31st Mar 2022 09:50
(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Royal Bank of Canada has agreed to buy London-listed investment adviser Brewin Dolphin for GBP1.6 billion. The acquisition is an "exciting strategic opportunity" for RBC, it said, allowing the Toronto-based lender a chance to combine its UK and Channel Islands wealth management arm with the FTSE 250 constituent. RBC will pay 515 pence per Brewin Dolphin share, a 62% premium to its 318p closing price on Wednesday. The RBC offer values Brewin's equity at GBP1.6 billion. RBC noted this represents 2.8% of Brewin Dolphin's GBP55.0 billion in assets under management as of February 28. The tie-up of Brewin with RBC's existing UK wealth management offering will create a "market leader" with GBP64 billion assets under management, on a pro-forma basis, as well as combined annual revenue of GBP545 million.
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Prudential confirmed that Chief Executive Officer Mike Wells will retire on Thursday and Mark FitzPatrick will take up the mantle of interim CEO. FitzPatrick will become interim CEO on Friday and retain this role while the company conducts a search for a permanent replacement for Wells, examining both internal and external candidates. Thereafter, FitzPatrick will step down from the board and remain available as an adviser for a period. Prudential last month said FitzPatrick had asked the board not to consider him for the permanent CEO role. James Turner, formerly chief risk & compliance officer, will become chief financial officer, succeeding FitzPatrick. Prudential first announced Wells's departure in February, and said it was looking for a new CEO based in Asia.
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Bayer announced investments worth around EUR2 billion to boost the German multi-national's pharmaceutical segment over the next three years. The money will flow into "new technologies, automation, and digitalization," the company announced in Berlin. A lion's share of the investments is aimed at "enhanced capacities in biotechnology, further strengthening the company's cell and gene therapy production as well as in the expansion of its manufacturing site in Berkeley, USA," Bayer said in a statement. The pharma giant has high hopes for the relatively new sector of biotechnology, which is expected to drive growth in the long term, and announced a collaboration with US firm Mammoth Biosciences at the beginning of the year to strengthen its cell and gene therapy division.
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German travel and tourism operator Tui said it is returning the first part of the credit lines of around EUR700 million provided during the pandemic on April 1. Regarding its outlook, the company said it expects a stable business development for 2022, especially for the main months of the summer season. The financial resources were made available by the German government and private banks in the framework of three stabilization packages. The company said the state credit lines granted were a safety buffer during the pandemic and lockdown.
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GlaxoSmithKline said HIV company ViiV Healthcare has received further approvals from the US Food & Drug Administration. Viiv Healthcare, majority-owned by GSK with Pfizer and Shionogi as minority shareholders, reported that Triumeq PD - a dispersible single-tablet regimen containing dolutegravir - received approval for its new drug application for the treatment of HIV type 1 in pediatric patients.
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MARKETS
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Equities lacked direction on Thursday, as it became clear no quick resolution to the crisis in Ukraine was likely. Oil prices continued to slide back toward USD100 per barrel after the US said it is considering releasing oil from its Strategic Petroleum Reserve. US officials said President Joe Biden will make a statement Thursday on plans to cut energy costs "and lower gas prices at the pump for American families". The announcement is expected at 1730 GMT.
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CAC 40: down 0.2% at 6,728.37
DAX 40: flat at 14,606.10
FTSE 100: down 0.1% at 7,573.01
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Hang Seng: closed down 1.1% at 21,996.85
Nikkei 225: closed down 0.7% at 27,821.43
S&P/ASX 200: closed down 0.2% at 7,499.60
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DJIA: called marginally higher, up 14.00 points
S&P 500: called up 0.2%
Nasdaq Composite: called up 0.5%
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EUR: down at USD1.1125 (USD1.1163)
GBP: down at USD1.3114 (USD1.3163)
USD: up at JPY122.17 (JPY121.94)
GOLD: down at USD1,925.80 per ounce (USD1,934.80)
OIL (Brent): down at USD106.47 a barrel (USD113.56)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK economy expanded at a faster pace than expected in the fourth quarter of 2021, data from the Office of National Statistics showed Thursday, despite the emergence of the Omicron variant. Gross domestic product expanded 1.3% quarter-on-quarter in the final three months of last year. The figure topped the previous estimate, which showed 1.0% growth. The revision means that the UK economy actually ended last year larger than it was two years earlier, before the emergence of Covid-19. In the third quarter, GDP had risen 1.3% on a quarterly basis. Annual GDP growth for the quarter was bumped up to 6.6% from 6.5%. In the third quarter, it had risen 6.9%. For the whole of 2021, GDP is estimated to have risen 7.4%, down from a previous 7.5% estimate. The ONS said this was due to a revised 9.3% decline in 2020, with previous figures showing a 9.4% fall.
