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(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Barclays said Jes Staley has agreed to leave as chief executive following a probe by UK regulators into his description of his relationship with Jeffery Epstein. The London-based bank said Staley is stepping down as CEO in order to contest probes into his description of his relationship with the disgraced late financier, Jeffery Epstein. In light of the UK Financial Conduct Authority and Prudential Regulation Authority's conclusions, and Staley's intention to contest them, he has agreed to part ways with the lender, Barclays said. The bank said it and Staley were made aware of the preliminary conclusions from the FCA and PRA on Friday evening. Barclays said it was "disappointed" with the outcome, saying Staley has run the company "with real commitment and skill" since 2015. Epstein, a convicted sex offender, died by suicide while awaiting trial on trafficking charges. Staley's successor will be CS Venkatakrishnan, known as Venkat, effective from Monday. Barclays said it has had succession planning in hand "for some time" and identified Venkat, head of Global Markets and co-president of Barclays Bank, as its preferred candidate over a year ago.
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Westpac Banking posted an annual profit increase and unveiled plans for a buyback worth AUD3.5 billion, around USD2.63 billion. Net operating income for the year ended September 30 increased 5.1% to AUD21.22 billion from AUD20.18 billion. While pretax profit jumped 99% to AUD8.50 billion from AUD4.27 billion. Westpac reported a AUD590 million impairment reversal, after booking charges of AUD3.18 billion in the virus-hit prior year. Westpac's net interest margin suffered, however. There was a four basis point reduction in net interest margin to 2.04%. Westpac raised its annual payout to 118 cents, from 31 cents the year prior. In addition, it earmarked plans to return more cash to shareholders. It plans a buyback worth AUD3.5 billion.
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Saudi Arabian Oil's earnings more than doubled year-on-year in the third quarter on higher oil prices and volumes sold as the global economy recovered, it said on Sunday. Aramco's net income was USD30.4 billion in the third quarter, up from USD11.8 billion in Q3 last year, with free cash flow more than doubling to USD28.7 billion. Shareholders will receive USD18.8 billion in dividends. The profits are the biggest since Aramco listed on the Saudi stock exchange in December 2019, before suffering a 44% slump in 2020.
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Ryanair said it is "considering the merits" of its London Stock Exchange listing following Brexit. Ryanair said trading of its shares in London "has reduced materially during 2021", after the prohibition on non-EU citizens purchasing Ryanair's ordinary shares was extended to UK nationals following Brexit. Ryanair has a primary listing in the Euronext Dublin market and also has American depositary shares listed on the Nasdaq. Also on Monday, the carrier said its traffic surged in October. It carried 11.3 million passengers last month, up sharply from 4.1 million a year earlier. The load factor, meanwhile, improved to 84% from 73%. October's figure was also improved from 10.6 million in September. In addition, Ryanair posted a half-year revenue hike and a narrowed loss, as the budget airline benefited from a rebound in passenger numbers. Dublin-based Ryanair painted a cautious picture for the remainder of its financial year, however, deciding against annual guidance as it approaches a potentially difficult winter period.
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AstraZeneca said it has agreed to transfer its global rights to eklira and duaklir to Swiss pharmaceutical company Covis Pharma. Both medicines are delivered via the Genuair device and used for the treatment of patients with chronic obstructive pulmonary disease. Covis will pay Astra USD270 million on completion. Covis will also cover some ongoing development costs related to the medicines. In 2020, eklira and duaklir generated revenue of USD143 million.
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Land Securities said it has agreed to buy fellow UK property developer U&I in a deal worth GBP190 million. LandSec has offered 149 pence per U&I share, representing a 73% premium to Friday's closing price of 86p. U&I is a London-based mixed-use space regeneration and property specialist. The deal has been unanimously endorsed by U&I directors, LandSec said, and it has secured letters of intent to vote in favour of the acquisition from institutions that together hold about 39.8 million U+I shares, about a 32% stake.
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General Electric said it has secured a contract worth USD1.58 billion to supply engines to the US Air Force. The firm-fixed-price contract will see GE supply F110 engines for the Boeing Co F-15EX Eagle II and become the sole provider for the US Air Force's entire F-15EX fleet.
