(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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The trial of the Oxford University and AstraZeneca vaccine in children has been paused while regulators investigate reports of a rare form of blood clot among adults. Oxford said that no safety concerns have arisen from the trial itself, but it is waiting for more information from the Medicines & Healthcare products Regulatory Agency before giving any more vaccinations. Regulatory bodies from the UK, Europe and the World Health Organisation are assessing data on the jab and a potential association with a rare form of blood clot. The European Medicines Agency will hold a press conference on its findings over possible links between AstraZeneca's coronavirus vaccine and blood clots at 1500 BST on Wednesday. "EMA is holding a virtual press briefing on the conclusion of the evaluation of a safety signal with Vaxzevria (formerly Covid-19 Vaccine AstraZeneca) relating to cases of thromboembolic events by EMA's safety committee," it said. A senior EMA official was quoted in Italian media on Tuesday as saying that there was a "clear" connection between the AstraZeneca jab and clots, and that the agency would announce it soon.
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Royal Dutch Shell guided to a hit of up to USD200 million to first quarter earnings from the Texas winter storm. In February, a historic winter blast knocked out power for millions in oil-rich Texas and also resulted in water problems across the state. Shell said the hit will be concentrated on the Upstream, Oil Products and Chemicals divisions, with the fallout to Integrated Gas limited. For the first quarter of 2021, Integrated Gas production is expected to be around 920,000 to 960,000 barrels of oil equivalent per day. Upstream earnings are expected to be positive in the first quarter, boosted by the current commodity price environment, but the Texas freeze will hit the result by up to USD40 million.
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Ryanair said it expects to report a pre-exceptional net loss of between EUR800 million and EUR850 million for the financial year that ended March 31, narrowed from the previously guided range of EUR850 million to EUR950 million. The budget airline said it carried 27.5 million passengers in financial 2021, down from 149 million in financial 2020. Easter travel restrictions and lockdowns alongside a delayed traffic recovery into the peak summer 2021 season, due to the slow rollout in the EU of Covid-19 vaccines, means that 2022 traffic is likely to be towards the lower end of the previously guided range of 80 million to 120 million passengers, Ryanair noted: "While it is not possible (at this time) to provide meaningful 2022 profit guidance, we do not share the recent optimism of certain analysts as we believe that the outcome for 2022 is currently close to breakeven."
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The Independent Workers' Union of Great Britain said hundreds of Deliveroo workers will strike on Wednesday over pay and "basic workers' rights". Riders from the union will take industrial action against the food delivery platform Wednesday to coincide the London initial public offering of Deliveroo Holdings, whose shares started trading unconditionally on Wednesday. Socially distanced protests are being organised in London, York, Sheffield, Reading, Wolverhampton. Deliveroo flopped on its London debut last week, at one point crashing more than 30% on the first day of conditional dealings. The Financial Times reported that US bank Goldman Sachs bought GBP75 million in Deliveroo shares to prop up the IPO. Deliveroo shares were up 2.7%.
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French asset manager Amundi said it is in talks to buy Societe Generale SA's Lyxor unit for EUR825 million. Lyxor manages EUR124 billion of assets and is a "key player" in the exchange-traded fund market, Amundi said. Amundi said the deal would make it the "European leader in ETF". Credit Agricole has roughly a 70% stake in Amundi, which was Amundi was formed following a merger of SocGen and Agricole's asset management arms. SocGen sold its stake in the company during Amundi's 2015 stock market float.
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Samsung Electronics flagged a 44% rise in first quarter operating profit, largely driven by robust sales of smartphones and the launch of its flagship Galaxy S21 series. The company said in an earnings estimate that it expected operating profits of KRW9.3 trillion, about USD8.3 billion, for January to March, up from KRW6.45 trillion a year earlier. The pandemic has seen many tech companies boom. Coronavirus-driven working from home has been boosting demand for devices powered by Samsung's chips, as well as home appliances such as TV and washing machines. Analysts say the company has had a particular boost from rolling out its Galaxy S21 series in January, more than a month ahead of the flagship product's usual annual launch schedule.
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Toshiba has received a buyout offer from a British private equity fund and will consider the proposal, it said Wednesday, with reports suggesting the deal could be worth about USD20 billion. Trading of Toshiba shares was temporarily halted on Tokyo's stock exchange at the open, after the Japanese firm confirmed the offer first reported hours earlier by local media. In a statement, Toshiba said it "received an initial proposal yesterday" by CVC Capital Partners for a buyout deal. "We will request detailed information and carefully discuss" the offer, the firm added. The Nikkei newspaper said CVC was considering a 30% premium over the Japanese industrial group's current share price, valuing the deal at nearly JPY2.3 trillion, about USD20.8 billion, based on Tuesday's close.
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Amazon said Tuesday it supports US President Joe Biden's proposal for a corporate tax increase to fund infrastructure improvements, saying it should be part of a "balanced solution that maintains or enhances US competitiveness." Chief Executive Jeff Bezos made the comment in a statement days after Biden singled out the US technology and e-commerce giant for avoiding income taxes as he proposed to boost the corporate tax rate to 28%. "We support the Biden administration's focus on making bold investments in American infrastructure," Bezos said. "We recognize this investment will require concessions from all sides – both on the specifics of what's included as well as how it gets paid for (we're supportive of a rise in the corporate tax rate)."
