TOP NEWS SUMMARY: Price pressures knock economic sentiment and markets

(Alliance News) - The following is a summary of top news stories ...

Alliance News 12 October, 2021 | 10:55AM
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(Alliance News) - The following is a summary of top news stories Tuesday.

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COMPANIES

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Entain backed full-year guidance following a "strong" third quarter. Net gaming revenue in the third quarter of 2021 was up 4% on a year ago, with online growth of 7% but retail revenue slipping 1%. On a constant currency basis, online growth was 10% and retail registered a 1% rise, resulting in total net gaming revenue growth of 6% for the quarter. The sports-betting and gaming firm continued to expect 2021 earnings before interest, tax, depreciation and amortisation in line with previous guidance of GBP850 million to GBP900 million. "These results demonstrate Entain's continuing ability to deliver sustainable, consistent and diversified growth. Our powerful Entain platform provides customers with great products and experiences, which enables us to grow ahead of our markets as demonstrated by 23 consecutive quarters of double-digit online growth," said Chief Executive Jette Nygaard-Andersen.

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The UK Competition & Markets Authority launched a probe into Veolia's takeover of French peer Suez to decide whether the deal will reduce competition in the UK. The anti-monopoly regulator said its inquiry has a deadline of December 7 for a phase 1 decision. Veolia, a Paris-based water management, waste management and energy services company that currently owns 29.9% of Suez, launched a tender offer on the remainder of Suez back in July. The move came after Veolia and Suez agreed on a price of EUR20.50 per Suez share. The transaction is expected to be completed by the end of 2021.

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Moderna has no plans to share the recipe for its Covid-19 vaccine because executives have concluded that scaling up the company's own production is the best way to increase the global supply, the company's chair said. In an interview with the Associated Press, Noubar Afeyan also reiterated a pledge Moderna made a year ago not to enforce patent infringement on anyone else making a coronavirus vaccine during the pandemic. "We didn't have to do that," Afeyan said. "We think that was the responsible thing to do."

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Amazon has said it will allow many tech and corporate workers to continue working remotely indefinitely as long as they can commute to the office when necessary. The new policy was announced in a blog post. It is a change from Amazon's previous expectation that most employees would need to be in the office at least three days a week after offices reopen from the Covid-19 pandemic in January.

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GlaxoSmithKline unveiled plans for a new global headquarters in Weybridge, Surrey for its soon-to-be spun-off Consumer Healthcare business. The new campus is due to open in 2024, the company said. The move comes amid plans for the separation of GSK's Consumer Healthcare division from its core pharmaceutical and vaccine business in mid-2022. After the split, the Consumer Healthcare business will relocate to a temporary headquarters in Weybridge before moving into the new facility. GSK said its pharmaceutical and vaccines business plans to remain at its current headquarters in Brentford, west London until at least 2023 and will provide an update on new headquarters in mid-2022.

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MARKETS

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Equity markets were lower on Tuesday, as lofty oil prices and price data prints heightened concern about inflation. Both Japan and Germany released reports showing rising input prices, while the UK reported a tightening jobs market. The US and German release consumer price index readings on Wednesday.

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CAC 40: down 0.4% at 6,541.82

DAX 40: down 0.3% at 15,151.07

FTSE 100: down 0.5% at 7,108.51

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Hang Seng: closed down 1.4% at 24,962.59

Nikkei 225: closed down 0.9% at 28,230.61

S&P/ASX 200: closed down 0.3% at 7,280.70

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DJIA: called up 0.1%

S&P 500: called up 0.1%

Nasdaq Composite: called up 0.2%

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EUR: down at USD1.1559 (USD1.1570)

GBP: down at USD1.3600 (USD1.3625)

USD: up at JPY113.38 (JPY113.28)

Gold: flat at USD1,758.16 per ounce (USD1,758.25)

Oil (Brent): up at USD83.94 a barrel (USD83.77)

(currency and commodities changes since previous London equities close)

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ECONOMICS AND GENERAL

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Supply chain woes have hit German economic sentiment, the Mannheim-based ZEW's monitor showed. The ZEW indicator of economic sentiment fell to 22.3 points in October from 26.5 in September. The reading also undershot consensus, which had stood at 24.0, according to FXStreet. The current situation monitor also declined, to stand at 21.6 points for October from 31.9 the month before. "The economic outlook for the German economy has dimmed noticeably. The further decline of the ZEW indicator of economic sentiment is mainly due to the persisting supply bottlenecks for raw materials and intermediate products," said ZEW president Achim Wambach.

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Selling prices in wholesale trade rose in Germany in September, figures from the Federal Statistics Office showed. Wholesale selling prices increased by 13% last month when compared to the prior year. This was the highest monthly annual rate of change since June 1974, after the first oil crisis. In August and in July, the annual rates of change had been 12% and 11%, respectively.

