(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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The US Federal Aviation Administration ordered extra inspections Sunday of some Boeing 777 passenger jets, after a United Airlines flight suffered engine failure a day earlier, scattering debris across a Colorado community. FAA Administrator Steve Dickson said the order meant some 777s would "likely" be removed from service. He had consulted with his team of aviation safety experts after Saturday's engine failure aboard a Boeing 777 airplane shortly after it took off from Denver. "I have directed them to issue an Emergency Airworthiness Directive that would require immediate or stepped-up inspections of Boeing 777 airplanes equipped with certain Pratt & Whitney PW4000 engines," Dickson said in a statement released on Twitter. A video shot from inside the aircraft – which had 231 passengers and 10 crew onboard – showed the right engine ablaze and wobbling on the wing of the Boeing 777-200, its cover entirely missing as the aircraft returned to Denver airport. There were no injuries on the plane or on the ground, authorities said.
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International Consolidated Airlines said British Airways has agreed two financial-support pacts worth GBP2.45 billion in total. BA has secured a GBP2.0 billion UK Export Development Guarantee loan facility of GBP2.0 billion. The term-loan is for five years. It is underwritten by a syndicate of banks and partially guaranteed by UK Export Finance. British Airways also agreed a deferral of GBP450 million in pension deficit contributions. The deferral involves GBP37.5 million in monthly contributions that were due from October 2020 to this coming September. BA will repay the deferred contributions, plus interest. The accumulated amount will be added as monthly payments to the end of its existing recovery plan, currently March 2023. BA will pay no dividend to IAG before the end 2023. From 2024 onward, any dividends paid to the parent company will be matched at a 50% rate by contributions into the pension fund until deferred contributions have been repaid.
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Sanofi and GlaxoSmithKline initiated a new phase 2 study with 720 volunteers to select the most appropriate antigen dosage for phase 3 evaluation of their adjuvanted recombinant protein Covid-19 vaccine candidate, both companies said. In parallel to the new phase 2 study and recognising the global emergence of new SARS-CoV-2 variants and their potential impact on vaccine efficacy, Sanofi has commenced development work against new variants which will be used to inform the next stages of the Sanofi/GSK development programme. "Over the past few weeks, our teams have worked to refine the antigen formulation of our recombinant-protein vaccine, based on learnings from our initial phase 1/2 study," said Thomas Triomphe, executive vice president & head of Sanofi Pasteur.
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Pharmaceutical firm AstraZeneca withdrew its Imfinzi drug in the US, a decision made following a consultation with the Food & Drug Administration. Back in May 2017, the drug secured accelerated approval based on promising tumour response rates from a Phase I/II trial. "Continued approval was contingent on results from the DANUBE Phase III trial in the 1st-line metastatic bladder cancer setting, which did not meet its primary endpoints in 2020. The withdrawal is aligned with FDA guidance for evaluating indications with accelerated approvals that did not meet post-marketing requirements, as part of a broader industry-wide evaluation. This withdrawal does not impact the indication outside the US and does not impact other approved Imfinzi indications within or outside the US," Astra added.
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HSBC is moving some of its more senior executives to Hong Kong, the Financial Times reported, as the Asia-focused lender moves away from its US retail operations. Executives relocating to Hong Kong are likely to include Greg Guyett, co-head of global banking & markets, Nuno Matos, chief executive of wealth & personal banking, and Barry O'Byrne, chief executive of global commercial banking, according to people familiar with the matter. With those three moving to east-Asia, the units that record almost all of HSBC's global revenue will be run out of Hong Kong. The personnel moves, first reported by Bloomberg, are dependent on regulatory approval, said a person close to the bank. HSBC declined to comment. The bank is also preparing to announce a withdrawal from consumer banking in the US after concluding it cannot turn round the struggling unit, the FT reported.
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Macquarie Group said the extreme weather conditions in Texas have significantly increased short-term demand for gas and power supply from one of its division, pushing the financial services firm into profit for financial 2021. The Australian investment bank and financial services company expects its profit for the financial year ending March 31, 2021 to be up by about 5% to 10%. In financial 2020, Macquarie reported net profit of AUD2.73 billion, about USD1.78 billion. In mid-February, the bank guided for its financial 2021 profit to be slightly down on the year before. "Extreme winter weather conditions in North America have significantly increased short-term client demand for Macquarie's capabilities in maintaining critical physical supply across the commodity complex and particularly in relation to gas and power," Macquarie explained.
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Xiaomi shares slipped in Hong Kong on Monday after the consumer electronics firm batted away rumours it may enter the electronic vehicle sector. "The group noticed certain media articles regarding the group's potential plans to enter into the electric vehicle manufacturing business," Xiaomi said. "The group has been paying attention to the developments in the electric vehicle industry, and has continuously studied the relevant industry trends. The group has not initiated any formal project regarding the study of electric vehicle manufacturing business." iFengNews first reported the story, saying the tech giant was planning on building its own car.
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Brazilian President Jair Bolsonaro nominated former army general Joaquim Silva e Luna to head oil giant Petrobras. Silva e Luna replaces Roberto Castello Branco, an economist who has been head of the semi-public multinational since the beginning of the Bolsonaro government in early 2019. The Petrobras board has yet to approve the change. With the personnel move, Bolsonaro is trying to appease lorry drivers angry about recent fuel price hikes. The truckers had threatened to strike.
