(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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China will strengthen supervision of the online payments industry and continue its anti-monopoly crackdown, the governor of the central bank said, indicating Beijing will press ahead with a regulatory crackdown on the country's technology firms, such as Alibaba, for alleged monopolistic practices and aggressive harvesting of consumer data. "We will continue to cooperate with anti-monopoly authorities to curb monopolies and actively deal with algorithm discrimination and other new forms of anti-competition behaviours," People's Bank of China Governor Yi Gang said in a keynote speech at a Bank for International Settlements conference on regulating the sector. He added that the central bank will strengthen supervision of the payments industry and ask all financial services companies to be licensed. "Top platform companies in China have acquired massive data from users," said Yi, adding that their "winner-takes-all nature...could lead to market monopoly and compromise innovation efficiency".
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Alphabet's Google will prohibit climate change deniers from being able to monetize their content on its platforms, the company announced. A new policy for advertisers, publishers and YouTube creators will prohibit ads for, and monetization of, content that "contradicts well-established scientific consensus around the existence and causes" of climate change, the company said in a statement. "This includes content referring to climate change as a hoax or a scam, claims denying that long-term trends show the global climate is warming, and claims denying that greenhouse gas emissions or human activity contribute to climate change," Google said.
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Samsung Electronics defied the global supply chain challenges to forecast a near 30% jump in third-quarter operating profits. The world's biggest smartphone maker said it expected its operating profits to reach around KRW15.8 trillion, about USD13.3 billion, in a regulatory filing, up 28% year-on-year. Samsung Electronics estimated sales for the July-September period at KRW73 trillion, up 9.0% year-on-year – a record for any quarter, a spokeswoman told AFP.
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Tesla chief Elon Musk told investors on Thursday that the leading electric vehicle maker is moving its headquarters from Silicon Valley to Texas, where it is building a plant. "I'm excited to announce that we're moving our headquarters to Austin, Texas," Musk said at an annual shareholders meeting. "Just to be clear, though, we will be continuing to expand our activities in California." Musk said Tesla sales are growing strongly, and the company is ramping up deliveries despite shortages of computer chips and other components. Tesla aims to increase production at its plant in Fremont, California, by some 50%, Musk said. But that plant is hitting its limits on how much more it can handle, he said.
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Renault said it is partnering with Finnish metals producer Terrafame to receive sustainably sourced nickel for the French car maker's electric vehicle batteries. Terraframce, which produces nickel, zinc, cobalt and other metal from its mine and production plant in Sotkamo, Finland, will supply Renault with nickel sulphate. Nickel is key material in lithium-ion batteries for electric vehicle.
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Royal Mail said its General Logistics Systems arm has agreed to buy Canadian logistics company Mid-Nite Sun Transportation for GBP210.5 million. Mid-Nite operates as Rosenau Transport, with a "strong presence" in western Canada. It generated revenue of CAD175.0 million - around GBP102.5 million - and earnings before interest, tax, depreciation and amortisation of CAD41.6 million in the 12 months to August 31. GLS is Royal Mail's parcels unit in Europe and North America. It entered the Canadian market in 2018 with the acquisition of Dicom, and now GLS Canada operates a network of 2 hubs and 27 depots, with around 1,400 employees. "The combination of the two businesses will create a network stretching across Canada which will enable GLS to cover the vast majority of the Canadian population and deliver further growth and synergies," said Royal Mail.
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MARKETS
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The dollar was rising on Friday ahead of the key nonfarm payrolls report for September, due at 1230 GMT. "It's blindingly obvious that unless payrolls are truly dismal and the wage component avoids any nasty news at all, the Fed will start tapering next month," said Kit Juckes of Societe Generale. "It's dazzlingly clear that regardless of today's figures, ISM ones were strong and next week offers up CPI and FOMC minutes that will show clearly the division at the Fed and the hawkish bias of some members."
Equities were slightly lower in Europe on Friday despite a positive Asian session. In London, Royal Mail was down 0.4%, having initially rallied on its Canada acquisition. In the New York pre-market, Tesla was down 0.8%, having closed up 1.4% on Thursday.