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MARKETS
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Stock markets were mostly higher in Europe and Asia, and Wall Street was called to open slightly up, amid optimism over global economic recovery following revised forecasts by the IMF. AstraZeneca shares were down 0.6% in London.
"Investors are constantly reminded the bullish narrative remains underpinned by the same themes, including reopening momentum, accelerating vaccinations, the potential for USD4 trillion in US fiscal stimulus later this year and the Fed's high bar for tapering and liftoff," commented Stephen Innes, chief global markets strategist at axi. He added however: "There was a remarkable move lower in US yields on Tuesday despite continued strong and accelerating economic data. US optimism may have been priced for the time being."
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CAC 40: up 0.2% at 6,143.88
DAX 30: marginally higher at 15,212.91
FTSE 100: up 0.7% at 6,871.62
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Hang Seng: closed down 0.9% at 28,674.80
Nikkei 225: closed up 0.1% at 29,730.79
S&P/ASX 200: closed up 0.6% at 6,928.00
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DJIA: called marginally higher
S&P 500: called marginally higher
Nasdaq Composite: called up 0.1%
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EUR: up at USD1.1883 (USD1.1843)
GBP: down at USD1.3825 (USD1.3848)
USD: flat at JPY109.85 (JPY109.83)
Gold: down at USD1,739.32 per ounce (USD1,744.00)
Oil (Brent): down at USD62.41 a barrel (USD63.42)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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A strong month for manufacturing helped the eurozone's private sector return to growth in March, purchasing managers' index figures from IHS Markit showed. The services sector remained in decline, though survey results suggested the pace of contraction eased in March. The IHS Markit services business activity index rose to 49.6 points in March, topping both February's 45.7 points and the early flash estimate of 48.8 points. "Germany and Ireland both recorded higher levels of service sector activity during March. All other nations recorded declines although rates of contraction were modest, and noticeably slower in France and Spain," Markit said. The composite figure, which is calculated using both the services and manufacturing tallies, posted better-than-expected growth in March. The composite index improved to 53.2 points, from February's 48.8 points. The final figure for March also topped the 52.5 points flash estimate.
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UK services sector activity accelerated in March as providers pointed to the reopening of the domestic economy, the latest figures from IHS Markit showed. The IHS Markit/CIPS UK services purchasing managers' index reading was revised a touch lower to 56.3 points in March from a preliminary estimate of 56.8, but higher compared to February's final 49.5. Markit said UK service providers reported a strong rebound in business conditions during March, with activity, new orders and employment all picking up since the previous month. The seasonally adjusted UK composite output index registered 56.4 points, up from 49.6 in February and above the neutral 50.0 threshold for the first time in 2021.
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UK Prime Minister Boris Johnson faces a battle to introduce domestic vaccine passports after running into fierce opposition from Tory critics and Labour. A government review into "Covid status certification" found they could "potentially play a role" in settings such as theatres, nightclubs and mass events, and might also be used in pubs and restaurants to reduce social distancing restrictions. The prospect of having to show a certificate to access shops or bars has outraged members of the Covid Recovery Group of Conservatives, while Labour hit out at the "discriminatory" and "poorly thought-through" proposals. The use of certificates – which would include vaccination status, test results or evidence of someone having contracted and recovered from Covid-19 – is opposed by at least 40 Conservative MPs. With Labour's opposition also hardening, along with the SNP raising concerns, the government would face difficulties in getting the measures through the Commons if Johnson pushed them to a vote. Ministers have ruled out bringing in certification for either the April 12 or May 17 stages of the road map but the documents – either in paper form or on an NHS app – could be introduced later this year.
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US President Biden said all adults across America can get Covid-19 vaccine shots within two weeks, sooner than expected, as the IMF boosted its forecast for world economic growth this year amid signs of a rebound from the pandemic. The White House said Biden is shifting the deadline for full eligibility up from May 1 to April 19 after rapid progress in all 50 states in the vaccine rollouts. If the target is met, this would mean an end to restrictions by age, health issues or other categories for people wanting to get coronavirus vaccines. It would not necessarily mean that anyone could get a shot immediately, as distribution remains a work in progress. As the White House prepared for the announcement, the International Monetary Fund said accelerated vaccines and a flood of government stimulus spending, especially in the US, means it now sees global economic growth this year of 6.0%, up from a forecast of 5.5% in January.
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Biden also said he has kept clear of Federal Reserve Chair Jerome Powell in a deliberate measure to restore the independence at the central bank after the Trump era. "I have not" spoken to Powell, Biden told journalists when asked if he'd made contact since taking office in January. "I think the Federal Reserve is an independent operation and starting off on my presidency I wanted to be real clear and I'm not going to be doing the kind of things that were done in the last administration." Fed chiefs are appointed by presidents but have traditionally retained independence in their key duties, such as overseeing the setting of interest rates.
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Accelerated vaccinations and a flood of government spending, especially in the US, have boosted the outlook for the global economy, but more must be done to prevent permanent scars, the IMF said Tuesday. The International Monetary Fund's World Economic Outlook now sees world growth of 6.0% this year after the contraction of 3.3% in 2020 amid the Covid-19 pandemic – the worst peacetime downturn since the Great Depression a century before.
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By Tom Waite; thomaslwaite@alliancenews.com
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