(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Nippon Telegraph & Telephone posted year-to-date growth in profit and guided to an increased dividend. For the nine months to the end of December, the Tokyo-headquartered telecommunications firm saw revenue grow 2.1% year-on-year to JPY8.923 trillion - around USD77.38 billion - from JPY8.738 trillion. This led to a 3.9% increase in pretax profit to JPY1.554 trillion from JPY1.495 trillion, while operating profit rose 2.5% to JPY1.540 trillion from JPY1.502 trillion. Forecasts for the year as a whole were edged up slightly, with revenue now seen at JPY12.180 trillion versus JPY12.000 trillion previously. Operating profit is expected at JPY1.745 trillion, up from a prior forecast of JPY1.730 trillion. NTT expects to pay a dividend to JY115.00 for the year, which would be up from JPY105.00 paid out for the 2021 financial year.
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Commonwealth Bank of Australia said it has partnered with Brisbane-based financial payment platform Paypa Plane. The Sydney-based lender explained that it will invest into Paypa Plane in exchange for a 20% stake and aid in the creation of a new payment experience for Paypa Plane customers. The investment amount was not disclosed. Commonwealth Bank said, as part of the partnership, it will aid in the business transiting to PayTo, a digital service which allows businesses to offer direct debit payments to their customers.
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The worst of rising food prices is "yet to come" ahead of a potential 5% increase in spring, the chair of the UK's largest supermarket chain, Tesco said Sunday. It comes amid a cost-of-living crisis in the UK, which will result from surging energy prices and increased national insurance contributions in April. John Allan said food prices at the supermarket chain grew by only 1% in the last quarter but could rise by 5% in the coming months.
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Housebuilder Taylor Wimpey promoted Jennie Daly to chief executive officer, effective from the conclusion of the annual general meeting on April 26 to replace the outgoing Pete Redfern. Daly is currently operations director of Taylor Wimpey and a member of the board of directors. She joined Taylor Wimpey in 2014 from Redrow, where she was managing director of its Harrow Estates business.
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Great Portland Estates reported record lettings at its buildings in central London, saying the commercial property market is rebounding after work-from-home guidance left offices empty. Since October 1, Great Portland Estates has agreed 17 new lettings for 102,100 square feet of space, generating an annual rent of GBP5.5 million, it said. In total, Great Portland has now signed 460,900 square feet of new lettings since the start of the financial year on April, generating a combined annual rent of GBP32.5 million. This surpassed its previous record leasing high of GBP31.8 million in 2016 with two months of the financial year still remaining, it noted.
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Reckitt Benckiser is weighing options for its infant nutrition unit, including a potential sale, Bloomberg reported on Friday. Citing people familiar with the matter, Bloomberg said Reckitt is reviewing the business globally and has been informally gauging buyer interest in the operations. The business could attract offers from private equity firms or rival baby food makers, the people said, asking not to be identified because the information is private. Bloomberg noted the sale would complete a reversal of Reckitt's largest-ever purchase, the USD17 billion acquisition of Mead Johnson Nutrition, made five years ago under former Chief Executive Officer Rakesh Kapoor. His successor, Laxman Narasimhan, sold the Chinese infant formula business to local buyout firm Primavera Capital for USD2.2 billion last year, exiting one of its largest markets.
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Namibia's state-owned oil company on Friday said oil major Shell and Qatar Energy, the state owned petroleum company of Qatar, had discovered light oil deposits offshore, but had yet to determine how large or viable they were. "We are pleased to announce that the Graff-1 deep-water exploration well, 270 kilometres from the town of Oranjemund, has made a discovery of light oil in both primary and secondary targets," National Petroleum Corp of Namibia said in a statement. Further work is needed to determine the quality, size and viability of the reservoir, it added.
