(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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The EU is set to bring antitrust charges against Apple for the first time, the Financial Times reported, citing people familiar with the case. The newspaper said the EU will act on a complaint brought two years ago by the music streaming site Spotify, which said Apple was taking a 30% cut of its subscription fees for featuring it in the App Store. Spotify also complained that Apple Music was able to undercut it on price because it did not have to pay the same 30% fee. More recently, Epic Games - the maker of Fortnite - had its hugely popular game thrown off Apple's App Store after it started directing players to its own payment system. Epic has also filed a competition complaint against Apple in the EU. On Thursday, the UK's Competition & Markets Authority announced an antitrust probe into whether Apple abuses its dominance on the App Store by imposing unfair terms on developers.
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China announced plans to boost supervision of the country's huge fintech sector and beef up its anti-monopoly drive, months after a crackdown on the sector that dealt a severe blow to e-commerce titan Alibaba and tycoon founder Jack Ma. Beijing has in recent months looked to rein in its booming financial technology companies to address a worrying debt mountain in the country, while also deflating the ambitions of high-flying business leaders thought to have stepped out of line with the Communist Party. On Friday, a draft plan for development from 2021-2025 said China would "steadily develop fintech" while stepping up in areas like risk assessment for applications of tech and financial innovation. Officials would also explore building a "correction and suspension mechanism" for innovative products.
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London Stock Exchange Group said it delivered a strong financial performance in 2020, saying revenue growth continued across its businesses as it prepared to take on new acquisition Refinitiv.
For 2020, LSEG posted total revenue of GBP2.12 billion, up 2.9% from GBP2.06 billion in 2019, and total income rose 6% to GBP2.44 billion from GBP2.31 billion. The figures were in-line with company-compiled consensus forecasts. Capital Markets revenue was up 8% on a like-for-like basis. Post Trade revenue was up 7%, driven by clearing house LCH. Revenue at index provider FTSE Russell rose by 3%. LSEG noted that more than GBP718 billion was raised on its fixed income markets, of which GBP75 billion was raised through Covid-19 response bonds. LSEG reported pretax profit of GBP685 million in 2020, up 5.2% from GBP651 million in 2019. LSEG declared a total dividend of 75.0 pence, up 7.1% from 70.0p paid out in 2019.
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Glasgow-based temporary power generation supplier Aggreko announced it has accepted a GBP2.32 billion takeover offer from Albion Acquisitions. Albion Acquisitions is a company newly formed by funds managed by Miami-based private equity firm I Squared Capital Advisors US and investment funds managed by London-based private equity firm TDR Capital. Under the acquisition's terms, Albion will acquire Aggreko for 880 pence per share in cash, reflecting a 2.0% discount to the company's closing price of 889.00 pence on Thursday, but a 39% premium to the closing price of 635p on February 4, the last day before the start of the offer period.
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MARKETS
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Stock markets were lower and the dollar higher on Friday, after comments by US Fed Chair Jerome Powell left market participants still concerned about widening Treasury yields and what that means for inflation and future monetary policy. "Markets are going to have to deal with the fact that yields are going to rise over the course of the year, with stocks put under pressure as a result," commented Josh Mahoney, senior market analyst at IG. "Rising yields typically lessen the case for growth stocks, with traders instead shifting towards value names that have been hard-hit over the course of the past year." The US nonfarm payrolls report at 0830 EST remains the last key risk event before the weekend.
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CAC 40: down 0.7% at 5,787.99
DAX 30: down 0.9% at 13,932.57
FTSE 100: up 2.57 points at 6,653.45
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DJIA: called down 0.3%
S&P 500: called down 0.3%
Nasdaq Composite: called down 0.4%
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S&P/ASX 200: closed down 0.7% at 6,710.80
Hang Seng: closed down 0.5% at 29,098.29
Nikkei 225: closed down 0.2% at 28,864.32
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EUR: down at USD1.1935 (USD1.2047)
GBP: down at USD1.3811 (USD1.3989)
USD: up at JPY108.50 (JPY107.56)
Gold: down at USD1,695.44 per ounce (USD1,718.65)
Oil (Brent): up at USD68.25 a barrel (USD67.11)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The US Senate, whipsawed over the USD1.9 trillion Covid rescue package, finally took up the sweeping bill Thursday, with multiple hurdles ahead as President Joe Biden seeks to push his top legislative priority through Congress. Republicans already appeared united in opposing the proposal over its high cost, and lawmakers braced for marathon days that will include up to 20 hours of debate and a lengthy list of amendments that will force contentious votes before the bill's final passage. But Biden has been desperate to implement its key elements, including direct checks of up to USD1,400 for most Americans, funding for vaccines, expanded unemployment benefits, resources to help open schools quickly and money to hard-hit businesses and communities. With the chamber deadlocked at 50-50, Vice President Kamala Harris broke the tie to allow debate to begin.
