(Alliance News) - The following is a summary of top news stories Tuesday.
----------
COMPANIES
----------
The UK Competition & Markets Authority said it is considering whether AstraZeneca's takeover of Alexion Pharmaceuticals will reduce competition. The regulator is inviting comments on the transaction to aid with its assessment. The deadline for its phase one decision is July 21. Earlier this month, both Alexion and AstraZeneca's shareholders voted in favour of the deal. AstraZeneca agreed to buy Alexion in December for USD39 billion to boost its work on immunology. The takeover has already been given the go-ahead by the US Federal Trade Commission in mid-April after competition clearances in Canada, Brazil and Russia, but Astra is still waiting on approval in the UK, EU and Japan.
----------
Smiths Group said it has hired Paul Keel as its new chief executive, replacing Andy Reynolds Smith who will step down from his role and the board with immediate effect. "The change has been mutually agreed as the right time to provide new leadership as Smiths enters into its next growth phase," it said. Keel has previously worked at 3M, within the US and UK, where in his time he led businesses including the Consumer Business Group. Smiths added that it remains committed to the separation of its Smiths Medical division, saying it is "actively engaging with all options to maximise value for all stakeholders and to provide the company with an enhanced platform for future growth." It said its full-year expectations are unchanged from its March update.
----------
Software firm Aveva reported a dip in annual revenue as it saw an improved second half following pandemic disruption, while recently acquired OSIsoft performed well. Revenue on a proforma basis slipped 1.4% to GBP1.20 billion for the financial year that ended March 31, but pretax profit shot up to GBP50.6 million from GBP19.0 million. On a statutory basis, which only includes 13 days trading from OSIsoft, revenue fell 1.6% to GBP820.4 million from GBP933.8 million, and pretax profit tumbled to GBP34.2 million from GBP92.0 million. Aveva completed its USD5.0 billion acquisition of real-time industrial data software firm OSIsoft on March 19.
----------
German property group Vonovia on Monday announced plans for a EUR18 billion merger with peer Deutsche Wohnen. "The lack of affordable housing in metropolitan areas, coupled with the need to meet climate protection targets, continues to pose a major challenge for society, policy-makers and businesses alike. In order to tackle both the housing shortage and climate change more robustly and efficiently, Vonovia and Deutsche Wohnen are joining forces," Vonovia said. Both companies are committing to limit their regular rent increases across their combined Berlin portfolio to no more than 1% per year for the next three years and to inflation adjustment for the following two years. The offer represents an 18% premium to Deutsche Wohnen's closing price on Friday.
----------
Shaftesbury reported a widened interim loss as lockdowns crippled activity in London's West End, but the property landlord's outlook was upbeat following the easing of virus restrictions. It held off on a full dividend payout for now, however. Net property income fell 43% to GBP26.5 million in the six months to March 31 from GBP46.2 million a year before, due to occupier support, reduced rent collections, and increased vacancy in the period, with rental income down 19% on a like-for-like basis. Shaftesbury's pretax loss widened to GBP338.5 million from GBP287.6 million. However, the real estate investment trust focused on London's theatre district said that, following 15 months of disruption, the phased lifting of virus restrictions is already resulting in a return of confidence and activity. Footfall and spending are recovering, it said, while hospitality and retail businesses have reopened.
----------
MARKETS
----------
Asian and European stock markets were mostly higher on Tuesday, following a positive lead from Wall Street. The FTSE 100 in London was lagging due a stronger pound, which briefly topped USD1.42. The euro also was higher, breaking through USD1.2250. New York was called for higher open. "The wider backdrop is...still dollar-negative," commented Kit Jukes at SocGen in London. "Its (stretched) valuation is consistent with the Fed's stance, and the only way that changes is if we seriously think an FOMC volte-face is just around the corner."
