Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
(Alliance News) - The following is a summary of top news stories Friday.
----------
COMPANIES
----------
British American Tobacco approved a GBP2 billion share buyback programme after making headway with its 'new categories' division in 2021. Revenue for 2021 slipped 0.4% to GBP25.68 billion from GBP25.78 billion the year before, though pretax profit increased 5.7% to GBP9.16 billion from GBP8.67 billion. Profit was helped by lower finance costs and depreciation, amortisation & impairment costs. Constant currency adjusted diluted earnings per share growth of 6.6% to 329.0 pence was at the top end of guidance, BAT said. It expects this to grow in the high-single figures in 2022. The Dunhill cigarette maker highlighted that revenue from 'new categories' - such as vapour and tobacco heating products - grew well ahead of the group as a whole last year, up 42% to GBP2.05 billion. Non-combustible consumers grew by 4.8 million to 18.3 million and non-combustible products now account for 12% of group revenue, up from 4% in 2017. Further, 'new categories' has a "clear pathway" to profitability by 2025. BAT lifted its annual dividend by 1.0% to 217.80p and set out plans for a GBP2 billion share buyback this year.
----------
Tesla is recalling over a half a million US electric cars due to a "Boombox" feature that can drown out audible warnings for pedestrians, in the fourth recall made public in two weeks, records showed Thursday. The automaker faces increasing scrutiny from American regulators, as watchdogs have accused Elon Musk's firm of pushing safety limits. US authorities have set specific standards for the sounds that electric and hybrid vehicles must make, which are quieter than vehicles with internal combustion engines, in order to warn pedestrians. Yet the "Boombox" option launched by Tesla in late 2020, which allows custom sounds like music to be emitted from an outdoor speaker when the car is parked or moving, could interfere with that warning, the National Highway Traffic Safety Administration found.
----------
Illumina reported a rise in earnings for 2021 as a whole, topping expectations in spite of a weaker finish to the year. For the three months ended January 2, the San Diego, California-based biotechnology company reported net income at USD112 million, down 56% from USD257 million the same period a year before, driven mainly by a rise in overall operating expenses. Diluted earnings per share fell 59% to USD0.71 from USD1.75, in spite of revenue growing 26% year-on-year to USD1.20 billion, from USD953 million. For the year as a whole, net income rose 16% to USD762 million from USD656 million, while diluted earnings per share increased 13% to USD5.04 from USD4.45, ahead of prior guidance ranging from USD4.41 to USD4.51. Revenue for the period grew 39% to USD4.53 billion from USD3.24 billion, ahead of guidance which targetted 36% growth.
----------
VeriSign reported annual earnings growth, with the internet services firm also reporting an increase in new domain names. The Reston, Virginia-based company provides domain name registry and internet infrastructure services. Revenue in the three months to December 31 climbed 6.3% to USD340.3 million from USD320.3 million a year earlier. Pretax profit increased 11% to USD203.4 million from USD182.9 million. For the whole of 2021, revenue increased 4.9% to USD1.33 billion from USD1.27 billion in 2020. Pretax profit was 4.3% higher at USD782.2 million from USD750.2 million. VeriSign concluded 2021 with 173.4 million .com and .net domain name registrations, up 5.0% from a year earlier.
----------
Semiconductor firm Tokyo Electron lifted its annual guidance after posting earnings growth in its third quarter. Net sales in the nine months ended December 31 jumped 50% to JPY1.439 trillion, about USD12.41 billion, from JPY959.89 billion a year earlier. Pretax profit more than doubled to JPY428.57 billion from JPY210.04 billion a year prior. Looking ahead, Tokyo Electron now expects annual sales of JPY1.950 trillion, lifted from its previous forecast of JPY1.900. It would represent a 39% rise from JPY1.399 trillion in the previous financial year.
----------
MARKETS
----------
Stock markets were lower and the dollar higher on Friday, as markets digested a US consumer price index reading on Thursday that showed a 40-year high rate of inflation at 7.5%.
Following the reading, Fed official James Bullard said he wants to see interest rates lifted by one percentage point by the start of July. The St Louis Fed boss said he was in favour of a 50 basis point lift next month double the usual 25 point rise and the first since 2000 and two more after that. "I'd like to see 100 basis points in the bag by July 1," Bullard, who has a vote on policy this year, told Bloomberg News. "I was already more hawkish, but I have pulled up dramatically what I think the committee should do."
Commenting on the choices facing Fed Chair Jerome Powell and other Fed policymakers, Kit Juckes of Societe Generale said: "Are Jay and Co planning a 50 basis point hike in March or, even more dramatically, considering the first intra-meeting rate hike since 1994?" Juckes said an intra-meeting rate hike "could be interpreted as panicky and seems unlikely" but a 0.50 percentage point hike in March is priced in by the market.
