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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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HSBC posted a first-half earnings slump and said its expected credit loss for 2020 could reach USD13 billion. In the six months to June 30, HSBC said revenue fell 8.8% year-on-year to USD26.75 billion from USD29.37 billion. Pretax profit dropped 65% to USD4.32 billion from USD12.41 billion a year ago. The profit figure missed the consensus estimate of USD5.69 billion that HSBC had compiled from analysts. During the half, HSBC booked USD6.86 billion in expected credit losses and other impairment charges, up sharply from USD1.14 billion a year ago. The Asia-focused bank put the brakes on a wide-ranging redundancy programme as the coronavirus took hold. However, plans to cut around 35,000 jobs worldwide now will be accelerated.
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GlaxoSmithKline said it is in advanced discussions with the European Union to supply up to 300 million doses of a Covid-19 vaccine. The FTSE 100-listed pharmaceutical company said the vaccine candidate developed alongside French partner Sanofi is based on the recombinant protein-based technology used by Sanofi to produce an influenza vaccine, and its own adjuvant technology. Glaxo said the doses would be manufactured in European countries including France, Belgium, Germany and Italy. It noted that the discussions mark a key milestone in protecting and serving the European population against Covid-19.
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National Grid said it has filed a request with the New York Public Service Commission to update electric and gas distribution rates for Niagara Mohawk. Niagara Mohawk is the power transmission and distribution company's upstate New York distribution business which serves 2.2 million customers and is almost 30% of the UK company's US rate base. The new rates of the one-year filing are expected to become effective in July next year. Niagara Mohawk also filed two additional years of data in order to create the opportunity for a multi-year settlement. The company is asking the New York state regulator to approve a 9.5% return on equity, with a USD353 million cumulative revenue increase from electric supply over three years and a USD136 million increase from gas supply.
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Microsoft announced it will continue talks to acquire the US operations of popular video-sharing app TikTok, after meeting with President Donald Trump who seemingly backed off his earlier threats to ban the Chinese-owned platform. The statement from Microsoft came after Trump on Friday said he would ban the app, which is especially popular with young audiences who create and watch its short-form videos and has an estimated one billion users worldwide. Trump said he would use an executive order to ban TikTok, or the International Emergency Economic Powers Act, a law granting the president powers to regulate international trade in the face of an "unusual and extraordinary threat" from abroad to US foreign policy, national security or the economy.
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MARKETS
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London shares were mixed with HSBC weighing on the FTSE 100, down 5.5%. Gold hit a fresh record high overnight, but gave back ground to trade lower. US futures were pointed to a mixed open amid a lack of substantial progress by US lawmakers on a new stimulus package. Microsoft shares are set to be in focus after confirming it was in talks to buy the US operations of TikTok from Chinese technology company ByteDance. The software maker was up 1.9% in pre-market activity.
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FTSE 100: flat at 5,898.00
FTSE 250: down 0.1% at 16,914.51
AIM ALL-SHARE: up 0.2% at 887.03
GBP: down at USD1.3040 (USD1.3125)
EUR: down at USD1.1745 (USD1.1820)
GOLD: soft at USD1,971.98 per ounce (USD1,973.70)
OIL (Brent): up at USD43.15 a barrel (USD42.94)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK manufacturing activity grew at its fastest pace in almost three years in July as factories reopened as coronavirus lockdown measures eased, IHS Markit said. The seasonally adjusted IHS Markit/CIPS purchasing managers' index rose to a 16-month high of 53.3 in July, up from 50.1 in June. Markit highlighted the manufacturing PMI posted above the neutral 50.0 mark separating improvement from deterioration in each of the past two months. According to Markit, manufacturers linked the expansion to a further loosening of the lockdown conditions in place due to the coronavirus pandemic. This, Markit said, allowed manufacturers to restart, or raise, production in response to clients reopening.
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The eurozone recorded its first month of manufacturing growth in a year-and-a-half during July, according to IHS Markit. IHS Markit's eurozone manufacturing purchasing managers' index climbed to 51.8 in July, beating the flash estimate of 51.1 and the 47.4 registered in June. IHS Markit noted a 27-month PMI high for Spain, a 25-month high for Italy, and France booked its best showing for 22 months. Both Germany and Austria climbed to 19-month highs. The only laggards were Greece and the Netherlands.
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Conditions in China's manufacturing industry improved at the quickest pace in nearly 10 years and notched up a third successive month of growth as the country's economy continues to bounce back from the Covid-19 crisis. Caixin's purchasing managers' index improved to 52.8 in July, from 51.2 in June. "Operating conditions have now improved in each of the past three months, with the latest upturn the strongest since January 2011," IHS Markit said. "Output expanded for the fifth month in a row, and at the fastest rate for nine-and-a-half years, with many companies citing greater client demand amid a further recovery in market conditions the Covid-19 outbreak.
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Plans for a radical shake-up of a "complex and outdated planning system" in the UK are due to be announced this week, in a bid to speed up the building of new homes, PA reports. UK Housing Secretary Robert Jenrick has proposed a complete overhaul of a system that has been in place since just after the Second World War, and one he said has failed to keep up with the needs of the country. Part of the new process will involve quicker development on land which has been designated "for renewal", with a "permission in principle" approach that the Ministry of Housing, Communities & Local Government said will balance the need for proper checks with a speedier way of working. The other two categories will see land designated for growth where new homes, hospitals and schools will be allowed automatically to empower development, while areas of outstanding natural beauty and the green belt will come under the protection category. The new process will be done through democratic local agreement, be clearer and cut out red tape, the government said.
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