(Alliance News) - Credit Suisse Group AG on Tuesday said it has chosen outgoing Lloyds Banking Group PLC Chief Executive Antonio Horta-Osorio to be its new chair.
Horta-Osorio will succeed Urs Rohner as chair of the Swiss bank's board of directors. Rohner became full-time chair in 2009 and will step down in 2021 once he has reached his statutory 12-year term.
Credit Suisse will propose Horta-Osorio's election to shareholders at its April 30 annual general meeting. His departure from Lloyds after 10 years at the helm was announced in June.
Lloyds on Tuesday said it has agreed for Horta-Osorio to depart the UK bank on April 30, so that he can take up the chair of Credit Suisse on May 1. Previously, he was intending to leave Lloyds by the end of June 2021.
Horta-Osorio served on the Court of Directors of the Bank of England from 2009 to 2011. Other previous roles including executive vice president of Banco Santander SA in Spain from 2000 to 2010, as well as from 2006 to 2010 as chief executive officer of Santander UK. He is 56 years old and a Portuguese citizen.
Lloyds has picked HSBC Holdings PLC's Wealth & Personal Banking head, Charlie Nunn, as its next chief executive.
Lloyds had said on Monday that Nunn's start date depends on agreement with HSBC. It noted that Nunn's contract calls for a six-month notice period and up to six months post-termination restrictions. The bank said that if Horta-Osorio steps down before Nunn's arrival, then Chief Financial Officer William Chalmers will be acting CEO.
Lloyds Chair Lord Blackwell, who himself will be stepping down in the new year, said: "On behalf of the board I would like to congratulate Antonio on this new role as he moves on after 10 years as group chief executive officer of Lloyds Banking group. During his tenure he has transformed the group's fortunes and established a solid operational and strategic base from which it can continue to build a successful future."
Credit Suisse has seen its share of turmoil in the upper ranks in the past year. Back in February, Credit Suisse's board "unanimously" accepted the resignation of Tidjane Thiam as its chief executive. This followed a scandal involving surveillance of Credit Suisse's former wealth management chief. Iqbal Khan was tailed after he jumped ship to competitor UBS, sparking fears he was preparing to poach employees and clients.
Thomas Gottstein, who had been CEO of Credit Suisse (Switzerland) Ltd, was appointed as the new CEO.
Lloyds Banking shares were up 1.0% early Tuesday in London.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 6,311.17
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Hang Seng: up 0.7% at 26,523.94
Nikkei 225: closed up 1.3% at 26,787.54
DJIA: closed down 271.73 points, 0.1%, at 29,638.64
S&P 500: closed down 0.5% at 3,621.63
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GBP: up at USD1.3388 (USD1.3343)
EUR: up at USD1.1970 (USD1.1948)
Gold: up at USD1,789.16 per ounce (USD1,772.60)
Oil (Brent): soft at USD47.56 a barrel (USD47.75)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
OECD economic outlook
OPEC and non-OPEC ministerial meeting
0930 GMT UK manufacturing purchasing managers' index
0955 CET Germany labour market statistics
0955 CET Germany manufacturing PMI
1000 CET EU manufacturing PMI
1100 CET EU flash estimate euro area inflation
0945 EST US manufacturing PMI
1000 EST US ISM manufacturing PMI
1000 EST US Treasury Secretary Mnuchin and Fed Chair Powell testify to Senate on CARES Act
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UK house prices surged in November to post their fastest growth since the start of 2015, according to Nationwide's latest house price index. House prices jumped 6.5% year-on-year in November, accelerating from growth of 5.8% in October to achieve the highest rate since January 2015. Month-on-month, house prices rose 0.9%, a touch faster than the 0.8% growth seen in October. The average UK house price stood at GBP229,721 in November versus GBP227,826 in October. Robert Gardner, Nationwide's chief economist, noted that housing market activity has remained robust in the face of headwinds facing the economy.
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Ireland's manufacturing sector continued to grow in November, as new orders and output returned to expansion, while employment was also on the rise. The headline AIB Ireland manufacturing purchasing managers' index - a composite indicator of manufacturing performance - rose to 52.2 in November from 50.3 in October, IHS Markit reported. "It was the third highest reading since April 2019, which is impressive considering that the Irish as well as some other European economies were back in lockdown in November. The index fell to very low levels during the first Covid lockdown in the spring. However, the manufacturing sector has remained open during this lockdown," said Oliver Mangan, AIB chief economist.
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Chinese manufacturers signalled the strongest improvement in operating conditions for a decade in November, as growth of both output and new orders accelerated to ten-year highs, IHS Markit reported. The Caixin China headline seasonally adjusted purchasing managers' index increased to 54.9 in November from 53.6 in October, to signal the sharpest improvement in conditions since November 2010 and well clear of the neutral mark of 50. Firms frequently attributed the increase to greater new order volumes, IHS Markit said, as well as a further recovery from the Covid-19 related disruptions seen earlier in the year. Underlying data suggested that the upturn continued to be led by firmer domestic demand, as growth in new export work was not as marked as that seen for total new orders.
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Japan's manufacturing sector moved nearer to stabilisation in November, with its manufacturing purchasing managers' index hitting its highest level since August 2019. The headline au Jibun Bank Japan manufacturing PMI, a composite indicator of manufacturing performance, inched up to 49.0 points in November from 48.7 in October. While this improvement put the country's manufacturing PMI at its highest level since August 2019, the sector remained in contraction. The improvement was driven by a softer contraction in production and new orders. Output dropped at its slowest pace since November 2019 and was only modestly lower overall.
