(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Prosus said it has moved 192 million shares in Chinese technology firm Tencent into the Hong Kong Central Clearing & Settlement System to allow for the shares to be traded. Shares are usually put in a clearing system before being sold. Based on Tencent's closing price on Wednesday of HKD311.60, when the shares were moved to the clearing system, the moved shares have a value of HKD59.83 billion, around USD7.62 billion. Tencent shares closed up 1.7% on Friday at HKD307.00. On Thursday, Prosus, an Amsterdam-based technology investor, sold 1.1 million shares in Tencent as part of its repurchase programme, bringing its total ownership in Tencent to 28%. The share move is part of an open-ended share repurchase programme opened by Prosus and parent company Naspers in June.
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The UK competition watchdog has provisionally cleared London Stock Exchange Group's acquisition of Quantile Group. The decision followed an in-depth phase 2 inquiry. In December, LSEG announced that it would acquire portfolio, margin and capital optimisation services provider Quantile for up to GBP274 million, an acquisition which would allow the stock exchange operator to expand its range of post-trade risk management solutions to its customers. The UK Competition & Markets Authority upgraded its investigation to a phase 2 after finding "competition concerns during an initial phase 1 review that warranted further investigation". The CMA has concluded, however, that the deal "does not raise substantial competition concerns in the UK".
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The executive and supervisory boards of German industrial group thyssenkrupp have given the green light for the construction of a hydrogen-based blast furnace in which low-carbon steel can be produced. The construction of the so-called direct reduction plant in Duisburg is expected to involve investments totalling over EUR1 billion. The contract is to be awarded in the coming weeks, with the first "green" steel expected to be produced by the plant in western Germany in 2026.
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Pharmaceutical and chemical group Merck & Co plans to invest more than EUR130 million to enlarge its Molsheim site in eastern France. Capacity for biopharmaceutical production at the plant near Strasbourg is to be expanded and create up to 800 new jobs by 2028. By 2024, another 3,500 square metres of production space, an administration building and a new logistics warehouse are to be put into operation. Specifically, the plant will produce single-use consumables used in the manufacture of coronavirus vaccines as well as other life-saving treatments. Many biopharma manufacturers have switched to single-use technology because of the greater flexibility, cost and time savings, and a reduced risk of contamination, the company said.
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DocuSign maintained annual guidance after a robust second quarter for the e-signature firm. In the second quarter ended July 31, revenue rose 22% year-on-year to USD622.2 million from USD511.8 million. Its pretax profit surged to USD3.36 billion from USD158 million. The San Francisco, California-based enjoyed a "solid" second quarter, Chair & Interim Chief Executive Maggie Wilderotter said. The stock was up 18% in New York pre-market trade on Friday.
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T-Mobile US has authorised stock buybacks of up to USD14.0 billion through to September 30 next year. "Repurchases are expected to be made from available cash on hand and proceeds of one or more debt issuances or other borrowings, based on the company's evaluation of market conditions and other factors," the wireless network operator says.
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Land Securities said Chief Operating Officer Colette O'Shea will step down from the role and leave the company as the business moves into its "next phase of its growth strategy". The London-based property developer and investor said O'Shea has supported Chief Executive Officer Mark Allen to develop and implement his growth strategy since 2020, but as it enters its next stage, there will be an increased emphasis on operational autonomy within business units. This means that the role of COO is no longer critical to its operations, the company noted. O'Shea will step down from the COO role on March 31 next year after a "transitional period".
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Asos said sales in August were weaker than expected, blaming a slow start to the autumn-winter shopping season as customers faced belt-tightening. "After having seen good growth in June and July, sales in August were weaker than anticipated. This reflected the impact of accelerating inflationary pressures on consumers and a slow start to autumn-winter shopping," the online fast-fashion retailer said. Asos said it expects its full-year sales, adjusted pretax profit and net debt to be within market forecasts. It noted company-complied consensus for the financial year ended August 31 shows total sales growth at 3.2%, adjusted profit at GBP28 million, and net debt to be GBP77 million. The London-based retailer's financial year ended on August 31. In financial 2021, Asos reported revenue of GBP3.91 billion and adjusted pretax profit of GBP193.6 million.
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Frasers Group will return to London's FTSE 100 index next week, replacing Meggitt which is on its way out after accepting a takeover bid. In August 2021, the aerospace components said it had accepted a GBP6.3 billion takeover offer from Parker-Hannifin. It will be deleted from the FTSE 100 index next week, index operator FTSE Russell said. Frasers, formerly known as Sports Direct International, will take its place. Frasers was booted out of the blue-chip index back in March 2016. It has not returned since. Replacing Frasers in the FTSE 250 will be WAG Payment Solutions. The company, also known as Eurowag, processes toll and fuel payments for trucks around Europe.
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MARKETS
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Stock markets were rallying into the weekend, after an aggressive 75-basis-point interest rate hike by the European Central Bank on Thursday and data on Friday that showed price inflation slowing in China. For the UK, Davy Research said inflation is likely to peak at 11.5%, well short of recent forecasts of 20% or more, after Prime Minister Liz Truss announced a support package that will cap annual energy bills at GBP2,500 for the average household from the start of October.
