(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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China's ride-hail giant Didi is preparing for an initial public offering in the US. Xiaoju Kuaizhi, Didi's holding company, made public its filing to the Securities & Exchange Commission, which does not reveal a specific timeline nor the targeted proceeds from the issue. The Wall Street Journal reported, citing insiders, that the Uber rival was seeking a valuation of more than USD70 billion, which would make it one of the biggest tech IPOs of the year. Didi had to deal with a 8.4% decrease in revenue to UDS21.6 billion last year compared to 2019, according to the SEC documents.
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The UK competition regulator said it will take up a role in the design and development of Google's Privacy Sandbox proposals to ensure they do not distort competition. The move follows a Competition & Markets Authority's investigation - launched in January - into Google's proposals to remove third-party cookies and other functionality from its Chrome browser. Third-party cookies are used by websites other than the one the user is visiting, and are particularly popular among advertisers. First-party cookies created by the website the person is on will not be affected. The watchdog said it has now secured commitments from Google to address its concerns. The CMA said it is now launching a consultation on whether to accept Google's commitments. The consultation will close on July 8.
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Sanne Group said it has agreed to enter talks with Cinven, after the private equity firm raised its takeover offer for Sanne to GBP1.42 billion. The London-based provider of alternative asset and corporate services has agreed to extend the put-up-or-shut-up deadline for Cinven to either announce a firm offer or walk away. The new deadline is July 9. There can be no certainty an offer will be made, Sanne said. Cinven has made five unsolicited approaches to Sanne. Its latest is for 875 pence per share in cash. The company's shares closed at 772.00p each in London on Thursday, with the latest offer representing a premium of 13%. Sanne Group shares were trading up 11% at 859.32p on Friday morning in London.
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Man Group said its chief investment officer is stepping down, and it also is making a switch of chief financial officers. Sandy Rattray told the investment manager he will retire as CIO. Rattray will hand over responsibilities over the next few months and then will leave the company during the second half of this year. At the same time, CFO Mark Jones will move to a new role of deputy chief executive officer - which comes with the responsibility of running the investment manager's quant strategies Man AHL and Man Numeric, as well as the firm's technology functions. Current Man AHL co-CEO Antoine Forterre will become the new CFO.
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MARKETS
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Markets were ending the week indecisively, as investors continued to ponder Thursday's inflation figures from the US, which showed consumer prices rising at the fastest annual pace in more than a decade. "While we could see volatility following the CPI release, we do not expect a more sustained disruption to equity markets," commented Mark Haefele, chief investment officer at UBS Global Wealth Management. "Investors should also remember that inflation readings are less reliable than usual since it was hard to accurately measure inflation in May 2020 when the pandemic was at its early stages. We agree with the Fed that elevated inflation pressures will prove short-lived."
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CAC 40: up 0.4% at 6,575.08
DAX 30: up 0.1% at 15,592.27
FTSE 100: up 0.6% at 7,130.43
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Hang Seng: closed up 0.4% at 28,842.13
Nikkei 225: closed marginally lower, down 9.83 points at 28,948.73
S&P/ASX 200: closed up 0.1% at 7,312.30
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DJIA: called up 0.1%
S&P 500: called marginally higher, up 1.75 points
Nasdaq Composite: called flat
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EUR: flat at USD1.2165 (USD1.2168)
GBP: down at USD1.4160 (USD1.4174)
USD: down at JPY109.49 (JPY109.56)
Gold: up at USD1,895.61 per ounce (USD1,891.85)
Oil (Brent): up at USD72.73 a barrel (USD72.45)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Oil demand is set to rise above pre-pandemic levels by the end of next year, the International Energy Agency said, but producers have sufficient capacity rise to the challenge. In its first detailed look at next year in its regular monthly review of the oil market, the IEA sees a gradual return of demand as vaccine distribution widens and economic activity returns to normal in many countries and sectors. "By end-2022, demand should surpass pre-Covid levels," it said. Oil demand tanked by a record 8.6 million barrels per day last year as countries shut down swathes of their economies as the coronavirus spread around the world. The IEA expects it to rebound by 5.4 million barrels per this year and a further 3.1 million barrels per next year.
