(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Beijing is looking to stop companies from going public on stock markets abroad by means of a loophole long-used by Chinese tech companies amid heightened concerns over data security, Bloomberg News reported. Such a ban would mark a major step by China to clamp down on listings overseas, after a New York initial public offering by ride-hailing giant Didi Chuxing went ahead this year despite regulatory concerns. Authorities have since launched investigations into Didi over cybersecurity, ordered it to be removed from app stores, and extended probes into other US-listed Chinese companies. China is now planning to ban companies from going public abroad using an offshore structure known as variable interest entities, closing a gap used by technology firms such as Alibaba and Tencent in recent decades to avoid restrictions on foreign investment and list offshore, Bloomberg reported.
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A panel of health experts appointed by the US government voted Tuesday to endorse Merck & Co's Covid-19 pill for high-risk adult patients who are within five days of experiencing their first symptoms. There were 13 votes in favour and 10 against, a narrow margin that reflected concerns about a recent downgrading of the treatment's efficacy results and fears over its potential harms. Monoclonal antibody treatments, which are given by infusion, have been shown to reduce the risk of severe Covid-19 in high-risk patients by up to 70%. Merck's treatment is taken as four capsules, twice a day, over five days – for a total of 40 pills.
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Pfizer announced Tuesday it was seeking US authorization for Covid booster shots among adolescents aged 16 and 17, as concerns grow about the impact of the new Omicron variant. The Food & Drug Administration has so far only granted emergency use authorizations for boosters to people aged 18 and over, six months after their primary series of the Pfizer or Moderna Covid vaccine, or two months after the Johnson & Johnson shot. "Today, we submitted a request to the US_FDA to expand the emergency use authorization of a booster dose of our Covid-19 vaccine to include 16- and 17-year-olds," Pfizer CEO Albert Bourla wrote on Twitter. "It is our hope to provide strong protection for as many people as possible, particularly in light of the new variant." Experts are concerned that the pattern of mutations detected on the Omicron variant will mean that the protection generated by the current generation of vaccines may take a partial hit.
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Aviva said it has completed its exit from Italy with the sale of its life insurance businesses there to CNP Assurances. Aviva said it has received GBP462 million in cash from the completed sale. "In the last 24 hours we have completed the sales of both Aviva Poland and our Italian life insurance business," said Chief Executive Officer Amanda Blanc. "These are major steps forward as we radically simplify Aviva."
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MARKETS
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Stock prices were rebounding globally on Wednesday, despite new travel curbs being imposed in the face of the Omicron variant of Covid-19 and the US Fed chair saying inflation is no longer viewed as "transitory". Powell's comment failed to lift the dollar, however, with both the pound and euro rising.
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CAC 40: up 1.3% at 6,807.52
DAX 40: up 1.5 at 15,326.47
FTSE 100: up 1.4% at 7,156.83
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Hang Seng: closed up 0.8% at 23,658.92
Nikkei 225: closed up 0.4% at 27,935.62
S&P/ASX 200: closed down 0.3% at 7,235.90
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DJIA: called up 0.9%
S&P 500: called up 1.2%
Nasdaq Composite: called up 1.4%
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EUR: up at USD1.1335 (USD1.1280)
GBP: up at USD1.3320 (USD1.3245)
USD: unchanged at JPY113.38
Gold: up at USD1,784.62 per ounce (USD1,776.50)
Oil (Brent): up at USD72.57 a barrel (USD70.75)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The Omicron variant of the coronavirus has added new uncertainties to the global economy and could threaten the recovery, the OECD's chief economist said. "We are concerned that the new variant of the virus, the Omicron strain, is further adding to the already high levels of uncertainty and risks, and that could be a threat to the recovery," Laurence Boone said after the Paris-based organisation lowered its global growth outlook for 2021.
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Japan suspended all new flight bookings into the country from Wednesday in response to Omicron, ignoring a World Health Organization warning against blanket travel bans as the new coronavirus strain spread further around the world. Brazil reported the first cases in Latin America of Omicron, which has pushed dozens of countries to impose travel restrictions – mostly targeting southern African nations. And while the likely futility of such broad curbs was underscored by Dutch authorities reporting that Omicron was present in the country before South Africa reported its first cases on November 25, governments pressed ahead with emergency travel measures. Japan confirmed its first Omicron case on Tuesday, and it had already tightened its tough Covid border measures. The latest travel bans came despite the WHO saying Tuesday that such "blanket" moves risked doing more harm than good. In a travel advisory, it warned the bans could ultimately dissuade countries from sharing data about the evolving virus.
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US President Joe Biden on Tuesday said he would decide on a weekly basis whether to extend US travel bans on southern Africa, depending what happens with the worrying new Omicron variant of Covid-19. Asked how long travel restrictions that took effect Monday on South Africa and seven other southern African countries would remain in place, Biden said it "kind of depends." The US president, who was boarding Air Force One at Minneapolis–Saint Paul International Airport, said he would see "week to week to determine what we need, the state of affairs."
