(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Singapore-based agricultural firm Olam International said it has chosen London for the initial public offering of its food ingredients business. Olam is in the process of demerging its two units - Olam Food Ingredients and Olam Global Agri. OFI supplies ingredients and products made from cocoa, coffee, nuts, spices, and dairy. The IPO is planned for the first half of 2022 and will be joined by a secondary listing on the Singapore Stock Exchange. OFI is planning to raise about GBP2 billion, Reuters reported on Friday, citing sources familiar with the matter. Citigroup, Credit Suisse, HSBC, JPMorgan and Morgan Stanley have been appointed to work on the IPO, according to Reuters. In the first half of 2021, OFI made revenue of SGD6.8 billion - about USD5.0 billion - and earnings before interest and tax of SGD316.3 million. Olam International is currently listed in Singapore, with a market capitalisation of SGD5.59 billion, equivalent to USD4.11 billion. It is controlled by the country's sovereign wealth fund, which has a 54% stake.
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Babcock International said it has reached an agreement with US science and technology company KBR to sell its subsidiary Frazer-Nash Consultancy for GBP293 million. Babcock said the sale forms part of its disposal programme, which aims to generate at least GBP400 million over the next twelve months. Babcock said Frazer-Nash Consultancy is an "outstanding business" which provides independent advice to its customers and has operated largely independently from Babcock. Cash from the sale will be used to reduce net debt. "We are making real progress on our plan to streamline and focus the group on our key markets. Divesting at least GBP400 million of businesses in our targeted disposals programme will enable us to reduce complexity and increase our focus as we return Babcock to strength," said Chief Executive Officer David Lockwood.
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Thungela Resources posted a significant increase in interim earnings due to strong thermal coal prices in its first report as an independent company. Thungela was formally spun off from Anglo American in June when it listed on both the London and Johannesburg stock exchanges. For the six months to June 30, the coal miner said revenue rose to ZAR10.05 billion from ZAR1.66 billion a year before, leading to a profit of ZAR351 million, around GBP17.2 million, from a ZAR122 million loss. Operating profit surged to ZAR1.89 billion from ZAR52 million, benefiting from a strong recovery in thermal coal prices, underpinned by the global economic recovery. The company expects to declare maiden dividend in its results for 2021 as a whole at 30% free cash flow.
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Vectura on Thursday backed Philip Morris International's takeover bid, despite concern about the ethics of the asthma treatment firm coming under the marquee of the tobacco company. On Tuesday, private equity firm Carlyle decided against raising its takeover offer for the FTSE 250 firm, meaning a proposed auction was cancelled. As a result, it meant the Marlboro maker's takeover offer of 165 pence per share, which values Vectura at GBP1.02 billion, remained the highest bid. Earlier in August, the British Thoracic Society, a UK charity focused on the treatment of those with lung disease, hit out at the Philip Morris and Vectura deal.
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Adidas on Thursday announced the sale of sportswear brand Reebok to Authentic Brands Group for a total consideration of up to EUR2.1 billion. New York-based Authentic Brands Group boasts brands like Juicy Couture, Brooks Brothers, Aeropostale and Forever 21. Herzogenaurach, Germany-based Adidas said the transaction is expected to occur in the first quarter of 2022, and will share the majority of the cash proceeds with Adidas shareholders. In February, Adidas said it planned to sell off US subsidiary Reebok after struggling for years to lift the brand's fortunes.
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Berkshire Hathaway-backed fintech firm Nu Pagamentos is planning a USD2 billion initial public offering for the end of this year, Bloomberg reported. The firm, known as Nubank, may seek a valuation of USD40 billion in a Nasdaq listing, Bloomberg reported citing people familiar with the matter. Banks handling the share sale include Morgan Stanley, Goldman Sachs, Citigroup and UBS. The Sao Paulo, Brazil-based company is also backed by Advent International and Tencent Holdings. Deliberations are ongoing, Bloomberg added.
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Walt Disney on Thursday said its third quarter revenue topped consensus and streaming subscriber numbers jumped. In the three months to July 3, revenue rose 45% year-on-year to USD17.02 billion, from USD11.78 billion. The figure topped CNN-cited consensus of a lesser jump to USD16.8 billion. The entertainment firm swung to a pretax profit of USD995 million from a USD4.84 billion loss a year earlier. Disney booked USD5.05 billion in restructuring and impairment costs in the third quarter of the last financial year. "We ended the third quarter in a strong position, and are pleased with the company's trajectory as we grow our businesses amidst the ongoing challenges of the pandemic," Chief Executive Bob Chapek said. The company said its Disney+ arm ended the quarter with 116.0 million subscribers, more than doubling from 57.5 million a year earlier and up from 103.6 million at the end of its second quarter.
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Microsoft on Thursday confirmed it is challenging a decision to award a multi-billion-dollar cloud computing contract to its rival Amazon. US media reports said the contract valued at USD10 billion is for modernizing storage of classified data at the National Security Agency. "Based on the decision we are filing an administrative protest via the government Accountability Office," Microsoft said in response to an AFP inquiry. "We are exercising our legal rights and will do so carefully and responsibly." NSA spokesperson said that it "will respond to the protest in accordance with appropriate federal regulations," while Amazon declined to comment.
