Cineworld said it will appeal the judgement and no damages will be payable during appeal. Cineworld had agreed to the acquisition before the Covid-19 pandemic and cancelled it as lockdowns closed cinemas.
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Miner and steel maker Evraz said that after a year-long study, first announced back in January, it has decided to de-merge its metallurgical coal assets. The demerger will be effected by means of a distribution of shares in Moscow-listed PJSC Raspadskaya, which holds the assets, directly to Evraz shareholders. They are expected to receive these by February 15. Evraz said that, even after the demerger, it still will pay a minimum of USD300 million in annual dividends.
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Distribution firm Bunzl said it expects to post a "strong performance in 2021". Underlying revenue growth will be in the "high single digit" level compared to 2019, before the onset of the pandemic. Revenue in 2021 is tipped to rise 2% year-on-year at actual exchange rates, and 7% on a constant currency basis. "At constant exchange rates, underlying revenue growth is expected to reflect a strong recovery in the base business, supported by inflation, partially offset by the anticipated decline in Covid-19 related orders with deflation on certain Covid-19 related products. Group adjusted operating margin is expected to be only slightly ahead of historical levels," the company said. Bunzl noted uncertainty related to new Covid-19 variants, but added that it expects revenue to increase in 2022. However, it warned sales of Covid-19 related products could moderate.
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GlaxoSmithKline, developing a Covid-19 jab alongside Paris-based Sanofi, said a single booster dose of the vaccine delivered "consistently strong immune responses". Neutralising antibodies increased in the 9- to 43-fold range, GSK said, regardless of which initial jab the patient took, be it AstraZeneca's, J&J's, Moderna or Pfizer's. "The booster was well tolerated, with a safety profile similar to currently approved Covid-19 vaccines. This is the most comprehensive booster trial to date to explore boosting across different vaccine technologies used for primary vaccination," GSK added. The companies plan to file the booster data with regulators following full phase III results.
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MARKETS
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London's FTSE 100 index was underperforming other European stock indices on Wednesday, amid a stronger pound after a surge in inflation increased the chances of a surprise interest rate hike by the Bank of England on Thursday. Ahead of the BoE decision - and one by the European Central Bank the same day - the US Federal Reserve is scheduled to announce its latest policy decision at 1900 GMT. Among individual stocks on Wednesday, IAG was down 1.7% and Cineworld down 27% in London.
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CAC 40: up 0.7% at 6,939.98
DAX 40: up 0.4% at 15,509.10
FTSE 100: down 0.3% at 7,195.42
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Hang Seng: closed down 0.9% at 23,420.76
Nikkei 225: closed up 0.1% at 28,459.72
S&P/ASX 200: closed down 0.7% at 7,327.10
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DJIA: called up 0.1%
S&P 500: called down 0.1%
Nasdaq Composite: called down 0.3%
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EUR: unchanged at USD1.1274 (USD1.1275)
GBP: up at USD1.3259 (USD1.3231)
USD: firm at JPY113.74 (JPY113.70)
Gold: down at USD1,769.77 per ounce (USD1,775.45)
Oil (Brent): down at USD72.94 a barrel (USD73.23)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Inflation in the UK raced above 5% in November. The UK's annual inflation rate accelerated to 5.1% in November, from 4.2% in October, according to the Office for National Statistics. The Bank of England's inflation target is 2%. November's figure was above market estimates of 4.7%, according to FXStreet. "This is the highest CPI 12-month inflation rate since September 2011, when it stood at 5.2%," the ONS said. On a monthly basis, consumer prices increased 0.7%, topping expectations of a 0.4% hike, following October's 1.1% rise. Producer price growth, meanwhile, similarly topped estimates in November, surging 9.1% yearly, versus expectations of an 8.3% hike. October's growth was upwardly revised to 8.6%. Monthly, producer prices rose 0.9%, following October's 1.5% rise.
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Consumer price inflation in Italy was the fastest since 2008 in November, driven by energy, data from Italian national statistical office Istat showed. On a yearly basis, consumer inflation accelerated to a downwardly revised 3.7% in November, following 3.0% in October and against a flash estimate of 3.8%, with the prices of energy products leading the gain, up by 31% after a 25% increase the month before.
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All adults in England now are being offered a Covid-19 booster. The NHS national booking system has opened up to all over 18s as the health service ramps up its vaccination programme. People are eligible for a booster three months after their second vaccine but they can book after two months. It marks the NHS meeting its objective of offering every eligible adult a chance to book a booster before the new year. The UK health service is now racing to boost as many people as possible as it braces for the impact of a wave of Omicron cases.
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The number of Omicron coronavirus infections is currently doubling every two to three days with the variant expected to take hold of Europe next month, European Commission President Ursula von der Leyen said. "Scientists expect that Omicron could establish itself as the dominant variant in most European countries in January already," von der Leyen told the European Parliament in Strasbourg. "This development is most worrying." But 66% of the European population - 300 million people - is now fully vaccinated, with 62 million people also given the booster shots shown to offer the best possible protection at present against Omicron, she stressed.
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The EU plans to stop funding new oil and gas pipelines in future, as it switches the focus to promoting energy sources that are less harmful to the climate. Negotiators from the EU member states and the European Parliament agreed on Wednesday morning on a reform of the TEN-E regulation which governs the expansion of cross-border energy networks. The revised regulation sets new priorities in energy production in order to achieve the EU's climate goals, with the aim of promoting electricity grids, lines to off-shore wind farms and for climate-friendly gases such as hydrogen. New projects exclusively using fossil oil or natural gas may no longer receive EU support in future.
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The US Senate voted Tuesday to raise the federal debt limit, moving the country a step closer to eliminating the threat of a calamitous credit default – just one day ahead of the deadline set by the Treasury. The deeply divided upper chamber of Congress voted along party lines to raise the borrowing cap by USD2.5 trillion, and the House of Representatives is expected follow suit later in the day – staving off the next showdown until at least 2023.
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Retail sales in China grew slower than expected in November with consumers cautious as domestic coronavirus cases rose, official data showed. A rebound in the world's second-biggest economy has been losing steam, with indicators muted last month, after the country made a swift coronavirus recovery helped by strict border controls and targeted lockdowns. Economists said a recent domestic flare-up, where virus infections hit 21 provinces and regions, likely led to more cautious consumer behaviour as containment measures kicked in, while a property market slump worsened. Retail sales rose 3.9% on-year, the National Bureau of Statistics said, below expectations and markedly slower than October's 4.9%.
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China's industrial production grew 3.8% on-year in November, in line with expectations of a pick-up. This came as disruptions from power shortages eased. Outages in recent months linked to emission reduction targets, the surging price of coal, and supply shortages had hit some factory production. Fixed-asset investment growth slowed to 5.2% in the first 11 months, with property investment rising six percent – down from the January-October period – with falling home sales and tight financing rules.
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By Tom Waite; [email protected]
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