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Coca-Cola is preparing to take full control of the sports drink group BodyArmor in a deal worth USD5.6 billion, the Wall Street Journal reported Sunday. Coca-Cola already holds a 30% stake in the sports drink group. The buyout, which would value BodyArmor at about USD8 billion, would see the soda giant buy the remaining 70% from BodyArmor's founders and investors, as well as a group of professional athletes who have invested in the company. BodyArmor expects sales to reach USD1.4 billion this year, compared to USD250 billion in 2018 when Coca-Cola first invested in the company.
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MARKETS
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A big surge by the Tokyo market on Monday gave an opening lift to European equities. The Nikkei 225 index closed up 2.6% after the ruling Liberal Democratic Party was returned to power with a stronger-than-expected mandate from voters. London's FTSE 100 was underperforming, dragged by a 2.0% fall for Barclays, after the bank was "disappointed" to be forced to change leader to a pre-designated internal successor. Commented Russ Mould, investment director at AJ Bell: "This smooth transition seems to be limiting the damage to Barclays' share price as does Venkatakrishnan's CV. Like Staley, he has an investment banking background from his time at both JP Morgan Chase and Barclays, so this suggests there will be no major shift in strategy at the bank now."
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CAC 40: up 1.1% at 6,902.33
DAX 40: up 0.9% at 15,826.90
FTSE 100: up 0.6% at 7,278.99
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Hang Seng: closed down 0.9% at 25,154.32
Nikkei 225: closed up 2.6% at 29,647.08
S&P/ASX 200: closed up 0.6% at 7,370.80
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DJIA: called up 0.4%
S&P 500: called up 0.4%
Nasdaq Composite: called up 0.9%
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EUR: firm at USD1.1571 (USD1.1564)
GBP: down at USD1.3659 (USD1.3697)
USD: up at JPY114.25 (JPY114.02)
GOLD: up at USD1,788.03 per ounce (USD1,778.08)
OIL (Brent): up at USD84.52 a barrel (USD84.27)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Japan's Prime Minister Fumio Kishida declared victory after his ruling coalition won a strong majority in national elections, vowing to boost the virus-hit economy and "take a leading role" in Asia's push towards carbon neutrality. Kishida, a soft-spoken centrist who has been in office for a month, said he would set out plans for a pandemic spending package this month in a bid to revive the world's third-largest economy. Before heading to the COP26 summit, his first international engagement as prime minister, Kishida said he was committed to climate targets set by his predecessor Yoshihide Suga. The long-ruling Liberal Democratic Party and its junior coalition partner Komeito won 293 of the 465 seats in parliament's lower house, local media reported while the official result was finalised. The coalition had previously held 305 seats.
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Japan's manufacturing sector saw its quickest expansion in six months after benefiting from an easing of Covid-19 restrictions in October. The latest headline au Jibun Bank manufacturing purchasing managers' index increased to 53.2 points from 51.5 in September. October's number was further above the 50.0 neutral mark, suggesting growth quickened. It was the ninth successive improvement in the PMI and the strongest expansion since April. "Renewed rises in both production and new order inflows contributed to a stronger overall rise in conditions as restrictions related to Covid-19 were eased further," IHS Markit said.
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The Chinese manufacturing sector registered a slight expansion in October, though gains were capped by power shortages. October's figure was, however, the strongest expansion in the sector since June, IHS Markit said. The Caixin China general manufacturing PMI came in at 50.6 points in October, improving from September, when it sat at the 50.0 no change mark.
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Factory activity in China declined more than expected in October, official data had shown on Sunday. The official PMI fell to 49.2 points this month from 49.6 in September, said the National Bureau of Statistics. This marks the second straight month in which China's PMI dipped below the 50-point mark separating growth from contraction. Non-manufacturing activity fell in October also, official data showed, as authorities noted "the recovery of the service industry has slowed". China's official non-manufacturing PMI came in at 52.4, down from 53.2 in September.
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The UK manufacturing sector expanded at a faster rate in October, but growth was held back by supply chain issues, according to survey results released by IHS Markit. The IHS Markit/Chartered Institute of Procurement & Supply PMI for October was 57.8 points, up from 57.1 in September. The PMI moved further above the no-change line of 50.0 last month, indicating growth accelerated. The final reading also improved upon October's flash figure of 57.7. However, the headline index reading masked difficult conditions for the sector in October. "Although the PMI was boosted by improved growth of new orders and employment, alongside a steeper rise in stocks of purchases and lengthier vendor lead times, a further slowdown in output growth held back the headline index," said IHS Markit.