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The OPEC oil producers' club will hold a second day of talks on Tuesday, as they attempt to reach agreement on extending production cuts introduced as the coronavirus pandemic weighs on global demand. "2020 continues to be a year of immense challenges caused by the Covid-19 pandemic," said Abdelmadjid Attar, who currently holds the rotating presidency of the Organisation of the Petroleum Exporting Countries. Attar, who is also Algeria's energy minister, was speaking in a live broadcast at the beginning of the group's videoconference meeting. The common goal of the 13 member states is to keep afloat a crude market devastated by the Covid-19 pandemic and which is slowly recovering from the depths into which prices plunged at the end of April. They will be joined by Russia and other allies forming the OPEC+ grouping on Tuesday. In April, OPEC members agreed to cut production by 7.7 million barrels per day, which was meant to be eased to 5.8 million bpd in January 2021. However, most observers expect the cut instead to be extended by three to six months to take into account the ongoing effects of the virus.
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BROKER RATING CHANGES
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BARCLAYS INITIATES SMITH & NEPHEW WITH 'OVERWEIGHT' - TARGET 1,900 PENCE
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DEUTSCHE BANK RAISES DIAGEO TO 'BUY' (HOLD) - PRICE TARGET 3,900 (2,850) PENCE
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GOLDMAN SACHS RAISES EASYJET TO 'NEUTRAL' (SELL) - PRICE TARGET 840 (500) PENCE
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GOLDMAN SACHS CUTS WIZZ AIR TO 'SELL' (NEUTRAL) - PRICE TARGET 4180 (4500) PENCE
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COMPANIES - FTSE 100
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AstraZeneca said it has agreed to sell the rights to Crestor in over 30 countries in Europe, except the UK and Spain, to Grunenthal. Crestor is a statin approved for the treatment of dyslipidaemia and hypercholesterolaemia. AstraZeneca said the deal is set to close in the first quarter of 2021, at which point Grunenthal will make an upfront payment of USD320 million for Crestor and may also make future milestone payments of up to USD30 million. The London-listed pharmaceutical firm said the Crestor sale will not impact its financial guidance for 2020. Ruud Dobber, executive vice president at AstraZeneca's BioPharmaceuticals Business Unit, said: "This agreement supports the management of our mature medicines to enable reinvestment into the pipeline and bringing new, innovative treatments to patients. Grunenthal previously acquired the rights to several established AstraZeneca medicines and is well placed to ensure continued access to Crestor for patients across Europe." AstraZeneca will continue to sell the medicine in other countries, including North America, Japan, China and other emerging markets.
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COMPANIES - FTSE 250
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Weir Group said it has won a GBP95 million order to provide aftermarket components and service to the Iron Bridge magnetite project in Western Australia. The Iron Bridge magnetite project is a USD2.6 billion joint venture between Fortescue Metals Group's subsidiary FMG Magnetite and Formosa Steel IB, and is located in the Pilbara region. The order will start in 2022, in line with the project's initial production.
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Pets at Home said it has sold its five specialist referral practices for up to GBP100 million in cash to Linnaeus Group. The Specialist Group comprises the assets and operations of Dick White Referrals in Cambridgeshire, Anderson Moores in Hampshire, both Northwest Veterinary Specialists and Eye Vet in Cheshire, and Veterinary Specialists Scotland in Livingston, Scotland. "Pets at Home's strategy as the UK's leading pet care business is unchanged, with this disposal being part of the continuing focus of group resources on customer-facing activities across our omnichannel retailing and First Opinion veterinary operations," Pets at Home said. The London-listed pet products and services provider said it will receive GBP80 million on completion and deferred cash consideration of GBP20 million, contingent on achieving financial milestones.
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COMPANIES - MAIN MARKET AND AIM
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Hyve swung sharply to annual loss as the events industry was battered by Covid-19. Revenue for the financial year ended September 30 more than halved to GBP105.1 million from GBP220.7 million the year prior, with the London-based exhibitions and conferences organiser swinging to a hefty pretax loss of GBP312.9 million from a GBP8.7 million profit. Impairment charges of GBP263.0 million were recognised in respect of "a number" of business units, the company said. "The pandemic has had a severe impact not just on Hyve, but the event industry as a whole," Hyve said. Despite starting to see signs of optimism, underpinned by vaccine progress, the company expects continued disruption to its event schedule and a "gradual" return of customer participation. Hyve said it has created two trading scenarios for the 2021 financial year, a 'Recovery' scenario including events in China, Russia, Ukraine and Turkey and a 'East-West' scenario that assumes that no western events take place throughout financial 2021. The company is "hopeful" of returning to a normalised schedule of events in the 2022 financial year.
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COMPANIES - GLOBAL
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Credit Suisse also Tuesday provided an update on its legacy US residential mortgage backed security case. Credit Suisse and MBIA have been in a legal dispute in New York since 2009 concerning warranties regarding US RMBS issued in 2007. On Monday night, the judge presiding over this case issued an order requiring that both parties submit damage estimates in respect of these mortgages, which could result in a judgement against Credit Suisse of as much as around USD680 million. "While Credit Suisse believes that it has strong grounds for appeal, it has already taken provisions totalling USD300 million in prior periods in connection with this case, and would expect to increase its RMBS-related provisions as a consequence of this order," the company said.
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Tuesday's Shareholder Meetings
Kingswood Holdings Ltd - AGM
Target Healthcare REIT PLC - AGM
JPMorgan Global Emerging Markets Income Trust PLC - AGM
Gunsynd PLC - GM re share placing
Rambler Metals & Mining PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
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