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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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Saudi Arabian Oil Co said income grew by almost a third in the first quarter of 2021. Aramco, based in Dhahran, said net income was USD21.7 billion for the first quarter of 2021, a 30% increase from USD16.7 billion a year prior, primarily driven by a stronger oil market and higher refining and chemicals margins, partly offset by lower production. Saudi Aramco reported average total hydrocarbon production of 11.5 million barrels per day of oil equivalent in the first quarter of 2021, including 8.6 million barrels per day of crude oil. Cash flow from operating activities and free cash flow was USD26.5 billion and UDS18.3 billion, respectively, in the first quarter, while first quarter capital expenditure stood at USD8.2 billion. The company declared a dividend of USD18.8 billion for the first quarter, to be paid in the second quarter of 2021, broadly unchanged year-on-year. "The momentum provided by the global economic recovery has strengthened energy markets, and Aramco's operational flexibility, financial agility and the resilience of our employees have contributed to a strong first quarter performance," said Chief Executive & President Amin Nasser.
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Berkshire Hathaway plans to name Greg Abel as chief executive when the conglomerate's longtime chief, Warren Buffett, eventually exits, CNBC reported Monday. Buffett, 90, confirmed the plan to the business network after Berkshire's annual meeting over the weekend. "The directors are in agreement that if something were to happen to me tonight, it would be Greg who'd take over tomorrow morning," Buffett told CNBC. Abel, 59, is vice chairman of Berkshire's non-insurance operations.
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Online trading platform eBay is open to cryptocurrency payment options, chief executive Jamie Iannone said Monday. In an interview with CNBC, Iannone noted that eBay has already expanded its range of payments and is now accepting Apple or Google Pay, for example, and said the company will continue to look into other alternatives such as cryptocurrency. The company's stock reacted with significant gains in late US trading. It is not the company's first flirtation with cryptocurrencies. In 2013, former eBay boss John Donahoe said he was open to Bitcoin as a means of payment. However, the plans fizzled out, and just under two years later Donahoe left eBay. At the time, PayPal also belonged to the group, but the online payment service was split off in 2015. Cryptocurrencies are now recognized by PayPal.
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Martin Sorrell's S4 Capital said the strong rebound in global economic growth in 2021 and 2022 will drive 20% per annum growth in digital advertising, as the pandemic accelerates digital transformation. The advertising firm also said it delivered a strong first-quarter performance. For the first quarter to March 31, revenue rose 71% to GBP122 million from GBP71 million in the first quarter of 2020. Gross profit also increased 71% to GBP104 million from GBP60.7 million a year ago. S4 Capital raised its like-for-like gross profit growth target to 30% from 25% previously. In addition, S4 Capital announced a the acquisition of Brazil-based Raccoon Group, which will be combined with S4's MightyHive in a move to expand the capabilities of its data and digital media practice in Latin America.
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Infineon Technologies reported double-digit revenue growth in the second quarter of its current financial year. The Neubiberg, Germany-based semiconductor manufacturer said revenue rose to EUR2.70 billion in the three months to the end of March, compared to EUR1.99 billion a year ago, a 36% increase. Quarter-on-quarter, revenue improved by 3%, Infineon said, driven by brisk demand, particularly in the Automotive segment and to a lesser extent in the Power & Sensor Systems segment, whereas revenue generated in the Industrial Power Control and Connected Secure Systems segments declined slightly.
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HelloFresh said it had a strong start to 2021 as it gathered more new customers than ever in the first quarter. The Berlin-based meal kit company reported active customers across both operating segments - the US segment and the International segment - reaching 7.3 million in the first three months of 2021 compared to 4.2 million a year earlier. As a result, HelloFresh said revenue reached EUR1.44 billion, doubling from EUR699.1 million a year ago. The robust performance was mainly driven by strong customer growth and supported by continued high order rates and order values.
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MARKETS
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European markets were mixed, after a mostly positive Asian trading session, though with both Tokyo and Shanghai remaining closed for holidays. In London, the FTSE 100 retook 7,000 points, but Frankfurt's Dax 30 index was lower. Wall Street also was called down at the open. Saudi Aramco shares were up 0.4% in Riyadh following its first-quarter results.
"Aramco's strong numbers have...put the fight back into oil stocks, lifting BP and Shell by an appreciable amount in early trading. Positive news on travel plans for the UK have also provided the spark for gains in travel stocks such as IAG and Tui, building on hopes that the summer will see a decent return to holidaying," commented IG Chief Market Analyst Chris Beauchamp. In London, BP was up 2.9%, Shell A shares up 3.1%, IAG up 2.2% and Tui up 3.8%.
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CAC 40: up 0.2% at 6,318.30
DAX 30: down 0.7% at 15,127.22
FTSE 100: up 0.5% at 7,004.62
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Hang Seng: closed up 0.7% at 28,557.14
Nikkei 225: Tokyo market closed for holiday.
