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The following is a summary of top news stories Thursday.
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COMPANIES
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Amazon.com unveiled a $10 billion share buyback and a stock split, which will make its shares more accessible. The e-commerce company approved a 1-into-20 stock split, increasing the number of shares in issue. ‘Trading is expected to begin on a split-adjusted basis on June 6, 2022,’ the company explained. Amazon shares were up 6.0% in the New York pre-market on Thursday to $2,952.00. After the split, they would still be priced near $150. Amazon follows the lead of other US tech firms. Google-owner Alphabet also announced a 20-for-1 stock split in February. This will go into effect in July. Electric carmaker Tesla announced a 5-for-1 split of common shares back in August 2020. Also in August 2020, iPhone maker Apple unveiled a 4-for-1 split.
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Bayer announced the $2.6 billion sale of its pest control business to a UK private equity firm to streamline its Crop Science portfolio. The German chemicals and pharmaceuticals giant has agreed to sell its Environmental Science Professional business to Cinven Ltd for a purchase price of $2.6 billion, around €2.4 billion. Bayer first announced its intention to sell the business in February of last year. The transaction is expected to conclude in the second half of the year, with proceeds to be put towards paying down debt. Bayer's net financial debt was €33.14 billion at the end of 2021. The Cary, North Carolina-based Environmental Science Professional business provides pest control chemicals, as well as products for the control of diseases and weeds in non-agricultural areas. It has around 800 employees, and conducts sales in over 100 countries, with €600 million in turnover.
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Credit Suisse said it has just short of a $1 billion credit exposure to Russia. The Zurich-headquartered investment bank and financial services firm said its Russian net credit exposure was fr.848 million, about $914.6 million at the end of 2021. ‘This includes derivatives and financing exposures in the investment bank, trade finance exposures in the Swiss Universal Bank and Lombard and other loans in International Wealth Management,’ the lender explained. These exposures have been trimmed since the end of last year, Credit Suisse added. Net assets held through its Russian units totalled fr.195 million at the end of last year. The company said its Russia exposure is ‘well-managed’.
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Anglo-Australian miner Rio Tinto announced it will sever all business ties with Russia following the invasion of Ukraine. The company said in a statement that it ‘is in the process of terminating all commercial relationships it has with any Russian business’. No timeline has been announced for the severance, which may be a complex disentanglement given the miner's ties with Russia. In Australia, Rio Tinto co-owns one of the world's largest alumina refineries Queensland Alumina Ltd with aluminium giant Rusal, which has a 20% stake. Rusal, which was founded by Russian oligarch Oleg Deripaska, weathered sanctions from the US in 2018 which were lifted the following year but the company has since avoided any additional penalties.
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Roman Abramovich's hopes of selling European champions Chelsea were put on hold, after the UK government hit the Russian billionaire with an assets freeze. The finance ministry said restrictions ‘apply to any entities that are owned or controlled by Roman Abramovich’, adding: ‘This means Chelsea Football Club is now also subject to an asset freeze under UK financial sanctions.’
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With oil prices high and Americans paying more for gasoline, US Energy Secretary Jennifer Granholm called for oil companies to increase production and offset the spike in pump prices. The surge in energy costs is a consequence of Russia's invasion of Ukraine, which prompted Washington and its European allies to impose tough sanctions on Moscow, including a US ban on Russian oil imports announced Tuesday. ‘We are on war footing. We are in an emergency and we have to responsibly increase short-term supply where we can right now to stabilize the market and to minimize harm to American families,’ Granholm told the CERAWeek energy conference in Houston.
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Nintendo and Sony's PlayStation are suspending shipments to Russia, the Japanese gaming giants said, as international brands increasingly halt operations in the country following Moscow's invasion of Ukraine. Sony said in a statement that its video game unit ‘joins the global community in calling for peace in Ukraine’. A Nintendo spokesman told AFP that the Kyoto-based company behind the popular Switch console is suspending shipments of all goods to Russia ‘for the time being’, without giving details on the start date or likely end of the move.
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Packaging maker DS Smith said its trading in the third quarter in been in line with expectations, with the momentum seen in the first half carrying into the second. In the period since November 1, the London-based firm said volume growth and packaging price increases have ‘more than’ offset ongoing input cost increases, leading to ‘good progress’ in profitability and cash generation. The company noted continued like-for-like volume growth in its fast-moving consumer goods unit, and expects mid single-digit percentage like-for-like volume growth for the year to April 30. DS Smith said its production in Ukraine and Russia is currently suspended, but said its involvement is a ‘minority investment’ in a Ukrainian business, which serves customers predominantly in Ukraine with ‘limited’ sales in Russia.
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Spirax-Sarco Engineering's annual profit was sharply higher after an ‘excellent performance’ beat pre-pandemic sales in 2019. In 2021, pretax profit surged 31% to £314.5 million from £240.1 million, on revenue growth of 13% to £1.34 billion from £1.19 billion - and was ahead of £1.24 billion sales in 2019. Spirax-Sarco declared an annual dividend of 136.0 pence, up 15% from 118.0p in 2020. Chief Executive Nicholas Anderson said: ‘For 2022 we currently anticipate strong sales growth, driven by record order books and continued global industrial production growth. While adjusted operating profit growth will be reduced by the full-year impact of revenue investments in 2021, we currently anticipate the adjusted operating profit margin in 2022 will still be comfortably above pre-pandemic levels.’
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ITV, a London-based television broadcaster and content producer, has hired the former chief executive of InterContinental Hotels Group to be its new non-executive chair, replacing Peter Bazalgette. Andrew Cosslett will join the ITV board on June 1 and take over as chair from Bazalgette on September 29. Cosslett currently is chair of DIY store chain Kingfisher and previously was chair of Rugby Football Union, the governing body for rugby in England.
