(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Credit Suisse moved to reassure its staff in the face of market turmoil and a stock price slide, Bloomberg reported late Friday. In a memo, Chief Executive Officer Ulrich Koerner told staff that the Swiss bank has a "strong capital base and liquidity position". Koerner told staff not to confuse its recent share price slide with a sign that the bank's day-to-day performance is weakening. Credit Suisse shares have slumped around 55% so far this year, including a more than 20% slide over the past month. Last week Monday, it said a strategic review is "well on track", with more details to be announced upon release of third-quarter results on October 27.
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RWE has acquired Consolidated Edison's green energy unit for USD6.8 billion. The deal boosts RWE's US offering, where it has already earmarked EUR15 billion worth of investments. The deal will be partly funded through an issue of a USD2.43 billion convertible bond to the Qatar Investment Authority. QIA will take a 9.1% stake in RWE.
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New vehicle deliveries by Tesla increased in the third quarter, beating the previous three months during which its Chinese factory was shuttered for multiple weeks. Between July and September, Tesla delivered a total of 343,380 vehicles around the world, the company led by Elon Musk said in a statement. That represents an increase of 43% over the same period last year, and 35% more than the second quarter of 2022. While the third-quarter results show a return to growth for Tesla deliveries, the total number was at the very bottom end of analyst estimates, which were between 343,000 and 370,000.
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According to Italian utility Eni, Russia has stopped gas deliveries to the Mediterranean country for the time being. Russian company Gazprom informed Eni on Saturday that it can no longer deliver gas through Austria. Russian gas normally arrives and is distributed from the Italian-Austrian border town of Tarvisio. An Eni spokesperson told the Ansa news agency that Gazprom had said it could no longer deliver to Austria. However, according to information from Eni, Austria continues to receive Russian gas, the spokesman added.
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Endeavour Mining said that its operations in Burkina Faso have not been affected by recent political events. The miner, which has assets in Burkina Faso and Ivory Coast, said it will continue to monitor the situation in Burkina Faso, west Africa. The country's military leader Paul-Henri Damiba was ousted in a coup on Friday and "religious and community" leaders said that he has formally agreed to step down. This is the second coup this year, in both cases, the country's security situation and failure to deal with Islamist insurgency were blamed.
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MARKETS
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Equities had a difficult start to the week with investors still tetchy amid rate hike and inflation fears. Concerns about the future of Credit Suisse did little to calm investor anxiety. The stock was down 8.6% in Zurich.
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CAC 40: down 1.3% at 5,686.46
DAX 40: down 1.2% at 11,966.40
FTSE 100: down 1.4% at 6,798.98
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Hang Seng: closed down 0.8% at 17,079.51
Nikkei 225: closed up 1.1% at 26,215.79
S&P/ASX 200: closed down 0.3% at 6,456.90
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DJIA: called up 0.2%
S&P 500: called down 0.1%
Nasdaq Composite: called down 0.5%
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EUR: flat at USD0.9796 (USD0.9796)
GBP: higher at USD1.1198 (USD1.1149)
USD: higher at JPY145.09 (JPY144.68)
GOLD: lower at USD1,662.66 per ounce (USD1,672.50)
OIL (Brent): higher at USD88.75 a barrel (USD86.35)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The eurozone's manufacturing sector fell deeper into negative territory in September, suffering its worst performance in over two years. The latest S&P Global eurozone manufacturing purchasing managers' index fell to 48.4 points in September, from 49.6 in August. The PMI slid further below the 50.0 no change mark, suggesting a contraction quickened. It was the lowest PMI score since May 2020, during the initial wave of Covid-19 lockdowns. Inflationary pressures gathered steam, due to rising energy costs. Price pressures from material shortages faded, however.
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Germany's manufacturing sector fell deeper into contraction in September. The manufacturing PMI sank further below the 50.0 no-change mark. It reached a 27-month low of 47.8 points in September. In August, the PMI was 49.1. A faster fall in new orders was the driving factor behind the decline, as customers postponed or cancelled orders due to rising prices and a worsening economic outlook.
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The French manufacturing sector in September fell at the sharpest pace since May 2020. The manufacturing PMI fell to 47.7 points, from 50.6 in August. This was slightly below an earlier flash estimate of 47.8. "Production fell at a rate which has only been exceeded during crisis periods. New orders also fell at a rapid pace, reflecting the hesitancy among clients to purchase goods at expensive prices," said Joe Hayes, senior economist at S&P Global Market Intelligence.
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The downturn in the UK's manufacturing sector persisted in September. The PMI for September was 48.4 points, rising from 47.3 in August. It came in slightly below a previous flash estimate of 48.5 points. Contractions were seen across the consumer, intermediate and investment goods industries, with the steepest decline seen in intermediate goods producers.
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UK Prime Minister Liz Truss and Chancellor Kwasi Kwarteng have abandoned a plan to abolish the top rate of income tax for the highest earners in an astonishing U-turn. The chancellor acknowledged that their desire to axe the 45% rate on earnings over GBP150,000 in a move to be paid for by borrowing had become a "distraction" amid widespread criticism. He issued a statement, hours before he had been due to defend the plans at the Conservative Party conference, saying: "We are not proceeding with the abolition of the 45p tax rate."
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Japan's manufacturing sector remained in growth territory last month, but output and new order wins weakened. The latest au Jibun Bank Japan manufacturing purchasing managers' index faded to 50.8 points in September, from 51.5 in August. Though still above the 50.0 no change mark, the figure suggests growth as slowed. "The Japanese manufacturing sector came under further pressures in September as downturns in output and new orders accelerated," S&P Global said.
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Business confidence fell among Japan's largest manufacturers for the third straight quarter, a closely-watched survey showed, defying analyst expectations for a rise in sentiment. The Bank of Japan's Tankan survey shows major manufacturers are still much more upbeat than during the gloomiest days of the Covid-19 pandemic. But inflation, including higher energy prices fuelled by the war in Ukraine, has weighed on business confidence this year, analysts say. The quarterly survey, considered to be the broadest indicator of how Japanese businesses are faring, showed confidence among large manufacturers at plus eight, down slightly from the previous reading of plus nine.
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Brazil's bitterly divisive presidential election is headed for a runoff on October 30 as incumbent Jair Bolsonaro beat expectations to finish a closer-than-expected second to front-runner Luiz Inacio Lula da Silva. Lula, the veteran leftist seeking a presidential comeback, had 48.4% of the vote to 43.2% for the far-right president with more than 99% of polling station results in, according to the Superior Electoral Tribunal. It was an unexpectedly strong result for combative ex-army captain Bolsonaro – and for Brazil's far-right, which also had surprise good showings in a series of key Congressional and governors' races.
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Oil prices jumped more than four percent in Asian trade Monday as reports said OPEC and other top producers considered slashing output. Bloomberg added that the move – which it said delegates to OPEC had not finalised – would be the biggest since the pandemic began, when crude prices collapsed. Such a move "will be enough to put a floor under prices", Phil Flynn, at Price Futures Group, said. The jump in prices comes after both main contracts suffered hefty losses in recent months on demand fears caused by an expected recession in major economies, while a strong dollar and China's economic woes have also weighed on the commodity.
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By Eric Cunha; ericcunha@alliancenews.com
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