(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Australia has finalised a deal to buy an extra 20 million doses of the Pfizer vaccine as it rapidly pivots away from its earlier plan to rely mainly on the AstraZeneca jab. Prime Minister Scott Morrison announced the deal just hours after saying Australia would stop using the AstraZeneca vaccine for people aged under 50. He said the deal means Australia will get a total of 40 million doses of the Pfizer vaccine by the end of the year, enough to inoculate 20 million people in the nation of 26 million. Australia's pivot came after the European Medicines Agency said this week it had found a "possible link" between the AstraZeneca vaccine and rare blood clots, though regulators in the UK and the EU emphasised that the benefits of receiving the vaccine continue to outweigh the risks for most people. After the European agency's declaration, Australian drug regulators held a series of urgent meetings on Thursday and recommended the Pfizer vaccine become the preferred jab for people under 50.
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Hong Kong on Friday confirmed it has requested AstraZeneca suspend delivery of its Covid-19 vaccine amid fears of severe side effects and concerns over its efficacy against new variants of the coronavirus. Britain sought Thursday to quell fears over the jab, saying the potential side effects were extremely rare – and the risk of falling seriously sick from Covid-19 was far greater. On Friday Hong Kong's health chief Sophia Chan said the city has asked AstraZeneca not to deliver as planned later this year. "We think it is not necessary for AstraZeneca to deliver the vaccines to the city within this year," she said, adding Hong Kong wanted "to avoid any waste as vaccines are in short supply globally". Meanwhile, France on Friday said under 55s who received a first injection of the AstraZeneca Covid-19 vaccine should be given a jab from a different producer for their second dose, a ruling affecting more than 500,000 people.
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Rio Tinto said it has entered into a new funding arrangement at the Oyu Tolgoi underground mine in Mongolia. The FTSE 100-listed miner has a stake in the asset through its holding in Turquoise Hill Resources. Rio owns just shy of 51% of Turquoise, which holds 66% of the Mongolia project. The remaining stake in copper asset is held by the Mongolian government. The new plan addresses a USD2.3 billion funding requirement at the project, and it replaces an agreement that was struck in September, Rio noted. Under the new deal, Rio and Turquoise will pursue a re-profiling of USD1.4 billion worth of debt repayments. The re-profiling will "better align with the revised mine plan, project timing and cash flows", Rio said.
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Frasers Group said it expects impairments of more than GBP200 million, double its previous estimate, because of Covid-19. Frasers owns department store House of Fraser and sporting goods retailer Sports Direct. The expected financial hit for the retailer is double February's estimate, when Frasers warned it would write down its assets by over GBP100 million. The company cited government announcements on the pandemic warning of a possible new wave and the end being "some way off", which it said makes further restrictions "almost certain". That's even as the UK prepares to lift restrictions on non-essential shops next week and Covid-19 case numbers continue to fall. The impairment is expected to be included in the FTSE 250-listed company's results for the financial year ending April 2021. It adds to the GBP124.9 million writedown included in Frasers's half-year results.
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Tui said it has launched a bond offering worth EUR350 million, bolstering the tour operator's balance sheet as it continues to navigate the Covid-19 pandemic. The senior unsecured bonds convertible are due in 2028 and the offering may be upsized to EUR400 million, Tui said, and they will be issued with a coupon between 4.50% and 5.00% per year. They will be convertible into new or existing Tui shares. "Tui intends to use the proceeds from the offering to further improve its liquidity position as the Covid-19 crisis continues and subsequently for the repayment of existing financing instruments," Tui said.
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M3 said it has agreed a deal to buy UK healthcare communications agency One Health Communications Holdings. M3 is a Japanese provider of medical-related services through the internet. It said the acquisition of the Leeds-based firm expands its UK reach. In the UK, M3 already operations the Doctors.net website, which the company said is the "largest professional network of physicians in the UK". M3 added: "With this acquisition, M3 further augments its reach as the largest dedicated HCP platform in the UK, as well as broadening its service offering. By combining the scale of Doctors.net.uk's professional network with ONEHealth Communications' extensive email reach, M3 cements its unparalleled position as the largest community of doctors in the United Kingdom."
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MARKETS
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A strong finish in the US overnight failed to boost spirits in Europe, with London and Frankfurt in the red and Paris posting just minor gains. New York, however, is largely set for further gains on Friday.
Though the FTSE 100 dipped on Friday, it still remains 2.8% higher since closing just above 6,700 on Thursday last week prior to the long Easter weekend.
"It's been a fantastic week for the FTSE 100 and S&P 500 as they put Covid in the rear-view mirror and raced ahead, but that momentum was tested as the trading week came to an end," said Danni Hewson, financial analyst at AJ Bell.
"The FTSE was dragged down by tobacco, pharmaceuticals and banking, more than offsetting the gains from UK reopening plays Whitbread and Next."
