(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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BP said it has joined up with Statkraft and Aker Offshore Wind in a consortium bidding to develop offshore wind energy in Norway. Each company will hold a third stake in the partnership, which will pursue a bid to develop offshore wind power in the Sorlige Nordsjo II licence area. The licence area's "favourable location" provides power export access to local and adjacent markets. The consortium also plans to explore opportunities to provide clean power to electrify offshore oil and gas facilities.
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Royal Dutch Shell is reviewing its holdings in the largest US oil field for a potential sale, Reuters reported, citing people familiar with the matter. The move is part of the oil major's shift away from fossil fuels as it faces growing pressure to slash carbon emissions, according to Reuters. Reuters said the sale could be for part or all of Shell's position in the US Permian Basin, located mostly in Texas, which accounted for around 6% of the Anglo-Dutch company's total oil and gas output last year. The holdings could be worth more than USD10 billion, the people said.
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Endeavour Mining began trading in London on Monday, with the gold miner praising its assets in west Africa and touting its "attractive" shareholder returns. The stock was trading at 1,762.20 pence each in London in early trade, valuing the company at GBP4.41 billion. Endeavour is also listed in Toronto, and has assets in Senegal, Burkina Faso and Ivory Coast. It did not raise any cash as part of its float.
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Serco raised its profit guidance on the back of promising trading and added that it has sealed a UK defence deal alongside Engie SA, worth up to GBP3.4 billion. Vivo Defence Services, a 50-50 joint-venture with Courbevoie, France-based energy firm Engie, has won contracts to provide facilities management services to the UK's Defence Infrastructure Organisation. The DIO is responsible for the UK Ministry of Defence's estate. Outsourcer Serco said the deals have a total base value of GBP900 million with a potential value of GBP3.4 billion during an initial seven-year term.
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Vodafone said it has turned to six firms, including Samsung Electronics and a Capgemini unit, to deploy what will be Europe's first commercial open radio access network, or RAN. Vodafone explained open RAN networks provide a "more cost-effective, secure, energy efficient and customer-focused" mobile telecommunications system. Open RAN allows networks to be deployed and operated using varied components from different suppliers.
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Facebook-owned WhatsApp is advertising full encryption on its chat service after its new usage rules sparked a backlash. The unit is launching the campaign on Monday in Germany and Britain - two of its most important markets. The short advertising videos highlight that content sent via WhatsApp is only visible in plain text to the users involved thanks to end-to-end encryption. WhatsApp has faced criticism and an exodus of users in recent months after it announced its new usage rules. The mid-May update was widely interpreted as meaning more data would be shared with WhatsApp's parent company Facebook.
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MARKETS
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Stocks were firm in Asia and Europe on Monday, though trading was thinned by holidays in China and Australia. Despite expectations the UK will delay the full ending of lockdown restrictions by four weeks, sentiment about global economic recovery was lifted by figures showing rising industrial production in Japan and the eurozone. "Supply shortages – particularly of semi-conductors – and logistical difficulties look likely to persist for a while longer," commented Jessica Hinds, Europe economist at Capital Economics. "That will hold back the recovery in industry. Nevertheless, the outlook for the overall eurozone economy is good for Q2, as the re-opening of closed services sectors boosts activity."
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CAC 40: up 0.3% at 6,621.38
DAX 30: up 0.2% at 15,731.43
FTSE 100: up 0.4% at 7,164.59
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Hang Seng: Hong Kong market closed for holiday
Nikkei 225: closed up 0.7% at 29,161.80
S&P/ASX 200: Sydney market closed for holiday
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DJIA: called marginally higher, up 10.00 points
S&P 500: called up 0.1%
Nasdaq Composite: called up 0.2%
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EUR: up at USD1.2112 (USD1.2096)
GBP: down at USD1.4083 (USD1.4105)
USD: down at JPY109.64 (JPY109.80)
GOLD: down at USD1,857.60 per ounce (USD1,894.00)
OIL (Brent): up at USD73.59 a barrel (USD72.85)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Prime Minister Boris Johnson is facing a furious backlash from Tory members of Parliament as he prepares to put the final lifting of coronavirus lockdown restrictions in England on hold. Johnson is expected to announce the ending of social-distancing rules – which had been slated for June 21 – will be delayed for four weeks to July 19, with the BBC reporting early on Monday the decision had been signed off by senior ministers. The move follows warnings from scientists that the rapid spread of the Delta variant first identified in India risks a "substantial" third wave if it is allowed to spread unchecked. Johnson is expected to appeal to the public to show patience, with one last push to ensure that when controls do finally end it is "irreversible". However, it comes as a huge setback to many businesses – particularly in the battered hospitality sector – which had pinned their hopes on a full summer reopening to recoup some of the losses of the past year.