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CAC 40: up 1.8% at 6,235.64
DAX 40: up 1.5% at 13,103.11
FTSE 100: up 1.7% at 7,382.14
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Hang Seng: closed up 2.7% at 19,362.25
Nikkei 225: closed up 0.6% at 28,242.95
S&P/ASX 200: closed up 0.7% at 6,895.80
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DJIA: called up 0.8%
S&P 500: called up 0.8%
Nasdaq Composite: called up 1.0%
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EUR: up at USD1.0103 (USD0.9996)
GBP: flat at USD1.1503 (USD1.1498)
USD: down at JPY141.99 (JPY144.00)
GOLD: up at USD1,728.11 per ounce (USD1,707.91)
OIL (Brent): up at USD90.68 a barrel (USD88.57)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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World leaders voiced their "profound regret" following the death of the Queen, remembering the UK monarch as "a beacon of calm and stability" spanning her record-breaking reign. Tributes to the Queen have poured in after she died at Balmoral on Thursday, describing her as "kind-hearted" and with a "wisdom, compassion, and warmth" to be cherished. US president Joe Biden and his wife Jill said in a statement that "Queen Elizabeth II was a stateswoman of unmatched dignity and constancy" who "helped make our relationship special". King Charles III was on Friday due to address his new subjects about 1800 BST. Also on Friday, the new king is expected to hold his first audience with Prime Minister Liz Truss, who was only appointed on Tuesday in one of the Queen's last ceremonial acts before her death.
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Planned strikes by UK rail and postal workers have been called off as a result of the Queen's death. Members of the Rail, Maritime & Transport union were due to walk out on September 15 and 17 in a long-running dispute over pay, jobs and conditions. Its general secretary Mick Lynch said: "RMT joins the whole nation in paying its respects to Queen Elizabeth. The planned railway strike action on September 15 and 17 is suspended."
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Chinese President Xi Jinping expressed his condolences to the royal family over the death of the Queen. He noted that she was the first UK monarch to visit China, in 1986, saying: "Her death is a great loss to the British people." The statement added that China was willing to work with the King as an opportunity to promote bilateral relations and benefit the two countries and their people. Chinese Premier Li Keqiang also sent a message of condolence to PM Truss. The Queen's death comes amid tensions between Britain and China over human rights, trade and China's relentless crackdown on free speech and political opposition in the former British colony of Hong Kong.
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Both consumer and factory price inflation slowed in China last month, data from the National Bureau of Statistics of China showed on Friday. China's annual inflation rate eased to 2.5% in August from 2.7% in July, data showed. Expectations, according to FXStreet, were for the rate to tick up to 2.8%. Annual food price growth was slower than the month. While pork prices accelerated, this was against a lower base a year before. Month-on-month, prices contracted 0.1% after growth of 0.5% in July. They had been expected to grow 0.2%. The core consumer price index, which strips out food and fuel, rose 0.8% year-on-year, matching July's rate.
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Industrial output in France slipped into contraction in July. Industrial production fell 1.6% month-on-month, reversing June's 1.2% advance. Manufacturing output fell 1.6%, sliding from a rise of 0.9% the month before, while there was an uptick in construction work, with production rising 0.5% after June's 1.4% decline.
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Industrial production in Spain continued to rise in July, but at a slower rate than the the month before. Calendar-adjusted industrial output rose 5.3% year-on-year in July, slowing from June's 7.0% growth.
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EU finance ministers will on Friday scrutinize different measures taken by the bloc's member states to reduce skyrocketing electricity prices and tackle record inflation. The meeting in Prague comes a day after the European Central Bank's decision to raise the key interest rate by 75 basis points to 1.25%, after inflation hit 9.1% in the euro area in August 2022. Energy ministers will meanwhile meet in Brussels to discuss a revenue cap for electricity companies profiting disproportionately from rising costs. The European Commission on Wednesday presented proposals for EU countries to start skimming off excess revenues to make money available to households and businesses in need as well as expanding domestic power generation.
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Ukraine's armed forces said they have liberated more than 20 localities in Kharkiv from Russian occupation since the start of the week, as Kiev's counter-offensive shows signs of success. "At this point, our soldiers have penetrated up to 50 kilometres deep into the enemy's defence lines," general staff representative Olexiy Hromov told the press on Thursday. He said "purges from the enemy" were continuing in the liberated areas, although his statements could not be independently verified.
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The Federal Reserve must continue to act "strongly" to cool demand and contain price pressures to avoid a repeat of the inflation surge the US economy suffered in the 1970s and 1980s, Fed Chair Jerome Powell said. With soaring prices in recent months pushing US annual inflation to the fastest in four decades, Powell's Fed has raised the benchmark lending rate four times this year, with a third massive, three-quarter point hike possible later this month. His predecessor from that era, Paul Volcker, had to take extreme measures because high inflation had become entrenched, resurging and surpassing the peak of the mid-1970s after repeated failed efforts to tame the price increases. "We need to act now forthrightly, strongly as we have been doing and we need to keep at it until the job is done to avoid...the kind of very high social costs" of the Volcker era, Powell said.
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Donald Trump's former advisor Steve Bannon was charged with fraud Thursday over a scheme that misappropriated millions of dollars donated for the construction of a wall between the US and Mexico. Bannon, 68, a far-right ideologue who was closely involved in Trump's rise to the American presidency, turned himself in earlier in the day to face the charges in New York. Standing outside the Manhattan prosecutor's office, he accused the judiciary of "persecuting" him.
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By Tom Waite; thomaslwaite@alliancenews.com
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