(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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US lawmakers debated into the early hours Thursday over details of legislation aimed at curbing the power of Big Tech firms with a sweeping reform of antitrust laws. House Judiciary Committee members clashed while tweaking bills with potentially massive implications for large online platforms and their users. Legislation being forwarded to the floor of the House of Representatives could force an overhaul of the practices of Alphabet's Google, Apple, Amazon.com and Facebook, or potentially lead to a breakup of the dominant tech giants. The bills would restrict how online platforms operate, notably whether tech giants operating them can favor their own products or services. Members of the committee went on to green-light a bill that would require Big Tech firms to prove an acquisition or merger would not crimp competition. Currently, US regulators have to prove a merger is anti-competitive to block it.
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Siemens outlined a new and improved revenue outlook as it sharpens focus on technology following the spin-off of its energy subsidiary. "Our customers benefit from our ability to combine the real and digital worlds. This unique capability enables Siemens to support its customers in a way that no other company can," Chief Executive Roland Busch said at the company's capital markets day on Thursday. Over next 3 to 5 years, Siemens is targeting comparable annual growth of 5% to 7%, which is increased from previous guidance of 4% to 5%. Earnings per share before purchase price allocations are to grow at an annual rate in the high-single-digit percentage range. Siemens on Thursday also unveiled plans to launch a new five-year share buyback program of up to EUR3 billion, beginning in financial 2022.
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Stroer SE & Co said its second quarter performance will be better than expected after a strong performance from its OOH Media unit. Total revenue is guided to grow about 42% year on year in the second quarter. "With Covid-19 infection rates falling and the number of people vaccinated rising, Stroer believes that the economic climate in Germany is improving significantly. These much brighter economic conditions are reflected in the rapid rise in bookings across all segments, but particularly the OOH Media segment, compared with June 2020," the company said. OOH Media unit revenue is guided to grow by about 50% year on year in the second quarter, up from previous forecast of 40% to 50% growth.
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Distribution and services firm Bunzl on Thursday said it has seen "good overall growth" in its first half, with a recovery in its base markets helping to offset a decline in Covid-related orders. Revenue for the period ending June 30 is tipped to rise 1% year-on-year, and by around 6% to 7% at constant exchange rates. "At constant exchange rates, underlying revenue growth is expected to reflect a strong recovery in the base business, including the foodservice and retail sectors, largely offset by the anticipated decline in larger Covid-19 related orders. Underlying revenue over the first half is expected to be approximately 6% higher than the comparable 2019 period," Bunzl added. The firm in 2020 got a boost from sales of Covid-19 related products such as gloves, masks and sanitisers.
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AstraZeneca said that its Lynparza drug has been approved in China for the treatment of a form of castration-resistant prostate cancer. China's National Medical Products Administration granted approval to treat adult patients with germline or somatic BRCA-mutated metastatic prostate cancer who have progressed following treatment that included a new hormonal agent. The approval was based on an earlier trial which found the use of Lynparza led to a "substantial improvement" in radiographic progression-free survival and overall survival compared to other treatments currently used. The trial showed Lynparza reduced the risk of disease progression or death by 78%. "This approval begins a new era of precision medicine for patients in China with advanced prostate cancer who have historically had a poor prognosis and few treatment options," said Dave Fredrickson, Executive Vice President of Oncology.
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Blackstone made an increased final offer for St Modwen Properties of GBP1.27 billion, after its first bid received a lukewarm reception from some analysts and investors. The private equity firm raised its bid to 560 pence per share from 542p per share. Blackstone said it will not increase the offer any further unless a third party makes a competing takeover bid. The new offer is a 25% premium to St Modwen's closing price on May 6 of 448p, before Blackstone announced the 542p-per-share approach. That was criticised as undervaluing the FTSE 250 firm, which owns and develops residential, logistics and land properties across England and Wales. The Birmingham-based company's portfolio is worth GBP1.37 billion, according to its website. JO Hambro Capital Management, which owns 9% of St Modwen, said the initial offer was too low according to a Bloomberg report.
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MARKETS
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European shares were on the rise on Thursday, though with the FTSE 100 lagging behind as pre-Bank of England jitters set in. The UK central bank - which unveils its latest interest rate decision at midday London time - is largely expected to stand pat on its current policy stance, though some analysts haven't ruled out a surprise. "We see a roughly even chance that the BoE could surprise markets today by signalling that it will end its planned asset purchases in August, instead of December as previously announced," said Berenberg's Kallum Pickering. The BoE's decision comes following a hawkish tilt from the Federal Reserve last week, with the US central bank moving up its timeframe for lifting interest rates to 2023.
Societe Generale was the top gainer in Paris's CAC 40, up 2.3%, while HeidelbergCement was helping to lift Frankfurt's DAX 30 higher, up 1.3% at midday. Wall Street is on track for a higher start to Thursday's session, following only limited moves in either direction on Wednesday.
