15th Nov 2021 11:05
(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Royal Dutch Shell set out plans to simplify its share structure and change its name to Shell PLC. Instead of the current 'A' and 'B' share structure, the oil major plans for a conventional single share structure. This would allow for an acceleration in distributions by way of share buybacks, reduce risk for shareholders, and let Shell manage its portfolio with greater flexibility, it said. The company will align its tax residence to the UK. It has been incorporated in the UK with Dutch tax residence and a dual share structure since 2005. Shell will retain its current share listings and will still be eligible for FTSE UK indices. It is the largest listed company in London. One change, however, will be the company's name. Shell explained: "Carrying the Royal designation has been a source of immense pride and honour for Shell for more than 130 years. However, the company anticipates it will no longer meet the conditions for using the designation following the proposed change."
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Banco Bilbao Vizcaya Argentaria has launched a takeover bid for the remaining stake in Turkiye Garanti Bankasi, the Bilbao-based lender said. BBVA currently holds a 49.85% stake in the Turkish financial services firm and will make an offer of TRY12.20 - or around USD1.21 - per remaining share in cash. The takeover would see the bank pay up to TRY25.70 billion, or about USD2.56 billion, for the rest of Garanti. The takeover bid will begin after regulatory approvals have been obtained, expected to close in the first quarter of 2022, BBVA noted. "This transaction represents a great opportunity to invest in our franchise in Turkey and create value for our shareholders," said BBVA Chair Carlos Torres Vila.
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South Africa's largest alcohol producer Distell announced its acquisition by Dutch brewer Heineken for ZAR180 per share, valuing the maker of Savannah Hunters Dry at ZAR40.1 billion, about USD2.63 billion. "The transaction will create a world-class, southern-African focused, alcoholic beverages entity with a leading beer and cider portfolio, combining the complementary brands, talent and skills of Distell, Heineken and NBL to better serve consumers across the region and having a significant presence in the adjacent African countries," Distell said. This is the second Benelux acquisition of an SA alcohol company, after the Anheuser-Busch InBev bought SABMiller in 2016 for USD122 billion. The potential acquisition of Stellenbosch-based Distell was first announced in May.
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Vodacom raised its interim payout marginally despite a slip in profit, as the company focuses on mergers & acquisitions and growing its offerings. The Johannesburg-listed telecommunications firm, two-thirds owned by the UK's Vodafone, reported pretax profit of ZAR12.41 billion, about USD815 million, in the six months ended September 30, slipping 1.0% from ZAR12.53 billion last year. A 8.1% rise in direct expenses to ZAR18.40 billion from ZAR17.02 billion partially offset revenue increasing 4.2% to ZAR49.86 billion from ZAR47.84 billion. Vodacom upped its interim dividend by 1.2% to 420 rand cents from 415 cents last year.
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Plane manufacturer Airbus has received an order for 255 medium-haul jets, hailing its first major sale of the pandemic. The order for the A321neo series aircraft comes from US private equity firm Indigo Partners on behalf of four low-cost airlines. The parties signed the deal on Sunday at the Dubai Airshow, according to Airbus. Airbus sales chief Christian Scherer called it a "landmark order" that showed the effect of the pandemic receding and a growing demand for sustainable flying. The four airlines receiving the planes are Hungary-based, London-listed Wizz Air, US operator Frontier, Mexico's Volaris and Chilean-Argentinian firm Jetsmart.
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Recruit Holdings lifted full-year guidance again after a first-half boost from labour market imbalances that drove healthy gains in revenue and profit growth. The Tokyo-based human resources company posted interim revenue of JPY1.366 trillion - or around USD12 billion - for the six months ended September 30, up 31% from JPY1.045 trillion a year earlier. Pretax profit multiplied to JPY223.84 billion from JPY78.49 billion. Adjusted earnings before interest, tax, depreciation and amortisation jumped to JPY266.3 billion from JPY123.4 billion.
