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The following is a summary of top news stories Tuesday.
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COMPANIES
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Informa returned to profit in 2021, with the business information publisher and events organiser expressing confidence about the year ahead as Covid restrictions are fully relaxed. Revenue for 2021 rose 8.4% to £1.80 billion from £1.66 billion the year before, with the firm swinging to a pretax profit of £137.1 million from a staggering loss of £1.14 billion in 2020. ‘Through the 2021 transition year, as the world progressively began to start living alongside Covid-19, the group's focus gradually shifted from stability and security to revitalisation and growth,’ said Informa. It is continuing to see a return in confidence and levels of activity in Live and On-Demand events. For 2022, Informa aims to achieve revenue between £2.15 billion and £2.25 billion with adjusted operating profit of £470 million to £490 million.
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Tobacco firm Imperial Brands said constant currency net revenue growth in its financial year ending September 30 is now seen between flat and 1%, after evaluating the financial fallout of an exit from its Russian assets and operations and the suspension of operations in Ukraine. The company said it has started negotiations with an unnamed ‘local third party’ about a transfer of its Russian assets and operations. ‘We believe that, in the current circumstances, an orderly transfer of our business as a going concern would be in the best interests of our Russian colleagues,’ said Imperial, which has 1,000 employees in the country. In financial 2021, Russia and Ukraine represented in total around 2% of net revenue and 0.5% of adjusted operating profit.
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Plumbing and heating products supplier Ferguson bumped up its shareholder returns after a strong first half, despite battling inflationary pressures. Net sales in the six months to January 31 rose to $13.31 billion from $10.31 billion a year before, boosting net income to $996 million from $429 million. Inflation in the period was ‘in the mid teens’, but despite this the firm reported gross margin expansion and good cost control. Ferguson raised its interim dividend by 15% to $0.84 and said it is increasing its share buyback programme by $1.0 billion to $2.0 billion. Ferguson is set to move its primary listing to New York from London on May 12 and so will be removed from the FTSE 100 index.
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Rentokil Initial said its acquisition of Terminix Global Holdings has completed the required antitrust process in the US, meeting one of the deal's principal conditions. In December, Rentokil had announced the deal to buy, Memphis, Tennessee-based pest control firm Terminix for $6.7 billion in cash and shares. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has now expired, marking the fulfilment of the US antitrust process.
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The UK Competition & Markets Authority said it has decided against a full competition review of the acquisition by Deutsche Post's DHL subsidiary of ocean freight forwarding firm JF Hillebrand. Deutsche Post agreed to buy Hillebrand in mid-August last year in a deal valued at €1.5 billion.
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Generali said it delivered its best ever operating results thanks to growth across all its business segments in 2021. The Trieste, Italy-based financial services firm reported income of €99.09 billion, up 16% from €85.24 billion in 2020. The company's operating profit totalled €5.85 billion, up 12% from €5.21 billion. Generali proposed a dividend of €1.07 per share, up 5.9% from €1.01 the previous year. Looking forward, Generali said the Russia-Ukraine conflict has created the risk of a downward revision of economic growth estimates. Nonetheless, the insurer still aims to achieve a compound annual growth rate between 6% to 8% in earnings per share between 2021 to 2024.
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Pfizer said it will continue to supply medicines through its Russian subsidiary, but all profits from the subsidiary will be donated to causes providing support to Ukraine. Pfizer said it will also no longer start new trials in Russia. Pfizer does not own any manufacturing sites in Russia, but will end all planned investments with local suppliers.
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New York-headquartered universal bank Citigroup back in 2021 had announced plans to exit its consumer business in Russia, but on Monday Citigroup said it plans to expand its exit to other lines of business, as well as reduce its remaining operations and exposure. ‘Due to the nature of banking and financial services operations, this decision will take time to execute,’ the bank said.
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Ford Motor said it will offer seven new electric vehicle models in Europe by 2024 and expand operations in Germany, Romania and Turkey. Ford last month created a new business dedicated to electric cars, and said it aims to sell more than 600,000 of these vehicles annually in Europe alone by 2026, as part of a larger goal of selling two million electric cars worldwide by that year. ‘Ford is all-in and moving fast to meet the demand in Europe and around the globe,’ Chief Executive Officer Jim Farley said.
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MARKETS
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Investor were given something new-old to think about on Tuesday, as escalating lockdowns in China reminded markets about the Covid-19 pandemic, even as the war in Ukraine continued to rage. Stock prices in China tumbled on Tuesday, with the market centres of both Shenzhen and Shanghai affected by virus restrictions. The Shanghai Composite index ended down 5.0%, while the Hang Seng index in Hong Kong fell 5.7%.
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CAC 40: down 1.9% at 6,252.20
DAX 40: down 1.8% at 13,673.01
FTSE 100: down 1.0% at 7,121.90
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Hang Seng: closed down 5.7% at 18,415.08
Nikkei 225: closed up 0.2% at 25,346.48
S&P/ASX 200: closed down 0.7% at 7,097.40
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DJIA: called down 0.2%
S&P 500: called down 0.2%
Nasdaq Composite: called marginally lower, down 1.00 point
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EUR: firm at $1.0999 ($1.0991)
GBP: soft at $1.3038 ($1.3059)
USD: unchanged at JP¥117.97 (JP¥117.98)
Gold: down at $1,929.50 per ounce ($1,957.83)
Oil (Brent): down at $100.48 a barrel ($105.30)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK government imposed an additional 35% import tariff on a swathe of Russian goods, including vodka, and banned exports of luxury products because of Moscow's invasion of Ukraine. ‘We want to cause maximum harm to [Russian President Vladimir] Putin's war machine while minimising the impact on UK businesses,’ the Department for International Trade said in a statement.