S&P/ASX 200: closed up 0.6% at 7,067.90
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DJIA: called down 0.1%
S&P 500: called down 0.2%
Nasdaq Composite: called down 0.4%
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EUR: down at USD1.2004 (USD1.2064)
GBP: down at USD1.3870 (USD1.3907)
USD: up at JPY109.41 (JPY109.09)
GOLD: down at USD1,786.12 per ounce (USD1,791.90)
OIL (Brent): up at USD68.27 a barrel (USD67.50)
(currency and commodities changes since New York equities close Monday)
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ECONOMICS AND GENERAL
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The US economy is likely to expand by 7% this year as it bounces back from the Covid-19 pandemic, its fastest rate since the early 1980s, a top Federal Reserve official said. "This is welcome progress after the toughest period for the economy in living memory and a winter when the pandemic was particularly severe, and the economy suffered as a result," New York Fed President John Williams said in a speech on Monday. He warned against the tendency to "overreact" to price spikes caused by the unique circumstances of the recovering economy this year, while predicting inflation would return to the central bank's two percent target in 2022.
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New York Governor Andrew Cuomo announced a major easing of coronavirus restrictions Monday, including the imminent resumption of 24-hour operations on the city subway. The announcement highlights how far New York City, once the epicentre of the US's outbreak, has come in getting the virus under control. From May 19, percentage limits on occupancy will be scrapped for many business and cultural venues in the city – including shops, restaurants, cinemas and museums, Cuomo said. These limits currently vary between 33 and 75% capacity.
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Meanwhile, Florida Governor Ron DeSantis on Monday lifted all Covid-19 restrictions in the US state, citing the effectiveness and availability of vaccines, in a move that attracted criticism from Democratic mayors. DeSantis signed a law invalidating local emergency orders – which impose restrictions due to Covid-19 – effective from July 1, and then signed an executive order that bridges the gap between now and then. Nearly nine million people – out of a total of 23 million residents – have had at least one dose of the vaccine in Florida, according to the US health department.
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India's coronavirus caseload topped 20 million on Tuesday as the relentless surge finally forced the suspension of the nation's lucrative cricket competition involving some of the sport's biggest global stars. More than 350,000 new cases were reported in India Tuesday, a drop from the peak of 402,000 last week, giving some cause for optimism that the worst of the devastating wave may have passed. But the glitzy Indian Premier League, the world's richest Twenty20 cricket tournament, had carried on in empty stadiums, sparking criticism that it was inappropriate under the circumstances.
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UK manufacturing sector activity strengthened in April as lockdown restrictions eased, according to IHS Markit. The seasonally adjusted IHS Markit/CIPS purchasing managers' index rose to 60.9 points in April, up from 58.9 in March and above the earlier flash estimate of 60.7. The latest reading is the highest since July 1994's record high. Markit said April saw a further acceleration in the rate of expansion of the UK manufacturing sector. Output growth was attributed to a loosening of lockdown restrictions, improved demand and rising backlogs of work. Further, solid and accelerated expansions of output were seen across the consumer, intermediate and investment goods industries, with the consumer goods category the strongest performer overall, Markit said.
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The UK has agreed a GBP1 billion trade deal with India which the British government says will create more than 6,500 new jobs. Around GBP533 million worth of investment into Britain will come from India, which includes GBP240 million of investment into vaccines by the Serum Institute of India. Around GBP446 million worth of export deals have also been agreed by the two nations as Britain looks for various agreements across the world having exited from the EU. On Tuesday, UK Prime Minister Boris Johnson will hold a virtual meeting with Indian Prime Minister Narendra Modi to discuss future co-operation between Britain and India with regards to trade, health, climate and defence. The British government added that the partnership already agreed will double the value of British-Indian trade by 2030.
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British holidaymakers may have the option of jetting off to a handful of European hotspots from next month. The European Commission proposed to ease restrictions on travel to countries in the bloc amid progressing Covid-19 vaccination campaigns and lower infection rates. And the UK government's "green list" of countries to which people can travel without having to isolate for 14 days on their return is expected to be released this week, although it is understood details are still being finalised. Reports suggested the list could include about a dozen countries, although some newspapers suggested it could be fewer than 10. Both The Times and The Guardian said destinations likely to make it onto the list for travel from May 17 include Portugal, Malta and Gibraltar, while the Telegraph said Spain, Greece and France could be added by the end of June.
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Reserve Bank of Australia policymakers decided to keep the cash lending rate unchanged amid an improving outlook for the local economy. At the central bank's meeting on Tuesday, RBA kept Australia's key interest rate at 0.1%. In addition, the board maintained the yield on the three-year Australian government bond, as well as the parameters of the term funding facility and the government bond purchase program. The Reserve Bank's central scenario for gross domestic product growth in Australia was revised up further, with growth of 4.75% expected over 2021 and 3.5% over 2022.
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By Tom Waite; thomaslwaite@alliancenews.com
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