(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The UK's antitrust watchdog said it is probing whether National Grid's sale of a shareholding in its gas transmission and gas metering business may lessen competition. National Grid, which manages the UK's power infrastructure, in March agreed to sell a 60% interest in its gas transmission and metering business in the UK to a consortium of "long-term infrastructure investors" for GBP2.2 billion in cash. The consortium includes Sydney-based asset manager Macquarie Asset Management and Victoria, Canada-based investment management firm British Columbia Investment Management. The Competition & Markets Authority is examining whether the deal will lead to a "substantial lessening of competition" in the UK. The watchdog has set a November 22 deadline for an initial decision.
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Biffa backed a GBP1.3 billion takeover from Energy Capital Partners. ECP will pay 410 pence cash for each share in the UK waste management firm, a 27% premium to its 323.90p closing price on Monday. "ECP is an experienced investor in environmental infrastructure and sustainability assets and offers a supportive environment to accelerate the group's further development and growth as a leading enabler of the circular economy," Biffa Chair Ken Lever said. The acquisition sum is, however, 7.9% lower than an initial 445p per share proposal made back in June. Lever explained: "It is the Biffa board's view that this offer represents a compelling opportunity, particularly in a weakening economic environment, for shareholders to realise, in cash and with certainty, the potential for future value creation."
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United Utilities warned that annual revenue will fall short of guidance as consumption was weaker than expected. The UK water and wastewater company expects revenue in the first half ending September 30 to be 1% lower year-on-year, due to "moderately lower than forecast consumption". It explained: "We expect this lower consumption to continue into the second half of the year and therefore full year group revenue is expected to be lower than the guidance that we gave in May." Back then, United Utilities said it expected annual revenue to grow 1%. Inflationary increases in input costs are expected to be higher than expected. United Utilities forecasts underlying operating costs to be GBP65 million higher in the first half. Interim underlying operating profit will be lower than the GBP332.8 million record a year earlier.
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Biogen has reached a USD900 million settlement with a whistleblower who accused the firm of having paid bribes to doctors to encourage them to prescribe its drugs against multiple sclerosis. The whistleblower behind the report, Michael Bawduniak, will receive about USD250 million directly, according to a statement released Monday by the US Justice Department. The rest will essentially go to the federal government, and a smaller part – USD56 million – to 15 American states that had joined the lawsuit, to which the agreement puts an end.
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German car maker BMW is aiming to increase unit sales next year following a fall this year resulting from supply chain problems with computer chips and the effects of the war in Ukraine, Chief Financial Officer Nicolas Peter said. Speaking during a video conference with journalists, Peter predicted a "slight" rise of between 1% and 5% in unit sales, driven primarily by an increase in sales of electric vehicles. Peter predicted sales of fully electrically powered cars would rise to 400,000 vehicles next year based on a positive order situation. For this year, sales in this segment are likely to more than double to between 240,000 and 245,000 vehicles.
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MARKETS
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Stock markets were mostly higher on Tuesday after a strong day in Asia, with Wall Street called to bounce back from Monday's lower close. The FTSE 100 index in London was underperforming, as the pound recovered some composure. However, this may be short-lived, commentators said. Kit Juckes of Societe Generale said that, with the Bank of England preferring to wait until its normal policy meeting on November 3 to raise UK interest rates, the currency market is likely to be "rudderless". He added: "There will be plenty of volatility ahead and with no new news likely to emerge, the next bout of weakness will come along soon enough."
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CAC 40: up 0.3% at 5,785.58
DAX 40: up 0.3% at 12,259.10
FTSE 100: down 0.4% at 6,994.90
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Hang Seng: closed marginally higher, up 5.17 points at 17,860.31
Nikkei 225: closed up 0.5% at 26,571.87
S&P/ASX 200: closed up 0.4% at 6,496.20
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DJIA: called up 0.5%
S&P 500: called up 0.7%
Nasdaq Composite: called up 0.9%
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EUR: unchanged at USD0.9624 (USD0.9626)
GBP: up at USD1.0804 (USD1.0655)
USD: unchanged at JPY144.43 (JPY144.41)
GOLD: down at USD1,634.54 per ounce (USD1,639.00)
OIL (Brent): firm at USD85.46 a barrel (USD85.30)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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US President Joe Biden's plan to forgive part of the country's massive student debt burden is estimated to cost the government USD400 billion, the Congressional Budget Office said. The estimate, requested by conservative lawmakers and issued by an apolitical federal body, is expected to add further fuel to the heated controversy between Democrats and Republicans over the topic. "CBO estimates that the cost of student loans will increase by about an additional USD400 billion in present value" as a result of the debt forgiveness, it said. But a White House official noted, "CBO called its own estimate 'highly uncertain.' We agree."