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The wave of price increases that has complicated the US pandemic recovery could last longer than anticipated, Federal Reserve Chair Jerome Powell acknowledged Tuesday in testimony where he also opened the door to raising interest rates sooner. It was a distinct change of tone for the central bank chief who for months tried to assuage fears by saying the recent inflation spike would be "transitory," and pledged to be patient before raising interest rates. He now says it is time to retire that term. The Fed has already begun to pull back on its stimulus measures put in place to buffer the economy from the pandemic hit, but Powell, who Biden last week nominated to a second term, previously said policymakers could be patient before raising lending rates. However, Powell signalled in his testimony that it may be appropriate to speed up the pace of the pullback in monthly asset purchases.
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Pandemic-induced lockdowns caused Australia's economy to shrink 1.9% in the third quarter, a downturn that bucked the trend of a steady recovery in other wealthy nations. The Australian Bureau of Statistics on Wednesday reported the country's second quarterly contraction since the pandemic began – and one of the largest contractions on record – sparked by long-running containment measures in populous states. There was a 21% drop in spending on hotels, cafes and restaurants and a 40% drop in spending on transport. Economists had forecast a 2.8% contraction, but increased exports appear to have come to the rescue – buoyed by high coal and gas prices. The Australian economy is widely expected to bounce back in the final quarter of the year.
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Manufacturing in China fell slightly in November, data from IHS Markit showed, with output growing but power supply issues hurting total new business. The Caixin China general manufacturing purchasing managers' index dropped to just below the neutral mark at 49.9 in November from 50.6 in October. IHS Markit noted this is only the second time since April 2020 the manufacturing sector has fallen into contractionary territory. On Tuesday, official government data showed manufacturing activity in China edged up in November. The purchasing managers' index in the world's second biggest economy rose to 50.1, returning above the 50-point mark separating growth from contraction after two months.
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Japan's manufacturing sector saw a quicker rate of growth in November as operating conditions continued to improve, data from IHS Markit showed. For November, the headline au Jibun Bank manufacturing purchasing managers' index increased to 54.5 points from 53.2 in October, a three-year high since January 2018 and marking the 10th consecutive month of growth. The improvement in operating conditions for the month was attributed to the fastest rise in production volumes since April 2021, through increased orders in spite of difficulties in finding raw materials.
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The pace of growth at factories in the eurozone showed signs of stabilising in November as firms continue to grapple with supply chain congestion. The final eurozone manufacturing purchasing managers' index inched up to 58.4 points in November from October's 58.3. The reading remains well above the no-change mark of 50, indicating the eurozone manufacturing sector continues to expand at pace - but the final reading was below the preliminary figure of 58.6. November's reading was the first rise in the headline index since June, IHS Markit noted. However, it marked the second-slowest expansion since February.
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Italy was November's manufacturing stand-out in the eurozone, notching a record high PMI reading of 62.8. Every other member state monitored, with the exception of France, posted multi-month lows. Austria and Germany both recorded 10-month lows, of 58.1 and 57.4 respectively. France, meanwhile, managed to outperform the flash reading of 54.6 for November to record a final score of 55.9, a three-month high. This was up from 53.6 and ended a five-month sequence of slowing growth.
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The UK manufacturing sector grew at the fastest rate for three months, survey data from IHS Markit showed, but heightened cost and supply chain pressures capped further expansion. The IHS Markit/Chartered Institute of Procurement & Supply purchasing managers' index rose to a three-month high of 58.1 in November, up from 57.8 in October.
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The pace of growth in the Irish manufacturing sector slackened last month, with November seeing the slowest increase in new orders since March, according to survey results from IHS Markit. The AIB Ireland manufacturing purchasing managers' index read 59.9 points in November, down from 62.1 in October. Though indicating the slowest improvement in the factory sector since March, the November score still was higher than any month before March since the survey began in May 1998. It also remained well above the neutral 50-point mark.
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Annual house price growth hit 10% in the UK in November, according to an index. The increase marked an acceleration from 9.9% growth in October, Nationwide Building Society said. Prices rose by 0.9% month on month, taking the average UK property value to GBP252,687. Robert Gardner, Nationwide's chief economist, said: "House prices are now almost 15% above the level prevailing in March last year when the pandemic struck the UK. There have been some signs of cooling in housing market activity in recent months; for example, the number of housing transactions were down almost 30% year on year in October. But this was almost inevitable, given the expiry of the stamp duty holiday."
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UK retail shop prices rose in November driven by rising food prices and non-food deflation slowing, according to the latest British Retail Consortium-NielsenIQ figures. On an annual basis, the UK shop price index rose by 0.3% in November, reversing October's decline of 0.4%. This is the first time that prices have risen since May 2019, it said. In addition, the BRC said food inflation accelerated to 1.1% in November, more than doubled from 0.5% rise in October. This is the highest inflation rate since November 2020, it added. Fresh food inflation accelerated to 1.2% in November from 0.3% in October, which was the highest inflation rate since August 2019.
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By Tom Waite; thomaslwaite@alliancenews.com
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