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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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Vodafone Group said its Vantage Towers spin-off may be worth nearly EUR15 billion on stock market admission before the end of March. The telecommunications firm outlined the price range for the unit's upcoming initial public offering in Frankfurt. Vantage Towers shares will fetch between EUR22.50 and EUR29.00 in its float. Vodafone explained this will imply a market capitalisation between EUR11.4 billion and EUR14.7 billion. The base offer size will be EUR2.0 billion, though Vodafone said there is flexibility to up this to EUR2.8 billion. Vodafone shares were up 1.5% in London.
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Standard Life Aberdeen reported an improvement in net outflows as it unveiled details of its new strategy. The investment and asset management firm reported fee-based income of GBP1.43 billion for 2020, down from GBP1.63 billion in 2019 and largely reflecting 2019 outflows. However, IFRS pretax profit of GBP838 million was up sharply on 2019's GBP243 million, reflecting lower impairments of goodwill and intangibles, as well as increased profit on disposal of interests in associates. Net outflows reduced to GBP3.1 billion from GBP17.4 billion in 2019 excluding Lloyds Banking Group tranche withdrawals, driven by a "significant improvement" in Institutional and Wholesale net flows. Assets under management & administration edged down to GBP534.6 billion from GBP544.6 billion, reflecting GBP25.9 billion LBG tranche withdrawals, partially offset by improvements in markets. Standard Life declared a final payout of 7.3p to bring the total for the year to 14.6p, down by a third from 21.6p for 2019. Back in February, Standard Life Aberdeen had said it would sell the 'Standard Life' brand to Phoenix Group during the course of 2021. On Tuesday, Standard Life said rebranding activity is underway to bring the business under "one unifying brand". It said further details on this brand will come later in the year.
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Asset manager M&G reported IFRS pretax profit for 2020 of GBP1.14 billion, up from GBP1.07 billion in 2019; however adjusted operating profit was GBP788 million, down from GBP1.15 billion. M&G had GBP367.2 billion in assets under management and administration, lifted by its acquisition of Royal London's platform business Ascentric back in September. M&G suffered net outflows of GBP6.6 billion in Savings and Asset Management during 2020. It declared a 12.23 pence ordinary dividend.
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Royal Dutch Shell has agreed to sell upstream assets in Egypt's Western Desert for a base amount of USD646 million, with additional payments of up to USD280 million through 2024. The disposal is to a consortium composed of Cairn Energy and Cheiron Petroleum. The package of assets consists of Shell Egypt's interest in 13 onshore concessions and its share in Badr El-Din Petroleum Co. Separately, Cairn said it has agreed to sell its 20% interest in the Catcher field and 29.5% interest in the Kraken field, both in the UK, to Waldorf Production for USD460 million in cash, plus additional payments contingent on oil prices through to the end of 2025.
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Continental became the latest manufacturer in the automotive sector to caution on chip shortages, as the tyre and car parts maker posted an annual revenue fall and warned of a "subdued" start to 2021. In 2020, Continental's sales fell 15% to EUR37.72 billion from EUR44.48 billion in 2019. Its loss before interest and tax widened to EUR718.1 million from EUR268.3 million. The automotive market was "historically weak" during a Covid-19-hit 2020, the Hanover, Germany-based firm said. Finance Chief Wolfgang Schafer said: "The start of the current fiscal year has been subdued so far due to the shortage of semiconductors. The effects of the ongoing coronavirus pandemic remain a source of uncertainty too. All in all, 2021 will therefore remain challenging. We nevertheless anticipate that the market will recover significantly compared to 2020." Continental did not declare a dividend for 2020, after a EUR3.00 per share payout in 2019.
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Broadcaster ITV reported a fall in 2020 profit but said it has seen recent encouraging trends in the television advertising market. Total group revenue for 2020 fell 16% to GBP3.26 billion, with ITV Studios revenue down 25% to GBP1.37 billion, while total advertising revenue fell 11% to GBP1.58 billion. Pretax profit slumped to GBP325 million from GBP530 million. ITV Studios revenue was hit by disruption to the majority of its productions from March onward, the company noted. "While total revenues and profits were down our financial performance was ahead of expectations driven by a strong end to Q4 and our firm control over costs," said Chief Executive Carolyn McCall. "We are seeing more positive trends in the advertising market in March and April and the majority of our programmes are now back in production." ITV declared no dividend for 2020 after paying out 8.0p for 2019. The firm said it intends to restore payouts "as soon as circumstances permit".
