Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The following is a summary of top news stories Monday.
----------
COMPANIES
----------
Indian billionaire Gautam Adani struck a $10.5 billion deal to buy Swiss cement maker Holcim's local business, the companies said, betting on a construction boom predicted in coming decades. In his biggest acquisition to date, the deal will give coal-to-ports magnate Adani who vies with fellow Indian Mukesh Ambani for the title of Asia's richest person a controlling stake in India's second-largest cement manufacturer. ‘Our move into the cement business is yet another validation of our belief in our nation's growth story,’ Adani said in a statement late Sunday.
----------
Vodafone welcomed its newest major shareholder, after Emirates Telecommunications took a 9.8% shareholding but said but it has no plans to make a takeover offer. UAE-based Emirates Telecom was formerly known as Etisalat and now goes by the moniker 'e&'. On Saturday, it said subsidiary Atlas 2022 Holdings Ltd purchased 2.77 billion Vodafone shares for about $4.4 billion, praising the quality of the business and its brand. ‘e& is fully supportive of Vodafone's board and existing management team and its current business strategy announced in November 2021,’ it said. The 9.8% stake makes Emirates Telecom the biggest single shareholder of Vodafone. The previous two biggest owners were BlackRock with a 6.9% stake and Norges Bank with 3.0%, according to Morningstar. ‘We look forward to building a long-term relationship with Etisalat,’ Vodafone said, adding that it will provide an update on its strategic plans alongside its annual results on Tuesday.
----------
Saudi Arabian Oil posted an 82% jump in first-quarter profit, buoyed by a global surge in oil prices that has made it the world's most valuable company. The announcement continued a string of recent positive economic news for Saudi Arabia, where a booming oil sector is fuelling the fastest growth rate in a decade. Saudi Aramco's net income of $39.5 billion was up from $21.7 billion compared with the same period in 2021, ‘primarily driven by higher crude oil prices and volumes sold, and improved downstream margins’, it said in a press release. The latest financial results were published four days after Aramco dethroned Apple as the world's most valuable company, with shares worth $2.42 trillion compared to Apple's $2.37 trillion. A dividend of $18.8 billion will be paid in the second quarter, it said.
----------
After mounting pressure since the Russian invasion of Ukraine, Renault announced it has signed deals to cut ties with its Russian operations. The Paris-based carmaker has agreed to fully divest of its shares in Renault Russia to a Moscow City entity. It will also sell its 68% controlling interest in AvtoVAZ, the largest carmaker in Russia with the country's top brand Lada, to NAMI which is Russia's Central Research & Development Automobile & Engine Institute. The deals are not subject to any conditions, Renault said, with all necessary approvals having been received. The financial details of the sales were not provided. The agreement allows Renault to buy back its interest in AvtoVAZ, at certain points in the coming six years.
----------
Low-cost airline Ryanair said a ‘fragile’ recovery for the travel industry was being threatened by higher fuel costs as a result of the Russian invasion of Ukraine, but it still expects to return to profit in the current financial year. The Dublin-based carrier reported a narrowed net loss of €355 million in the financial year that ended March 31, cut from €1.02 billion the year before, as revenue multiplied to €4.80 billion from €1.64 billion. ‘This recovery, however, remains fragile’ following Russia's invasion of Ukraine, Chief Executive Michael O'Leary said in a statement. ‘Given the continuing risk of adverse news flows on’ Ukraine and Covid, ‘it is impractical if not impossible to provide a sensible or accurate profit guidance range at this time,’ he added. While Ryanair expects cost increases as a result of surging oil prices fuelled by the war, it hopes ‘to return to reasonable profitability’ in its current financial year.
----------
MARKETS
----------
Factory output figures showing the damage being done to the Chinese economy by the Beijing government's strict zero-Covid strategy put a damper on European stock prices, though Asian markets had done better. Spot gold was lower. ‘Downward pressure [on the gold price] is likely to linger in the near term, particularly if [US Federal Reserve Chair Jerome Powell] maintains a hawkish tone this week; however, gold could find a respite if US economic data turns sour,’ said Stephen Innes of SPI Asset Management.