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Producer prices grew in Japan in September compared to the month before and on an annual basis, preliminary data from the Bank of Japan showed. Producer prices were 0.3% higher in September when compared to August, after staying flat in August from July. Annually, prices grew 6.3% in September, compared to a 5.5% increase in August and 5.6% growth in July.

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The UK jobs market has continued to tighten, with no sign yet of a wave of redundancies ahead of the closure of the government's furlough scheme. The UK unemployment rate eased in line with market expectations, standing at 4.5% in the three months to August versus 4.6% for July. The number of payroll employees rose 207,000 to a record 29.2 million in September, returning to pre-pandemic levels. The number of job vacancies in the three months to September hit a record high of 1.1 million, an increase of 318,000 from its pre-pandemic level. Growth in average total pay - which includes bonuses - was 7.2%, and regular pay, which strips out bonuses, was 6.0% among employees for the three months to August. Ahead of the wind-up of the government's pandemic job retention scheme on September 30, the redundancy rate remained around pre-virus levels.

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UK retail sales growth slowed considerably in September, figures showed, during an uncertain month which saw consumer confidence hit by fuel shortages, souring a traditionally strong month for the sector. According to the latest British Retail Consortium-KPMG monitor, UK retail sales increased 0.6% year-on-year in September, slowing sharply from August's 3.0% jump. Apart from a 1.3% annual decline in a lockdown-hit January, it was the weakest sales performance for the sector this year. On a like-for-like basis, sales fell 0.6% yearly in September, the first decline by this measure since March of last year.

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Grocery sales in the UK slipped over the past quarter, but promisingly remained ahead of pre-pandemic levels, survey data from Kantar showed. In the 12 weeks ended October 3, UK grocery sales fell 1.2% to GBP28.79 billion from GBP29.13 billion in the same period the year before. This, however, remained 8.1% higher from the same period in 2019, before the onset of the pandemic. The drop, Kantar noted, could have stemmed from customers limiting trips to the supermarket following the squeeze on petrol in the country. Tesco, the UK's largest grocer, was one of just two major supermarket to post sales growth during the period. Tesco sales increased 1.2% to GBP7.3 billion from GBP7.84 billion. Market share improved to 27.5% from 26.9% - its best result since February 2019. J Sainsbury's sales, meanwhile, fell 1.5% to GBP4.29 billion from GBP4.35 billion, though its market share was unchanged at 14.9%.

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UK Brexit minister David Frost is to set out Britain's demands for changes to the Northern Ireland Protocol amid a stand-off with the EU over the role of the European Court of Justice. In a speech to the diplomatic community in Lisbon on Tuesday, Frost will warn the protocol cannot survive without fundamental reform to governance arrangements. But even before he delivered his address, he was accused by the Irish government of creating a "red line" barrier to progress in resolving the dispute over post-Brexit trading arrangements. Irish Foreign Minister Simon Coveney said the peer was setting demands he knew the EU could not move on and questioned whether the UK really wanted to agree a way forward.

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The Irish government will unveil its budget for 2022 later Tuesday, in a package that will amount to EUR4.7 billion. Following last-minute discussions among some departments and officials, the details of the budget were rubber-stamped and will be set out on Tuesday afternoon. Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath will deliver their speeches in the Dail chamber at 1pm. It marks a step on the road to recovery from the pandemic after last year's budget was made in the Convention Centre. Another indication of the Dublin government's plan to emerge from the Covid crisis is the winding down of emergency spending that propped up the country throughout the pandemic.

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The IMF executive board reaffirmed on Monday its "full confidence" in the Washington-based crisis lender's chief, Kristalina Georgieva, keeping her on as managing director after she was hit with allegations of data tampering. "Having looked at all the evidence presented, the Executive Board reaffirms its full confidence in the Managing Director's leadership and ability to continue to effectively carry out her duties," the institution's governing body said. An investigation by law firm WilmerHale has concluded that the Bulgarian economist manipulated data in favour of China while in a senior role at the World Bank. WilmerHale's controversial findings centre on the drafting of the 2018 and 2020 editions of the World Bank's report ranking countries according to their ease of doing business. The push came while bank leadership was engaged in sensitive negotiations with Beijing over increasing the bank's lending capital.

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Russia, France and Germany said Monday that their foreign ministers could soon meet to discuss the ongoing conflict in eastern Ukraine. Moscow said President Vladimir Putin, his French counterpart Emmanuel Macron and German Chancellor Angela Merkel instructed the ministers to work towards a meeting during a joint telephone call Monday. According to the Kremlin, it would take place within the framework of the "Normandy Four" – which usually brings together officials from Moscow and Kiev under the mediation of Paris and Berlin. The Kremlin did not say in its statement if Ukraine would take part in the meeting. However France's presidency said that it should involve Ukraine.

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By Tom Waite; thomaslwaite@alliancenews.com

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