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The US labour market faces a lengthy recovery and the economy will not see "maximum employment" this year, Federal Reserve Chair Powell said on Thursday. While he expressed hope about the restoration of jobs lost during the pandemic, Powell noted that millions of workers have left the labour force. "I think it's not at all likely it would reach maximum employment this year. I think it's going to take some time to get there," Powell said during an event hosted by The Wall Street Journal. In another effort to assuage financial markets worried that rising prices will lead to increased borrowing costs, he again stressed that the central bank is in no rush to raise its benchmark lending rate. As the economy recovers, Powell said "you could see prices moving up" but those increases are likely to be transient.
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The OPEC group of oil producers and its allies decided to allow a slight rise in crude output in April after talks on Thursday, with market demand still fragile. A statement released after the ministerial-level talks said that participants "approved a continuation of the production levels of March for the month of April, with the exception of Russia and Kazakhstan, which will be allowed to increase production by 130,000 and 20,000 barrels per day respectively, due to continued seasonal consumption patterns". The oil exporting countries are largely extending their restrictive production policy for another month until the end of April.
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The World Health Organization has scrapped plans for a team that visited Wuhan, China to probe the origins of the coronavirus pandemic to issue an interim report, The Wall Street Journal reported late Thursday. Wuhan is the city where the pandemic is believed to have originated in late 2019. The WHO team returned recently from its visit there saying it had no clear finding on the genesis of the virus, amid tensions between the US and China on what caused the once-in-a century global health crisis. The US responded by saying it had "deep concerns" about what the team learned and it pressed China for more information. WHO director Tedros Adhanom Ghebreyesus had said February 12 that a preliminary report with a summary of the team's findings would be issued soon thereafter, and a full report in a matter of weeks. But now the plan is to scrap the interim report, the Journal said, quoting Peter Ben Embarek, the scientist who led the team. Instead, the team will publish the full and final report, with a summary of its findings, the newspaper said, quoting a WHO spokesman.
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China's leaders set a growth target "above six percent" for 2021, putting it back above pre-pandemic levels, after the virus was largely brought under control at home thanks to strict lockdowns and mass testing. The goal comes after the world's number two economy suffered its slowest rate of expansion in four decades because of the strict containment measures and as the disease wiped out global trade. "In setting this target, we have taken into account the recovery of economic activity," said Premier Li Keqiang at the opening of the country's annual legislative session, adding that this dovetails with future goals such as "high-quality development", innovation and reform. The freezing of the economy last year raised some doubts about the Communist Party's ability to deliver on its pledge of continued prosperity in return for unquestioned political power.
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UK house prices eased again in February as the housing market's soft start to 2021 continues, the latest figures from Halifax showed. On an annual basis, house price growth was 5.2% in February, slowing slightly from 5.4% in January. On a monthly basis, prices fell 0.1% in February, having declined 0.4% in January. The UK mortgage lender said average prices stood at GBP251,697 last month, broadly unchanged from GBP251,968 in January. Going forward, the housing market found support in Wednesday's budget statement, as UK Chancellor of the Exchequer Rishi Sunak extended the stamp duty holiday on house purchases until the end of June. Sunak also outlined a mortgage guarantee scheme to help buyers with small deposits get on the property ladder.
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The annual decline in UK retail footfall eased in February, though the drop was still steep as the country remained in lockdown. According to the latest British Retail Consortium-Sensormatic monitor, UK retail footfall dropped 74% in February. This was a lesser decline than January's 82% drop, but was the second-worst fall since May. In high streets, footfall dropped 68% year-on-year in February. This was a worse showing than the average three-month decline of 61%. In retail parks, footfall dropped 35% annually in February, compared to the three-month average drop of 29%. While at shopping centres, footfall tumbled 76% in February, steeper than the three-month average drop of 64%.
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