(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Aviva said it was making progress on its company simplification strategy and announced a new sustainable dividend policy, based on its core markets of the UK, Ireland and Canada. The London-based insurer said it is "exploring options across our manage-for-value portfolio", meaning non-core, including in France, Poland, the remainder of Italy and other joint ventures. Aviva declared a 7.0 pence per share interim dividend. The insurer currently expects to recommend a final 2020 dividend of 14 pence per share, subject to a decision to be taken in March 2021. The expected 2020 total dividend of 21.0 pence per share is then expected to grow by low to mid-single digits, it said. Aviva said its trading performance so far in 2020 has been robust and financial position is strong with a capital surplus of GBP11.8 billion. The first nine months of the year has demonstrated its ability to grow in core markets where it has long-term growth prospects.
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Severn Trent raised its dividend but the water company saw its first half earnings drained by Covid-19. For the six months ended September 30, Severn Trent posted pretax profit of GBP126.5 million, a 30% plunge from GBP180.7 million recorded a year prior. This was as revenue declined 2.5% to GBP887.6 million from GBP910.0 million, as the Covid-19 pandemic resulted in a reduction of consumption from non-household customers. Profit was also hurt by increased bad debt provisions due to the expected hit from the rise in UK unemployment amid Covid-19 and higher depreciation. An interim dividend of 40.63p was declared, up 1.5% from 40.03p paid for the first half of financial 2020.
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SSE said it has reached financial close with 50/50 joint venture partner Equinor on the first two phases of Dogger Bank wind farm, 60 miles off the North East coast of England. SSE said its expected equity investment forms part of the project's GBP7.5 billion investment programme to March 2025. The two companies are proceeding with the first two phases of the wind farm, scheduled for completion in March, 2026. SSE said that each phase has a capacity of 1,200 megawatts and will generate around 6,000 gigawatt hours. The company did not give dates for the completion of the separate phases. In total, Dogger Bank is expected to produce enough clean electricity to supply 5% of the UK's demand, equivalent to powering six million UK homes, and will double SSE's renewables output by 2025, the company said.
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Vodafone Group said the merger of joint venture Indus Towers and Bharti Infratel in India that was first announced in April 2018 has now been completed. In October, the FTSE 100-listed UK telecoms firm said the merger was conditional on consent for a security package for the benefit of the combined company from Vodafone's existing lenders for the EUR1.3 billion loan used to fund its contribution to the Vodafone Idea rights issue in 2019. Consent was received from its lenders that same month. The new company will be jointly controlled by Vodafone and Bharti Airtel under a new shareholders agreement, in which 1,565 shares of Bharti Infratel will be issued for every Indus Towers share.
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Concerns are increasing over the way Oxford University and AstraZeneca have handled the early readout from trials of their coronavirus vaccine candidate, the Financial Times reported on Wednesday. The results were hailed a success for showing an average efficacy of 70%, a figure reached by pooling the results from cohorts on two different dosing regimens. AstraZeneca on Monday said one dosing regimen showed vaccine efficacy of 90% when AZD1222 was given as a half dose, followed by a full dose at least one month apart. Another dosing regimen showed 62% efficacy when given as two full doses at least one month apart. The combined analysis from both dosing regimens resulted in an average efficacy of 70%. But on Tuesday, Moncef Slaoui, the head of Operation Warp Speed, the US government's funding programme for vaccine development, disclosed that the subgroup that scored 90% was limited to people aged 55 or below, a demographic with lower risk of developing severe Covid-19, FT reported. Oxford and AstraZeneca did not disclose the age breakdown on Monday, when results were released.
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MARKETS
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European stocks made a slow start on Thursday, noted ThinkMarkets analyst Fawad Razaqzada. "However, it remains to be seen whether the weakness for the major EU indices can last long given that the underlying sentiment remains bullish. Expect a slower second half of the day insofar as traditional markets are concerns as Wall Street is closed for Thanksgiving and economic calendar is void of any major news."
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FTSE 100: down 0.6% at 6,353.48
FTSE 250: down 1.2% at 19,333.75
AIM ALL-SHARE: up 0.2% at 1,033.62
GBP: weaker at USD1.3351 (USD1.3382)
EUR: flat at USD1.1911 (USD1.1909)
GOLD: higher at USD1,814.33 per ounce (USD1,1811.61)
OIL (Brent): lower at USD48.01 a barrel (USD48.04)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Health Secretary Matt Hancock is to set out which tier each local authority in England will fall under after the end of the national lockdown. Hancock will make the announcement in Parliament on Thursday after the UK government set out its Covid-19 "winter plan" earlier this week. Each area will be placed into one of three tiers when lockdown ends on December 2 – but the system has been toughened from the previous regime, meaning more authorities will move into the higher tiers. Areas which make progress in slowing the spread of the virus could still be moved down a tier before Christmas, however, with the first review of the allocations due to take place by December 16. On Wednesday night reports suggested there would be few areas in England placed in Tier 1, with The Times reporting parts of eastern England and remote areas in Cornwall and Cumbria are expected to be allocated the lightest measures. Meanwhile, London was expected to go in Tier 2 along with the majority of the country.
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The number of cars built in the UK fell by almost a fifth last month compared to a year ago, new figures revealed. Just over 110,000 models left factories, down by 24,490, or 18%, on October 2019, said the Society of Motor Manufacturers & Traders. The impact of coronavirus and fresh lockdowns in the UK and overseas subdued demand for new cars in many key markets, said the trade body. October's decline was driven largely by falling exports, particularly to the EU and US. Shipments to the US and to the EU both fell by 26%.
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US President-Elect Joe Biden said Wednesday that Americans "won't stand" for attempts to derail the US election outcome, as Donald Trump called for the results to be overturned. In a speech on the eve of the Thanksgiving holiday, Biden said in his hometown of Wilmington, Delaware that Americans "have full and fair and free elections, and then we honour the results." "The people of this nation and the laws of the land won't stand for anything else," he said. The Democrat's statement signalled a hardening line against Trump who for more than three weeks has been touting conspiracy theories, with no meaningful evidence, that Biden stole victory on November 3. Trump, who also issued a full pardon for former security aide Michael Flynn, convicted of lying to the FBI over Russia contacts, dug his heels in. "We have to turn the election over," he told Republican supporters in Pennsylvania.
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German consumer sentiment in November was significantly damped by the partial lockdown, GfK said. As a result, the data and analytics provider has forecast an index reading of negative 6.7 points for December, 3.5 points down from November, which was revised to negative 3.2 points. In November 2019, the index recorded positive 9.6 points. Turning to the economic expectation indicator, it fell by 7.3 points to negative 0.2, it's lowest figure since May when it stood at negative 10.4 points. GfK explained that lockdown came into effect at the start of November and with it, consumers' hopes of a sustained recovery of the German economy have faded. Income expectations, meanwhile, have suffered another setback in November, in the wake of a declining economic outlook. Propensity to buy also has not been immune to falling economic and income expectations. The indicator dropped 6.5 points to 30.5, a level which is still considered satisfactory when compared to the other two indicators, GfK said.
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