(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Meta Platforms's Facebook and multiple media websites were partially inaccessible in Russia on Friday, as authorities crack down on critical voices and fighting rages in Ukraine. AFP journalists in Moscow were not able to access Facebook, as well as the sites of media outlets Meduza, Deutsche Welle, RFE-RL and the BBC's Russian-language service. The monitoring NGO GlobalCheck also said the sites were partially down. On its Telegram account, independent outlet Meduza said that its site was no longer available to "some of its users" in Russia, but added that it had not received notification from the authorities about a block. Since Moscow's invasion of Ukraine last week, Russian authorities have stepped up pressure against independent media, though press freedoms in the country were already rapidly waning.
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US online search firm Google has stopped selling online advertisements in Russia amid Moscow's attack on Ukraine. "In light of the extraordinary circumstances, we're pausing Google ads in Russia," the company, part of Alphabet, said in a statement. "The situation is evolving quickly, and we will continue to share updates when appropriate." It had earlier banned Russian state-funded media from buying or selling ads through its technology, and switched off real-time traffic information services for Ukraine in its Google Maps navigation software, which it said was a move to protect the Ukrainian public decided in consultation with the country's authorities. Meanwhile, vacation rental company Airbnb has stopped its activities in Russia and Belarus, Chief Executive Brian Chesky wrote on Twitter.
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Credit Suisse denied allegations that it forced investors to destroy documents linked with oligarch clients in the wake of Russia's invasion of Ukraine. The Zurich-headquartered investment bank and financial services firm explained that any paperwork that was erased was done to ensure "good data hygiene". The Financial Times on Wednesday reported Credit Suisse asked hedge funds and other investors to destroy documents that related to yachts and private jets belonging to the Swiss firm's richest clients. Citing a trio familiar with the matter, the FT said investors were sent a letter asking them to "destroy and permanently erase" any confidential information related to a transaction. The transaction concerned the securitisation of loans which were backed by yachts, jets and property. Any requests for non-participating investors to destroy documents was "market practice", Credit Suisse said.
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Italian insurer Generali said it will pull out of Russia after the Kremlin's invasion of Ukraine, starting with the closure of its Moscow office. There has been a stampede of companies in recent days away from Russia affecting nearly every sector. Generali said in a statement it was resigning from positions held on the board of the Russian insurer Ingosstrakh, in which it holds a minority investment stake of 39%. The company said Europ Assistance, which is part of the Generali group and which operates in Russia, will wind down its business. "Generali's minor exposure to the Russian market in terms of investments and insurance business is also under constant evaluation and fully compliant with all applicable sanctions," it said.
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Sony and Honda Motor are mulling the idea of an alliance that might include the creation of an electric vehicle joint venture. The two Tokyo-based companies announced that they have agreed to deepen discussions about forming a strategic alliance that aims to "create a new era of mobility and mobility services". Specifically, the media and electronics conglomerate and the vehicle manufacturer inked a memorandum of understanding that outlines their intent to establish a joint venture which will focus on the development and sales of high value-added battery electric vehicles and commercialise them in conjunction with providing mobility services. They said the JV could be established this year, with sales of the first EV model from the JV are expected to start in 2025.
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Shopping centre owner Hammerson cut its pretax loss to GBP408.0 million in 2021 from GBP1.74 billion in 2020, in a year of "fundamental change". The narrowed loss was aided by a GBP457.5 million revaluation loss on its managed properties, which had been GBP1.44 billion in 2020. Hammerson also recorded a GBP171.3 million loss from joint ventures in 2021, compared to a whopping GBP880.2 million loss in 2020. Gross rental income fell to GBP241.6 million from GBP286.9 million. It declared a final dividend of 0.2 pence, unchanged from the year before. "Since the beginning of 2021, we have made fundamental changes in our business, realigning our portfolio with GBP623 million of disposals, significantly strengthening the balance sheet, re-setting our organisation and putting in place a clear strategy for value creation focused on our prime urban estates," Chief Executive Rita-Rose Gagne said. Hammerson's shopping centres include the Bullring in Birmingham, Brent Cross in London, and Cabot Circus in Bristol.
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Broadcom reported a strong start to its financial year, with solid increases in profit and revenue for the first quarter due to robust demand. For the three months ended January 30, the San Jose, California-headquartered designer, developer, manufacturer and supplier of a wide range of semiconductors posted net income at USD2.47 billion, up 79% from USD1.38 billion the same period a year before. Diluted earnings per share rose 83% to USD5.59 from USD3.05, on revenue which grew 16% year-on-year to USD7.71 billion from USD6.66 billion.