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CAC 40: up 0.2% at 6,175.74
DAX 30: down 0.1% at 15,194.27
FTSE 100: down 0.2% at 6,928.27
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Hang Seng: closed down 1.1% at 28,698.80
Nikkei 225: closed up 0.2% at 29,768.06
S&P/ASX 200: closed down 0.1% at 6,995.20
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DJIA: called up 0.2%
S&P 500: called up 0.1%
Nasdaq Composite: called down 0.1%
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EUR: down at USD1.1891 (USD1.1903)
GBP: down at USD1.3710 (USD1.3739)
USD: up at JPY109.65 (JPY109.25)
GOLD: down at USD1,746.76 per ounce (USD1,754.40)
OIL (Brent): unchanged at USD62.89 a barrel
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Germany's latest industrial output and trade data both underperformed market expectations, data from Destatis showed. Germany's industrial production fell 1.6% monthly in February, massively underperforming market forecasts of a 1.5% hike. In January, output had fallen 2.0% monthly. Year-on-year industrial production fell 6.4% in February, following the 4.0% drop in January. February 2020 was the final month before Covid-19 restrictions were imposed. Germany's trade surplus in February also fell short. Numbers from Destatis showed Europe's largest economy had a EUR19.1 billion trade surplus in February on a calendar and seasonally adjusted basis. This was down from EUR21.2 billion in January and it also undershot expectations, cited by FXStreet, of a surplus of EUR20 billion.
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French industrial production figures for February massively undershot market estimates, data showed. According to INSEE, French industrial output dropped 4.7% monthly in February, having risen 3.2% in January. According to consensus, cited by FXStreet, a rise of 0.5% was expected for February. Year-on-year, output "remained in sharp decline". Industrial production was down 6.6% from a year earlier in February. February 2020 was the final month before Covid-19 restrictions were imposed.
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Spain's industrial production fell at a greater pace than expected in February, data from INE showed. Spain's industrial output dropped 2.1% year-on-year in February. Though eased from January's 2.3% drop, the February figure was expected to show a softer fall of 1.3% according to market estimates, so the figure undershot expectations. Monthly, Spain's industrial production was unchanged on February on a calendar and seasonally adjusted basis.
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The Swiss unemployment rate beat market forecasts and ticked down in March, according to figures from the State Secretariat for Economic Affairs. The Swiss unemployment rate fell to 3.4% in March, from the February figure of 3.6%. According to consensus cited by FXStreet, the rate of those out of work was expected to be unchanged at 3.6% in March, so the figure topped expectations. The number of those out of work fell by 9,985 monthly in March, though it rose by 22,344, or 17%, yearly. Figures also showed 5,796 fewer people were looking for work monthly. Annually however, the number of jobseekers jumped by 40,042, or 19%.
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UK Transport Secretary Grant Shapps insisted foreign holidays will be able to resume "safely and sustainably" under new government plans. But travel firms have slammed measures to force holidaymakers returning from low-risk destinations to take an "expensive and unnecessary" type of coronavirus test. Shapps announced a "framework" for resuming overseas leisure travel which includes requiring all arrivals to take pre-departure and post-arrival coronavirus tests. Post-arrival tests must be the polymerase chain reaction type which cost around GBP120, he revealed. This is despite pleas from the travel sector to allow travellers returning from countries on the "green" list under the new risk-based traffic light system to take lateral flow tests, which are cheaper and quicker.
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UK house prices hit record high levels in March buoyed by government support measures, the latest figures from Halifax showed. On an annual basis, house price growth was 6.5% in March, picking up from 5.2% in February. On a monthly basis, prices rose 1.1% in March. The UK mortgage lender said average prices stood at GBP254,606 last month, higher than GBP251,697 in February. The domestic housing market continues to find support from the UK government's extension of the stamp duty holiday and the new mortgage guarantee scheme. Halifax Managing Director Russell Galley said: "Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over 1% compared to February. This rise - the first since November last year - means the average property is now worth GBP254,606, a new record high.
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Factory prices in China climbed further in March, growing at the fastest pace in more than two years, official data showed Friday – backed by a rise in commodity prices and the country's economic recovery from Covid-19. The producer price index, which measures the cost of goods at the factory gate, exceeded expectations to grow 4.4% from a year ago, said the National Bureau of Statistics. A smaller rise of 3.5% was expected, according to consensus cited by FXStreet. The figure was "due to factors such as rising international commodity prices" including those of crude oil and iron ore, and boosted by an "increase in domestic industrial production and investment demand", said NBS senior statistician Dong Lijuan. Official data Friday showed China's consumer price index rose 0.4% on-year in March, with prices of some food items such as fresh fruit growing but that of pork dropping. A smaller annual rise in consumer prices of 0.3% was expected, according to consensus cited by FXStreet.
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By Lucy Heming; lucyheming@alliancenews.com
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