(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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The UK government cut its stake in NatWest to 59.8% from 61.7%. NatWest said it agreed with the Treasury to make an off-market purchase of 590.7 million shares from UK Government Investments at Thursday's closing market price of 190.50 pence per share, worth GBP1.12 billion. NatWest was up 1.2% on Friday at 192.80p. The UK government now holds 6.92 billion NatWest shares. NatWest said it plans to cancel 390.7 million of UK government shares and hold the remaining 200 million in treasury. NatWest said the off-market purchase of shares also required it to contribute GBP500 million to its main pension scheme, under an agreement announced back in 2018.
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Thomson Reuters, Blackstone and members of Refinitiv's management team have sold GBP745 million worth of stock in London Stock Exchange Group. JPMorgan Securities placed 10.4 million LSEG shares at 7,150 pence each, in a deal worth GBP745 million. The stock exchange operator will not receive any proceeds from the sale, as they were existing shares. LSEG was down 1.4% in London on Friday at 7,251.68p each. The placing shares were sold by Thomson Reuters, members of Refinitiv management, and York Holdings II and York Holdings III. These are entities owned indirectly by BCP York Holdings, which itself is owned by a consortium of investment funds affiliated with Blackstone. Following completion of the placing, the sellers will own in aggregate around a 30% economic interest and a 22% voting interest in LSEG.
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The UK Competition & Markets Authority said it is requiring Countryside Properties and Taylor Wimpey to remove contract terms that mean leaseholders have to pay ground rents that double every 10 or 15 years. The CMA said the lease terms mean people can struggle to sell their properties and become trapped. The regulator added it is still investigating similar lease terms used by Barratt Developments and Persimmon Homes.
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Nike said its third-quarter performance in Europe and North America was hurt by Covid-19, though soaring sales in China helped lift revenue. Revenue for the quarter ended February 28 failed to meet consensus though. Revenue rose 2.5% annually to USD10.36 billion from USD10.10 billion. Sharper growth to USD11 billion was expected, however, according to consensus cited by CNN. Net income for the quarter soared 71% to USD1.45 billion from USD847 million a year earlier. Third quarter North America sales tumbled 10% with trading in the area hit by "global container shortages and US port congestion". In the Europe, Middle East & Africa region, sales were 3.7% lower. More positively, sales in Greater China were 58% higher in the third quarter. It is a promising reading on consumer spending in China, the first country hit by Covid-19.
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Eni will ask shareholders to approve a buyback programme of up to EUR1.60 billion. The Rome-based oil & gas company said the stock repurchases, which will span 18 months, will be subject to Brent prices, as stated in its 2021-2024 strategic plan. Back in February, Eni said it planned a EUR300 million a year buyback to re-start when the oil price hits USD56 per barrel, a buyback of EUR400 million a year from USD61 a barrel, and EUR800 million a year from USD66 per barrel. "The price reference for the current year will be defined and announced to the market in July 2021, during the half year presentation of the financial results," Eni said.
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MARKETS
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Asia closed lower and European markets also were trading lower on Friday, but Wall Street was pointed to a positive open after a poor Thursday that saw the Nasdaq Composite index lose 3.0%. US 10-year Treasury yields retreated to below 1.70% on Friday, having hit 1.75% on Thursday. "The rapid rise in long-end US yields has spooked investors again overnight as there appears to be no lasting respite for the fixed income onslaught," commented Stephen Innes, chief global markets strategist at axi. "Given the untimely ferocious nature of the selloff, which caught some investors wrong-footed whilst cheering the [US Fed's] 'lower for longer' mantra, it caused a real stinger to longer duration growth asset sentiment like mega-cap tech names."