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CAC 40: down 0.4% at 6,573.65
DAX 40: down 0.3% at 15,203.70
FTSE 100: marginally lower at 7,077.49
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Hang Seng: closed up 0.6% at 24,837.85
Nikkei 225: closed up 1.3% at 28,048.94
S&P/ASX 200: closed up 0.9% at 7,320.10
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DJIA: called down 0.1%
S&P 500: called down 0.2%
Nasdaq Composite: called down 0.3%
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EUR: down at USD1.1555 (USD1.1566)
GBP: down at USD1.3598 (USD1.3625)
USD: up at JPY111.95 (JPY111.45)
Gold: down at USD1,756.03 per ounce (USD1,759.45)
Oil (Brent): up at USD83.16 a barrel (USD81.76)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The US Senate voted Thursday to stave off a credit default, as Democrats and Republicans agreed to a stop-gap fix to raise the nation's debt limit. The breakthrough – which temporarily defers the crisis by adding another USD480 billion to the allowable debt total – came with an estimated 11 days to go until the country would no longer have been able to borrow money or pay off loans for the first time in its history. Chuck Schumer, who leads the Democrats in the Senate, announced the breakthrough deal after fractious negotiations in Congress going into the early hours of the morning. Republican Senate Minority leader Mitch McConnell offered the deal on Wednesday as his party was set to vote against House-passed Democratic plans for a hike in the nation's borrowing cap of more than a year. Rather than solving the crisis, the new arrangement kicks the can down the road to coincide with another major funding deadline – a shutdown that would kick in from December 3 when the government's coffers theoretically run out, closing federal services and properties.
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US President Joe Biden on Thursday championed Covid-19 vaccination requirements, determined that the roughly 67 million unvaccinated American adults must receive the shot even as he acknowledged that mandates were not his "first instinct". Biden had ruled out such requirements before taking office in January, but they now are a tactic he feels forced into using by a stubborn slice of the public that has refused to be inoculated and has thus jeopardised the lives of others and the nation's economic recovery. "There is no other way to beat the pandemic than to get the vast majority of the American people vaccinated," Biden said in suburban Chicago at an event promoting the mandates. "While I didn't race to do it right away, that's why I've had to move toward requirements."
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The Irish and Estonian governments on Thursday agreed to sign up to a 15% global minimum tax rate on multinational firms, leaving only Hungary as the last hold-out against the far-reaching deal. The reform is aimed at stopping international corporations slashing tax bills by registering in nations with low rates. In Ireland, the corporate tax rate currently is 12.5%. The new 15% rate will apply to companies with turnover in excess of EUR750 million. "The government has now approved my recommendation that Ireland joins the international consensus," Irish Finance Minister Paschal Donohoe said. "I'm absolutely satisfied that our interests are better served within the agreement," he added. Finance ministers from wealthy G7 nations in June endorsed a global minimum corporate tax rate of at least 15%, reached in the framework of the Organisation for Economic Co-operation & Development.
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China's services sector enjoyed a resurgence in September, helping to bolster the nation's wider private sector economy. The latest Caixin China services purchasing managers' index increased to 53.4 points in September, from 46.7 in August, returning above the 50.0 no change mark. Besides the decline in August, service sector output has increased every month in China since May of last year. The composite PMI - a weighted average of the services and earlier manufacturing reading - rose to 51.4 in September, from 47.2 in August. It signalled an expansion of the Chinese private sector, though a "modest" one by historical standards, Markit said.
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Germany's trade surplus declined both annually and monthly in August, according to data from Destatis. Europe's largest economy registered a trade surplus of EUR13.0 billion in August, fading 27% from EUR17.7 billion in July and also 14% below the EUR15.1 billion from a year earlier. In addition, the EUR13.0 billion surplus also missed FXStreet cited consensus of EUR15.8 billion, which would have been an annual hike. Exports were down 1.2% monthly at EUR104.4 billion in August, although this represented a 14% yearly rise. Imports were 3.5% higher monthly at EUR93.8 billion and up 18% yearly.
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A total of 47 countries including South Africa, Mexico and Thailand will be removed from England's red list on Monday, UK Transport Secretary Grant Shapps has announced. Travellers arriving from those destinations will no longer need to spend 11 nights in a quarantine hotel at a cost of GBP2,285 for solo travellers. Just seven countries will remain on the red list following the changes. They are Colombia, Dominican Republic, Ecuador, Haiti, Panama, Peru and Venezuela. The devolved administrations in Scotland, Wales and Northern Ireland set their own travel rules but have recently mirrored announcements made in Westminster. Shapps also announced that the government would recognise vaccines for arrivals from a further 37 countries and territories including Brazil, Ghana, Hong Kong, India, Pakistan, South Africa and Turkey.
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The UK has embarked on a 14-week consultation on a future trade deal with the Gulf Co-operation Council, seeking the views of the public and business before International Trade Secretary Anne-Marie Trevelyan hopes to begin talks in 2022. The GCC comprises of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, and it is one of the UK's largest trading partners. Total bilateral trade was worth over GBP30 billion in 2020 and an accord with the six monarchies is seen as a key target for post-Brexit Britain.
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By Tom Waite; thomaslwaite@alliancenews.com
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