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Johnson repeatedly told EU leaders the UK was "indivisible", as UK Foreign Secretary Dominic Raab claimed they had been "offensive" by suggesting Northern Ireland was not part of the country. The comments came after French President Emmanuel Macron reportedly suggested Northern Ireland was not part of the UK during his talks with Johnson in the margins of the G7 summit. At a close-of-summit press conference in Cornwall, Johnson said: "Of course we make the point continuously we are part of one great, indivisible UK." Macron used his G7 summit press conference to call for calm – but also insisted the terms of the Brexit deal must be honoured. Earlier, Raab told Sky News: "We have serially seen senior EU figures talk about Northern Ireland as if it was some kind of different country to the UK. It is not only offensive, it has real world effects on the communities in Northern Ireland, creates great concern, great consternation."
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China accused the G7 of "political manipulation" after it criticised Beijing over its human rights record in Xinjiang and Hong Kong. In a communique after a three-day summit in England, G7 leaders slammed China over abuses against minorities in the Xinjiang region and pro-democracy activists in Hong Kong, while US President Joe Biden called for Beijing to "start acting more responsibly in terms of international norms on human rights". The Chinese embassy in the UK responded angrily on Monday, and accused the G7 of "interfering". "The Group of Seven takes advantage of Xinjiang-related issues to engage in political manipulation and interfere in China's internal affairs, which we firmly oppose," an embassy spokesman said in a statement. The statement accused the G7 of "lies, rumours and baseless accusations".
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US President Biden will take part in his debut NATO summit on Monday as the 30 countries look to put the strained years of Donald Trump's administration behind them and instead turn their attention to external threats. After the G7 summit in Cornwall, England, Biden arrived in Brussels on Sunday evening for the NATO meeting. Leaders are expected to send a pointed message to an increasingly aggressive Russia - the defence alliance's traditional adversary - and to address China's ascendancy on the world stage, security issues linked to climate change, cyber defence and new military technology. In addition, the allies should sign off a reform plan for 2030 and formally decide to start overhauling their core strategic concept, which was last updated in 2010.
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The eurozone's industrial output growth came in above estimates in April, data from Eurostat showed. According to Eurostat, industrial output in the eurozone rose 0.8% monthly in April, following a 0.4% climb in March. According to consensus cited by FXStreet, another month of 0.4% growth was expected in April, so the figure topped forecasts. On an annual basis, eurozone output growth was 39% in April, up from March's 12% hike, and beating forecasts for a 37% rise.
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Swiss producer and import prices grew at a greater pace than expected in May, numbers from the Federal Statistics Office showed. According to the FSO, the producer and import price index grew 0.8% monthly in May, topping April's 0.7% growth. FXStreet-cited consensus was for monthly growth of 0.2%, so the figure beat forecasts. Annually, import and producer prices accelerated 3.2%, beating expectations of 2.8% growth, and quickening from April's 1.8% hike.
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The Swiss surprisingly rejected a law that would help cut carbon emissions in a referendum on Sunday in which they also voted down two other environmental initiatives. The rejection of a law to limit carbon dioxide emissions was a political bombshell after it failed with 51.6% against at the ballot box. The government and parliament had been working on the law for years. It was supposed to reduce annual CO2 emissions to half of 1990 levels by 2030. This would have made petrol and diesel more expensive and air travellers would have had to pay a climate levy of up to CHF120, about USD134, on their tickets, depending on the route.
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Industrial production in Japan surged at a greater pace than expected in April. According to the Ministry of Economy, Trade & Industry, industrial output jumped by just shy of 16% annually in April, having risen 3.4% in March. According to consensus cited by FXStreet, another jump of just over 15% was expected for April, so the figure narrowly topped consensus. On a monthly basis, output growth was 2.9% in April, accelerating from March's 1.7% hike. Consensus forecasts were growth of 2.5% in April.
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Israeli lawmakers narrowly approved a new coalition government on Sunday, putting an end to Benjamin Netanyahu's historic 12-year run as prime minister. Taking his place is far-right politician Naftali Bennett, 49, of the small Yamina party, which is just one member of the unprecedented eight-party coalition that spans Israel's ideological landscape. Members of the Knesset voted in favour of Bennett's government by a razor-thin majority of 60 to 59 in the 120-seat assembly. The confidence vote saw one abstention. Bennett, a former defence minister and one-time Netanyahu ally, was sworn into office within minutes of his victory. Israeli television showed him shaking Netanyahu's hand after the vote. After two years in the top post, Bennett is suppose to give way to centrist politician Yair Lapid, 57, under a rotating plan for the premiership.
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By Tom Waite; thomaslwaite@alliancenews.com
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