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UK house prices saw the strongest annual surge since 2004 in March, figures from Nationwide showed. UK house prices rose 14% yearly in March, accelerating from a 13% climb in February. On a monthly basis, house prices rose 1.1% to GBP265,312 from GBP260,230 in February. Prices had risen 1.7% monthly in February. The annual surge, Nationwide analyst Robert Gardner said, was the strongest growth since November 2004.
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The eurozone's unemployment rate ticked lower in February, though the figure was above market estimates. The single currency bloc's unemployment rate edged down to 6.8% in February from 6.9% in January, according to data from Eurostat. The figure for February came in above an FXStreet-cited estimate of 6.7%. In February 2021, the unemployment rate stood at 7.5%. The unemployment rate has now fallen for 10 months in a row.
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Retail sales growth slowed in Germany on a monthly and annual basis in February. Unemployment figures, meanwhile, were in line with market expectations. Figures from Destatis showed the German unemployment rate in March remained unchanged month-on-month at 5.0%. The number was in line with consensus cited by FXStreet. Separately, Destatis said price-adjusted retail sales in February were up 7.0% on an annual basis, slowing from the 10% annual growth seen in January. This was ahead of consensus estimates of 6.1% annual growth for February, cited by FXStreet. On an unadjusted basis, retail sales were up 11% in February, compared to 14% annual growth in January.
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The unemployment rate in Italy fell in February, confounding market expectations of an increase, data from national statistics office Istat showed. Italy's jobless rate edged lower to 8.5% in February from a downwardly revised 8.6% in the prior month. The rate was expected to rise to 8.7%, according to market consensus cited by FXStreet. The January unemployment rate was revised from the initial 8.8%.
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The Kremlin played down hopes of a breakthrough following peace talks between Russian and Ukrainian delegates in Istanbul a day earlier. "We cannot state that there was anything too promising or any breakthroughs," Kremlin spokesman Dmitry Peskov told reporters on Wednesday. "There is a lot of work to be done," Peskov said. He added that Moscow considered it "positive" that Kyiv had started outlining its demands in writing. "We carefully avoid making statements on the matters" that are discussed at the talks because "we believe that negotiations should take place in silence", he added. Moscow's lead negotiator, Vladimir Medinsky, described talks in Istanbul on Monday as "meaningful".
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US securities regulators proposed new rules for shell investment companies, tightening a pathway for businesses to go public that has been criticized for skimping on investor protections. The new rules seek to place firms that are set up with the sole purpose of merging with another entity, known as special purpose acquisition companies, on an equal plane with companies participating in traditional initial public offerings. The move comes after a surge of SPAC deals in 2020 and 2021 and with well-known companies ranging from Virgin Galactic and WeWork to several celebrity-linked ventures employing the tactic. The new rules require additional disclosures about SPAC sponsors, conflicts of interest and sources of equity dilution, said the Securities & Exchange Commission, which will launch a public comment period on its 372-page proposal.
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Japan's car industry saw a significant boost to manufacturing last month after production losses due to Covid-19 and supply shortages. Output increased by 11% in February after a 17% drop in January, the Japanese Ministry of Economy, Trade & Industry said, referring to preliminary data. The ministry said the country's manufacturing industry was showing signs of recovery. Industrial output overall meanwhile rose by 0.1%. That missed expectations for an increase of 0.5% following the a 0.8% contraction in January. On an annual basis, industrial production rose 0.2%, matching forecasts after slipping 0.5% in the previous month.
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China's factory activity shrank in March, official data showed, as the country's worst Covid outbreak in two years brought sporadic lockdowns and factory closures. The purchasing managers' index – a key gauge of manufacturing activity – slid to 49.5 points, just below the 50-point mark separating growth from contraction, according to data from the National Bureau of Statistics. That marked the first contraction in five months and was lower than expectations from economists polled by Bloomberg. The fall comes as authorities struggle to stamp out coronavirus outbreaks with restrictions and lockdowns on key manufacturing hubs such as Shenzhen in the south and Changchun in the northeast.
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By Tom Waite; [email protected]
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