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MARKETS
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Asian stock markets on Thursday followed through from a rally on Wall Street on Wednesday, but European markets were giving up their gains from a day before. Hopes of a breakthrough from talks between the Ukraine and Russian foreign ministers in Turkey were dashed. There also was caution among market participants ahead of a European Central Bank policy decision at 1245 GMT and a US inflation reading at 1330 GMT.
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CAC 40: down 2.1% at 6,253.69
DAX 40: down 2.2% at 13,547.91
FTSE 100: down 0.9% at 7,127.68
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Hang Seng: closed up 1.3% at 20,890.26
Nikkei 225: closed up 3.9% at 25,690.40
S&P/ASX 200: closed up 1.1% at 7,130.80
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DJIA: called down 0.7%
S&P 500: called down 0.6%
Nasdaq Composite: called down 0.8%
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EUR: down at $1.1044 ($1.1070)
GBP: unchanged at $1.3168 ($1.3165)
USD: up at JP¥115.94 (JP¥115.77)
Gold: down at $1,986.60 per ounce ($2,000,80)
Oil (Brent): down at $116.40 a barrel ($121.55)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Ukraine and Russia made no progress towards agreeing a ceasefire after the Russian invasion at tense talks in Turkey, the Ukrainian foreign minister said. ‘We also talked on the ceasefire, but no progress was accomplished on that,’ Dmytro Kuleba told reporters after his meeting with Russian Foreign Minister Sergei Lavrov in Antalya, describing the meeting as ‘difficult’ and accusing his counterpart of bringing ‘traditional narratives’ to the table. Lavrov said Russia wants to continue negotiations with Ukraine.
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The Ukrainian army said it is slowing down and holding back the Russian offensive two weeks into the conflict. The Ukrainian general staff said in a bulletin that in some operational areas, Russian units had lost their fighting strength and were bringing in reserves. Russian forces were still working on surrounding Kiev and were also beefing up their units around Mykolaiv in Ukraine's south. Attacks were also reported from the eastern cities of Kharkiv and Izyum, as well as from Sumy and Oktyrka in north-eastern Ukraine. The information could not be independently verified.
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EU leaders are gathering at an informal summit in Versailles on Thursday after a frantic two weeks of supplying arms, sheltering nearly 2 million people and signing off on three rounds of massive sanctions on Russia for its invasion of Ukraine. The first day of the two days of talks are to focus on bolstering the bloc against the economic and humanitarian impacts of the war in Ukraine and how to wean the bloc off Russian energy imports. Plans published by the European Commission on Tuesday outlined the bloc's shift away from Russian gas before 2030. Moscow's repeated threats to suspend gas supplies have injected urgency into the discussions.
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US lawmakers signed off on almost $14 billion in aid for war-torn Ukraine as part of a giant blueprint to fund federal agencies and avoid a damaging government shutdown at home. The House of Representatives green-lit around $1.5 trillion in spending through September, less than 48 hours before the Friday-Saturday midnight deadline, when government funding was due to dry up. The 2,700-plus page package will need to be rubber-stamped by the Senate before the budget can pass into law. Lawmakers in the lower chamber also passed a four-day ‘continuing resolution’ to keep federal agencies running until next Tuesday.
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The United Arab Emirates said it would urge fellow states in the OPEC oil producers' cartel to boost output after prices surged following Russia's invasion of Ukraine. ‘We favour production increases and will be encouraging OPEC to consider higher production levels,’ UAE ambassador to Washington Yousef al-Otaiba said, in a statement obtained by AFP. Gulf countries have an interest in acting in coordination both within the Organization of the Petroleum Exporting Countries, and with Russia-led allies in the OPEC+ group to avoid a price war and keep control over the market.
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Germany has rejected a complete ban on Russian gas and oil imports over Russia invading Ukraine, but voices are growing louder for Berlin to ditch its economic imperative to take a moral stand. After the US and Britain imposed a ban on Russian oil, pressure has mounted on German Chancellor Olaf Scholz's government and other G7 members to follow suit. Germany imports more than half its gas and coal and about a third of its oil from Russia.
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Industrial producer prices in Italy continued to rise rapidly in the first month of 2022, figures from national statistics office Istat revealed. Italy industrial producer prices jumped by 33% year-on-year in January, accelerating the growth path from a 23% annual rise in December. On a monthly basis, producer prices surged by 9.7% in January from December after the increase of 1.1% - revised from the initial 0.8% rise - in December from November.
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Australia will boost its defence forces by some 30% by 2040, Prime Minister Scott Morrison said Thursday, describing it as the country's largest military build-up in peacetime. The force would grow by 18,500 personnel to 80,000 over the 18-year period, at a cost of some A$38 billion, about $27 billion, the prime minister said at an army barracks in Brisbane. Morrison, who is expected to call a general election in May, told a news conference it was the ‘biggest increase in the size of our defence forces in peacetime in Australian history’. He said the military build-up was a recognition by his government of the ‘threats and the environment that we face as a country, as a liberal democracy in the Indo-Pacific’.
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South Koreans elected conservative opposition politician Yoon Suk Yeol to be their new president. The centre-left ruling party candidate, Lee Jae Myung, conceded defeat and congratulated Yoon on winning the presidential election, Yonhap news agency reported. North Korea conducted a series of missile tests in January, including the launch of a medium-range missile capable of carrying nuclear weapons. Yoon is expected to take a tougher stance against Pyongyang.
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