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CAC 40: down 0.6% at 6,028.53
DAX 30: down 0.3% at 14,733.56
FTSE 100: down 0.9% at 6,720.91
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DJIA: called up 0.1%
S&P 500: called up 0.3%
Nasdaq Composite: called up 0.7%
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Hang Seng: closed down 1.4% at 28,990.94
Nikkei 225: closed down 1.4% at 29,792.05
S&P/ASX 200: closed down 0.6% at 6,708.20
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EUR: down at USD1.1895 (USD1.1935)
GBP: down at USD1.3925 (USD1.3949)
USD: down at JPY108.84 (JPY108.95)
GOLD: up at USD1,737.00 per ounce (USD1,735.34)
OIL (Brent): down at USD64.22 a barrel (USD65.14)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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France and Germany were set to resume AstraZeneca vaccinations on Friday after EU regulators gave the jab the all-clear, and US President Joe Biden said his administration would meet its goal of inoculating 100 million Americans weeks ahead of schedule. Spain, Italy, the Netherlands, Portugal, Lithuania, Latvia, Slovenia and Bulgaria also said they would resume vaccinations after the European Medicines Agency said Thursday that the jab was "safe and effective". America was due Friday to administer its 100 millionth dose, boosting optimism – as infection rates fall – that the world's worst-hit country is headed for a powerful rebound. Meanwhile, France prepared to enter a new month-long, limited lockdown from midnight Saturday after the country recorded its highest new caseload in nearly four months. Non-essential businesses in Paris will close, although schools will stay open and outdoor exercise allowed up to 10 kilometres from home. French Prime Minister Jean Castex said he would get the AstraZeneca jab on Friday, while Norway and Sweden were holdouts among European countries, saying they would wait before resuming their own vaccine drives.
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The UK insisted that its plan to ease coronavirus lockdowns in the coming months remains on track, despite a vaccine supply shortfall from India which will hit the inoculation drive in April. The state-run National Health Service in England has warned in a letter to local vaccination centres that doses will be "significantly constrained" from March 29 for four weeks. The next phase of the inoculation campaign, covering people in their 40s, will have to be suspended until May, the letter said. The problem is linked to a delay in getting new jabs from the Serum Institute of India by AstraZeneca – whose supply issues have caused anger in the EU.
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The UK government borrowed another hefty amount in February, though less than economists were expecting, as lockdown restrictions continued, the latest figures from the Office for National Statistics showed. UK public sector net borrowing, excluding public sector banks, was estimated to have been GBP19.1 billion in February, up from GBP3.1 billion in January, but lower than economist forecasts of GBP21 billion. Still, the latest figure was the highest February borrowing since monthly records began in 1993, according to the ONS.
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UK consumer confidence is showing "green shoots" of recovery on the back of well-received government budget announcements, the successful vaccine rollout and roadmaps in place for ending lockdown, a survey suggests. British peoples' positivity about their personal finances over the next 12 months is at its highest point in three years, jumping six points to a score of 10 in March, seven points higher than this time last year, according to the long-running consumer confidence index by market research company GfK, which stands for Growth from Knowledge. The index recorded an overall score of minus 16. While this indicates that attitudes remain negative, it is a robust increase on last month's score of minus 23, with all five measures increasing on February and marking an improvement each month of this year.
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The Bank of Japan maintained its negative interest rate and tweaked its monetary easing programme as it battles to boost inflation and shore up the pandemic-hit economy. The adjustment, which marginally expands the fluctuation in long-term rates for 10-year bonds that the bank will accept, is seen as a potential forerunner to further tweaks in policy. The bank said the range of 10-year government bond yield fluctuation would be "between around plus and minus 0.25%" from the target level in order to conduct yield curve control flexibly. The bank also said it would allow more flexibility in its stock purchases, dropping a target for its intervention in the Tokyo stock market, which has strongly recovered since crashing in spring 2020 as the pandemic began to bite. In its policy review, the central bank dropped its pledge to purchase exchange-traded funds at an annual rate of JPY6 trillion, about USD55 billion, while keeping an upper limit of JPY12 trillion. The bank's policies were otherwise largely left untouched after its two-day meeting, with an interest rate of negative 0.1% left intact, as well as an annual ceiling on stock purchases.
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Japan's core consumer price index was down 0.4% year on year in February for the seventh straight month of decline, a government report showed. Kerosene dropped 11.6% from a year earlier and petrol fell 6.2%, according to the report published by the Ministry of Internal Affairs and Communications. The core consumer price index, which excludes fresh food, stood at 101.5 against a base of 100 for 2015, the ministry said. In 2020, consumer prices fell 0.2% on average, marking the first decline in four years, as the government launched a travel promotion campaign to reboot local economies and the tourism industry hit hard by the Covid-19 pandemic. But it was suspended following a resurgence of new virus cases. The index is projected to fall 0.5% in the current financial year ending March 31, said the Bank of Japan in January.
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By Tom Waite; thomaslwaite@alliancenews.com
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