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MARKETS
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Investors were fleeing to safety at the end of another traumatic week, as Ukraine warned the world had risked a nuclear catastrophe when Russia attacked a huge power plant. Markets also continued to calculate the global economic damage that will be caused by the mounting sanctions against Russia. "No country of this size and importance, this deeply integrated into the global economy, has ever faced this kind of global freeze-out," noted Marshall Gittler, head of Investment Research at BDSwiss.
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CAC 40: down 3.5% at 6,157.87
DAX 40: down 3.2% at 13,258.27
FTSE 100: down 2.8% at 7,039.31
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Hang Seng: closed down 2.5% at 21,905.29
Nikkei 225: closed down 2.2% at 25,985.47
S&P/ASX 200: closed down 0.6% at 7,110.80
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DJIA: called down 0.6%
S&P 500: called down 0.6%
Nasdaq Composite: called down 0.6%
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EUR: down at USD1.1008 (USD1.1047)
GBP: down at USD1.3295 (USD1.3341)
USD: down at JPY115.45 (JPY115.63)
Gold: up at USD1,943.50 per ounce (USD1,928.05)
Oil (Brent): down at USD111.42 a barrel (USD113.62)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Ukraine accused the Kremlin of "nuclear terror", after Europe's largest atomic power plant was attacked and taken over by invading forces, sparking Western horror at the threat of Russia's war contaminating all of Europe. Blasts lit up the night sky as the plant at Zaporizhzhia came under shell fire, while Russian forces advanced in southern Ukraine and continued their sometimes indiscriminate bombardment of several cities elsewhere. Ukrainian firefighters said they were prevented from accessing the site initially, before the attack was paused and they were able to douse a blaze at a training facility on the site. The six reactors at Zaporizhzhia, which can power enough energy for four million homes, were apparently undamaged and international monitors reported no spike in radiation. But the attack was slammed in Washington, London and other Western capitals as utterly irresponsible. "We survived a night that could have stopped the story, the history of Ukraine, the history of Europe," Ukrainian President Volodymr Zelensky said. An explosion at Zaporizhzhia would have equalled "six Chernobyls", he said, referring to the plant in Ukraine that was the site of the world's worst nuclear disaster in 1986.
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Russian President Vladimir Putin said Moscow's advance in Ukraine was "going to plan" and Kyiv appealed for Western military aid on Thursday, even as the warring sides met for ceasefire talks. After the fall of a first major Ukrainian city to Russian forces, Putin appeared in no mood to heed a global clamour for hostilities to end as the war entered its second week. Putin again said Russia was rooting out "neo-Nazis", adding during the televised opening of a national security council meeting that he "will never give up on [his] conviction that Russians and Ukrainians are one people."
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The China-backed Asian Infrastructure Investment Bank said it will suspend business related to Russia and Belarus in a sign of the two countries' deepening pariah status over the war in Ukraine. In a statement issued Thursday, the AIIB said that "in the best interests of the bank, management has decided that all activities relating to Russia and Belarus are on hold and under review". China, whose bilateral relationship with Russia has strengthened in recent years, has thus far avoided criticizing Moscow over its invasion of Ukraine. Beijing is the largest stakeholder in the multilateral institution – the brainchild of Chinese President Xi Jinping – with almost 27% voting power.
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China avoided making any comments on the war in Ukraine at an annual press conference on Friday ahead of its National People's Congress. Russia's invasion of Ukraine was not mentioned at the press conference. Spokesman Zhang Yesui spoke about topics including China's zero-Covid strategy and the country's deliveries of vaccines across the world. He also spoke on relations with the US, which he said should be based on "mutual respect". Zhang warned the US against undermining mutual trust and cooperation. Instead of talking about the war in Ukraine, the spokesman responded to a question from a Russian reporter on the current tensions between China and Lithuania. Beijing downgraded its relations with the Baltic state after it allowed Taiwan to open a representative office under its own name in its capital city of Vilnius.
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US lawmakers urged President Joe Biden to ban oil imports from Russia as further punishment for its invasion of Ukraine, a step the US administration has so far opposed. "The US should not be subsidizing Vladimir Putin's war on Ukraine by purchasing and importing Russian oil, petroleum, natural gas and coal," said West Virginia Senator Shelley Moore Capito. She is among a group of senators from both parties that introduced a bill Thursday seeking a ban on such imports. Many of them are from oil and gas producing states. Biden on Wednesday said he had not ruled out halting imports of Russian oil. But the White House later warned that such a step could cause further jumps in oil prices and hurt US consumers.
