(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Ocado said it has launched a commercial partnership with Oxbotica to collaborate on hardware and software interfaces for autonomous vehicles, enhancing and integrating Oxbotica's autonomy software platform into a variety of vehicles. Ocado expects that the development of vehicles that operate in low-speed urban areas or in restricted access areas, such as inside its customer fulfilment centre buildings or yards, may become a reality sooner than fully autonomous deliveries to consumers' homes. However, it said, all aspects of autonomous vehicle development will be within the scope of the collaboration. Ocado expects to see the first prototypes of some early use cases for autonomous vehicles within two years. Under the terms, Ocado will invest GBP10 million in Oxbotica as part of Oxbotica's latest Series B equity funding round and will also take a seat on Oxbotica's board.
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Bank of Ireland Group said it has entered into a memorandum of understanding with KBC Bank Ireland to acquire substantially all of KBC Bank Ireland's performing loan assets and liabilities. The transaction remains subject to customary due diligence, further negotiation and agreement of final terms and binding documentation, as well as regulatory approvals, it said. Bank of Ireland said KBC's remaining non-performing mortgage loan portfolio in Ireland, which is not part of the MoU, is currently being analysed whereby KBC is reviewing its options to divest this NPL portfolio. The completion of these two transactions would result in Brussels-based KBC Group's withdrawal from the Irish market.
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Daimler said it expects to report first-quarter results ahead of market forecasts. The German automaker said it has experienced sales momentum at Mercedes-Benz Cars in the three months to the end of March, driven by all major regions, especially China, strongly supported the product mix and pricing. Earnings before interest and tax totalled EUR5.75 billion versus consensus forecast of EUR4.96 billion. In the first quarter of 2020, Daimler reported Ebit of EUR617 million.
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Administrators of failed German payments provider Wirecard said they have agreed to sell the companies' subsidiaries in the Asia-Pacific region. Nomu Pay, a payments firm backed by Amsterdam-based venture capital fund Finch Capital, is set to buy Wirecard's units in the Philippines, Malaysia, Hong Kong and Thailand as well as the company's regional data warehouse in Singapore, its Asia-Pacific headquarters. The companies sold provide financial institutions and regional merchants with a range of payment processing solutions. These also include the Merchant & Acquiring business and licences for accessing the major payment card networks. At least 110 jobs will be retained at the various sites in Asia as a result, the administrators noted. The transaction is still partly subject to approval by local banking regulators.
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Apple announced a USD200 million fund to invest in timber-producing commercial forestry projects, with the goal of removing carbon from the atmosphere while also generating profit. The Restore Fund, launched in partnership with Conservation International and Goldman Sachs, is expected to have its first projects targeted later this year. The fund aims to remove one million metric tons of carbon dioxide annually from the atmosphere, equal to the amount spewed by more than 200,000 passenger vehicles. Apple said last year it would become carbon neutral by 2030 for all its operations, including manufacturing.
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Amazon founder Jeff Bezos told investors the e-commerce giant needs a better "vision" for its workers, just days after an effort to create the company's first labour union was defeated. Defending Amazon's treatment of employees, Bezos laid out a new goal for the company to be "Earth's best employer and Earth's safest place to work," in his final letter as chief executive. "Despite what we've accomplished, it's clear to me that we need a better vision for our employees' success," Bezos said in the letter. Bezos will remain chairman of the board after he resigns as chief executive later this year, handing control of Amazon to Andy Jassy of the company's cloud services unit.
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L'Oreal said it "significantly" outperformed the market to post hefty first-quarter sales growth despite Covid-19 lockdowns. L'Oreal noted fast sales growth in China, with Western Europe the only zone to post a decline. Total sales in the first quarter rose 5.4% annually to EUR7.61 billion. Only a like-for-like basis, sales were up 10%. "In spite of the health crisis and the ongoing associated measures in some countries, particularly in Western Europe, the beauty market continues to recover," Chair and Chief Executive Jean-Paul Agon said.
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The head of Pfizer said in an interview aired Thursday that people will "likely" need a third dose of his company's Covid-19 shot within six to 12 months of vaccination, while elsewhere defending the relatively higher cost of the jab. Chief Executive Albert Bourla also said annual vaccinations against the coronavirus may well be required. "We need to see what would be the sequence, and for how often we need to do that, that remains to be seen," Bourla told CNBC in an interview recorded on April 1. "A likely scenario is that there will be likely a need for a third dose, somewhere between six and 12 months and then from there, there will be an annual revaccination, but all of that needs to be confirmed," he said, adding that variants will play a "key role".
