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(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Credit Suisse warned of a sizeable first quarter loss and said two key members of its key team will depart the bank, in the wake of a US-based hedge fund defaulting on a margin call and the collapse of supply chain finance firm Greensill Capital. Brian Chin, the chief executive of CS's investment banking arm, will depart on April 30. Chief Risk & Compliance Officer Lara Warner stepped down from the Credit Suisse executive board effective Tuesday. What's more, Credit Suisse said two investigations will be carried out by "external parties". One probe will be centred on the hedge fund matter and another on its supply chain finance funds.
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Oil major BP said it hit its USD35 billion net debt target during the first quarter of 2021, due to the early delivery of disposal proceeds and a positive operating performance, paving the way for share buybacks. BP had previously guided that it would get its debt down to USD35 billion by the end of 2021. The oil major said during the first quarter it received around USD4.7 billion of disposal proceeds, the largest being USD2.4 billion from the sale of its 20% interest in Oman's Block 61. BP now expects disposal proceeds in 2021 to be at the top end of the previously announced USD4 billion to USD6 billion range. BP also reported a strong business performance during the first quarter, driven by "trading, the price environment and resilient operations".
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A top official in the European Medicines Agency said in an interview published Tuesday that there is a link between the AstraZeneca coronavirus vaccine and blood clots. EMA head of vaccines Marco Cavaleri told Italy's Il Messaggero newspaper that "in my opinion, we can say it now, it is clear there is a link with the vaccine", although it was not clear what caused such a reaction. He implied the link would be confirmed by the agency in the coming hours.
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Cybersecurity startup Darktrace is planning an initial public offering in London, Sky News reported. The Cambridge-based company may announce the IPO this week, and shares could begin conditional trading by around the end of the month. Darktrace's advisors are planning a more conservative approach to pricing after Deliveroo plunged on its first day of trading last Wednesday. The company is expected to be valued at around GBP3 billion, rather than the GBP5 billion mooted in recent months, according to Sky. The IPO will probably involve the sale of about GBP250 million of new and existing shares. Unlike Deliveroo, Darktrace will not have a dual-class share structure.
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The US Supreme Court handed Google a major win in a long-running copyright battle with Oracle, ruling that the use of the Java programming language for the Android mobile operating system was "fair use". The 6-2 ruling had been closely watched as a key test of copyright in the digital era, and allows Google, part of Alphabet, to avoid paying out billions to its technology rival. Justice Stephen Breyer wrote in the 39-page majority opinion that even if Google used copyrightable material, "the copying here at issue nonetheless constituted a fair use. Hence, Google's copying did not violate the copyright law." The case revolved around whether copyright protection should be extended to application software interfaces, the bits of code that allow programs and apps to work together, and if so, whether Google's implementation was a "fair use" of Oracle's copyrighted material.
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Japan's SoftBank will buy a 40% stake in Norwegian robotics company AutoStore in a deal worth USD2.8 billion, the two firms said. The deal is the latest bet by SoftBank, which has spent heavily on some of the tech world's hottest start-ups and biggest names, ranging from artificial intelligence to biotech companies. The deal values AutoStore, which develops warehouse automation technology, at USD7.7 billion, according to a statement released by the pair on Monday. Known for its cuboid systems that reduce the space needed to store goods, AutoStore says it has deployed 20,000 robots across 35 countries and that its clients include Puma and Siemens. "We view AutoStore as a foundational technology that enables rapid and cost-effective logistics for companies around the globe," said SoftBank Founder Masayoshi Son.
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MARKETS
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European stock markets were higher on Monday, as they caught up with Wall Street after the long holiday weekend. However, New York was pointed to a slightly lower open after rising to new records on Monday following strong US economic data. Credit Suisse shares were up 1.4% in Zurich on Tuesday, while BP shares were up 3.3% in London.
