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(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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More than 30 firms, including at least two major Chinese property developers, saw trading in their shares halted in Hong Kong on Friday after they failed to report annual results. The move deepens uncertainty for China's embattled property sector, which has been struggling after a clampdown by Beijing suddenly turned off the liquidity taps. It also comes as China's wider economy battles with sweeping lockdowns in key cities including Shanghai after a surge of coronavirus infections. Major Chinese developers Shimao and Sunac China were among at least 33 companies suspended on Friday. The firms had all failed to publish their unaudited annual results by a March 31 deadline.
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Randall & Quilter Investment Holdings has accepted a GBP482 million takeover offer from 23% shareholder Brickell PC Insurance Holdings. Brickell will pay 175 pence in cash per R&Q share, a 20% premium to its closing price of 146p on Thursday. The stock was up 9.6% early Friday in London at 159.44p. Despite holding 23% of R&Q shares, Brickell has only 9.9% of the voting rights under an agreement related to its exchange of preferred stock last year. The offer also has support from R&Q directors for their 3.3% holding. Brickell has committed to provide USD100 million in new equity funding to R&Q to de-leverage its balance sheet. R&Q is a Bermuda-based specialty non-life insurance company with Program Management and Legacy Insurance businesses. Brickell is controlled by Steven Pasko whose investment firm 777 Partners is based in Miami.
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Amazon narrowly led in an effort to prevent unionization in Alabama, according to preliminary results Thursday, but the e-commerce behemoth trailed in a partial tally in a parallel election in New York. The results were not final in either case. In the Alabama election, a re-vote after federal officials threw out results of a 2021 referendum, 993 workers voted against the labor group, compared with 875 employees in favor. But there were 416 "challenged" ballots, a "determinative" amount, according to the National Labor Relations Board, meaning the number of ballots still to be settled is big enough to potentially decide the final result. When the New York count wrapped up for the day early Thursday evening, there were 1,518 workers voting in favor of the union, compared with 1,154 employees voting no. At stake is Amazon's ability to remain union-free in its home market, a status it has guarded fiercely since the company was founded in the 1990s.
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US lawmakers voted on Thursday on a bill limiting the cost of insulin to USD35 a month, a transformative curb for millions of diabetics who pay hundreds of dollars for the life-sustaining hormone. Drug pricing has vexed politicians for years in the US, which has the highest annual health expenditure of any industrialized country, at around USD11,000 per capita. Insulin costs the 7.4 million American adults who use it to manage their diabetes eight times as much as in other wealthy nations, according to a 2020 study commissioned by the Health & Human Services Department. The bill would require private health insurance companies to set prices for a month's supply of insulin at no more than USD35, or 25% of a plan's negotiated price, whichever is lower, starting in 2023 for some patients and 2024 for all.
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MARKETS
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Stock prices were in the green near midday in Europe, despite economic indicators showing the damage being done to the global economy by the war in Ukraine and rising energy costs, though spot crude oil prices were weakening on Friday. The day's main risk event lays ahead with the March nonfarm payrolls report in the US at 1330 GMT.
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CAC 40: up 0.5% at 6,694.32
DAX 40: up 0.5% at 14,482.07
FTSE 100: up 0.3% at 7,539.24
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Hang Seng: closed up 0.2% at 22,039.55
Nikkei 225: closed down 0.6% at 27,665.98
S&P/ASX 200: closed down 0.1% at 7,493.80
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DJIA: called up 0.5%
S&P 500: called up 0.5%
Nasdaq Composite: called up 0.5%
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EUR: down at USD1.1056 (USD1.1111)
GBP: down at USD1.3131 (USD1.3155)
USD: up at JPY122.52 (JPY121.43)
Gold: down at USD1,934.30 per ounce (USD1,941.55)
Oil (Brent): down at USD105.75 a barrel (USD108.02)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Ukraine President Volodymyr Zelensky warned Russia is consolidating and preparing "powerful strikes" in the country's east and south, including besieged Mariupol, where a new attempt will be made Friday to evacuate civilians from the devastated city. Russia meanwhile threatened to turn off its gas taps to Europe if payments are not made in rubles, as US President Joe Biden ordered a record release of strategic oil reserves to ease soaring US prices. In peace talks this week, Russia said it would scale back attacks on the capital Kyiv and the city of Chernigiv, but Ukrainian and Western officials have dismissed the pledge, saying Moscow's troops were merely regrouping. "This is part of their tactics," said Zelensky in a late-night address.
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The EU plans to use a virtual summit being held in Brussels on Friday to send a stark message to China that helping Russia in Ukraine is not in Beijing's economic interest. The EU is to impress on China the consequences for relations with the bloc if Beijing offers "overt support" to Russia's invasion, now in its second month, a senior EU official told dpa ahead of the talks. The war in Ukraine is set to dominate the meeting, with EU officials being as concerned about China's ability to prolong the conflict as their US counterparts. Beijing has given Russia political backing and has refused to condemn the invasion, portraying the US and NATO as the main causes of the crisis. The West is concerned that China could provide material support to Russia or help Moscow evade strict Western sanctions. Expectations ahead of the talks were low. No concrete outcomes, joint statements or press conferences are planned and neither Covid-19 nor climate change have made it onto the agenda.