----------
CAC 40: up 0.1% at 6,366.55
DAX 40: marginally lower, down 3.77 points at 14,024.16
FTSE 100: up 0.1% at 7,425.85
----------
Hang Seng: closed up 0.3% at 19,950.21
Nikkei 225: closed up 0.5% at 26,547.05
S&P/ASX 200: closed up 0.3% at 7,093.00
----------
DJIA: called marginally higher, up 4.00 points
S&P 500: called down 0.2%
Nasdaq Composite: called down 0.4%
----------
EUR: up at $1.0433 ($1.0410)
GBP: firm at $1.2240 ($1.2230)
USD: up at JP¥129.39 (JP¥129.28)
GOLD: down at $1,799.80 per ounce ($1,812.69)
OIL (Brent): soft at $110.79 a barrel ($111.00)
(currency and commodities changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
The European Commission sharply cut its eurozone growth forecast for 2022 to 2.7% as skyrocketing energy prices due to the war in Ukraine challenged the economy. The war also spurred the EU's executive to sharply revisit its eurozone inflation prediction for 2022, with consumer prices seen to jump by 6.1% year-on-year, much higher than the earlier forecast of 3.5%, a statement said.
----------
Industrial production in China unexpectedly fell by 2.9% in April compared to the same period last year amid continued strict Covid-19 restrictions, according to official figures released Monday. Retail sales also fell more sharply than analysts had predicted, by as much as 11%, the Bureau of Statistics said. ‘Covid outbreaks in April had a big impact on the economy, but the impact is short-term,’ Bureau of Statistics spokesman Fu Linghui said. ‘With progress in Covid controls and policies to stabilize the economy taking effect, the economy is likely to recover gradually,’ he added. According to experts, however, the figures for April indicate that the economic downturn this year will be stronger than expected.
----------
Inflation for corporate goods picked up speed in Japan in April. The producer price index rose 1.2% on a monthly basis in April, according to the Bank of Japan, increasing from the 0.9% rise in March. Producer prices rose 10% on an annual basis in April, accelerating slightly from the 9.7% rise in March.
----------
Finland and Sweden have both decided to apply for membership of NATO, setting aside decades of effective neutrality in light of growing concerns for their own security following Russia's invasion of Ukraine, both countries announced. ‘A new era is beginning,’ Finnish President Sauli Niinisto said alongside Prime Minister Sanna Marin, announcing a step that the two leaders called historic. Later on, Sweden announced its intention to apply for NATO membership in a move that marks a major shift in their position on the defence alliance. After Finland's announcement, Swedish Prime Minister Magdalena Andersson's governing Social Democrats announced its support for Swedish membership of NATO following a specially-convened meeting on Sunday. However, Sweden's Social Democrats have indicated they want neither nuclear weapons nor permanent NATO bases on their territory.
----------
UK Prime Minister Boris Johnson will hold emergency talks with Northern Ireland's political leaders later in a bid to break a Stormont deadlock caused by post-Brexit trading arrangements. The powersharing institutions have been plunged into crisis in the wake of the recent Assembly election with the DUP refusing to re-enter a devolved government in protest at the contentious Northern Ireland protocol, which has created economic barriers between the region and the rest of the UK. Johnson's visit comes amid heightened tensions between the UK and EU over the prospect of him moving to override elements of the protocol by way of domestic legislation at Westminster. Brussels has made clear that such unilateral action to walk away from a key plank of the Brexit Withdrawal Agreement would represent a clear breach of international law. Ahead of his trip to Northern Ireland, Johnson said the UK will have a ‘necessity to act’ if the EU is unwilling to reach a compromise in the deepening row over the protocol.
----------
Growth in Ireland's construction sector slowed slightly in April. BNP Paribas Real Estate's construction total activity index for Ireland dropped to 52.5 points in April from 53.9 points in March. This is closer to the 50-point ‘no-change’ market that separates growth from contraction, showing growth slowed in the month.
----------
The United Arab Emirate's new president, Sheikh Mohamed bin Zayed Al Nahyan, met his French and British counterparts Sunday as world leaders offered congratulations and paid tribute to his late predecessor. French President Emmanuel Macron, on the maiden foreign trip of his second term, was the first of a number of Western leaders to meet 'MBZ', the oil-rich Gulf state's long-time de facto ruler who was appointed on Saturday, a day after the death of his ailing half-brother Sheikh Khalifa. He was followed later by UK PM Johnson, who offered his commiserations on Sheikh Khalifa's death and his congratulations on the presidency, an official told AFP. Queen Elizabeth II also sent her congratulations. Israel's president and the king of Spain were also scheduled to meet Sheikh Mohamed on Sunday, with US Vice President Kamala Harris and Secretary of State Antony Blinken due on Monday.
----------
Copyright 2022 Alliance News Limited. All Rights Reserved.