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A bipartisan group of 10 US senators said Thursday they have reached a tentative agreement on a "realistic" infrastructure plan, days after talks between US President Joe Biden and Republican lawmakers collapsed. The agreement, considerably less ambitious than Biden's original USD2.3 trillion American Jobs Plan, would be "fully paid for and not include tax increases," the five Democrats and five Republicans said in a brief statement. "Our group...has worked in good faith and reached a bipartisan agreement on a realistic, compromise framework to modernize our nation's infrastructure and energy technologies," they said. A deal is far from certain. Details of the plan were omitted from the statement, suggesting there are questions about whether its current form will pass muster with both parties and the White House. US media citing sources familiar with the package reported that it amounts to USD1.2 trillion over eight years, with some USD579 billion of it being new spending – and none of it raised through new corporate or income taxes.
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House Speaker Nancy Pelosi and other leading Democrats have called for an investigation after The New York Times reported the Department of Justice under president Donald Trump seized the communications data of members of the House Intelligence Committee. The Times reported on Thursday that the DOJ subpoenaed Apple for data from at least two committee members, as well as aides and family members, in 2017 and 2018, over issues including leaks relating to investigations concerning the Trump administration's contacts with Russia. The paper anonymously cited committee officials and two other people briefed on the inquiry.
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The UK's economic recovery gathered pace in April, figures from the Office for National Statistics showed. Gross domestic product expanded 2.3% month-on-month in April, marking the fastest monthly growth since July 2020, as lockdown restrictions eased. This marks an uptick from a rise of 2.1% for March, though April's reading was slightly below expectations, according to FXStreet, for 2.4% growth. In mid-April, beer gardens, hairdressers and non-essential retail re-opened in England. The service sector grew by 3.4% in April, the ONS said, with consumer-facing services growing by 13%. Meanwhile, industrial production fell by 1.3% in April with the manufacturing sector contracting 0.3%, and construction output shrinking 2.0% following "exceptionally strong" growth in March. While UK GDP remains 3.7% below pre-pandemic levels, it is now 1.2% above the initial recovery peak in October 2020.
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The UK's trade deficit narrowed in April, figures from the ONS revealed. The total trade balance narrowed to negative GBP935 million from March's deficit of GBP1.97 billion. The goods trade deficit also narrowed, to GBP10.96 billion from GBP11.71 billion. Goods exports to the EU totalled GBP12.94 billion in April, nudging up from GBP12.65 billion in March. Exports are off the immediate post-Brexit low of GBP7.89 billion seen in January 2021, but still below the GBP13.60 posted for December 2020 - though the year-end figure will likely have been boosted by stockpiling. The UK's Brexit transition period ended on December 31, 2020.
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UK Prime Minister Boris Johnson has suggested the EU is taking an "excessively burdensome" approach to post-Brexit trading arrangements for Northern Ireland. Johnson, who signed the Brexit divorce deal which included the Northern Ireland protocol, insisted he was not trying to back out of the agreement. But he said the UK's "internal market" had to be respected and "we just need to make it work". The EU has threatened to launch a trade war against Britain if it fails to implement checks on goods entering Northern Ireland under the terms of the Brexit "divorce" settlement which Johnson signed. The protocol effectively keeps Northern Ireland in the European single market in order to avoid a hard border with Ireland, meaning a trade barrier in the Irish Sea for goods crossing from Great Britain. Johnson, who will hold talks with EU leaders over the course of the G7 summit, told the BBC: "You will understand that there are ways of enforcing the protocol, ways of making it work, that may be excessively burdensome."
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The selling prices in wholesale trade rose in Germany in May, figures from the Federal Statistics Office showed. Wholesale selling prices increased by 9.7% in May compared with the prior year, the highest monthly annual rate of change since July 2008. In April and in March, the annual rates of change had been 7.2% and 4.4%, respectively.
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By Tom Waite; thomaslwaite@alliancenews.com
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