"The rest of the week could see markets struggle for direction with relatively few big corporate announcements on the horizon," commented AJ Bell financial analyst Danni Hewson. "Given investors' current understandable obsession with what will happen next on inflation and interest rates, tomorrow's release of minutes from the latest meeting of the US Federal Reserve is likely to be closely followed to get a sense of the central bank's current thinking on monetary policy."
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CAC 40: up 0.6% at 6,140.09
DAX 30: up 1.0% at 15,258.31
FTSE 100: up 1.2% at 6,814.99
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Hang Seng: Hong Kong market shut for Easter holiday.
Nikkei 225: closed down 1.3% at 29,696.63
S&P/ASX 200: closed up 0.8% at 6,885.90
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DJIA: called down 0.2%
S&P 500: called down 0.2%
Nasdaq Composite: called down 0.2%
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EUR: up at USD1.1812 ((USD1.1765)
GBP: flat at USD1.3834 (USD1.3830)
USD: down at JPY110.48 (JPY110.60)
GOLD: up at USD1,730.25 per ounce (USD1,728.70)
OIL (Brent): down at USD63.54 a barrel (USD63.63)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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China's services sector posted stronger growth in March, with hiring also picking up and optimism surging to its highest level in over 10 years. The Caixin headline seasonally adjusted business activity index posted 54.3 points in March, improved from 51.5 in February. It was further above the 50.0 no change mark, suggesting growth quickened in March. "Furthermore, the rate of growth was the steepest seen for three months and slightly quicker than the series average," IHS Markit said. The composite PMI, a weighted average of both the services and manufacturing prints, climbed to 53.1 in March, from 51.7 in February.
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The eurozone's latest unemployment figures disappointed, painting a pessimistic picture of the health of the single currency area's jobs market. The eurozone's unemployment rate was unchanged monthly at 8.3% in February. However, according to consensus cited by FXStreet, the figure was expected to fall to 8.1%. Eurostat figures showed the number of those out of work rose by 48,000 to 13.57 million in the eurozone. Compared with a year ago, the number of those out of jobs is 1.51 million higher.
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UK Prime Minister Boris Johnson said he plans to stick "like glue" to his plan for easing restrictions despite scientific advisers warning it could create a wave of Covid infections akin to that seen during spring last year. Johnson confirmed shops, hairdressers and pub beer gardens will reopen from April 12 in England and urged the public against complacency when it came to obeying the rules. Johnson, setting out the move to the second step of the road map on Monday, said the shift was "fully justified by the data" and that he had seen "nothing" to make him think he would have to "deviate" from his intention to scrap all restrictions by June 21 at the earliest. His comments come despite modelling from the Scientific Advisory Group for Emergencies showing that, while stage two of the unlocking is unlikely to exert pressure on the NHS, the proposed changes for May and June when social mixing is set to be permitted again could cause hospital admissions to rise to levels seen during January's winter peak.
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The Reserve Bank of Australia left interest rates and its quantitative easing target changed and added that it is prepared to stay "highly supportive" should the economy need a helping hand. RBA left interest rates at 0.1%, as expected. "The rollout of vaccines is supporting the recovery of the global economy, although the recovery is uneven. While there are still considerable uncertainties regarding the outlook, the central case has improved. Global trade has picked up and commodity prices are mostly higher than at the start of the year. Inflation remains low and below central bank targets," RBA added.
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The US is pushing in the G20 to adopt a global minimum corporate tax to stem the erosion of government revenues, US Treasury Secretary Janet Yellen said. Just days after President Joe Biden announced plans to raise corporate taxes to finance a massive USD2 trillion infrastructure and jobs program, Yellen said a collective international effort would end the "race to the bottom" on taxation. Biden's plan would raise the US corporate tax rate to 28% and the minimum for multinationals to 21%. Yellen said the practice of seeking tax havens erodes government revenues and undermines an economy's competitiveness. "Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations," she said in a speech to The Chicago Council on Global Affairs.
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By Tom Waite; thomaslwaite@alliancenews.com
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