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(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Vodafone Group said it has agreed a deal to sell its majority 55% holding in its Egypt business to Saudi Telecom Co for USD2.39 billion. The deal gives Vodafone Egypt an enterprise value of USD4.35 billion. The FTSE 100 telecommunications firm said that despite the disposal, it will continue to have a "significant presence in Egypt", including a partnership agreement with Saudi Telecom. The transaction is expected to close in June 2020, following regulatory approval. Vodafone Egypt contributed EUR1.11 billion in revenue to the telecommunications firm in the year to March 2019.
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United Utilities said its main subsidiary, United Utilities Water, has accepted the final determination covering the period from 2020 to 2025 from water regulator Ofwat. In addition, the FTSE 100-listed utility expects to declare a dividend of 42.60 pence for its year ending March 31, a 3.2% increase from the year before. Reflecting its assessment of the final determination from Ofwat, United Utilities will target growing its dividend each year by CPIH inflation, which is the consumer price index as well as owner-occupiers' housing costs. This will be a change from its current dividend growth, which is calculated by RPI inflation. Ofwat's final determination for United Utilities is expected to cut average bills by 14% for the period compared to the group's proposed 11% reduction.
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International Consolidated Airlines Group's British Airways has suspended all flights to and from mainland China as the government finalises urgent plans to bring Britons back from the coronavirus-hit province of Hubei. The airline, which operates daily flights to Shanghai and Beijing from Heathrow, said it was halting the flights with immediate effect after the Foreign Office warned against "all but essential travel" to the country because of the virus outbreak. A British teacher in Wuhan city, who said UK citizens were being given details of forthcoming flights, said flights taking Britons back home could begin as early as Thursday.
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MARKETS
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London shares were higher with investors appearing to be shrugging off the growing health crisis in China. The pound was up against the dollar ahead of the Bank of England's interest rate decision on Thursday. Wall Street was set for a higher open, with aircraft maker Boeing and fast food chain McDonald's to report earnings before the opening bell in New York. Social media platform Facebook, software firm Microsoft and electric carmaker Tesla round things off after the market close. In addition, the US Federal Reserve will announce its interest rate decision at 1900 GMT.
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FTSE 100: up 0.2% at 7,492.05
FTSE 250: up 0.2% at 21,481.55
AIM ALL-SHARE: up 0.3% at 956.14
GBP: up at USD1.3014 (USD1.2993)
EUR: flat at USD1.1001 (USD1.1008)
GOLD: flat at USD1,570.55 per ounce (USD1,569.90)
OIL (Brent): up at USD60.12 a barrel (USD59.92)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK house prices saw another above-1% annual growth rate in January, according to the latest figures from Nationwide. Month-on-month, house prices increased 0.5% in January after a 0.1% increase in December. On an annual basis, prices were up 1.9% after 1.4% growth in December. January's reading marked the strongest annual growth rate since November 2018.
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Overall shop prices in the UK continued to decline in January, numbers showed, despite food inflation accelerating. According to the British Retail Consortium-Nielsen Shop Price Index, shop prices in the first week of January were 0.3% lower year-on-year, compared with a 0.4% decrease registered in December. Month-on-month, prices were also down 0.3% in January. Non-food prices fell 1.5% annually in January, in-line with 1.5% year-on-year decline in December. Month-on-month, non-food prices were 1.0% lower. Food prices however, surged 1.6% year-on-year in January, rising from December's 1.4% climb. Food prices were 0.8% higher month-on-month in January.
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US Secretary of State Mike Pompeo is flying into the UK amid deep concern in Washington at Johnson's decision to allow the Chinese tech giant Huawei to have a role in the UK's 5G network. The UK National Security Council agreed on Tuesday to give the green light for the firm to play a limited part in building the network, despite repeated appeals by the US not do so. The Trump administration has warned it would suspend intelligence-sharing with any ally that allows the Chinese firm into its 5G networks amid fears security could be compromised. Following the announcement, Johnson spoke to the US president by telephone to explain the decision in an attempt to allay US fears.
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The death toll in mainland China following the outbreak of coronavirus has risen to 132 while nearly 6,000 people are infected, authorities have said. There were 26 deaths recorded in the last 24 hours, with all but one recorded in Hubei province. Authorities added there had been an increase in the number of cases to 5,974, up by 1,459 from Tuesday's figure. Countries on Wednesday began evacuating their citizens from the Chinese city hardest-hit by the outbreak, Wuhan. China has cut off access to Wuhan and 16 other cities in Hubei province to prevent people from leaving and spreading the virus further. The lockdown has trapped more than 50 million people in the most far-reaching disease control measures ever imposed.
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The European Parliament is to set the seal on Britain's departure from the EU in a final vote on UK Prime Minister Boris Johnson's Brexit deal. MEPs meeting in Brussels are expected overwhelmingly to back ratification of the Withdrawal Agreement, paving the way for the UK to leave with a deal in place on Friday. It follows the completion last week of the passage of the Withdrawal Agreement Bill through the British Parliament at Westminster. It was formally signed by the presidents of the European Council, Charles Michel, and the European Commission, Ursula von der Leyen, in Brussels and Johnson in Downing Street. The agreement settles the terms of Britain's departure, including future citizens' rights, the arrangements on the Northern Ireland border and the UK's divorce settlement. It also allows for an 11-month transition period, during which the UK will continue to follow EU rules while talks take place on a free trade agreement.
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The US federal government's budget deficit is on track to surpass the USD1 trillion mark in fiscal year 2020, the non-partisan Congressional Budget Office said on Tuesday. The deficit will rise from 4.6% of gross domestic product to 5.4% over the next 10 years, the office projected, indicating that over the longer term the deficit will hit averages not seen since the end of World War II. The expansion of the federal budget under President Donald Trump - based on a tax cut and increased spending - comes as the US economy is growing, in what will be of concern to fiscal hawks. In 2017, the deficit was 3.5% of GDP, and has been on a steady climb upward. The last budget was approved with bipartisan support. The last time a yearly budget deficit was so large was in 2012, as the US was exiting a recession. The economy will grow an adjusted 2.2% this year, short of Trump's plan for 3%.
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