(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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UK electricity utility SSE lifted annual guidance and said it does not have any supply pacts with Russian counterparts. SSE lifted its adjusted earnings per share guidance for the financial year, which ends on Thursday, amid a backdrop of energy market volatility. It expects adjusted EPS in the range of 92 and 97 pence, up from the previous 90p guidance. It could represent a rise of much as 11% from 87.5p in financial 2021. Dividend guidance was unchanged, remaining linked with the retail price index for now. SSE will pay 81p per share plus RPI for this year. It will have an RPI-linked payout for the following year before a rebase to 60p in financial 2024 after. In addition, SSE said unfavourable weather has led to a "shortfall in output from renewable sources" since it updated on its third quarter in early-February.
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Chemicals maker Croda International outlined its aim to lift the fortunes of its Consumer Care arm. Croda said it is focused on "accelerating growth in its Consumer Care sector". "The event will focus on how Consumer Care has evolved significantly in recent years to become a highly differentiated sector for Croda, comprising four business units, each with leading market positions in fast growth niches," the company said. The personal care arm, which part of Consumer Care, includes the Sederma skin care brand. The unit was bolstered by the EUR820 million acquisition of Spanish fragrances firm Iberchem, announced in November 2020. By 2025, Croda targets sales of GBP1 billion in Consumer Care, up from GBP763 million in 2021.
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Miner Rio Tinto said it has completed the acquisition of the Rincon lithium project in Argentina for USD825 million, having received approval from Australia's Foreign Investment Review Board. The purchase, from private equity firm Sentient Equity Partners, was first was announced back in December. Rincon is a undeveloped lithium brine project in the 'lithium triangle' in Salta Province. "Rincon strengthens our battery materials business and positions Rio Tinto to meet the double-digit growth in demand for lithium over the next decade, at a time when supply is constrained," said Chief Executive Jakob Stausholm.
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FedEx founder Frederick Smith will step down as chief executive after some five decades atop the package delivery firm. FedEx, which grew under Smith from a modest operation in the US state of Tennessee into a global titan with some 570,000 employees, announced Chief Operating Officer Raj Subramaniam will take the company's helm. The transition will take place on June 1, with Smith, 77, becoming executive chair and Subramaniam ascending to president & CEO. Smith first devised the idea for Federal Express – which adopted FedEx as its brand name in 1994 – while an undergraduate at Yale University, identifying urgent shipments as an economic imperative. "Smith named the company Federal Express because he believed the patriotic meaning associated with the word 'federal' suggested an interest in nationwide economic activity," according to the company's official history.
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The US Senate voted to greenlight a multibillion-dollar bill aimed at jumpstarting high-tech research and manufacturing, countering China's growing influence and easing a global shortage of computer chips. The legislation is the upper chamber's version of the House's America Competes bill that passed in February. Lawmakers are expected to start negotiations between both parties in the House and Senate to marry the different texts. The House and Senate versions both provide for President Biden's aim of investing USD52 billion in domestic research and production, marking a win he could trumpet ahead of November's midterm elections. "America cannot afford to come in second place when it comes to technologies like 5G, AI, quantum computing, semiconductors, bioengineering and so much more," said Senate Majority Leader Chuck Schumer.
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MARKETS
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Stock markets were rising globally on Tuesday, as fresh round of face-to-face negotiations between Ukraine and Russia got underway. At the same time, survey data revealed weaker consumer confidence in France and German as a result of the war and higher energy prices. In London, the FTSE 100 was trailing similar indices in Paris and Frankfurt, as broker downgrades knocked the shares of Barclays and Royal Mail, down 3.5% and 3.0%, respectively.
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CAC 40: up 2.1% at 6,726.87
DAX 40: up 1.8% at 14,678.37
FTSE 100: up 0.9% at 7,538.45
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Hang Seng: closed up 1.1% at 21,927.63
Nikkei 225: closed up 1.1% at 28,252.42
S&P/ASX 200: up 0.8% at 7,469.90
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DJIA: called up 0.4%
S&P 500: called up 0.4%
Nasdaq Composite: called up 0.4%
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EUR: flat at USD1.0976 (USD1.0973)
GBP: down at USD1.3052 ((USD1.3090)
USD: up at JPY123.77 (JPY123.32)
Gold: down at USD1,913.92 per ounce (USD1,937.20)
Oil (Brent): up at USD114.56 a barrel (USD111.48)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Ukrainian and Russian negotiators held face-to-face talks in Istanbul on Tuesday as Ukraine resumed evacuations from territory occupied by Russian forces and clung on in the besieged city of Mariupol. The talks were taking place with Turkish President Recep Tayyip Erdogan in attendance and under the shadow of shock allegations that delegates were poisoned at a previous round of negotiations. Erdogan called on the delegations to "put an end to this tragedy," saying both Russia and Ukraine both have "legitimate concerns" ahead of the meeting at the Dolmabahce Palace. It is now more than a month since Russian President Vladimir Putin's tanks rolled into Ukraine, hoping to cripple or oust the democratic government in Kyiv. The fighting has already forced more than 10 million from their homes and according to Ukrainian President Volodymyr Zelensky has killed an estimated 20,000 people. On the edge of the suburban town of Irpin to the northwest of Kyiv, AFP reporters on Tuesday heard the sound of sporadic shell fire, a day after Ukrainian forces said they had recaptured the town.