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Shares in at-home fitness equipment company Peloton Interactive jumped Friday evening in extended trading on Wall Street amid reports of the company's potential takeover by e-commerce firm Amazon.com. Peloton shares surged 26% to USD31.10 in after-hours trading in New York. The stock was up 24% at USD30.40 in pre-market activity on Monday. Amazon shares, which had risen 14% in the main trading session on Friday following a strong earnings report late Thursday, edged down 0.1% in after-hours trade and also were slightly down early Monday. Several US media reported on Amazon's interest in Peloton, which has struggled to maintain growth amid easing Covid-19 restrictions. "Amazon has been speaking to advisers about a potential deal," the Wall Street Journal reported Friday, citing sources. The newspaper added, however that "there's no guarantee the e-commerce giant will follow through with an offer or that Peloton, which is working with its own advisers, would be receptive." Separately, the Financial Times reported that US sports apparel firm Nike also is evaluating a bid for Peloton, citing people briefed on the matter. Neither Amazon nor Nike have held talks with Peloton, the FT sources said.
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MARKETS
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Stock markets were starting the new week narrowly mixed, though the Nasdaq Composite index was called up 1.1%, having closed up 1.6% on Friday. Strong earnings from Amazon late Thursday have inspired a fight back for US technology shares. Meanwhile, the Brent oil price fell back a bit on Monday after having risen about USD93 a barrel on Friday, its highest level since 2014.
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CAC 40: down 0.1% at 6,944.58
DAX 40: up 0.1% at 15,114.75
FTSE 100: up 0.2% at 7,533.25
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Hang Seng: closed marginally higher, up 6.26 points at 24,579.55
Nikkei 225: closed down 0.7% at 27,248.87
S&P/ASX 200: closed down 0.1% at 7,110.80
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DJIA: called down 0.2%
S&P 500: called down 0.2%
Nasdaq Composite: called up 1.1%
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EUR: down at USD1.1425 (USD1.1443)
GBP: down at USD1.3520 (USD1.3535)
USD: down at JPY115.03 (JPY115.25)
GOLD: up at USD1,812.70 per ounce (USD1,804.75)
OIL (Brent): down at USD92.20 a barrel (USD93.35)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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China's service sector saw growth slow at the start of 2022 due to an uptick in Covid-19 cases across the globe, survey data from Caixin showed. The business activity index fell to 51.4 points in January from 53.1 in December. As the reading remained above the no-change mark of 50.0, it signalled the sector continued to expand in January, but at a slower pace than December. Firms highlighted that the pandemic and subsequent measures to contain the virus weighed on growth. New export orders fell for the first time in four months, and at the quickest pace since October 2020, as businesses pointed towards damped international demand due to Covid cases overseas. The composite output index - a weighted average of the services and manufacturing purchasing managers' indices - fell to 50.1 in January from 53.0 in December. Figures last week showed the manufacturing PMI fell to 49.1 in January from 50.9 December.
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A Chinese city of 3.5 million near the border with Vietnam was in lockdown Monday after more than 70 coronavirus cases were discovered there over the past three days. China, the only major world economy still sticking to a staunch zero-Covid policy, is on high alert for any outbreaks as it hosts the Beijing Winter Olympics. Local officials in the city of Baise in the southern Guangxi region announced Sunday that no one would be allowed to leave the city, while residents of some districts would be confined to their homes. "Citywide traffic controls will be implemented," vice-mayor Gu Junyan told a briefing. "In principle, vehicles and people cannot enter or leave the city... with personnel control strictly enforced and no unnecessary movement of people." Residents of some neighbourhoods in smaller rural cities and counties under Baise's jurisdiction have been placed under strict home confinement, while others cannot leave their district, Gu added.
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Australia will reopen its borders to tourists from February 21, Prime Minister Scott Morrison announced, ending some of the world's strictest and longest-running pandemic travel restrictions. "It's almost two years since we took the decision to close the borders to Australia," Morrison said after a meeting of the national security cabinet. He announced the borders will reopen to all visa holders "on the 21st of February of this year," adding, "if you're double vaccinated, we look forward to welcoming you back to Australia." Australia's borders slammed shut in March 2020 in the hope of protecting the island continent against a surging global pandemic. For most of the time since then, Australians have been barred from leaving and only a handful of visitors have been granted exemptions to enter.
