(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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JD.com said that with approval from its board, it has upsized and extended the duration of its existing share repurchase program, which was first launched in March 2020. Now the Beijing-based e-commerce firm has increased the repurchase authorisation to USD3.0 billion from USD2.0 billion, and the program's deadline has been extended to March 17, 2024. Also on Wednesday, JD.com said it has entered a USD2.0 billion unsecured term and revolving loan facility, which will be used for financing new or existing green projects. The facility has a duration of five years, and is priced at 85 basis points over Libor.
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Anglo American confirmed it has entered talks with Brazilian mining peer Vale over the potential to jointly develop the Serpentina iron ore resource. Anglo noted that Vale's Serpentina is contiguous to its Minas-Rio iron ore operation in Brazil. "These discussions are preliminary in nature and there can be no certainty that any agreement will be reached or, if any agreement is reached, on the terms or scope of any such agreement," Anglo added. In its own release, Vale also confirmed the discussions. The company was responding to a letter from the Securities & Exchange Commission of Brazil, following a media report by Bloomberg on Thursday last week. It said there was no decision or agreement on the acquisition of a stake in Minas-Rio.
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AstraZeneca said it has agreed to a global development and commercialisation agreement with California-headquartered Ionis Pharmaceuticals Inc for eplontersen, formerly known as Ionis-TTR-LRX. The drug helps to treat TTR amyloidosis by reducing the production of transthyretin, or TTR protein. The two pharma firms will jointly develop and commercialise eplontersen in the US, while Astra will develop and commercialise it in the rest of the world, except in Latin America. As part of the deal, Astra will pay an upfront fee of USD200 million, and will make additional conditional payments of up to USD485 million upon regulatory approvals. After that, Astra will pay up to USD2.9 billion of sales-related milestones based on sales thresholds between USD500 million and USD6 billion, plus royalties in the range of low double-digit to mid-twenties percentage depending on the region.
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Miner Fresnillo said its 44%-owned Juanicipio project continues to face delays. The Mexican state-owned electricity utility, Comision Federal de Electricidad, has told Fresnillo that approval to complete the tie-in to the national power grid cannot yet be granted and the mill commissioning timeline will therefore be extended by approximately six months. "This is directly related to knock-on effects of the pandemic on the CFE's operations, predominantly related to a lack of CFE staff which limits its ability to oversee three key tasks to: review the existing installation; supervise physical connection to the active power grid; and approve required blackout prevention devices," Fresnillo explained. The miner said it will "do all that it can to expedite these necessary approvals". Full load commissioning activities are now expected to be approved sometime after the first week of May 2022.
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Telefonica announced an agreement with unions in Spain to cut around 2,700 jobs, part of a wave of job cuts in the telecom sector in the country this year. The redundancy plan targets workers turning 55 or older in 2022 and with at least 15 years employment at the company, Telefonica said in a statement. The firm said the job cuts, which will affect about 15% of its workforce of 18,500 people in Spain, will cost about EUR1.5 billion this year. The Spanish telecom giant predicted the staff reduction will produce annual savings of more than EUR230 million from 2023. Telefonica is the third telecoms operator to announce a round of layoffs in Spain in 2021 following the UK's Vodafone in September and France's Orange in May.
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Teleperformance said it has bought Kentucky-headquartered Senture for an enterprise value of USD400 million. Founded in 2003, Senture is a business process outsourcing operator for government services in the US. Paris-based telemarketing and business support services provider Teleperformance said the deal bolsters its citizen lines of service, already active in the US, UK, continental Europe, Middle East, Asia and Africa. "This acquisition will reinforce the group's global leadership in the citizen lines of service vertical, which offers strong potential growth worldwide, notably in the US. It also positively impacts Teleperformance's profitability profile. This acquisition is consistent with Teleperformance's vertical specialization strategy," said Chair & Chief Executive Daniel Julien.
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MARKETS
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Stock indices were mixed on Wednesday, with Sydney and London catching up to the post-Christmas gains made by markets that were open on Monday and Tuesday. While the World Health Organisation warned anew that Omicron still poses "very high" risk and could overwhelm healthcare systems, financial markets were pricing in a weak variant of Covid-19 that won't disrupt economic growth in the new year.
"The impact seems to be less than during previous outbreaks," commented Marshall Gittler, head of Investment Research at BDSwiss. "The New York Times reported that new cases were up 83% over the last two weeks, but hospitalizations are up only 8% and deaths up 3%." Gittler added, however, that due to a relatively low vaccination rate in the US, "I think the virus is likely to be a much bigger problem for the US in a few weeks – whether it's big enough to change the Fed's tightening plans though is another question. Probably not as long as people can stay out of the hospital. That means it might not impact the dollar as much as one might expect."