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MARKETS
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European equities were following Asia higher on Friday, following strong economic data from China. However, New York was pointed to a mixed open. Morgan Stanley is scheduled to report first-quarter results before the open, capping a week of US bank earnings.
Rabobank cautioned against reading too much into the 18% jump in Chinese economic output in the first quarter, saying this was from a low base, considering the Covid-19 pandemic was at high tide in China throughout the comparison quarter. "Although the overall first quarter growth was driven by production, more recent data suggests that services are taking over, while production growth is slowing," the Dutch bank commented. "We think the recovery will lose steam as the initial pent up demand dies out and because policy support is being scaled back." Rabobank kept its 2021 GDP forecast for China at 7.7%.
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CAC 40: up 0.4% at 6,260.30
DAX 30: up 0.8% at 15,380.73
FTSE 100: up 0.7% at 7,028.62
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Hang Seng: closed up 0.6% at 28,969.71
Nikkei 225: closed up 0.1% at 29,683.37
S&P/ASX 200: closed up 0.1% at 7,063.50
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DJIA: called up 0.1%
S&P 500: called flat
Nasdaq Composite: called down 0.2%
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EUR: up at USD1.1975 (USD1.1965)
GBP: down at USD1.3761 (USD1.3788)
USD: up at JPY108.88 (JPY108.71)
Gold: flat at USD1,766.25 per ounce (USD1,766.35)
Oil (Brent): up at USD67.20 a barrel (USD66.58)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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China's economy expanded at its fastest pace on record in the first quarter, in a sharp turnaround from the historic contraction caused by the coronavirus outbreak. The world's second largest economy was the only major one to grow at all in 2020, supported by strong retail spending and industrial activity as well as better-than-expected exports as the virus hit markets around the world. It marks the fastest pace since quarterly records began three decades ago, though the GDP figure of 18% is slightly below forecasts in an AFP survey of economists. While the disease first emerged in central China in late 2019, the country was also the quickest to bounce back after authorities imposed strict control measures and consumers stayed home. "The national economy made a good start," National Bureau of Statistics spokeswoman Liu Aihua told reporters.
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The euro area recorded an international trade in goods surplus in February, Eurostat said, while other data showed that annual inflation accelerated in the region. The first estimate for eurozone exports of goods to the rest of the world in February was EUR178.6 billion, a decrease of 5.5% compared with February 2020. Imports from the rest of the world stood at EUR161.0 billion, a fall of 2.7% year-on-year. As a result, the euro area recorded a EUR17.7 billion surplus in trade in goods with the rest of the world in February compared with EUR23.4 billion surplus posted the year prior.
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Turning to inflation, the statistical office of the EU reported an annual rate of 1.3% in March for the eurozone, up from 0.9% in February. A year earlier, the inflation rate was 0.7%. In the EU, annual inflation was 1.7% in March, up from 1.3% in February. A year earlier, the rate was 1.2%.
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US President Joe Biden on Friday receives Japan's prime minister for his first in-person summit, with the leaders expected to announce a USD2 billion 5G initiative as part of a concerted US push to compete with China. Biden's decision to invite Prime Minister Yoshihide Suga as his first guest – with South Korean President Moon Jae-in set to come in May – reflects his renewed priority on US alliances as he zeroes in on a rising China as America's most pressing challenge. A senior US official said that technology leader Japan would announce a "very substantial commitment" of USD2 billion in partnership with the US "to work on 5G and next steps beyond." China's Huawei has taken an early dominance in fifth-generation internet, which is becoming an increasingly crucial part of the global economy, despite heavy US pressure on the company, which Washington argues poses threats to security and privacy in the democratic world. The official said Biden will also speak to Japan about its climate goals as the US prepares to hold a virtual summit on climate change next week.
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Biden, after announcing sanctions against Russia, said that for both countries "now is the time to deescalate". Biden described the sanctions, which are aimed at the Russian economy and dozens of individuals, as a "measured and proportionate" response to Moscow's hostile actions against the US. He said that during a phone call earlier this week he was "clear with President Putin that we could have gone further" but added that Washington is "not looking to kick off a cycle of escalation and conflict with Russia." Biden said that with direct communication between him and Vladimir Putin they could establish "a more effective relationship" and that the Kremlin leader "agreed" with this. Biden's proposed summit with Putin, which he said could take place "this summer in Europe," would be a chance to "launch a strategic stability dialogue."
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By Tom Waite; thomaslwaite@alliancenews.com
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