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MARKETS
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European stock markets were lower at midday on Monday after a weak Asian session, as optimism for the lifting of virus restrictions was offset by concerns that rising inflation will mean the removal of fiscal and monetary stimulus. Wall Street was called for a lower open, with the tech-heavy Nasdaq Composite pointed down by more than a percentage point.
The pound bounced back above USD1.40 ahead of UK Prime Minister Boris Johnson's presentation to Parliament of his roadmap out of lockdown, due at 1530 GMT. Johnson then will host a press conference at 1900 GMT. "European markets have kicked off the week on a somewhat unstable footing, with the fears over rising inflation and Treasury yields once again dampening sentiment on a day that had promised to be dominated by reopening hopes," commented Joshua Mahony, senior market analyst at IG.
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CAC 40: down 0.5% at 5,742.53
DAX 30: down 0.5% at 13,918.85
FTSE 100: down 0.6% at 6,584.03
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DJIA: called down 0.5%
S&P 500: called down 0.7%
Nasdaq Composite: called down 1.1%
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S&P/ASX 200: closed down 0.2% at 6,780.90
Hang Seng: closed down 1.1% at 30,319.83
Nikkei 225: closed up 0.5% at 30,156.03
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EUR: soft at USD1.2130 (USD1.2139)
GBP: firm at USD1.4025 (USD1.4020)
USD: up at JPY105.63 (JPY105.53)
GOLD: up at USD1,796.14 per ounce (USD1,786.45)
OIL (Brent): soft at USD63.26 a barrel (USD63.47)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK PM Johnson is to set out a "steady as she goes" plan for easing England's lockdown, with schools and outdoor activities the first in line for a return. Johnson will tell members of Parliament that all pupils in all years in England can go back to the classroom from March 8, with outdoor after-school sports and activities allowed to restart as well. Socialising in parks and public spaces with one other person will also be permitted in a fortnight, when the rules are relaxed, to allow people to sit down for a drink or picnic. A further easing of restrictions will take place on March 29 when the school Easter holidays begin – with larger groups allowed to gather in parks and gardens. The moves form the first step in a four-part plan, which will not be completed until the summer – with around five weeks between stages expected to assess the impact on the spread of the virus and prepare businesses for the next move. By the Easter holidays the "rule of six" will return, along with new measures allowing two households totalling more than six people to meet – giving greater flexibility for families and friends.
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The US was on the brink Sunday of the grim milestone of 500,000 Covid-related deaths since the start of the pandemic, as the nation's top virus expert warned a semblance of normalcy may not return until the end of the year. Signs of hope were emerging in the rollout of vaccines and the dropping off of a massive winter spike in infections, but the heavy toll continues to mount in a nation that has reported the most fatalities and cases in the world. "It's terrible. It is historic. We haven't seen anything even close to this for well over a hundred years, since the 1918 pandemic of influenza," Anthony Fauci, chief medical advisor to US President Joe Biden, said on NBC's Meet The Press. The toll on the Johns Hopkins University tracking website stood at some 498,000. Fauci noted that the number of daily new infections was on a steep decline after peaking in January, but he added normal life may still be some way off. "I think we'll have a significant degree of normality...as we get into the fall and the winter, by the end of the year," Fauci said on CNN's "State of the Union." According to Biden, his goal of administering a million shots a day for a total of 100 million in the first 100 days of his presidency is on track to be easily surpassed, with a current average of 1.7 million vaccinations a day.
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China's foreign minister called on Biden to drop the tariffs and sanctions imposed by his predecessor Donald Trump. Beijing hopes the US will change tack "as soon as possible" and "abandon unreasonable tariffs on Chinese goods," Foreign Minister Wang Yi said Monday at a policy forum in China's capital. "We are ready for open communication with the US side," the top envoy said. But he urged Washington to respect China's core interests and "stop smearing" the Communist Party and China's political system. Relations between Beijing and Washington plumbed new depths during the Trump administration, which launched a trade war that saw tariffs slapped on Chinese imports and sanctions imposed on Chinese officials over the continuing crackdown on Hong Kong's pro-democracy movement. There has been no signal so far that Biden plans to reverse the Trump-era measures.
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China's central bank left interest rates unchanged again. The Chinese central bank has now kept its benchmark interest rate at the same level for the tenth month in a row. The one-year loan prime rate was held at 3.85%, the last time the rate was changed was back in April. The five-year rate also was unchanged at 4.65%.
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German business confidence improved sharply in February, survey results from the Munich-based Ifo institute showed. The Ifo business climate index rose to 92.4 points in February from 90.3 in January - which represents the strongest monthly increase since July last year. "The German economy is proving robust despite the lockdown, especially thanks to strength in industry," Ifo said. German gross domestic product in the final three months of 2020 grew just 0.1% on the previous quarter. This followed 8.5% growth in the third quarter. The country's unemployment rate held steady at 6.0% in January.
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Germany's Foreign Minister said the EU should give the green light on Monday to slap new sanctions on Russia following the jailing of dissident Alexei Navalny. "I am in favour of giving the order to prepare [...] sanctions, listings of individual people," he said on the way into key talks in Brussels with his EU counterparts. "At the same time, we must look for ways to stay in dialogue with Moscow. We need Russia to resolve many international conflicts," Maas added.
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