(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Westpac Banking said net profit nearly tripled in the first half of its financial year, as a large credit impairment charge a year ago was replaced by a benefit. Net profit rose to AUD3.44 billion, about USD2.65 billion, in the half year to March from AUD1.19 billion a year before. The Sydney-based lender recorded an impairment benefit of AUD372 million, swung from an impairment charge of AUD2.24 billion in the first half of financial 2020. Profit before impairments and tax was more steady, up 6.0% to AUD4.69 billion from AUD4.42 billion, amid mostly flat income. Net operating income before operating expenses and impairments was AUD10.69 billion, up 0.8% from AUD10.60 billion a year before. Net interest income declined by 7.2% to AUD8.35 billion from AUD9.00 billion, as lower interest rates reduced net interest margin by 4 basis points to 2.09%.
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Berkshire Hathaway returned to profit in the first quarter of 2021 as it booked gains on investments and derivatives versus losses at the start of last year, the insurance and utilities holding company said Saturday. Net earnings attributable to Berkshire shareholders was USD11.71 billion, a stark improvement on a USD49.75 billion loss a year ago. Investment and derivative gains were USD4.69 billion, versus USD55.62 billion in losses, while operating earnings rose by 20% to USD7.02 billion from USD5.87 billion. Within operating income, insurance underwriting earnings more than doubled to USD764 million in the first quarter from USD363 million a year before, but insurance-investment income was down 13% to USD1.21 billion from USD1.39 billion. Railroad, utilities and energy earnings rose 12% to USD1.95 billion from USD1.75 billion. Warren Buffett's Omaha, Nebraska-based company held its annual general meeting on Saturday.
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Siemens Healthineers raised its guidance for financial 2021 after an 8.0% rise in net income in the second quarter. Net income rose to EUR447 million in the three months that ended March 31 from EUR414 million a year before. Revenue rose by 7.6% to EUR3.97 billion from EUR3.69 billion, and Siemens Healthineers said comparable annual revenue growth was 13%. The Erlangen, Germany-based company was spun off from Siemens back in 2018. It provides medical equipment, including imaging devices, laboratory diagnostics, and most recently, a Covid-19 antigen test. The Diagnostics division was the standout performer due to its Covid-19 test, with a 23% increase in revenue to EUR1.24 billion in the second quarter from EUR1.01 billion a year before. The larger Imaging division reported EUR2.37 billion in quarterly revenue, up 2.6% - or 7.4% comparable - from EUR2.31 billion a year earlier.
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Farxiga has been approved by the US Food & Drug Administration for treatment of chronic kidney disease, AstraZeneca said late Friday. The approval of Farxiga, whose generic name is dapagliflozin, "is the most significant advancement in the treatment of chronic kidney disease in more than 20 years," the Cambridge, England-based pharmaceutical firm said. The US approval was based on positive results from the DAPA-CKD Phase III trial, AstraZeneca said, and follows the grant of a priority review by the FDA earlier this year.
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In a court clash with potentially huge repercussions for the world of mobile tech, Fortnite maker Epic Games takes on Apple starting Monday aiming to break the grip of the iPhone maker on its online marketplace. The case opening in federal court comes with Apple feeling pressure from a wide range of app makers over its tight control of the App Store, which critics say represents monopolistic behaviour. The two firms will be debating whether Apple has the right to set ground rules, control payment systems and kick out apps from its marketplace that fail to comply. Also at stake will be Apple's slice of revenue from iPhone apps, as much as 30%.
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MARKETS
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Paris and Frankfurt stocks were flat to lower on Monday in the absence of London, which was closed for the early May bank holiday. Tokyo and Shanghai also were closed, leaving Hong Kong and Sydney to give a negative lead to Europe. Wall Street was looking more positive, ahead of the IHS Markit and ISM PMI readings at 1345 and 1400 GMT, respectively.
The main data event of the week will be on Friday with the US jobs report for April. Jefferies said it sees a "significant upside risk for April US payrolls (up 2.1 million vs consensus 975,000)", adding: "This should ignite the discussion over tapering whilst also reinforcing the bear steepening of the US yield curve that began last year."
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CAC 40: down 0.1% at 6,262.51
DAX 30: flat at 15,135.20
FTSE 100: London market closed for holiday.
