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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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Toyota aims to sell 3.5 million electric vehicles per year from the next decade, Chief Executive Akio Toyoda said, nearly doubling the Japanese auto giant's existing target as part of efforts to drive down carbon emissions. The world's top-selling carmaker also plans to roll out 30 battery-powered electric models by 2030, Toyoda told reporters in Tokyo. Toyota has faced pressure from environmental groups to do more to phase out engines that burn planet-warming fossil fuels in favour of electric vehicles. It had previously set a yearly sales target of 2 million EVs and fuel cell vehicles by 2030.
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Billionaire telecom tycoon Patrick Drahi lifted his stake in BT to 18% from 12% but confirmed he has no plans to make a takeover offer. Drahi's Altice UK Sarl bought a further 585.5 million BT shares on Monday, according to a stock exchange filing, raising its holding to 1.8 million shares, an 18.0% stake, up from 12.1%. Altice said it "restated its position to the board" of BT that it doesn't intend to make an offer and will be bound by that statement under UK takeover rules, meaning it cannot make a bid for the next six months, expect under defined exceptions. Altice announced its initial 12% stake in BT back in June. Drahi said on Tuesday he holds BT's management in "high regard". He added that he supports BT's strategy of rolling out full-fibre broadband in the UK.
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Rentokil Initial said it has struck a cash and shares deal to buy pest control peer Terminix Global Holdings, bolstering the UK company's presence in North America. The deal values Terminix at USD6.7 billion. Crawley, England-based Rentokil will issue Terminix shareholders 643.3 million new shares, worth about GBP3.86 billion, and pay USD1.3 billion in cash. The deal implies a value of USD55.00 per Terminix share, a 47% premium to its share price on Monday. Shareholders in Memphis-based Terminix will own 26% of the enlarged company.
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Ocado is looking forward to a busy festive period, with the grocer also boosted by a legal victory. A US International Trade Commission patent case verdict, delivered on Monday, "has found in favour of Ocado", the company said. The dispute was with Norwegian firm Autostore. In October of last year, Autostore had said it sued and already filed complaints in the US and the UK. Autostore accused Ocado's Smart Platform of infringing Autostore's patented technology. Ocado Smart Platform is a storage and picking system used in fulfilment centres. Autostore's system is also used in warehouses. A judge found that three of four Autostore patents are invalid, while a fourth has not been infringed. Ocado said its continues to pursue its own claims against AutoStore for infringement of Ocado's patents. On the trading front, Ocado Retail, its joint venture with Marks & Spencer, is set for its "best-ever Christmas ahead". In the fourth quarter ended November 28, retail revenue fell 3.9% annually to GBP547.8 million, though this was up 32% from 2019. Typical shopping baskets are getting smaller. While average orders per week increased 9% annually, order value fell 12%. Ocado expects the M&S partnership's annual performance to be in line with guidance. For financial 2022, it expects revenue growth at the top of the pre-virus range of 10% to 15%.
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National Express and Stagecoach have agreed to an all-share merger that will see the UK's two largest transport providers combine operations. The public transport peers will form a combined group with a fleet of around 40,000 vehicles and a workforce of approximately 70,000 staff. Following completion of the merger, Stagecoach shareholders will own about 25% and National Express shareholders will own around 75% of the combined group. The deal will see Stagecoach shareholders receive 0.36 of new National Express shares for each Stagecoach share they hold. Ignacio Garat and Chris Davies, chief executive and chief financial officer respectively of National Express, will take on those roles for the combined group. Stagecoach Chair Ray O'Toole has been named as chair of the combined group.
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Woodside Petroleum has hired BHP's Graham Tiver as chief financial officer. Tiver joins the Perth-based petroleum exploration and production company from BHP, where he held the role of group financial controller with responsibility for the Melbourne-based miner's global accounting and reporting function and financial improvement. BHP is in the process of merging its petroleum business with Woodside. The all-stock deal will see Woodside shareholders take 52% of the new company and BHP shareholders 48%. Completion is targeted for the second quarter of 2022.
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State-owned China Mobile has received approval to list publicly in Shanghai, documents showed, nearly a year after it was delisted in the US along with two other Chinese telecom giants as tensions between Beijing and Washington soared. China Mobile plans to issue up to 845.7 million shares, according to a prospectus released on the Shanghai stock exchange website on Tuesday, in a move that could raise around USD5 billion based on the last closing price of its Hong Kong-listed shares. The firm was delisted in the US along with China Telecom and China Unicom in January following an executive order by former president Donald Trump. The order banned Americans from investing in a range of companies deemed to be supplying or supporting China's military and security apparatus.
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MARKETS
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Equities and currencies were trading in narrow ranges on Tuesday, amid cautious trading ahead of a US Federal Reserve policy decision on Wednesday, followed by the Bank of England and European Central Bank on Thursday. Kit Juckes of Societe Generale summarised the reason for the indecision: "The market is worried that the Fed will tighten too much, but also that inflation rises, or stays too high for too long. Nothing else is nearly as worrying." Among companies in the news on Tuesday, Toyota closed up 2.2% in Tokyo on Tuesday, while BT was down 6.2% in London.