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Russian billionaire Roman Abramovich has joined face-to-face talks between Russia and Ukraine in Istanbul, a Turkish presidential official told dpa. The owner of the Chelsea football club, who was slapped with British and EU sanctions as part of the Western response to Russia's invasion of Ukraine, arrived at the venue with the Russian delegation, the official said. Abramovich was reportedly among several people who suffered symptoms of poisoning after an earlier round of talks.
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Kremlin spokesman Dmitry Peskov said Russia has no plans to use nuclear weapons in the war against Ukraine. No one is thinking about using...even about [the] idea of using a nuclear weapon," Peskov said in an interview with US public broadcaster PBS. "We have no doubt that all the objectives of our special military operation in Ukraine will be completed. We have no doubt about that," Peskov said. "But any outcome of the operation, of course, is not a reason for usage of a nuclear weapon," he said. "We have a security concept that very clearly states that only when there is a threat for existence of the state in our country, we can use and we will actually use nuclear weapons to eliminate the threat," he explained.
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Joe Biden has said he would make "no apologies" and was not "walking anything back" after his weekend comment that Putin "cannot remain in power" in Russia. The US president insisted he was not calling for regime change in Moscow, adding: "I was expressing the moral outrage that I felt toward this man. I wasn't articulating a policy change." The president's jarring remark about the Russian president, which came at the end of a speech in Warsaw on Saturday that was intended to rally democracies for a long global struggle against autocracy, stirred controversy in the US and rattled some allies in western Europe. On Monday Biden rejected the idea that his comment could escalate tensions over the war in Ukraine or that it would feed Russian propaganda about western aggression. "Nobody believes…I was talking about taking down Putin," he said, adding: "The last thing I want to do is engage in a land war or a nuclear war with Russia."
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The world's leading economies have rejected Russian demands to pay for imported natural gas in roubles, German Economy Minister Robert Habeck said on Monday. Speaking after an online meeting with the G7 energy ministers, which he chaired, Habeck said the ministers had agreed that the demands for payment in roubles were "a unilateral and clear breach of existing contracts." Contracts that had been concluded still applied, he said. "This means that payment in roubles is not acceptable," he said. Russian President Putin said last week that "unfriendly states" would have to pay for natural gas in Russian roubles.
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Germany said the cost of imported energy in February had more than doubled compared to the previous year. "Uncertainties in the energy markets and the tight supply of natural gas even before Russia's attack on Ukraine contributed to high increases in energy prices," the Federal Statistical Agency noted. The cost of imported energy in February was more than double the cost of imported energy in the same month of the previous year, while the cost of energy produced in Germany rose by 68%. Consumers were not hit as hard, but still had to pay 23% more for household energy and car fuel than in February 2021, according to Destasis.
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War in Ukraine and rising energy costs sunk consumer sentiment in Germany and France in March, with German consumer confidence set to fall further over April. The latest GfK indicator shows consumer sentiment in Germany took a "considerable downturn" in March, dropping to minus 8.5 points from minus 6.7 in February. In France, figures from INSEE showed consumer confidence had fallen sharply in March. The indicator fell to 91 points in March from 97 points in February. The figure is well below the long-term average tally of 100 and the FX Street forecast for March of 94 points.
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People who attended alleged lockdown-breaking parties at Downing Street and the Cabinet Office are reportedly braced for an initial tranche of fines from the Metropolitan Police. The Guardian has suggested the fixed penalty notices will be issued "imminently", while other outlets have reported they are due to surface soon. The force is investigating 12 events, including as many as six that UK Prime Minister Boris Johnson is said to have attended. Last week it emerged that detectives investigating alleged parties had begun interviewing key witnesses.
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UK grocery sales declined in recent weeks from a year before, numbers from Kantar showed, with the pace of growth compared to two years earlier also slowing. Some pandemic trends have begun to normalise, though some patterns, such as chunkier sales contributions from online offerings, have lingered. Grocery price inflation, meanwhile, hit a near 10-year high in March. In the 12 weeks to March 20, the value of UK grocery sales fell 6.3% yearly to GBP29.17 billion from GBP31.12 billion. On a two-year basis, they grew 0.7%. Two-year growth slowed markedly from 8.4% in the 12 weeks to February 20. It was in March 2020 that UK grocers received a considerable boost in demand due to stockpiling, as consumers feared shortages following the emergence of Covid-19.
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UK mortgage approvals ticked down in February, though the figure remained above pre-virus levels, according to data from the Bank of England. UK mortgage approvals fell to 71,000 monthly in February from 73,800 in January. The figure sits above the pre-pandemic average of 66,700 in the 12 months to February 2020. Monthly individual net borrowing of mortgage debt in February amounted to GBP4.7 billion, down from GBP5.9 billion in January. BoE figures also showed the average annual growth of consumer credit accelerated to 4.4% in February from 3.2% in January.
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Australian retail sales grew at a faster pace than expected in February. According to the Australian Bureau of Statistics, retail sales rose 1.8% month-to-month in February, following 1.6% growth in January. According to FXStreet-cited consensus, the monthly rise was forecast to slow to 1.0%. January's climb was downwardly revised from 1.8%, the ABS noted. Annually, the pace of growth quickened to 9.1% in February from 6.4% in January.
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By Tom Waite; thomaslwaite@alliancenews.com
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