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Hang Seng: closed down 1.3% at 28,357.54
Nikkei 225: Tokyo market closed for holiday.
S&P/ASX 200: closed up 3.00 points at 7,028.80
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DJIA: called up 0.4%
S&P 500: called up 0.3%
Nasdaq Composite: called marginally lower, down 1.25 points
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EUR: up at USD1.2046 (USD1.2035)
GBP: up at USD1.3845 (USD1.3827)
USD: up at JPY109.49 (JPY109.26)
GOLD: up at USD1,777.20 per ounce (USD1,768.81)
OIL (Brent): down at USD66.34 a barrel (USD67.32)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The manufacturing sector in the eurozone put in "another stellar performance" in April, IHS Markit said, though the month's final survey reading was lower than the flash score issued late last month. The final eurozone manufacture purchasing managers' index reading was 62.9 points in April, down from the flash score of 63.3 but still up from 62.5 in March. The eurozone economic indicator was weighed down by its two largest economies but still managed to set a new record high since the survey began in June 1997. Both Germany and France saw their final PMI prints lower than the flash reading. Germany's was 66.2 points, down both from the flash score of 66.4 and March's record high of 66.6. In France, the final manufacturing PMI was 58.9, down from the flash reading of 59.2 and March's 59.3. The strongest result for April was in the Netherlands at 67.2 points, while the weakest surveyed sector was in Spain, with a score of 57.7 points.
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Growth in the Australian manufacturing sector accelerated in April, according to survey results from IHS Markit. The Australian manufacturing purchasing managers' index rose to 59.7 points in April from 56.8 in March. This was the highest reading for the gauge since the survey began in May 2016 and marked the 11th straight month of improvement in conditions. "The manufacturing PMI surging to the highest on record is an encouraging sign for the recovery of the Australian economy from COVID-19 restrictions," commented Jingyi Pan, economics associate director at IHS Markit. "Despite evidence of an increase in new COVID-19 cases globally, demand rose both domestically and externally, reflecting resilient economic conditions."
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International aid to alleviate India's dire oxygen shortage arrived in the South Asian nation on Sunday, as its coronavirus death toll climbed to a grim new record. The country of 1.3 billion reported 3,689 coronavirus deaths on Sunday – another grim daily record, with nearly 400,000 new cases of Covid-19 registered across India. Surges in Brazil and Canada have also highlighted the persistent threat of the pandemic, with the global death toll approaching 3.2 million even as many nations ramp up vaccination drives. India expanded its vaccination programme to all adults on Saturday, but many of its states are struggling with shortages despite an export freeze for shots produced domestically. Brazil, the worst-hit Latin American nation, has crossed 400,000 Covid-19 deaths – second only to the US – with many of its hospitals pushed to the brink of collapse. Meanwhile, Saudi Arabia said it will permit citizens immunised against Covid-19 to travel abroad from May 17.
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Britain this week hosts the first face-to-face meeting of G7 foreign ministers in two years, joined by US Secretary of State Antony Blinken, as world powers tackle pandemic recovery plus growing tensions with Russia and China. The Covid-secure gathering in London will prepare the ground for a G7 summit in southwest England next month, which will mark Joe Biden's inaugural visit to Europe as US president. Both events will also be joined by Indian leaders.
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The historic post-Brexit trade deal between the EU and Britain came into effect on Saturday, as the fifth anniversary of the Brexit vote approaches. The trade deal - struck in late December - had been provisionally applied since the beginning of 2021 to allow the European Parliament time to ratify it. The UK parliament gave its green light back in December. After EU lawmakers overwhelmingly voted in favour earlier this week and the Council of the EU gave its final approval, the new rules were officially published in the EU's journal.
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EU Budget Commissioner Johannes Hahn has called for a reform of the EU's Growth & Stability Pact in order to create more flexible rules for countries deep in debt. Instead of the rigid upper limit for total government debt of 60% of the gross domestic product, debt targets should be agreed with each country individually, Hahn told the online edition of German newspaper Die Welt on Saturday. These targets had to be realistic within a clearly defined time frame and should consist of concrete measures to reduce debt, the commissioner said. It was no longer possible to "lump all 19 euro countries together", 24 years after the EU's stability pact, Hahn said, in light of the coronavirus pandemic.
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By Tom Waite; thomaslwaite@alliancenews.com
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