(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Alibaba said it will increase the size of its share repurchase programme by USD10 billion in what the e-commerce firm labelled as a sign that it is bullish about its prospects. Hangzhou-based Alibaba's share buyback programme is now worth USD25 billion, lifted from USD15 billion. The repurchase programme will be effective for two years until March 2024. The chunkier buyback is a "sign of confidence about the company's continued growth in the future", Alibaba said. It comes after Chinese authorities last week Wednesday promised support for beaten-down financial markets.
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Oil company BP is expanding its offshore wind portfolio by forming a strategic partnership with Japanese conglomerate Marubeni for offshore wind and other potential decarbonisation projects including hydrogen in Japan. BP will acquire a 49% stake in Marubeni's proposed offshore wind project in the country for an unspecified amount. In Tokyo, BP will set up a local offshore wind development team.
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BP peer Shell has filed an appeal against a Dutch ruling to slash by 45% its worldwide aggregate carbon emissions by 2030. Last year, a group of Dutch NGOs won a major district court battle in The Hague against Shell, with a ruling saying the company was contributing to the "dire" effects of climate change. It was the first time a company had been made to align its policy with the 2015 Paris climate accords. The Dutch branch of Friends of the Earth followed up in January by saying it was targeting some 30 multinational companies to produce a plan to cut greenhouse emissions in the hope the Shell ruling could set a precedent. In a statement Tuesday, Shell said "we want to be a leader in the energy transition" but added that it had filed an appeal against the court decision ordering it to slash worldwide aggregate carbon emissions by 45% by 2030 over its 2019 levels.
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France's TotalEnergies has decided to halt all oil and oil-related purchases from Russia by year end at the latest. "Given the worsening situation in Ukraine and the existence of alternative sources for supplying Europe, TotalEnergies has unilaterally decided to no longer enter into or renew contracts to purchase Russian oil and petroleum products, in order to halt all its purchases of Russian oil and petroleum products as soon as possible and by the end of 2022 at the latest," the firm stated. The group, which has been operating in Russia for three decades, had earlier faced criticism for not pulling out of Russia following Moscow's invasion of Ukraine a month ago. It added it would be taking further measures given the "worsening of the conflict."
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Adobe posted record first quarter revenue in a period of "strong execution", though warned of a hit to annual revenue due to the conflict in Ukraine. The San Jose, California-based computer software firm notched record revenue of USD4.26 billion for its first quarter ended March 4, up from USD3.91 billion a year before. Net income rose to USD1.27 billion from USD1.26 billion, and diluted earnings per share improved to USD2.66 from USD2.61. "Adobe achieved record Q1 revenue as Creative Cloud, Document Cloud and Experience Cloud continue to be pivotal in driving the digital economy," said Chair & Chief Executive Shantanu Narayen. Digital Media revenue rose 9% to USD3.11 billion, while Digital Experience revenue rose 13% to USD1.06 billion. Digital Media annualised recurring revenue increased USD418 million quarter-on-quarter to USD12.57 billion. However, Adobe expects a full-year hit of USD87 million due to the war in Ukraine, translating into a USD75 million hit to revenue.
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UK hazard detection and life protection firm Halma said it expects annual adjusted pretax profit to be in line with forecasts. Halma said it has made good progress so far in the second half of the financial year that ended March 31. It said it continues to benefit from a diverse portfolio and long-term growth drivers. Halma expects adjusted pretax profit for the year to be in line with market consensus expectations. Halma expects to deliver a sequential improvement in revenue in the second half of the year and substantial revenue growth in the year as a whole. Order intake has continued to be ahead of both revenue this year and order intake for the same period last year, it added.
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MTU Aero Engines said it saw a partial recovery from the impact of the pandemic over 2021. The Munich-based jet engine maker said it "returned to a growth trajectory" in 2021, as pretax profit rose substantial 62% to EUR315 million, from EUR195 million in 2020. Revenue grew 5.3% to EUR4.19 billion, from EUR3.98 billion in 2020, but came in slightly lower than revised forecasts of between EUR4.3 billion to EUR4.4 billion, and is still 9.5% shy of revenue in 2019 of EUR4.63 billion. The growth was mostly due to the development of its commercial maintenance business, where revenue grew by EUR219 million or 8.7%. MTU proposed a EUR2.10 dividend for the year, a 68% increase on the payout of EUR1.25 the year before.
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MARKETS
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London's benchmark stock index was outperforming peers in Paris and Frankfurt, as a new rise in oil prices was supporting shares of BP and Shell, up 3.6% and 3.0% respectively. UK investors were awaiting the 'spring statement' by Chancellor of the Exchequer Rishi Sunak just after midday. Wall Street was called to open lower, major indices having closed up as much as 2.0% on Tuesday.