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The Office for National Statistics said the UK labour market continued to recover at the start of 2022. The unemployment rate in the three months to January was 3.9%, down from 4.1% in the three months to December and returning to pre-pandemic levels. The ONS said the number of payrolled employees in February stood at a record 29.7 million. Meanwhile, job vacancies rose to a new record of 1.3 million. Growth in average total pay - which includes bonuses - was 4.8% and growth in regular pay, stripping out bonus payments, was 3.8%. But when adjusted for inflation, growth in total pay was 0.1% and regular pay fell on the year by 1.0%, likely to heighten concerns about a cost-of-living squeeze in the UK. Data last month showed the UK's annual inflation figure raced to just shy of a 30-year high in January at 5.5%. The Bank of England meets this week, unveiling its latest interest rate decision on Thursday.
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Industrial production was stable in the eurozone at the start of 2022, data from Eurostat showed. Factory output was flat in the euro area in January on a month-on-month basis, while the wider EU notched 0.4% growth. This represented a slowdown from growth of 1.3% for the single currency bloc in December. Analysts, according to FXStreet, had pencilled in output growth of 0.1% for the eurozone in January. Annually, production was down 1.3% in January in the eurozone and up 0.4% in the EU. This also undershot forecasts, with the market expecting just a 0.5% decline for the eurozone.
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Nearly 30 million people were under lockdown across China on Tuesday, as surging virus cases prompted the return of mass tests and hazmat-suited health officials to city streets on a scale not seen since the start of the pandemic. China reported 5,280 new Covid-19 cases on Tuesday, more than double the previous day's tally, as the highly transmissible Omicron variant spreads across a country that has tethered tightly to a ‘zero-Covid’ strategy. That approach, which pivots on hard localised lockdowns and has left China virtually cut off from the outside world for two years, appears to be on the line as Omicron finds its way into communities. At least 13 cities nationwide were fully locked down on Tuesday, and several other cities had partial lockdowns.
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Unemployment in China rose and youth unemployment spiked in the first months of the year, amid the surge of coronavirus cases. The unemployment rate in cities edged up to 5.5% by the end of February, compared with 5.1% in December, the National Bureau of Statistics said Tuesday. Job seekers aged 16-24 were struggling with a 15% increase in unemployment. But China reported better-than-expected retail sales and industrial output in January and February. Retail sales for the first two months rose 6.7% on-year, it said. This was well above the 3% forecast by Bloomberg analysts. Industrial production was up 7.5% for the first two months, beating analysts' expectations of a 3.9% growth.
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China's foreign minister has said his nation does not want to be impacted by Western economic sanctions on Russia, state media reported, as pressure grows on Beijing to withdraw support from an isolated Moscow. ‘China is not a party to the crisis, still less wants to be affected by the sanctions,’ Wang Yi said, according to a readout of a phone call with his Spanish counterpart Jose Manuel Albares published on Tuesday. China has ‘always opposed using sanctions to solve problems, let alone unilateral sanctions that has no basis in international law, which will... harm people's livelihood in all countries’, Wang said according to the readout.
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The US has ‘deep concerns’ about ‘alignment’ between Russia and China, a senior US official said Monday after high-ranking US and Chinese officials met for seven hours on the Ukraine war and other security issues. ‘We do have deep concerns about China's alignment with Russia,’ the official told reporters, speaking on condition of anonymity. High-level US and Chinese officials engaged Monday in ‘substantial discussion’ on the Russian invasion of Ukraine, the White House said after talks held in Rome between the two superpowers. US National Security Advisor Jake Sullivan and Yang Jiechi, the Chinese Communist Party's chief diplomat, did not address reporters after their meeting in a hotel. The White House said the two officials also ‘underscored the importance of maintaining open lines of communication between the US and China.’
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Russian forces are advancing only slowly in their assault on Ukraine's capital, according to a US military assessment. As of Monday, the Russian forces remain about 15 kilometres away from Kiev, according to a high-ranking Pentagon official. Nor has a convoy that has seemed stuck at times on its approach to the city seemed to make much progress. Moving to the northern Ukrainian city of Chernihiv, the Pentagon notes it is cut off by Russian forces, but noted that Russia's military also does not seem to be making progress into it due to strong resistance by the Ukrainians. He added that, despite a Russian attack on a military training facility near the Polish border on Sunday, that Western supplies would continue to be delivered to Ukrainian forces. He also noted that Russia has not established dominance of Ukrainian airspace.
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Negotiations between Ukraine and Russia on an end to the fighting have been put on hold until Tuesday, according to Kiev. Ukrainian presidential advisor Mykhailo Podolyak described the top level delegations as taking a pause to sort out technicalities, but that discussions among working groups were still under way. ‘Negotiations are ongoing,’ he tweeted. The two sides had met by video link on Monday. Before that, the delegations had met three times in person in Belarus. There has been no breakthrough so far, though the parties had expressed cautious optimism over this week's talks.
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A key Democratic Senator said he will not support one of US President Joe Biden's picks to serve on the Federal Reserve board, which could torpedo her chances for confirmation. Sarah Bloom Raskin, tapped for the post of top banking regulator at the Fed, has become a lightning rod for critics, who say she is hostile to the oil industry, and Republicans have blocked efforts to even hold a vote on her nomination. Now Democratic Senator Joe Manchin of West Virginia said Monday he was ‘unable to support her nomination.’ Manchin, who has been a key swing vote in the evenly split Senate, blocking many of Biden's initiatives, pointed to Bloom Raskin's comments on credit for the oil industry.
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