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Hurricane Ian made landfall in western Cuba early Tuesday, with the Caribbean nation and the US state of Florida ramping up preparations for high winds and potential flooding. About 50,000 people in Cuba's western Pinar del Rio province moved to safer locations, 6,000 of them to state-run shelters and the rest to the homes of relatives and friends, local authorities said. The US National Hurricane Center had warned that Ian had strengthened into a major Category 3 storm on the Saffir-Simpson scale. In Florida, the city of Tampa was under a hurricane watch, and Governor Ron DeSantis declared a state of emergency in all 67 counties as officials scrambled to prepare for the storm's forecast landing on Wednesday or Thursday.
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The French government will borrow a record EUR270 billion next year to finance a budget that includes caps on energy prices that are expected to soar over the winter, officials said. "This is not a restrictive budget, nor an easy one – it's a responsible and protective budget at a time of great uncertainties," Finance Minister Bruno Le Maire said at a press conference. Electricity and gas prices have jumped since Russia's invasion of Ukraine, and officials are urging energy "sobriety" to help avoid any shortages as the conflict drags on. The government has vowed that, from January, increases of electricity and gas prices will be limited to 15%, a measure expected to cost EUR45 billion.
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Giorgia Meloni, who is set to become Italy's first far-right leader since World War II, said she wants to "enhance what unites" people in the country, rather than what divides them, after her alliance won parliamentary elections at the weekend. "The Italians have entrusted us with an important task. Now it is our job to not let them down and do our utmost to restore dignity and pride to the nation," she wrote on Twitter. Meloni is set to lead a right-wing coalition into power as her alliance secured an absolute majority of seats in both houses of parliament, the Ministry of Interior confirmed.
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The Bank of England has said it "will not hesitate" to raise interest rates to prop up the value of sterling after a day of turmoil on the markets which saw the pound slump to its lowest level for at least half a century. UK Chancellor Kwasi Kwarteng announced he would bring forward an announcement of a "medium-term fiscal plan" to start bringing down debt levels following an adverse reaction to his GBP45 billion package of tax cuts set out on Friday. The Treasury said it would now be published on November 23, having previously been slated for the new year.
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UK opposition leader Keir Starmer will be buoyed by promising polling for Labour as he accuses the Tories of losing control of the economy and vows to get the UK "out of this endless cycle of crisis". He will quote former UK prime minister Tony Blair to dub Labour the "political wing of the British people", as a new YouGov survey suggests the party has opened up a 17-point lead over the Conservatives – the greatest since the firm began polling in 2001. The Conservatives accused Labour of "another relaunch full of vacuous statements and empty promises, with no details", as they claimed "no one knows what Starmer stands for".
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Downing Street has confirmed it will employ UK Prime Minister Liz Truss's chief of staff Mark Fullbrook directly after it emerged he was being paid through his lobbying company. Fullbrook will be put on a special advisor contract to avoid "any ongoing speculation", a Number 10 spokesperson said early on Tuesday. The Cabinet Office had previously said it was "not unusual" for a special adviser to join government "on secondment" and that his salary was paid to a "seconding company". But the arrangement drew accusations of renewed "Tory sleaze" from opposition parties. Number 10 did not deny that Liz Truss's top aide received payments through Fullbrook Strategies, a private lobbying firm he set up in April, as The Sunday Times reported.
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A tax credit for renters and double welfare payments are among the measures expected in Ireland's 2023 government budget, which will be officially unveiled in Parliament on Tuesday. In what could be one of Ireland's most significant budgets in years, the pressure is on the coalition government to get the balance right as bills for energy, fuel, groceries and housing soar. One measure expected to be announced has already been labelled as "a serious disappointment". The government had indicated during the summer that the budget would be worth EUR6.7 billion, but on Sunday it published a white paper that indicated it had a surplus of EUR4.4 billion, mostly due to the over-performance of corporate tax. A one-off package of measures to help people with inflationary prices is, as of yet, uncosted.
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By Tom Waite; thomaslwaite@alliancenews.com
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