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US Federal Reserve Chair Jerome Powell told Congress it's "too early to say" whether Russia's invasion of Ukraine will change the bank's plan to hike interest rates throughout 2022 to fight runaway inflation. "I do think before the invasion, we were planning to raise rates this year. We were planning to make a series of interest rate increases. That is still the case," Powell told the Senate Banking Committee on the second day of his semi-annual testimony to Congress. "I think right now in this very sensitive time, where uncertainty is highly elevated and we really don't know which way things are going to go, I think we need to move carefully." Consumer prices have climbed by rates not seen in four decades over the past year as supply chain snarls dogged the US economy amid its recovery from the Covid-19 pandemic.
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S&P Global Ratings downgraded Russia's debt rating to "CCC-," citing Western sanctions imposed on Moscow over its invasion of Ukraine that the agency said increased the risk of default. "The downgrade follows the imposition of measures that we believe will likely substantially increase the risk of default," S&P Global Ratings said. "Among these are capital controls introduced by authorities that aim at shielding the ruble from the impact of severe economic sanctions while preserving remaining useable reserve buffers." On Thursday, Fitch and Moody's had slashed Russia's sovereign debt to "junk" status.
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French President Emmanuel Macron announced he will seek a second term in office at elections next month, with Russia's war in Ukraine likely to eclipse the campaign but boost his chances. Macron formally announced his attempt to become the first French president to be re-elected in 20 years in a letter to the French people published online by numerous news sites. There was little suspense about the 44-year-old's intentions, but the announcement has been repeatedly delayed because of the crisis in eastern Europe that has seen Macron take a prominent role in diplomatic talks. "I'm a candidate to invent, with you, and faced with the challenges of this century, a singular French and European response," he said.
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German exports fell in January, official figures showed, as bottlenecks and coronavirus-related health restrictions stifled Europe's largest economy. The value of exports fell by 2.8% on the previous month, figures from the federal statistics agency Destatis showed, but were still 7.5% above the same month last year. In all the traditionally export-strong country shipped EUR116.9 billion worth of goods in the first month of the year. Meanwhile, imports fell faster than exports, down 4.2% for a total value of EUR107.5 billion.
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The eurozone construction sector continued to expand at a strong pace in February, albeit slower than January, figures from IHS Markit showed, with good growth coming out of Italy and Germany. The eurozone construction total activity index fell to 56.3 points in February from 56.6 in January, but was still above the 50.0 point neutral mark to denote expansion. In Germany, February's construction PMI came in at 54.9, rising from 54.4. For France, the construction PMI fell to the neutral 50.0-point mark in February, down from 52.0 in January.
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The UK construction sector enjoyed further growth in February, data from IHS Markit showed, achieving its fastest rise in output for eight months. The headline seasonally adjusted IHS Markit-CIPS UK construction purchasing managers' index total activity improved to 59.1 in February from 56.3 in January. Market consensus, according to FXStreet, had predicted the construction PMI to remain at 56.3.
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A business group has downgraded its expectations for economic growth in the UK this year amid soaring inflation, tax rises and global shocks, including Russia's invasion of Ukraine. The British Chambers of Commerce predicted growth of 3.6%, down from 4.2% in its previous forecast in December, warning the UK economy is forecast to run out of steam in the coming months. The BCC said the downgrade largely reflects a deteriorating outlook for consumer spending and a weaker-than-expected rebound in business investment. Consumer spending is forecast to grow at 4.4% this year, down from its previous forecast of 6.9%, reflecting the "historic squeeze" on real household incomes from high inflation, said the BCC.
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UK retail footfall inched closer to pre-virus levels in February, figures on Friday showed, despite storms battering towns and cities up and down the country. According to the latest British Retail Consortium-Sensormatic IQ monitor, retail footfall declined 15% on a two-year basis in February. The decline eased from a 17% fall in January. On high streets alone, footfall was 19% below pre-virus levels in February. High street footfall was 22% lower on two years earlier in January. In retail parks, footfall was down 10% from two years earlier, narrowing a touch from 11% in January. Shopping centre footfall was 35% below pre-Covid levels in February, improving from 37% in January.
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Sales of new cars in the UK remain down by a quarter on pre-pandemic levels as the global shortage of computer chips limits supply. The Society of Motor Manufacturers & Traders said 58,994 new cars were registered in February. That is up 15% on the same month last year when showrooms were closed due to coronavirus lockdowns. But the total was 26% below February 2020, before the virus crisis affected new car sales. Registrations continue to be restricted by the global shortage of computer chips.
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By Tom Waite; thomaslwaite@alliancenews.com
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