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CAC 40: down 0.2% at 6,643.39
DAX 40: down 0.3% at 14,428.49
FTSE 100: up 0.3% at 7,497.08
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Hang Seng: closed up 1.2% at 22,154.08
Nikkei 225: closed up 3.0% at 28,040.16
S&P/ASX 200: closed up 0.5% at 7,377.90
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DJIA: called down 0.3%
S&P 500: called down 0.4%
Nasdaq Composite: called down 0.4%
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EUR: down at USD1.1003 (USD1.1014)
GBP: down at USD1.3225 (USD1.3255)
USD: up at JPY121.05 (JPY120.55)
GOLD: up at USD1,931.05 per ounce (USD1,922.93)
OIL (Brent): up at USD117.96 a barrel (USD115.05)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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US President Joe Biden leaves Wednesday for Europe on a mission to bolster Western unity, ramp up unprecedented sanctions against Russia over its invasion of Ukraine and attempt to upset the post-Cold War balance of power. The conflict with Russian President Vladimir Putin is redefining Biden's 14-month old presidency as he pivots from domestic woes to leading the transatlantic alliance in the most serious crisis in Europe for decades. After four years of Donald Trump, who treated European nations as economic competitors and scorned the traditional US role as senior partner in NATO, Biden has put the accent on unity. At back-to-back summits in Brussels on Thursday, he'll be pushing for more. White House National Security Advisor Jake Sullivan told reporters that Biden will seek to "reinforce the incredible unity we built with allies and partners". Sullivan also said that economic sanctions, imposed by a global network of Western allies to cripple Russia's finances, will be deepened.
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Ukrainian President Volodymyr Zelensky described peace negotiations with Russia as "very difficult," in a video message released early Wednesday. "They are very difficult, sometimes scandalous, but we are moving forward step by step," Zelensky said, adding that Ukrainian representatives were negotiating every day. Both Ukraine and Russia claimed successes on the battlefield on Tuesday, as the conflict was showing no sign of abating: The Ukrainian side reported that it had hit nine Russian targets in the air within 24 hours. Russia reported a further advance in the regions of Donetsk and Luhansk in eastern Ukraine, although Kiev refuted this and Western powers say Moscow's advance remains stalled in many places.
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German Chancellor Olaf Scholz said he remains firmly against a boycott of of energy imports from Russia. Scholz said the sanctions already imposed against Russia were having a major impact, but there was a risk that pushing even harder could start to have serious consequences for Europe's economies. "We have to be very clear: This may not be a short affair, but a longer dispute. And we all have to stick it out together," he said. There have been calls for the West to impose a comprehensive boycott on all Russian energy products due to the attack on Ukraine.
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The US has not seen evidence of any recent Chinese weapons shipments to its ally Russia as Moscow wages its war in Ukraine, a top US official said Tuesday. Washington has raised concerns about Beijing helping Moscow in the midst of the bloody but stalled invasion. "We have not seen...the provision of military equipment by China to Russia. But of course, this is something we are monitoring closely," US National Security Advisor Sullivan said. Biden held a nearly two-hour call with his Chinese counterpart Xi Jinping last Friday in which the White House says he warned Xi against bailing out Russia's economy from Western sanctions or assisting Moscow's war effort. "We will continue to monitor it, and the president made clear to President Xi the implications and consequences of any such provision of equipment, and they very well understand one another," Sullivan added.
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The US announced an agreement with the UK to end tariffs on steel and aluminium imports imposed by former president Donald Trump. Britain will be allowed to import "historically-based sustainable volumes" of steel and aluminium duty-free into the US again from June 1, according to a statement on the agreement distributed in Washington on Tuesday. Under the deal, that UK will lift retaliatory tariffs it imposed on USD500 million in American imports, including alcohol and consumer goods, the statement said. It also stipulates that any British steel company "owned by a Chinese entity must undertake an audit of their financial records to assess influence from the People's Republic of China government," the results of which will be shared with the US, the Commerce Department said. The deal was the latest in a series of efforts by Biden to settle trade spats with US allies.
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The UK annual inflation figure hit its highest level since March 1992 as the country grapples with a cost of living crisis, data from the Office for National Statistics showed. On an annual basis, the UK consumer price index rose by 6.2% in February, accelerating sharply from a 5.5% rise in January. The reading was higher than the market forecast, cited by FXStreet, of 5.9%. UK CPI rose 0.8% monthly in February, having edged down 0.1% in January. The print exceeded the consensus estimate for a rise of 0.6%. The ONS noted that UK inflation has risen sharply in recent months, driven by a broad range of items, with particular pressure coming from food, durables, consumer goods and energy.
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The average price for a house in the UK rose slightly in January, according to the Office for National Statistics. On an annual basis, the ONS UK house price index rose by 9.6% in January, slowing from a 10.0% rise in December. London continued to be the region with the lowest annual growth at 2.2% in January, slowing sharply from 5.1% in December. The ONS said the UK average house price for January was GBP274,000, up marginally from GBP273,000 in December.
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Pressure is building on UK Chancellor Rishi Sunak to unveil new plans to help struggling households as he is set to vow to "stand by" British families amid the deepening cost of living crisis. Sunak, who will deliver his spring statement on Wednesday around midday, will link strengthening the UK economy to opposing Russia's invasion of Ukraine. Beyond rhetoric on the Kremlin, Sunak will be forced to address a crisis at home – with Labour dubbing him the "high-tax chancellor" and the Federation of Small Businesses urging him to provide more help. It has been suggested Sunak may look to ease the burden on the taxpayer by cutting fuel duty and raising the income threshold at which people begin to pay national insurance.
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By Tom Waite; thomaslwaite@alliancenews.com
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