----------
CAC 40: down 1.2% at 7,018.67
DAX 40: down 0.6% at 15,392.36
FTSE 100: down 0.7% at 7,622.02
----------
Hang Seng: closed down 0.1% at 24,906.66
Nikkei 225: Tokyo market closed for National Foundation Day holiday
S&P/ASX 200: closed down 1.0% at 7,217.30
----------
DJIA: called down 0.4%
S&P 500: called down 0.5%
Nasdaq Composite: called down 0.7%
----------
EUR: down at USD1.1387 (USD1.1488)
GBP: down at USD1.3555 (USD1.3629)
USD: up at JPY116.01 (JPY115.84)
Gold: down at USD1,826.60 per ounce (USD1,839.85)
Oil (Brent): down at USD91.98 a barrel (USD92.78)
(currency and commodities changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Despite a weaker end to the year due to the Omicron wave of virus infection, the UK economy staged an impressive rebound in 2021 after a pandemic-battered 2020. For 2021 overall, the Office for National Statistics said gross domestic product increased by 7.5% following a 9.4% fall in 2020. GDP shrank 0.2% month-on-month in December, beating forecasts after expectations of a 0.6% decline, according to market consensus cited by FXStreet. This still marked a deterioration from growth of 0.7% in November. Services output fell by 0.5% in December but remained 0.5% above pre-virus levels. The sector was dented by the Omicron variant of Covid-19. In the fourth quarter of 2021, GDP grew 1.0% on a sequential basis, at this level 0.4% below pre-pandemic times. However, the ONS noted that December's monthly GDP figure matched pre-coronavirus levels. November 2021 remains the first month that GDP recovered to above its pre-coronavirus levels, by 0.3%.
----------
German inflation eased back below 5% at the start of 2022. The German consumer price index rose 4.9% year-on-year in January, softening from December's annual inflation rate of 5.3%. Energy prices jumped 21% year-on-year, and stripping these out January's annual inflation rate would have been a more moderate, though still elevated, 3.2%. Month-on-month, prices grew 0.4%, easing from December's growth of 0.5%. The harmonised index of consumer prices - calculated for EU comparative purposes - grew 5.1% year-on-year and 0.9% month-on-month, both confirming the provisional print.
----------
Swiss consumer prices ticked up slightly at the start of the year, data from the Federal Statistical Office showed. January's annual inflation rate was 1.6%, picking up from 1.5% in December. Month-on-month, prices grew 0.2%, reversing December's 0.1% decline.
----------
The top diplomats of the US, Australia, Japan and India opened talks in Melbourne on Friday on deepening their Quad alliance, hoping to blunt China's expanding power across the Asia-Pacific region. "Together we are a vital network of liberal democracies committed to practical cooperation and to ensuring all Indo-Pacific nations, large and small, are able to make their own strategic decisions, free from coercion," Australia Foreign Minister Marise Payne said Friday ahead of the meetings. US Secretary of State Antony Blinken said that even though Russia's threat to Ukraine occupies Washington right now, the longer term challenge is China's advance, challenging the "traditional order."
----------
US President Joe Biden on Thursday urged American citizens to leave Ukraine immediately, and warned about potential major conflict with Moscow should US and Russian troops engage each other on the ground. "American citizens should leave, should leave now," Biden said in an interview with NBC News. "We're dealing with one of the largest armies in the world. This is a very different situation and things could go crazy quickly," the president said. Biden also reiterated that under no circumstances would he send US troops to Ukraine, even to rescue Americans in case of a Russian invasion.
----------
Trucker-led protests against coronavirus restrictions in Canada shut down another US border crossing on Thursday, as copycat movements gathered steam overseas and Washington called on its northern neighbor to use federal powers to end the blockades. The border obstructions have already impacted business, with the key Ambassador Bridge linking Ontario and Detroit out of service for several days and major automakers forced to cut back production at several plants as a result. A second crossing in the western province of Alberta has been blocked for days, and on Thursday protesters closed down a third in central Manitoba. Citing supply shortages, Ford said it was forced to slow down production at factories in Canada, while some Stellantis factories in the US and Canada halted work Wednesday evening, General Motors cancelled several shifts and Toyota said its plants were also hit.
----------
The UK government is "taking the trouble out of travel" by easing restrictions as the half-term getaway begins, the aviation minister said. Robert Courts said the end of coronavirus testing for people arriving in the UK who are fully vaccinated was "a long time coming". Hundreds of thousands of people are embarking on foreign trips as the relaxation of travel rules coincides with the school holiday. The UK's rules for arriving travellers were eased from 4am on Friday. People who are fully vaccinated no longer need to take a post-arrival lateral flow test, which typically cost about GBP20 each. The requirement for unvaccinated arrivals to self-isolate has been dropped, but they still need to take tests. All arrivals must continue to complete a passenger locator form.
----------
Gatwick Airport announced it will reopen its south terminal next month, to meet expected strong demand for air travel this summer. The terminal has been dormant since June 15 2020 to reduce costs during the coronavirus pandemic. It will reopen on March 27 as airlines ramp up their schedules. British Airways has previously announced it will restart its short-haul flights at Gatwick from March 29, with 35 European routes operated by a standalone business. Rival London airport Heathrow reported that demand for flights in January was 57% down on pre-pandemic levels. Just 2.6 million people travelled through the west London airport last month. That is nearly a four-fold increase on January 2021, when international leisure travel to and from the UK was banned. But the total is less than half of the 6.1 million recorded in January 2020, before the virus crisis hit the aviation industry.
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.