(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Royal Bank of Scotland Group is gearing up for a name change in 2020, in an effort to shed some of the baggage associated with the bailed-out UK bank, as it also looks to restructure its investment bank. RBS will rename itself NatWest Group, but did not offer any further details on the name change, only saying that it will happen "later this year". The investment bank already is called NatWest Markets. RBS said it will look to "refocus" its investment bank arm NatWest Markets. This will result in the unit seeing its assets halved. Turning to its results, RBS saw profit and net interest income beat expectations in 2019. The state-backed lender's operating pretax profit increased 26% to GBP4.23 billion from GBP3.36 billion in 2018. Operating pretax profit, according to company-compiled consensus, was forecast at GBP3.77 billion. Attributable profit for 2019 came in at GBP3.13 billion, compared to consensus of GBP2.52 billion. In 2018, when RBS reported its second profit in a decade, the figure was GBP1.62 billion.
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AstraZeneca was cautious in its outlook, predicting its 2020 results will suffer as a result of the coronavirus outbreak in China. For 2020, Astra is guiding for "a high single-digit to a low double-digit percentage" rise in total revenue, and "a mid- to high-teens percentage" increase in core earnings per share at constant currency. Astra's core figures exclude amortisation and impairment of intangible assets, restructuring charges and provisions, and other costs. In 2019, Astra's core EPS rose 1.2% to USD3.50 from USD3.46 a year, but below consensus of USD3.57 and sitting at the bottom of Astra's guidance for core EPS of between USD3.50 and USD3.70 at constant currency. Revenue in 2019 rose 10% to USD24.38 billion from USD22.09 billion, just below consensus of USD24.40 billion. "All guidance assumes an unfavourable impact from China lasting up to a few months as a result of the recent novel coronavirus outbreak. The company will monitor closely the development of the epidemic and anticipates providing an update at the time of the first quarter of 2020 results," said Astra. It posted a 22% drop in 2019 pretax profit to USD1.55 billion from USD1.99 billion the year before.
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SEGRO said 2019 was another year of strong financial and operational performance supported by rental growth and additional income generated from its development pipeline. The real estate investment trust also upped its dividend payment for the year and added that it has made strong start to 2020 due to continuation of the earnings momentum. For 2019, the FTSE 100-listed company recorded pretax profit of GBP902.0 million, down 18% from GBP1.09 billion in 2018, mainly due to lower realised and unrealised gains in its wholly-owned portfolio. Adjusted pretax profit, however jumped 11% to GBPP267.5 million from GBP241.5 million due to a record year of development completions, high customer retention rates, like-for-like rental growth and a low vacancy rate.
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MARKETS
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London shares are subdued as the coronavirus crisis in China continues to weight on traders' minds, but international trade is in focus, too. China is due to reduce its tariffs on US products later on Friday. RBS was down 7.2% amid a weak outlook, the worst FTSE 100 performer. Wall Street was called for a higher open, with the Dow Jones Industrial Average and S&P 500 both called up 0.1%. The Nasdaq Composite is seen 0.3% higher.
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FTSE 100: flat at 7,455.19
FTSE 250: up 0.2% at 21,713.00
AIM ALL-SHARE: down 0.1% at 965.05
GBP: lower at USD1.3034 (USD1.3045)
EUR: soft at USD1.0842 (USD1.0850)
Gold: higher at USD1,576.20 per ounce (USD1,574.60)
Oil (Brent): higher at USD57.08 a barrel (USD56.30)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Eurozone economic growth slowed as expected in the last three months of 2019, data from Eurostat showed. Annually, gross domestic product rose by 0.9% in the euro area in the fourth quarter of 2019, slowing from 1.2% in the third quarter. The fourth-quarter expansion missed market expectations, cited by FXStreet, of 1.0%. Quarter-on-quarter, the eurozone economy expanded 0.1% in the fourth quarter of 2019 from the third, slowing from an increase of 0.3% in the third quarter from the second. The quarter-on-quarter reading was in line with economists' forecasts. Elsewhere, data from Eurostat showed the euro area recorded a EUR23.10 billion surplus in trade in goods in December 2019, up from EUR16.30 billion in December 2018. Exports rose 4.8% to EUR186.1 billion in December from EUR177.5 billion a year before, while imports rose 1.1% to EUR163.0 billion from EUR161.2 billion.
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The German economy stuttered at the end of 2019, data from Destatis showed. German gross domestic product was flat quarter-on-quarter, while rising 0.3% on a year ago. Market consensus, according to FXStreet, had pencilled in a 0.1% quarter-on-quarter rise, and a 0.2% annual one. After a "dynamic start" in the first quarter, with growth up 0.5% sequentially, and a decline in the second quarter of 0.2%, there had been a slight recovery in the third quarter of the year, Destatis said, but GDP failed to rise in the final three months of the year.
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UK Prime Minister Boris Johnson will chair the first meeting of his new-look Cabinet after a dramatic reshuffle which saw Sajid Javid quit as chancellor. Several senior heads rolled as Johnson recast his top ministerial team on Thursday – with Javid ordered to fire his closest aides and replace them with advisers chosen by Number 10. The former chancellor chose to quit instead and was replaced by his former deputy at the Treasury, Rishi Sunak, in the biggest shock of Johnson's shake-up. Javid accused the PM of setting conditions "any self-respecting minister" would reject – seen as a thinly veiled swipe at his successor. And he told Johnson in his resignation letter that he believed it was "important as leaders to have trusted teams that reflect the character and integrity that you would wish to be associated with".
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The death toll from China's virus epidemic neared 1,400 on Friday, as the US complained of a "lack of transparency" from Beijing over its handling of a crisis that has fuelled global panic. Nearly 64,000 people are now recorded as having been made ill by the virus in China, with the last two days showing a steep rise after a change in diagnostic methods. The National Health Commission disclosed a statistical error, however, saying it removed 108 deaths in Hubei that had been double-counted, but the nationwide toll still rose to 1,380 on Friday. The deepening crisis in China has caused fears of more global contagion, with Vietnam locking down villages after finding new cases and Japan becoming the third place outside the mainland on Thursday to report a death. More than two-dozen countries have now reported hundreds of cases among them.
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