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MARKETS
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European shares were looking to cap a positive week, while Wall Street also was called higher. In Paris, the CAC 40 was reading above the 6,900 point mark, while in Frankfurt the DAX was above 16,000, both fresh territory for the indices. London's FTSE 100 also was finishing the week strongly, though it remained short of a high set back in 2018. "European shares are extending yesterday's gains amid a rising appetite for riskier assets ahead of the weekend. Even though the Delta variant keeps weighing on market sentiment in many regions like Asia, investors are optimistic about countries with more aggressive vaccination programs in place, such as Europe and the US," commented Pierre Veyret, technical analyst at ActivTrades.
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CAC 40: up 0.4% at 6,907.16
DAX 30: up 0.5% at 16,014.28
FTSE 100: up 0.3% at 7,214.05
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Hang Seng: closed down 0.5% at 26,391.62
Nikkei 225: closed down 0.1% at 27,977.15
S&P/ASX 200: closed up 0.5% at 7,628.90
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DJIA: called up 0.2%
S&P 500: called up 0.1%
Nasdaq Composite: called up 0.1%
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EUR: up at USD1.1742 (USD1.1729)
GBP: down at USD1.3800 (USD1.3829)
USD: soft at JPY110.30 (JPY110.35)
Gold: up at USD1,756.15 per ounce (USD1,750.13)
Oil (Brent): down at USD70.93 a barrel (USD71.22)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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China rejected the World Health Organization's calls for a renewed probe into the origins of Covid-19, saying it supported "scientific" over "political" efforts to find out how the virus started. Pressure is once more mounting on Beijing to consider a fresh probe into the origins of a pandemic which has killed more than four million people and paralysed economies worldwide since it first emerged in the central Chinese city of Wuhan. A WHO team of international experts went to Wuhan in January 2021 to produce a first phase report, which was written in conjunction with their Chinese counterparts. It failed to find a conclusive position on how the virus began. On Thursday the WHO urged China to share raw data from the earliest Covid-19 cases to revive its probe into the origins of the disease. China hit back, repeating its position that the initial investigation was enough and that calls for further data were motivated by politics instead of scientific inquiry.
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The UK competition watchdog is looking at whether there are any "immediate actions" the government can take amid concerns about the high cost of PCR tests required for travel abroad. The Competition & Markets Authority had previously confirmed it will look into issues around testing, following a request from UK Health Secretary Sajid Javid, but said it will report its recommendations "within the next month". Now, the regulator said it is also looking at "steps that could be considered in the interim" to address what it described as a "particularly pressing issue". The CMA said it is looking at three areas – whether individual PCR providers may be breaching their obligations under consumer law and should be subject to enforcement action; whether there are structural problems in the market for PCR tests, affecting price or reliability; and whether there are any immediate actions that the government can take in the meantime.
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The US on Thursday authorized an extra dose of Covid vaccine for people with weakened immune systems, as the country struggles to thwart the Delta variant. "The country has entered yet another wave of the Covid-19 pandemic, and the FDA is especially cognizant that immunocompromised people are particularly at risk for severe disease," said acting Food & Drug Administration Commissioner Janet Woodcock in a statement.
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San Francisco is poised to become the first US city to demand proof of full vaccination against Covid-19 to access indoor dining and entertainment venues, officials announced Thursday. Bars, restaurants, night clubs, theaters, fitness centers and other establishments in this large Californian city will require visitors to present vaccination certificates to enter starting August 20. For staff, the measure will take effect in October.
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Canadian Prime Minister Justin Trudeau is expected to pull the plug on his minority Liberal government and call snap elections on Sunday despite a nationwide uptick in Covid infections that is worrying voters, media reported. Trudeau is to visit the governor general to ask her to dissolve parliament and announce voting will be held on September 20, according to public broadcaster CBC and other local media, citing unnamed sources. He and opposition leaders have been criss-crossing the country in recent weeks making election-style announcements as talk of a possible fall ballot has heated up. Trudeau was re-elected to office in 2019 but lost his majority in his second term.
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French unemployment dipped by less than expected in the second quarter, while inflation eased. France's unemployment rate for the second quarter was 8.0%, down from 8.1% for the first three months of the year but analysts, according to FXStreet, had expected a decrease to 7.9%. Statistical body INSEE noted that the 2021 second quarter rate was "almost identical" to pre-virus levels, having stood at 8.1% in the fourth quarter of 2019. Separately, INSEE said French annual consumer price inflation slowed to 1.2% in July from 1.5% in June. This easing was attributed to a fall back in the prices of manufactured goods, linked to postponed summer sales, as well as a drop in tobacco prices.
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Spain's annual inflation rate was confirmed as accelerating in July. The consumer price index advanced 2.9% year-on-year last month, statistics agency INE said, strengthening from June's growth of 2.7%. The monthly figure for July waned further from the preliminary forecast, with prices down 0.8% in July from the initial figure of 0.7%. This compared with month-on-month growth of 0.5% in June.
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Swiss producer and import prices gained further in July, figures from the Federal Statistical Office showed. The price index rose 3.3% on an annual basis in July, picking up from growth of 2.8% in June and ahead of consensus forecasts, according to FXStreet, of 2.9%. July's reading marks the fourth consecutive month of year-on-year producer and import price increases. April 2021 was the first time the index posted a positive reading since December 2019.
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Tens of thousands of people were urged to evacuate as "unprecedented" levels of torrential rain hit western Japan, raising the risk of floods and landslides, the weather agency said. The downpours are forecast to continue for several days over a large swathe of the country, from the northern Tohoku region to Kyushu in the south. "There is a possibility that a grave disaster will occur" in the coming days, a Japan Meteorological Agency official told an emergency news conference shown live on public broadcaster NHK.
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By Tom Waite; thomaslwaite@alliancenews.com
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