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Despite concerns that Russian gas shipments to Europe would be cut off amid a fight about European sanctions and demands for payments in roubles, Russian gas firm Gazprom said pipelines are still sending gas westward. There will be 104.4 million cubic metres of gas pumped to Europe on Friday, said Gazprom spokesperson Sergey Kupriyanov, in comments reported by the Interfax news agency. That is almost the maximum daily amount allowed under current contracts. This means shipments continue in the face of Kremlin threats to shut off the taps unless payments for gas start coming in roubles. A new proposal allowing dollar or euro payments to a Russian-controlled bank went into effect on Friday, but it is unclear if Western purchasers have opened such accounts, dpa reports.
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US President Joe Biden is ordering the release of one million barrels of oil per day from the nation's strategic petroleum reserve for six months, the White House said. The move is a bid to control energy prices that have spiked after the US and allies imposed steep sanctions on Russia over its invasion of Ukraine. The White House said Biden wants Congress to impose financial penalties on oil and gas companies that lease public lands but are not producing. The actions show that oil remains a vulnerability for the US. Higher prices have hurt Biden's approval domestically and added billions of oil-export dollars to the Russian government as it wages war on Ukraine. Tapping the stockpile would create pressures that could reduce oil prices, though Biden has twice ordered releases from the reserves without causing a meaningful shift in oil markets.
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Eurozone inflation is set to surge to a fresh record high in March, preliminary data from Eurostat showed. The annual inflation rate is expected to accelerate to 7.5% in March from 5.9% in February, in large part due to a hefty 45% increase in energy prices. Excluding energy, the inflation rate for March was 3.4% - still above the European Central Bank's 2% target and ticking up from 3.1% in February.
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Manufacturers in the eurozone saw output ease in March as the war in Ukraine weighed on confidence and supply chains. "Just as the fading of the latest pandemic wave was creating a tailwind for the eurozone manufacturing recovery, with economies re-opening and supply chain bottlenecks easing, the war In Ukraine has created an ominous new headwind," said Chris Williamson, chief business economist at S&P Global. The eurozone manufacturing purchasing managers' index declined to 56.5 points in March from 58.2 in February, signalling the slowest improvement in operating conditions since the start of 2021.
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The German manufacturing sector saw a slowdown in March as the conflict in Ukraine and surge in Covid cases in China put further pressure on supply chains. The S&P Global/BME manufacturing PMI fell to an 18-month low of 56.9 points in March, down from 58.4 in February and below the flash estimate of 57.6. Any reading over the neutral mark of 50.0 indicates expansion, signalling Germany's heavyweight manufacturing sector continued to grow in March, but at a slower pace than in February.
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UK factory growth faded in March as firms struggled with supply shortages and customers grew cautious amid inflationary pressures and geopolitical tensions. The S&P Global/Chartered Institute of Procurement & Supply manufacturing PMI declined to 55.2 points in March, a 13-month low, from 58.0 in February. The reading was also below March's flash estimate of 55.5. New order growth eased with domestic demand "less robust" and new export orders contracted for the sixth time in the past seven months. This was linked to Russia's invasion of Ukraine and to post-Brexit difficulties. Manufacturers also faced escalating cost inflationary pressures in March, which they passed on in the form of higher charges to clients. Average selling prices rose at the quickest pace in three months. Firms remained upbeat over the year ahead, but sentiment fell to a 14-month low amid worries over the Ukraine conflict, inflationary pressures and labour shortages.
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Growth in the Irish factory sector picked up pace in March, a survey showed, but manufacturers warned about the impact of the war in Ukraine on both supply and demand. The AIB Ireland manufacturing PMI rose to 59.4 points in March from 57.8 the month before. The February reading had been an 11-month low. The March reading was the joint ninth highest in nearly 24 years of survey data collection, compilers S&P Global said.
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China's manufacturing sector swung into contraction in March, with a S&P Global index of activity showing its lowest reading since February 2020 when the Covid-19 pandemic was first affecting the country. The headline seasonally adjusted PMI for manufacturing fell to 48.1 points in March from 50.4 in February. On Thursday, a similar manufacturing PMI compiled by the National Bureau of Statistics also showed contraction, hitting 49.5 points in March. Not only did China face internal challenges related to Covid-19, but inflation and the war in Ukraine also added to factory woes.
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Japan's factory sector expansion hastened in March despite the prevailing global headwinds, survey results from S&P Global showed, with manufacturers remaining positive about the year ahead. The headline au Jibun Bank manufacturing PMI rose to 54.1 points in March from 52.7 in February. This signalled the 14th consecutive improvement in the health of the sector. The figure was ahead of the flash PMI for the month of 53.2 points.
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Japan's government approved fresh sanctions against North Korea over its recent test-firing of an intercontinental ballistic missile, following Washington's calls for tougher international punishment for the nuclear-armed state. Japan already has bans on trade and vessel entries as part of unilateral sanctions against Pyongyang, but said Friday it would "designate four groups and nine individuals involved in nuclear and missile development." The entities and individuals would be "subject to an asset freeze," top government spokesman Hirokazu Matsuno told reporters.
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By Tom Waite; thomaslwaite@alliancenews.com
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