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CAC 40: up 1.0% at 6,614.25
DAX 30: up 0.7% at 15,570.70
FTSE 100: up 0.3% at 7,094.70
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Hang Seng: closed up 0.2% at 28,882.46
Nikkei 225: closed flat at 28,875.23
S&P/ASX 200: closed down 0.3% at 7,275.30
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DJIA: called up 0.5%
S&P 500: called up 0.5%
Nasdaq Composite: called up 0.6%
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EUR: soft at USD1.1943 (USD1.1947)
GBP: flat at USD1.3963 (USD1.3965)
USD: flat at JPY110.87 (JPY110.85)
GOLD: down at USD1,780.62 per ounce (USD1,788.30)
OIL (Brent): down at USD75.35 a barrel (USD75.65)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Business conditions in Germany improved markedly June, with the Munich-based Ifo Institute for Economic Research noting optimism has grown sharply as the country bounces back from the coronavirus crisis. The ifo business climate index rose to 101.8 points in June from 99.2 points in May. Analysts at ING commented: "Another strong Ifo reading sets the bar for German growth even higher. Now the only thing that's missing is for the hard data to catch up." In manufacturing, the index rose to its highest value since April 2018. While, in the service sector, the business climate index also jumped higher. "Companies assessed their current business situation as much better. Optimism regarding the second half of the year also grew. The German economy is shaking off the coronavirus crisis," ifo explained.
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The EU should seek direct talks with President Vladimir Putin even as it stands together against "provocations" from Russia, said Germany's Chancellor Angela Merkel. "In my opinion, we as the EU must also seek direct contact with Russia and the Russian president," she told parliament. "It is not enough for the American president to talk to the Russian president," she said, stressing that the EU too "must also create different formats for talks". Putin and US President Joe Biden held face-to-face talks last week, in a meeting that both said could lead to a more predictable, albeit still tense, relationship. Merkel said recent events had shown that it was not enough "if we react to the multitude of Russian provocations in an uncoordinated manner".
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Spain's economy contracted in the first quarter, the National Institute of Statistics said. Spanish gross domestic product slipped 0.4% in the first quarter of 2021 versus the previous quarter, which follows a flat performance in the fourth quarter of 2020. Year on year, GDP dropped 4.2% in the first period of 2021, improving from the fourth quarter's 8.9% drop. Spain's economy is expected to improve after it opened its borders to vaccinated travellers from all over the world at the start of June, hoping an influx of visitors will revitalise its all-important tourism sector which has been battered by the coronavirus pandemic. Non-vaccinated Europeans – who were asked to take a negative PCR test within 72 hours – are now able to take a cheaper antigen test instead. But in a setback, the UK, a huge tourism market for the country, has not yet removed Spain from its list of at-risk countries, meaning British travellers will have to quarantine on their return home as well as pay for expensive Covid-19 tests.
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However, UK holidaymakers could be given more options for quarantine-free travel when the government reviews its foreign travel list on Thursday. An update of the lists which determine the quarantine and testing requirements for people arriving in the UK could see Malta and the Balearic Islands added to the green list, according to reports. It comes after the vaccines minister revealed almost half of all adults aged 25 to 29 in England and a third of those aged 18 to 24 had now received their first dose of a coronavirus jab. People arriving in the UK from green list destinations are not required to self-isolate, but there are currently no viable major tourist destinations in that tier. However, Malta and the Balearic Islands, with its popular destinations of Mallorca and Ibiza, are among a "handful" of places being considered for addition to the green list, according to the Times.
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The White House has a reached a possible bipartisan agreement on a US infrastructure package which could top USD1 trillion, the Financial Times reported. The infrastructure deal represents a core aspect of the Joe Biden administration's agenda. Biden initially earmarked a figure of USD2.3 trillion to boost US roads, broadband networks and bridges, so the USD1 trillion amount falls some way short of that. The FT added that final details of how the package will be paid for is uncertain, but added that Republicans have previously been reluctant to agree to fund it through an increase in corporate taxes.
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China said it had filed a lawsuit at the World Trade Organization challenging Australia's anti-dumping measures on a range of goods, marking further escalation in tensions between the two countries. The suit – regarding Chinese exports of train wheels, wind turbines and stainless steel sinks – comes a week after Canberra challenged Beijing's crippling tariffs on Australian wine exports. It aims to "safeguard the legitimate rights and interests of Chinese companies", Chinese commerce ministry spokesman Gao Feng said at a regular briefing Thursday. "We hope that Australia will take concrete actions to correct its wrong practices, avoid distortions in the trade of related products, and bring such trade back to the normal track as soon as possible."
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By Lucy Heming; lucyheming@alliancenews.com
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