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Growth in the Irish manufacturing sector in October picked up pace for the first time in five months to signal its strongest improvement since August, survey data from IHS Markit showed. The headline AIB Ireland manufacturing PMI climbed to the fifth-highest on record at 62.1 points in October, from September's six-month low of 60.3. The PMI has now registered above 60.0 points for seven months running, having never previously passed that threshold, IHS Markit said. Manufacturing growth was achieved despite production remaining constrained by supply delays, with lead times lengthening the most in any month on record.
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Retail sales in Germany fell in September, disappointing consensus forecasts that had predicted growth for the month. According to Destatis, retail sales in Germany fell 2.5% monthly in September, significantly missing forecasts of a 0.6% climb. On an annual basis, retail sales fell 0.9%. Annual growth was expected to be 1.8%. Despite the disappointing month, retail turnover in real terms was still up by 3.7% in September on the pre-crisis month of February 2020.
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The US is back to leading the world on fighting climate change, and US President Joe Biden will use a UN summit in Glasgow to energize partners, US officials said. Special climate envoy John Kerry told reporters ahead of Biden's arrival on Monday at the COP26 summit that the aim is "to leave Glasgow having raised global ambition very significantly and to be more on track to keep a 1.5 degrees within reach". Biden is set on Monday to address COP26, which is tasked with trying to maintain a global bid to restrict average temperature rises to 1.5C, preventing what scientists say will be an ever more destructive climate crisis. He will also attend the summit on Tuesday before flying home.
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Biden and European Commission head Ursula von der Leyen on Sunday saluted what they called a "new era" in the transatlantic relationship with an agreement reached in Rome to lift steel and aluminium tariffs. US officials said the agreements would not only avert punishing tariffs put in place by former president Donald Trump but lead to "cleaner" steel, lower inflation and badly needed improvements in snarled global supply chains. "The US and the EU are ushering in a new era of transatlantic cooperation that's going to benefit all of our people, both now and I believe in the years to come," Biden said in a press conference with von der Leyen at the G20 summit. Washington and the EU reached the tariff-lifting agreement Saturday, resolving a conflict that had poisoned trade links between Washington and Brussels since they were declared by the Trump administration.
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Biden also said on Sunday he hopes Congress will vote on his huge investment plan as soon as this week. His "Build Back Better" framework "is God willing going to be voted on as early as sometime this coming week," Biden said at a press conference after the G20 summit in Rome. The president last week announced a "historic" blueprint for remaking America's economy, as he sought to pressure dissenters within his own Democratic Party to back the plan after months of tortuous negotiations. Biden is staking his legacy on the passage of the USD1.75 trillion Build Back Better social welfare package, a compact with the American people for a more equitable and greener society and the jewel in the crown of his domestic agenda. However, it remains to be seen whether his efforts will galvanise the party's feuding rank-and-file.
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UK Prime Minister Boris Johnson said he has seen no evidence to indicate a Christmas lockdown is "on the cards", as he once again insisted ministers are sticking with the current plan to tackle coronavirus. Johnson said that, despite high case numbers, there is no reason to activate the government's Covid Plan B. Speaking to reporters during his trip to the G20 summit in Rome, the prime minister said only the Labour Party wanted tighter restrictions at the present time. Asked if he could guarantee a good Christmas, he did not answer directly, saying: "I see no evidence whatever to think that any kind of lockdown is on the cards."
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Australia's international border reopened on Monday almost 600 days after a pandemic closure began, sparking emotional scenes at Sydney airport as loved ones reunited. Shortly after dawn, bleary-eyed passengers began to trickle into the arrivals terminal at Kingsford Smith International and were quickly wrapped up in the tearful embraces of flower-clutching relatives. On March 20 last year, Australia introduced some of the world's toughest border restrictions in response to the coronavirus pandemic. Almost all travel to the island continent halted, prompting critics to dub the country a "hermit state".
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French President Emmanuel Macron said Australia's prime minister outright lied to him over a cancelled submarine deal, deepening an already fraught diplomatic crisis. "I don't think. I know," Macron said when asked by Australian media if Scott Morrison was untruthful in their private dealings. Both leaders are attending the G20 in Rome and a major UN-backed climate summit in Glasgow, but the weeks-long spat continues to trail them. In September, Australia's leader without warning tore up a decade-old multi-billion-dollar contract with France to build a new fleet of submarines. At the same time, Morrison revealed he had been in secret talks to acquire US or British nuclear subs.
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By Tom Waite; thomaslwaite@alliancenews.com
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