(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Swiss Life unveiled plans for a new share buyback worth over USD1 billion as the Zurich-based life insurance company set out a new strategic plan. The 'Swiss Life 2024' plan also will see it target a larger dividend payout ratio and a chunkier annual fee intake. The CHF1 billion, around USD1.07 billion, buyback runs from December 2021 to May 2023. From 2022, Swiss Life will target a dividend payout ratio of 60%, topping the 50% to 60% aim from the Swiss Life 2021 plan. In addition, Swiss Life expects its fee result to rise to between CHF850 million and CHF900 million by 2024. For 2021, it targeted a fee result between CHF600 million and CHF650 million under a previous strategic plan.
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Vivo Energy accepted a USD2.3 billion takeover offer from largest shareholder, Vitol Group. Vivo, a pan-African retailer of Shell and Engen-branded fuels and lubricants, will recommend a USD1.85 per share offer from Vitol Investment Partnership.In sterling terms, the offer is roughly a 25% premium to its closing price of 111.40 pence on Wednesday - which implies a market cap of about GBP1.4 billion. The offer includes planned dividends. Vivo Energy shares were up 19% to 133.00p on Thursday. Geneva-based Vitol noted it has been in talks with one of Vivo's founding shareholders, Helios, over a potential deal for its 27% stake in Vivo. The bid for the entire company is intended to prevent minority shareholders from being put in an illiquid position.
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Hochschild Mining "welcomed" the move by the presidency of the Council of Ministers in Peru, which the miner believes clarified comments made late last week by the head of Cabinet. "In particular, the company notes the government's commitment to upholding the rule of law and that its express recognition of the continued rights of mining companies to request extensions and modifications of existing permits for mining and exploration activities," Hochschild said. The miner added: "In line with the announcement, the company's operations in southern Ayacucho, Pallancata and Inmaculada will continue to operate under the existing legal framework." The stock had plunged on Monday, more than halving at one point, after Hochschild reported the risk that the Peruvian government may close two of its three operating gold and silver mines, one of which is its largest in terms of production and has represented around three-quarters of its cashflow. However, the Peruvian government on Wednesday reaffirmed its respect for the current legal framework.
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Orange Chief Executive Officer Stephane Richard will leave his post by the end of January, the French telecoms giant said in a statement after he was convicted over his role in a fraud-tainted state payout to tycoon Bernard Tapie and given a one-year suspended sentence. Richard's departure "will be effective once new leadership is in place and no later than January 31", the company said in a statement. The 60-year-old is one of several senior officials past and present to be caught up in a decade-old scandal over the colossal EUR404 million payment made to Tapie in 2008 when Richard was working in the French finance ministry.
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Generali is in talks to buy Credit Agricole Assurances' La Medicale, its insurance subsidiary for healthcare professionals. La Medicale's annual premiums stand at EUR552 million and it had more than 600,000 policies in its portfolio at the end of 2020. "For Generali, this acquisition represents a key strategic opportunity for growth, enabled also by good ties with Credit Agricole," company says. Any agreement which arises from the exclusive talks will remain subject to regulatory approval. No financial details of the talks were given.
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National Australia Bank said its deal to purchase Citigroup's Australian consumer business received the backing of the local antitrust regulator. The Australian Competition & Consumer Commission has opted not to oppose the AUD1.2 billion, around USD864.0 million, transaction. The deal still needs approval from the Australian Prudential Regulation Authority. Melbourne-headquartered NAB expects the deal to conclude in the first half of 2022. Citigroup's institutional business in Australia is not included in the acquisition.
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Gaming and messaging firm Tencent has been told all its new apps and updates must be approved by the government, state media reported, as Beijing continues its domestic tech sector crackdown. This latest move against embattled Tencent comes after nine of the group's apps were found to have committed "violations" since the beginning of the year, prompting the need for "transitional administrative guidance measures", state media CCTV quoted the government as saying. The company must submit any new apps or updates for inspection by the Ministry of Industry & Information Technology before they can be uploaded or updated. Tencent told AFP it would comply with the requirements.
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MARKETS
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Stock markets were firm in Asia and Europe on Thursday, amid thinned trade due to the US Thanksgiving Day holiday. Wall Street is closed on Thursday, reopening for a half-day session on Friday. In Zurich, Swiss Life shares were up 3.8%. The dollar was mostly flat, though down slightly against the euro.