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CAC 40: marginally higher, up 1.10 points at 7,182.21
DAX 40: down 0.3% at 15,915.67
FTSE 100: up 1.0% at 7,445.93
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Hang Seng: closed down 0.8% at 23,086.54
Nikkei 225: closed down 0.6% at 28,906.88
S&P/ASX 200: closed up 1.2% at 7,509.80
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DJIA: called up 0.2%
S&P 500: called up 0.2%
Nasdaq Composite: called up 0.4%
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EUR: down at USD1.1286 (USD1.1330)
GBP: unchanged at USD1.3418 (USD1.3416)
USD: up at JPY115.01 (JPY114.38)
Gold: down at USD1,799.60 per ounce (USD1,808.50)
Oil (Brent): up at USD78.98 a barrel (USD76.00)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Omicron still poses "very high" risk and could overwhelm healthcare systems, the WHO warned on Wednesday, as the highly transmissible coronavirus variant fuelled record outbreaks in many countries. Case numbers have shot up 11% globally in the last week, forcing governments from China to Germany and France to find a difficult balance between anti-virus restrictions and the need to keep economies and societies open. "The overall risk related to the new variant of concern Omicron remains very high," the UN health agency said in its Covid-19 weekly epidemiological update. "Consistent evidence shows that the Omicron variant has a growth advantage over the Delta variant with a doubling time of two to three days." The WHO said early data from the UK, South Africa, and Denmark – which currently has the world's highest rate of infection per person – suggested there was a reduced risk of hospitalisation for Omicron compared with Delta. But it added that further data was needed to understand Omicron's severity.
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France said nightclubs would remain closed for a further three weeks, after nearly 180,000 new Covid cases smashed the record for daily cases since the pandemic began. The roughly 1,600 clubs were ordered shut on December 6 for four weeks as officials hoped to avoid a wave of infections prompted by holiday travel and festivities, fuelled by the highly infectious Omicron variant. But on Tuesday, France's health agency said 179,807 Covid cases had been reported over the previous 24 hours, far beyond the previous record of 100,000 reported on Saturday.
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The National Health Service is mounting a fresh drive to get Covid booster jabs into arms to protect against the fast-spreading Omicron variant in the UK. The NHS vaccination programme is sending around 650,000 text messages and 50,000 letters to people who have not yet received their top-up dose, encouraging them to roll up their sleeve and have a "jabby new year". The move comes as ministers continue to monitor the latest data with England and Wales recording a record 129,471 confirmed cases on Tuesday, while separate figures for Scotland showed another 9,360 cases. No data was available for Northern Ireland. The government at Westminster has said while the early evidence suggests Omicron is less likely to cause serious illness than earlier waves it stands ready to impose new measures in England if necessary. Currently England is alone among the home nations in ruling out additional controls before the new year, with Scotland, Wales and Northern Ireland all having put in place further controls since Christmas.
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People in the UK who managed to save some money during coronavirus lockdowns have now spent around a fifth of it typically, research suggests. Seven in 10 people said they had been able to put money aside during the pandemic amid fewer opportunities to spend, Paragon Bank found. The average amount people had saved during lockdowns was GBP1,216. But when asked what percentage of their pandemic savings people had now spent, the average amount was just over a fifth – equating to around GBP261 of lockdown savings having been spent. Over-55s were twice as likely as young adults to have managed to hang onto all of their savings.
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Eurozone money supply growth slowed in November, according to figures from the European Central Bank. Annual M3 money supply grew by 7.3% in November, slowing from October's increase of 7.7%. The November growth figure fell short of expectations of 7.5%, according to consensus cited by FXStreet. Annual growth of M1 money supply, comprising currency in circulation and overnight deposits, slowed to 9.7% in November from 11%.
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The Spanish Parliament passed Prime Minister Pedro Sanchez's 2022 budget plan with a comfortable majority on Tuesday, giving his left-wing minority government an important win. "The budget for 2022 was supported by up to 15 parties. This has never happened before...We are moving on!" Finance Minister Maria Jesus Montero tweeted. Now that the budget has been approved, Spain's political stability looks to be largely secure until the elections in autumn 2023. Only recently, it seemed possible Sanchez could face the same fate as his Portuguese counterpart Antonio Costa, whose budget plan was voted down by parliament, triggering fresh elections that are due to be held in late January.
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The US government promised its allies in Europe transparency and solidarity regarding its planned talks with Russia to address tensions over Ukraine. The dialogue would focus on "mutual goals," US State Department spokesperson Ned Price told reporters. He stressed that Washington would stick to the principle of "nothing about them without them" regarding any issues affecting US allies in Europe. Nonetheless, Price said the "strategic stability dialogue" with Russia would take a bilateral format. "We have always fully and thoroughly briefed our allies" following past meetings, he added. Representatives from the US and Russia plan to come together in Geneva on January 10 to discuss the Ukraine tensions and security guarantees demanded by Moscow.
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The US said it has seen possible progress in talks with Iran but joined European negotiators in pressing for urgency in rolling back Tehran's nuclear programme. Negotiations resumed Monday in Vienna in a fresh push to make headway on reviving a landmark 2015 agreement that curtailed Iran's nuclear activities in return for sanctions relief. "There may have been some modest progress," State Department spokesman Ned Price told reporters in Washington. "But it is in some ways too soon to say how substantive that progress may have been. At a minimum any progress, we believe, is falling short of Iran's accelerating nuclear steps and is far too slow." Former president Donald Trump in 2018 withdrew from the nuclear accord and imposed a slew of punishing sanctions, including a unilateral US ban on Iran selling its key export of oil.
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By Tom Waite; thomaslwaite@alliancenews.com
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