----------
CAC 40: marginally higher, up 1.03 points at 6,409.52
DAX 30: up 0.7% at 15,551.28
FTSE 100: down 0.1% at 7,046.60
----------
Hang Seng: closed up 1.8% at 28,910.86
Nikkei 225: closed up 0.7% at 28,553.98
S&P/ASX 200: closed up 1.0% at 7,115.20
----------
DJIA: called up 0.3%
S&P 500: called up 0.3%
Nasdaq Composite: called up 0.5%
----------
EUR: up at USD1.2260 (USD1.2222)
GBP: up at USD1.4192 (USD1.4157)
USD: unchanged at JPY108.74 (JPY108.75)
Gold: down at USD1,882.76 per ounce (USD1,884.66)
Oil (Brent): firm at USD68.21 a barrel (USD68.00)
(currency and commodities changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
European Council President Charles Michel said Minsk was playing "Russian roulette" after a Ryanair flight was diverted and a prominent critic arrested in Belarus. Journalist Roman Protasevich was on board a Ryanair flight from Athens to Vilnius on Sunday when it was forced to change course to head for the Belarussian capital after a reported bomb scare, escorted by a MiG fighter jet. He was arrested and, in a video released by Belarusian authorities on Monday evening, appeared to admit he was involved in organising mass protests in Minsk last year. The EU and the UK have issued new sanctions against Belarus in light of the incident, with UK Transport Secretary Grant Shapps instructing the Civil Aviation Authority to request airlines avoid Belarusian air space "to keep passengers safe".
----------
The German economy fared slightly worse than initially expected at the start of 2021, revised figures from Destatis showed. Gross domestic product shrank 1.8% quarter-on-quarter in the first three months of the year. This previously had been first reported as a 1.7% contraction, and follows 0.5% growth in the fourth quarter of 2020. Year-on-year, GDP fell 3.1%, also a touch worse than the 3.0% decline initially estimated. This is still improved from a 3.3% fall in the final quarter of 2020. Compared with the fourth quarter of 2019, the quarter before the Covid crisis began, GDP was 5.0% lower in the first quarter of 2021. Separately, the Munich-based Ifo Institute for Economic Research said business conditions in Germany improved in May. Optimism has returned to the virus-hit hospitality and tourism sectors, Ifo said. Its German business climate index improved to 99.2 points in May from 96.6 in April. May's figure was the best score for two years.
----------
UK grocery sales have slowed, according to the latest data from market researchers Kantar, as pubs, bars and restaurants were allowed to reopen once again after lockdown measures were relaxed. However, Kantar noted UK grocery sales are still ahead of 2019's levels. In the 12 weeks ended May 16, take-home grocery sales were 0.4% lower annually at GBP31.30 billion from GBP31.41 billion in 2020. Growth in online sales slowed from the previous Kantar survey. More consumers did their shopping in stores as the UK vaccination programme progressed. Online sales were 13.4% higher year-on-year this time around, compared to the 13.9% climb in the April figures.
----------
Producer prices in Spain climbed annually for the fourth month in a row in April. According to INE, producer prices were 13% higher year-on-year in April. This followed annual growth of 6.4% in March. Producer prices in Spain have risen every month so far in 2021, having climbed 0.6% in February and 1% in January. On a monthly basis, producer prices were 2.9% higher, following a rise of 2.6% in March.
----------
The US warned its citizens not to travel to Olympic host Japan, citing the growing risk of the Covid-19 pandemic in the Asian nation just two months before the Games begin. The warning came in a travel advisory issued by the State Department as Japan, which has been criticized for its slow inoculation rate, opened its first mass vaccination centres in a push ahead of the Olympics, which were postponed last year due to the pandemic. The decision was based primarily on government health advice, as well as "secondary factors such as commercial flight availability, restrictions on US citizen entry, and impediments to obtaining Covid test results within three calendar days," the advisory said. Just 2% of Japan's population of 125 million has been fully vaccinated so far. It began giving the Pfizer shot in February first to medical workers and then over-65s, whom the government aims to finish inoculating by late July, when the Olympics begin.
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