The main economic news was a third reading of German economic growth in the third quarter. This was revised down to 1.7% quarter-on-quarter from 1.8% previously, while a separate report showed a decline in business confidence. "It is clear that the recent resurgence in new virus cases is leaving a mark on German sentiment," commented Ricardo Amaro, senior economist at Oxford Economics. "With some public health restrictions being re-tightened, we expect economic activity will also be impacted. Accordingly, we will revise down our Q4 GDP forecast of 0.5% growth and think it is increasingly plausible that activity will contract in the current quarter."
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CAC 40: up 0.2% at 7,056.28
DAX 40: up 0.2% at 15,909.79
FTSE 100: up 0.1% at 7,290.83
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Hang Seng: closed up 0.2% at 24,740.16
Nikkei 225: closed up 0.7% at 29,499.28
S&P/ASX 200: closed up 0.1% at 7,407.30
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New York market closed for holiday.
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EUR: up at USD1.1225 (USD1.1195)
GBP: flat at USD1.3329 (USD1.3328)
USD: flat at JPY115.34 (JPY115.38)
Gold: up at USD1,792.20 per ounce (USD1,790.62)
Oil (Brent): down at USD81.77 a barrel (USD82.73)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Germany's economy expanded in the third quarter, but still remains below where it was before the coronavirus pandemic struck, data from the Federal Statistics Office of Germany showed. German gross domestic product grew 1.7% quarter-on-quarter in the three months to September 30, slightly behind FXStreet-cited forecasts of 1.8% growth. The second quarter GDP hike was upwardly revised to 2.0%. Annually, GDP growth was 2.5%, slowing from the second quarter's 10% hike. Compared with the fourth quarter of 2019, the quarter before the coronavirus crisis began, GDP was 1.1% lower.
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Less positively, the advance GfK consumer sentiment index for Germany fell to minus 1.6 in December, from a revised positive 1.0 in November, below the consensus of minus 0.5.
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The US said it looks forward to working with Germany's incoming government after a centre-left coalition clinched a deal. Olaf Scholz from the Social Democrats, who is expected to become Germany's next chancellor, presented the coalition deal between his party and their Green and Free Democrat partners on Wednesday. "We look forward to working with Germany's new government on our goals of revitalizing the Transatlantic partnership, increasing cooperation with our NATO Allies, and raising the level of ambition of our relationship with the EU," a US State Department spokesman said Wednesday evening. "We have every expectation that the relationship between the United States and Germany will continue to be incredibly close and effective." The three parties' rank-and-file will need to give their blessing to the deal in the coming days to approve the incoming government.
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Germany announced record coronavirus fatalities and infections, as its total death toll passed 100,000, with its most severe virus wave yet breaking just as a new government prepares to take the reins. Germany weathered earlier bouts of the pandemic better than many other European countries, but has seen a recent resurgence, with intensive care beds rapidly filling up. Europe's largest economy recorded 351 fatalities in the past 24 hours, bringing the total death toll since the start of the pandemic to 100,119, according to figures from the Robert Koch Institute, a public health agency. The weekly incidence rate also hit an all-time high of 419.7 new infections per 100,000 people, RKI announced.
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Spanish producer price growth accelerated at a record annual pace in October, figures from statistics agency INE showed. Producer price index inflation quickened to 32%, the highest since records began in 1976, from 24% in September. A huge contributor to the annual surge was an 87% annual hike in energy prices. They had grown by 60% in September. On a monthly basis, producer prices rose by 6.1%, following growth of 5.4% in September. Save for a 1.7% monthly fall in February, Spanish producer prices have risen every month in 2021.
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UK Prime Minister Boris Johnson has called on France to agree to joint police patrols along the French Channel coast after a migrant boat capsized with the loss of 31 lives. The PM spoke to French President Emmanuel Macron on Wednesday evening in the wake of the worst incident of its kind in the Channel since the current migrant crisis began. Downing Street said they had agreed to "keep all options on the table" in their efforts to break up the human trafficking gangs responsible for putting desperate people at risk in one of the world's busiest sea lanes. Immigration compliance minister Tom Pursglove confirmed that Johnson had renewed a previous offer to send UK police and Border Force officers to mount joint patrols with the French. The aim is to prevent migrant boats from attempting the perilous crossing but the French have previously resisted amid concerns about the implications for their national sovereignty.
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Some rate-setters at the US Federal Reserve are prepared to raise rates sooner than expected if inflation continues to run ahead of target, minutes released on Wednesday showed. "Various participants noted that the committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the committee's objectives," the minutes from November's meeting read. The minutes show the Fed discussed inflationary pressures and supply chain challenges, believing that supply constraints are set to continue longer than the central bank had previously expected. Positively, labour market conditions continue to improve and the Fed expects better payroll numbers in the months ahead.
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By Tom Waite; thomaslwaite@alliancenews.com
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