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CAC 40: marginally higher, up 2.57 points at 6,945.48
DAX 40: marginally lower, down 5.31 points at 15,616.41
FTSE 100: up 0.4% at 7,262.44
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Hang Seng: closed down 1.3% at 23,635.95
Nikkei 225: closed down 0.7% at 28,432.64
S&P/ASX 200: closed down marginally at 7,378.40
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DJIA: called down 0.1%
S&P 500: called down 0.3%
Nasdaq Composite: called down 0.6%
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EUR: up at USD1.1312 (USD1.1283)
GBP: flat at USD1.3232 (USD1.3230)
USD: flat at JPY113.55 (JPY113.50)
Gold: down at USD1,784.88 per ounce (USD1,788.71)
Oil (Brent): down at USD74.22 a barrel (USD75.05)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The growth of the German economy is set to be slower than expected next year due to disrupted supply chains and a new wave of Covid-19 infections, a leading economic think-tank said. The Ifo institute downgraded its forecast for growth in Europe's biggest economy in 2022 to 3.7% from an earlier estimate of 5.1%. "Ongoing supply bottlenecks and the fourth wave of the coronavirus are noticeably slowing down the German economy, said Timo Wollmershaeuser, Ifo's head of forecasts. Disruption caused to supply chains by the pandemic has led to material shortages in everything from wood to semiconductors.
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Industrial production in the eurozone rose in October on an annual and monthly basis, with capital goods leading the charge, figures from Eurostat showed. Industrial production rose by 1.1% in the euro area in October compared to September, and by 1.2% in the EU as a whole. In September, industrial production fell by 0.2% month-on-month in the euro area and by 0.5% in the EU. On an annual basis, industrial production increased by 3.3% in the euro area and by 3.6% in the EU.
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The UK unemployment rate edged lower in October, moving closer to pre-virus levels. Figures from the Office for National Statistics showed the UK unemployment rate was reduced to 4.2% in the three months to October, having sat at 4.3% in September. The October figure came in line with market consensus cited by FXStreet. The UK jobless rate is now just 0.2 percentage point higher than it was before the pandemic. October's labour force survey came shortly after the end of the UK's furlough scheme on September 30, the ONS explained. Over the same three-month period to October, annual growth in average total pay - which includes bonuses - was 4.9%, while regular pay, which strips out bonuses, was 4.3%.
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UK Prime Minister Boris Johnson is facing the biggest rebellion of his premiership, with dozens of Tory MPs set to vote against the latest Covid restrictions. More than 70 backbenchers are threatening to defy the whips and oppose the government's Plan B for England, introduced in the face of the fast-spreading Omicron variant. It is reported that up to 10 ministerial aides could resign to oppose the controls, with up to four votes on the measures expected to take place on Tuesday evening. The measures – including Covid passes for entry into nightclubs and other venues – are expected to pass the Commons with the support of Labour, who back tighter controls.
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China's economically important Zhejiang province wrestled on Tuesday with a Covid outbreak that has left half a million people quarantined and some districts under business shutdown. Zhejiang, a major industrial and export hub on the country's east coast, reported 44 of China's 51 domestically transmitted coronavirus cases on Tuesday, bringing the total since late last week to nearly 200. Although Chinese case counts are miniscule compared to other major economies, officials in Zhejiang have employed the country's signature mass testing blitz and targeted lockdowns with concern high over fresh outbreaks as Beijing gears up to host the Winter Olympics in February. More than 540,000 people have been put in quarantine in Zhejiang, officials have said.
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Japan's industrial production rose in October, showing the first increase since July, thanks to a strong month for shipments, data from the Ministry of Economy, Trade & Industry showed. On a monthly basis, industrial production increased 1.8% in October, driven by 2.4% growth in shipments. This compares to a flash reading of 1.1% growth and follows a 5.4% decline in September. It was the first growth in industrial production since June and was credited to an easing of supply constraints for automakers and other export-reliant industries. On a yearly basis, industrial output still was down 4.1% after a 2.3% fall in September, making it the second straight month of annual decline.
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The Asian Development Bank downgraded its economic growth outlook for Asia and the Pacific, citing new outbreaks of the coronavirus disease that led to slower growth in the third quarter. Growth in developing Asia was now forecast to grow 7% this year and 5.3% in 2022, down from its September projection of 7.1% in 2021 and 5.4% next year, the Manila-based ADB said. East Asia's outlook was downgraded by 0.1 percentage point for both 2021 and 2022 to 7% and 5%, respectively, as the bank also lowered its forecast for China's growth. The region's largest economy is now expected to grow 8% this year and 5.3% next year, from the previous projection of 8.1% and 5.5%, respectively.
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US Secretary of State Antony Blinken urged China to cease "aggressive actions" in the Indo-Pacific, speaking during a visit to the region, as Washington seeks to bolster alliances against Beijing. President Joe Biden's administration is trying to reset relations and reassert its influence in Asia after the turbulence and unpredictability of the Donald Trump era. Blinken's comments came in Indonesia, the first leg of a Southeast Asian tour, the latest visit to the region by a senior US official in recent months. In a speech outlining the US approach to the Indo-Pacific, Blinken said Washington would work with allies and partners to "defend the rules-based order" and countries should have the right to "choose their own path".
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The US is preparing "alternatives" with allies in case talks on reviving a deal to curb Iran's nuclear ambitions fail, Blinken also said. "We continue in this hour, on this day, to pursue diplomacy because it remains at this moment the best option, but we are actively engaging with allies and partners on alternatives," he said during his visit to Indonesia.
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By Tom Waite; thomaslwaite@alliancenews.com
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