9th Mar 2020 11:09
(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Tesco has agreed to sell its Thailand and Malaysia operations to a combination of CP Group entities for USD10.6 billion on a cash and debt free basis. CP Group entities comprise of CP Retail Development, Charoen Pokphand Holding, CP All Public and CP Merchandising .The UK supermarket chain said it expects to secure USD10.3 billion upon completion of the transaction, which is expected in the second half of 2020. Tesco also said it will return GBP5.0 billion to its shareholders via a special dividend. The FTSE 100 grocer said the sale of these south-east Asian businesses will further de-risk its business by reducing indebtedness through a GBP2.5 billion pension contribution that is expected to eliminate the current funding deficit and "significantly" reduce the prospect of having to make further pension deficit contributions in the future.
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Phoenix Group reported a sharp rise in 2019 profit, with its Standard Life Assurance acquisition delivering synergy targets and its ReAssure Group acquisition on track for completion. For 2019, the life insurer and pensions consolidator recorded GBP351 million in pretax profit, 36% higher than the GBP259 million seen in 2018. Operating profit - a key financial indicator for the group - came in ahead of consensus, rising 14% year-on-year to GBP810 million from GBP708 million. Market consensus had predicted GBP734 million. In early December, Phoenix agreed to acquire Swiss Re Group's UK business ReAssure Group for GBP3.25 billion. Phoenix confirmed the deal is on track to be completed by mid-2020.
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Saudi state oil giant Saudi Arabian Oil, commonly called Saudi Aramco, saw its shares drop by 10% as Riyadh's stock market opened on Monday, halting trading. The Tadawul market only allows stocks to fluctuate by 10% a day, meaning it halted trading as the market opened. The drop came as global oil prices suffered their worst losses since the start of the 1991 Gulf War. Other Middle East markets also fell as the new coronavirus affected global energy prices and OPEC failed to make a production cut deal with Russia last week. Boursa Kuwait shut down within 30 minutes of opening on Monday as stocks again dropped by 10%, the third such emergency halt to trading in recent days. Earlier, coronavirus concerns led Saudi Arabia to cut off air and sea travel to and from nine countries: Bahrain, Egypt, Iraq, Italy, Kuwait, Lebanon, South Korea, Syria and the United Arab Emirates.
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MARKETS
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London shares were firmly in the red, with oil majors BP and Shell the worst blue chip performers following a plunge oil prices. Brent crude fell to a low of USD31.26 a barrel overnight - its lowest level since early 2016. US stock market futures were pointed to a sharply lower open as the number of US coronavirus cases surged.
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FTSE 100: down 6.2% at 6,065.28
FTSE 250: down 4.7% at 17,860.65
AIM ALL-SHARE: down 4.9% at 809.39
GBP: up at USD1.3090 (USD1.3020)
EUR: up at USD1.1420 (USD1.1325)
GOLD: up at USD1,677.80 per ounce (USD1,665.00)
OIL (Brent): down at USD35.47 a barrel (USD46.00)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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A GBP5 billion investment to roll out faster broadband across the UK by 2025 is expected to be confirmed by the UK chancellor in this week's Budget. Rishi Sunak, who has been in office for less than a month, will outline his financial plan to MPs on Wednesday amid the uncertainty of the coronavirus crisis. The Conservatives pledged at the election to bring full fibre and gigabit-capable broadband to every home and business in Britain within five years. Sunak is set to use his first Budget to confirm the GBP5 billion investment, which he hopes will benefit more than five million homes and businesses.
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Germany's trade surplus fell in January amid a rise in both exports and imports, the country's Federal Statistical Office reported. Destatis showed that Germany exported goods to the value of EUR106.5 billion and imported goods to the value of EUR92.7 billion, giving a trade surplus of EUR13.9 billion in January, down from EUR15.2 billion in December. Based on provisional data, exports declined by 2.1% and imports by 1.8% in January year-on-year. Compared with December, exports were flat and imports were up 0.5% after calendar and seasonal adjustments. Elsewhere, Destatis reported that Germany's industrial production in January was up by 3.0% on the previous month on a price, seasonal and calendar-adjusted basis. Year-on-year, January's production was down 1.3%.
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China closed several makeshift hospitals for coronavirus patients, some schools reopened and Disney resort staff went back to work as normality slowly returns to the country after weeks battling the epidemic. New virus cases in China - which accounts for the vast majority of the more than 100,000 infections worldwide - have declined in recent weeks in a sign the country's unprecedented lockdown measures are working. The improving situation stands in stark contrast with the growing global spread of the disease that has affected scores of countries and prompted some governments to impose their own draconian measures and quarantines. China reported 40 new infections nationwide on Monday – the smallest increase since the country began reporting the data in January. The number of US coronavirus cases soared past 500 on Sunday, including two further deaths, as California braced for the arrival of infected cruise ship passengers and saw a major tennis event canceled.
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Oil prices plunged after top exporter Saudi Arabia launched a price war in response to a failure by leading producers to strike a deal to support energy markets. Saudi Arabia launched an all-out oil war Sunday with the biggest cut in its prices in the last 20 years, Bloomberg News reported, after a failure by cartel OPEC and its allies to clinch a deal to cut production. A meeting of main producers was expected to agree to deeper cuts to counter the impact of the new coronavirus - but Moscow refused to tighten supply. In response, the Gulf powerhouse cut its price for April delivery by USD4 to USD6 a barrel to Asia and USD7 to the US, with Aramco selling its Arabian Light at an unprecedented USD10.25 a barrel less than Brent to Europe.
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