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Tesla Founder & CEO Elon Musk sold more than USD6.9 billion worth of shares in the electric carmaker in total last week, according to regulatory filings released Friday. The 50-year-old South African billionaire sold more than 5.1 million Tesla shares, of which about 4.2 million were held in a trust. His massive disposal hit Tesla's share price, which slumped 15% over the week. Musk's sell-off came days after he created a Twitter poll – in which millions voted – asking whether he should sell 10% of his huge stake in the electric carmaker.
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MARKETS
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Stock markets were mostly higher, despite mixed economic data from Asia. In China, industrial production beat expectations in October, but the Japanese economy shrank by more than expected in the third quarter. Meanwhile, in Europe, the eurozone trade surplus fell from a year before. "The euro area's trade surplus is sinking without a trace," said Claus Vistesen, chief eurozone economist for Pantheon Macroeconomics, noting a wider deficit with China is to blame.
Wall Street was called for a positive start, with the tech-dominated Nasdaq Composite pointed up 1.3%. Tesla was down 1.9% in pre-market trade, having closed down 2.8% on Friday. The newly dubbed Meta Platforms, owner of Facebook, was up 0.8%, having climbed 4.0% on Friday.
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CAC 40: up 0.2% at 7,108.23
DAX 40: up 0.2% at 16,117.63
FTSE 100: marginally lower, down 3.28 points at 7,344.63
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Hang Seng: closed up 0.3% at 25,390.91
Nikkei 225: closed up 0.6% at 29,776.80
S&P/ASX 200: closed up 0.4% at 7,470.10
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DJIA: called up 0.2%
S&P 500: called up 0.2%
Nasdaq Composite: called up 1.3%
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EUR: flat at USD1.1446 (USD1.1450)
GBP: unchanged at USD1.3413
USD: flat at JPY113.85 (JPY113.88)
GOLD: up at USD1,863.16 per ounce (USD1,861.52)
OIL (Brent): down at USD81.19 a barrel (USD82.26)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The eurozone's trade surplus more than doubled in September on the month before, data from Eurostat showed, but was far smaller than a year ago. The euro area recorded a EUR7.3 billion surplus in goods with the rest of the world in September, more than double the EUR3.5 billion reported for August. However, the figure is well below the EUR24.1 billion recorded for September 2020. Exports rose 10% year-on-year to EUR209.3 billion, while imports surged 22% to EUR202.0 billion.
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Austria began a lockdown on Monday for people not vaccinated against Covid-19, a first in the EU as the Alpine member fights a record surge in cases, Chancellor Alexander Schallenberg said. About 65% of Austria's almost nine million people are vaccinated, below the EU average of 67%, while daily increases in infections have hit records this week. Other European governments are also eyeing unpopular Covid curbs, with the Netherlands opting for Western Europe's first partial lockdown of the winter. Austria's lockdown means people over 12 who are not vaccinated or cannot show that they have recently recovered from Covid will not be allowed to leave the house except for reasons such as buying essential supplies, exercise or seeking medical care.
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EU foreign ministers were set to adopt a fresh package of sanctions against Belarus on Monday after more than a week of escalating tensions over migrants at the EU's eastern border. Belavia, Belarus's state airline, is the intended target of the new sanctions, the fifth package since a contested election in August 2020 that reinstalled long-time President Alexander Lukashenko in power. The airline is to be included for its alleged role in transporting migrants to Minsk where they are driven under Belarusian guard to the country's borders with EU member states Poland, Lithuania and Latvia. Thousands of migrants are now stranded in dire conditions between Poland and Belarus, caught at the centre of a fierce diplomatic row between Lukashenko and the EU, which does not recognize the authoritarian ruler as a legitimate leader.
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UK house prices saw the biggest drop since January in November, data from Rightmove showed, with sellers looking to tempt bargain-hunting pre-Christmas buyers. Overall, UK house prices fell 0.6% monthly in November to GBP342,401. This was the largest monthly fall since January's 0.9% decline. In October, house prices had risen 1.8% on a monthly basis. Annually house prices in November were 6.3% higher, slowing from October's 6.5% surge. This pre-Christmas price lull aims to attract festively distracted buyers and offers a small window of opportunity for bargain hunters before the traditional Boxing Day buyer boom, Rightmove said, adding that market activity remains robust.