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PayPal Holdings said it has acquired Curv, a leading provider of cloud-based infrastructure for digital asset security based in Tel Aviv, Israel. PayPal said Curv will join its newly-established business unit focused on blockchain, crypto and digital currencies. The acquisition is expected to complete in the first half of 2021. "The acquisition of Curv is part of our effort to invest in the talent and technology to realize our vision for a more inclusive financial system," said Vice President Jose Fernandez da Ponte.
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Troubled UK finance firm Greensill has collapsed into administration after encountering serious financial difficulties, administrators Grant Thornton said Monday, sparking fears for the future of thousands of jobs worldwide. Greensill specialises in short-term supply chain financing for businesses, but itself faces funding problems and mounting questions over opaque and complex accounting methods. Administration caps a crisis-hit month for Greensill, whose collapse risks more than 50,000 jobs – including over 7,000 in Australia – across the group and its customers.
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MARKETS
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CAC 40: up 0.2% at 5,913.01
DAX 30: up 0.4% at 14,430.87
FTSE 100: up 0.5% at 6,753.06
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DJIA: called up 0.7%
S&P 500: called up 1.1%
Nasdaq Composite: called up 2.1%
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S&P/ASX 200: closed up 0.5% at 6,771.20
Hang Seng: closed up 0.8% at 28,773.23
Nikkei 225: closed up 1.0% at 29,027.94
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EUR: up at USD1.1904 (USD1.1862)
GBP: up at USD1.3871 (USD1.3810)
USD: soft at JPY108.76 (JPY108.82)
Gold: up at USD1,703.31 per ounce (USD1,682.85)
Oil (Brent): up at USD68.98 a barrel (USD68.55)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Germany's trade surplus widened in January, data from Destatis showed, amid a near 5% monthly fall in imports. On a calendar and seasonally-adjusted basis, Europe's largest economy posted a trade surplus of EUR22.2 billion, improved 35% from EUR16.4 billion in December. This topped market forecasts of a decline in the surplus to EUR16.2 billion. Germany kicked off 2021 with a 1.4% monthly rise in exports. Imports were 4.7% lower.
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The French economy will rebound strongly this year from a deep recession sparked by Covid-19, the country's central bank chief said. Growth will reach at least 5% in 2021, Bank of France Governor Francois Villeroy de Galhau told France Info radio, a forecast that "comforted" a prediction the bank made in December. "The recession is behind us," he said. French GDP slumped 8.3% in 2020, national statistics bureau Insee estimated in late January, saying that downturn had turned out to be less brutal than originally forecast.
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UK retail sales grew in February, numbers from an industry body showed on Tuesday, as a tough start to the year for the sector was alleviated by Prime Minister Boris Johnson's roadmap to exit lockdown. The British Retail Consortium said that putting the date of March 8 on the return of schools in England meant parents in their droves began shopping for uniform and supplies. What's more, a stay-at-home Valentine's Day holiday gave a boost to online sales. Total UK retail sales rose 1.0% annually in February, according to the BRC-KPMG monitor, following a 1.3% fall in January. In February 2020, total sales rose 0.1%. Like-for-like sales were 9.5% yearly in February, topping January's 7.5% rise and the 0.4% fall a year earlier. In-store sales of non-food items were 39% lower annually in the three months to February. The 12-month average decline is 31%. Food sales were 7.9% higher over the same period. Online non-food sales surged 82% yearly in February, topping the 12-month average jump of 49%.
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The Japanese economy grew at an annualized rate of 12% in the October-to-December period, downgraded from a preliminary figure of 13%, a government report showed. In 2020, the economy shrank by 4.8% due to a consumption tax hike and the Covid-19 pandemic, marking the first contraction in 11 years, the Cabinet Office said in a statement. In the last quarter of 2020, corporate spending grew 4.3% quarter-on-quarter, revised down from an initial reading of 4.5% reported last month, and an increase from a 2.4% contraction in the July-to-September period, the office said. Private consumption rose 2.2% following a 5.1% increase in the third quarter. Exports soared 11%, thanks to China, the biggest trading partner, following a 7.4% rise in the third quarter, while imports rose 4%, marking the first increase in second quarters.
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For the first time in nearly three and a half months, the US recorded fewer than 1,000 deaths in a day from Covid-19 on Monday, according to Johns Hopkins University. In 24 hours, 749 people died from the coronavirus, far below the peak of 4,473 deaths recorded on January 12. The daily US death toll has not been below the thousand mark since November 29, when 822 people died in a 24-hour period. That indicates that the slowdown in the epidemic is continuing in the US, where infection rates and deaths have fallen to similar levels as before Halloween, Thanksgiving and other end-of-year holidays that were marked by travel and larger gatherings that boosted the spread of the virus.
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