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The German industrial sector rounded off 2021 on a downbeat note, with production remaining below pre-pandemic levels. Data from Destatis showed industrial production in December was down 0.3% month-on-month, after 0.3% growth in November. December was expected to show growth of 0.4%, according to FXStreet-cited consensus. Annually, output fell 4.1% after November's 2.2% decline. For 2021 a a whole, production was up 3.0% on a pandemic-battered 2020, but 5.5% below 2019, a Covid-free year. Compared with February 2020, the month before lockdown restrictions were imposed in Germany, production was 6.9% lower.
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The Swiss unemployment rate nudged down in January, data from the State Secretariat for Economic Affairs showed. The seasonally adjusted jobless rate in Switzerland fell to 2.3% in January from 2.4% in December.
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UK house prices continued to climb in January, boosted by a shortage in available properties, figures from mortgage lender Halifax showed. On an annual basis, the Halifax UK house price index rose by 9.7% in January, the same pace as in December. However, the latest reading missed the market forecast, cited by FXStreet, for an 11% increase. UK house prices rose 0.3% month-on-month in January, slowing sharply from 1.1% in December. This print missed the market estimate of 0.7%. It was also the smallest monthly increase since June 2021.
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UK Prime Minister Boris Johnson is expected to make further changes to his Downing Street operation as he tries to maintain his grip on power. Johnson made new appointments over the weekend, with Chancellor of the Duchy of Lancaster Steve Barclay becoming his chief of staff and journalist and former aide Guto Harri returning as his head of communications. The Times reported No 10 was hoping to announce the return of Emily Lawson as the new permanent secretary this week. Lawson, who currently runs NHS England's vaccination programme, was seconded to Downing Street's delivery unit – a team in charge of ensuring the government delivers on its policies – in April last year before returning to the health service in October. Senior backbencher Tom Tugendhat, a potential leadership candidate if Johnson is forced out, said the prime minister's future depends on how the "reset" goes.
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With war clouds gathering over Ukraine, international diplomacy goes into overdrive on Monday with the French and Russian presidents to talk in Moscow and the German chancellor heading to the White House to meet with US leader Joe Biden. Also on Monday, the German, Czech, Slovak and Austrian foreign ministers were expected in Kyiv, which has played down dire US warnings that Moscow had stepped up preparations for a major incursion into Ukraine. US officials have said the Kremlin has assembled 110,000 troops along the border with its pro-Western neighbour but intelligence assessments have not determined whether President Vladimir Putin has actually decided to invade. They said Russia is on track to amass a large enough force – some 150,000 soldiers – for a full-scale invasion by mid-February. Such a force would be capable of taking the capital Kyiv in a matter of 48 hours in an onslaught that would kill up to 50,000 civilians, 25,000 Ukrainian soldiers and 10,000 Russian troops and trigger a refugee flood of up to five million people, mainly into Poland, the officials added.
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Iran's top security official said Sunday that Washington and Tehran had so far failed to produce "balance" in their commitments during the Vienna talks aimed at restoring the nuclear deal. "Despite limited progress in the #ViennaTalks, we are still far from achieving the necessary balance in the commitments of the parties," Supreme National Security Council secretary Ali Shamkhani said in a Twitter post. "Political decisions in #Washington are requirements for balance of commitments to reach a good agreement." Iran is engaged in negotiations with Britain, China, France, Germany and Russia directly and with the US indirectly to revive the 2015 deal formally called the Joint Comprehensive Plan of Action. The US State Department on Friday said it was waiving sanctions on Iran's civil nuclear programme in a technical step necessary to return to the JCPOA. The waiver allows other countries and companies to participate in Iran's civil nuclear programme without triggering US sanctions on them, in the name of promoting safety and non-proliferation.
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By Tom Waite; thomaslwaite@alliancenews.com
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