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A new 'Glasgow Pact' secured at the Cop26 talks commits countries to more climate action and a historic – if watered down – move against coal. Ministers and negotiators at the UN summit in the Scottish city agreed to get countries to strengthen their emissions-cutting targets for 2030 by the end of next year as part of the bid to limit dangerous warming climbing above 1.5C. They have also sent a signal on the shift away from the world's dirtiest fuel, with the deal calling for efforts to accelerate the "phase down" of unabated coal, as well as the phasing out of inefficient fossil fuel subsidies. In the wake of the deal Cop26 President Alok Sharma, who was close to tears on a couple of occasions during an hours-long final plenary, said the summit had met its key goal of keeping the 1.5C limit within reach. Language in the pact on coal was watered down at the last minute – following a push led by China, and backed up by India – from accelerating the "phase out" of unabated coal, to "phase down", prompting angry responses from European and vulnerable countries.
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China's economy showed signs of stabilising in October, according to data on Monday, with retail sales and factory output beating expectations as a power supply crisis appeared to ease. The recovery in the world's second biggest economy has been losing steam for much of the year after a swift bounce-back from harsh lockdowns to contain Covid-19, with officials earlier citing an "unstable and uneven" economic rebound. Power outages in recent months caused by emission reduction targets, the surging price of coal, and supply shortages also had impacted some factory production. But industrial production grew 3.5% on-year last month, up from September, said the National Bureau of Statistics, as China worked to boost coal production and ease the energy shortage. A survey of economists by Bloomberg News tipped a 3.0% expansion.
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US Secretary of State Antony Blinken "expressed concern" over Beijing's pressure against Taiwan in a phone call with Foreign Minister Wang Yi, the State Department said on Saturday. "The Secretary emphasized longstanding US interest in peace and stability across the Taiwan Strait and expressed concern regarding the [People's Republic of China's] continued military, diplomatic, and economic pressure against Taiwan," said a statement by State Department spokesperson Ned Price. "He urged Beijing to engage in meaningful dialogue to resolve cross-Strait issues peacefully and in a manner consistent with the wishes and best interests of the people on Taiwan." Price said that the phone call took place on Friday ahead of an online meeting between US President Joe Biden and China's leader Xi Jinping set for Monday. A statement by China's Foreign Ministry said that, during the call, Wang "further elaborated on China's solemn position" on the Taiwan question in response to what it called Washington's "recent wrong words and deeds".
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Japan's economy shrank far more than expected in the three months to September, as a surge in virus cases hit spending and supply chain issues hampered business, data showed Monday. The world's third largest economy shrank 0.8% quarter-on-quarter, much worse than the 0.2% economists had forecast. The contraction was driven in part by a 1.2% dip in household consumption that tracked the imposition of a virus state of emergency over the summer, when Japan saw its worst-ever Covid surge. Also weighing heavily was a drop in non-residential investment, which plunged 3.8% on a chip shortage and supply chain issues that weighed on factory output. Exports also were down, with vehicle exports stalling over a shortage of semiconductor components, though imports of goods and services also dropped, making net trade a slight positive overall for GDP growth.
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The US and Japan have launched talks aimed at resolving the dispute over US tariffs on steel and aluminium imports, trade officials in Washington said Friday. Citing the distortions caused by global overproduction, "the US and Japan will seek to resolve bilateral concerns in this area", US Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo said in a statement.
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US President Biden will nominate cardiologist and researcher Robert Califf to lead the Food & Drug Administration, the White House said Friday. Califf led the FDA under then president Barack Obama in 2016 and 2017, and "has the experience and expertise to lead the Food & Drug Administration during a critical time in our nation's fight to put an end to the coronavirus pandemic," the White House said. Biden also thanked Janet Woodcock, who held the position on an interim basis, for her leadership over the past year. Biden waited until the last minute to make his choice, selecting Califf three days before Woodcock's term ran out.
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By Tom Waite; [email protected]
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