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The following is a summary of top news stories Monday.
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COMPANIES
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South African media conglomerate Naspers and subsidiary Prosus reported a strong annual performance, with sizeable increases in profit and revenue due to a gain from a partial sale of the latter's holding in Tencent. They also announced the immediate launching of an open-ended share repurchase programme for both Prosus and Naspers N ordinary shares. Prosus will start selling a small number of shares in Hong Kong-listed investee Tencent Holdings Ltd in an orderly manner, and then use the proceeds from the sale to purchase shares in Prosus and Naspers, so long as the trading discount of both companies to net asset value remains wide. The share buyback programme aims to increase the net asset value per share of both companies, they said, adding Tencent is supportive of the withdrawal by Prosus of its voluntary restriction on the sale of its interest in Tencent.
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US pharmaceutical firm Pfizer and German partner BioNTech announced positive results from their trial of a vaccine candidate adapted to the Omicron variant of the coronavirus. Pfizer and BioNTech announced positive data from the phase 2/3 trial evaluating the safety, tolerability, and immunogenicity of Omicron-adapted Covid-19 vaccine candidates against Omicron. The companies reported positive data from two trials-one as a monovalent and the other bivalent, a combination of the Pfizer-BioNTech Covid-19 vaccine and a vaccine candidate targeting the spike protein of the Omicron BA.1 variant of concern. The companies noted that the trial found that a booster dose of both Omicron-adapted vaccine candidates elicited a substantially higher immune response against Omicron BA.1 as compared to the companies' current Covid-19 vaccine.
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AstraZeneca said its Lynparza treatment has been recommended for approval in the EU by the Committee for Medicinal Products for Human Use for early breast cancer treatment, after positive phase-three results. Lynparza also demonstrated a statistically significant and clinically meaningful improvement in overall survival, reducing the risk of death by 32% versus placebo, the drugmaker said. Separately, AstraZeneca said its Enhertu drug also has been recommended for approval in the EU for patients with breast cancer. The CHMP based its positive opinion on results from the Destiny-Breast03 phase three trial, which were published in The New England Journal of Medicine. The trial results showed that Enhertu reduced the risk of disease progression or death by 72% compared with the trastuzumab emtansine drug. Lynparza was co-developed by AstraZeneca with Merck & Co, while Enhertu was jointly developed with Daiichi Sankyo.
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GSK announced positive interim results from its B-Clear phase IIb trial, which tested bepirovirsen as a treatment of chronic hepatitis B. Interim analysis from the trial showed that bepirovirsen had reduced levels of the hepatitis B surface antigen and hepatitis B virus DNA after 24 weeks of treatment in people with hepatitis B. Chronic hepatitis B is a viral infection of the liver, and occurs when the body's immune system is unable to fight off the virus, and can progress to further complications including cirrhosis and liver cancer. Looking ahead, GSK is planning to evaluate bepirovirsen as a monotherapy, in a phase III trial which is expected to start n the first half of 2023.
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Money transfers provider Wise said the UK regulator is investigating its chief executive after a tax breach. Wise said the UK Financial Conduct Authority has opened an investigation into Co-Founder & Chief Executive Officer Kristo Kaarmann. Wise said that UK tax collector HM Revenue & Customs in September of last year updated its published list of individuals and businesses receiving penalties for a deliberate default regarding their tax affairs. Kaarmann was included on the list and will remain so for 12 months from its publication. Following Kaarman's inclusion on the list, the board of Wise had conducted an investigation with the help of external legal counsel and shared the findings of this with the FCA.
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Hamburg-based wind turbine maker Nordex raised €139.2 million in gross proceeds from private placement with its ‘anchor’ shareholder, Acciona. Nordex offered 16.0 million shares for subscription at €8.70 each, representing 10% of its existing issued share capital.
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MARKETS
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Stock markets were rallying globally to start the new week, on hopes that central banks are getting control over inflation, meaning that interest rates may not have to rise as high as previously expected. The dollar was slightly softer on Monday, though it remains near its strongest level since 2003. Kit Juckes of Societe Generale said the end of the second quarter and first half of the year on Thursday could see some long-dollar positions unwound. ‘It wouldn't be surprising if that turns into speculation that the dollar has peaked, but I'd be inclined to see what happens this week as merely the tea interval in a game whose final session could be pretty volatile,’ he said.
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CAC 40: up 0.5% at 6,105.37
DAX 40: up 1.2% at 13,273.92
FTSE 100: up 1.9% at 6,706.00
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Hang Seng: closed up 2.4% at 22,229.52
Nikkei 225: closed up 1.4% at 26,871.27
S&P/ASX 200: closed up 1.9% at 6,706.00
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DJIA: called up 0.4%
S&P 500: called up 0.5%
Nasdaq Composite: called up 0.6%
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EUR: up at $1.0586 ($1.0549)
GBP: up at $1.2307 ($1.2282)
USD: soft at JP¥135.00 (JP¥135.10)
GOLD: up at $1,838.11 per ounce ($1,830.41)
OIL (Brent): down at $112.90 a barrel ($113.44)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Leaders of the G7 were on Monday expected to announce new economic measures to tighten the screws on Moscow, as Ukrainian President Volodymyr Zelensky appealed for more help in fending off Russia's invasion. US President Joe Biden and his counterparts from the Group of Seven wealthy democracies are holding a three-day summit in the Bavarian Alps that has been dominated by the war in Ukraine and its global fallout. Zelensky joined the leaders of the US, Germany, Britain, France, Italy, Japan and Canada via video link. He was expected to ask for more heavy weapons and tougher sanctions against Moscow. Among the new action being weighed by G7 leaders was a price cap on Russian oil imports and fresh sanctions on Russia's defence sector, the White House said on Monday.
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Four G7 powers will ban Russian gold exports in a new bid to stop oligarchs from buying the precious metal to avoid the impact of sanctions against Moscow. The joint action taken by Britain, Canada, Japan and the US, ‘will directly hit Russian oligarchs and strike at the heart of [President Vladimir] Putin's war machine,’ said UK Prime Minister Boris Johnson. Given London's central role in the international gold trade and parallel US, Japanese and Canadian action, ‘this measure will have global reach, shutting the commodity out of formal international markets,’ Britain said. Worth $15.5 billion to the Russian economy in 2021, gold is a major export for the country.
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The US announced new G7 sanctions targeting Russia's defence industry in a bid to hobble the Kremlin's ability to maintain the military machine during its invasion of Ukraine. ‘G7 leaders will align and expand targeted sanctions to further restrict Russia's access’ to Western technology that can support the Russian arms industry, the White House said. And the US will ‘aggressively target Russian defence supply chains...and limit Russia's ability to replace the military equipment it has already lost during its brutal war’.
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Iran and the EU have agreed to restart stalled nuclear talks with the US ‘in the coming days,’ senior EU diplomat Josep Borrell said in Tehran on Saturday. ‘The coming days means the coming days. I mean quickly, immediately. And so, we are going to break this stalemate and stop this escalation,’ he said alongside Iranian Foreign Minister Hossein Amirabdollahian. After the diplomats met, Iranian President Ebrahim Raisi told state television that the Islamic Republic would continue negotiations while sticking to its core demands. Iran has long called on Washington to lift some sanctions to show it is serious about reaching a compromise in the efforts to revive the nuclear deal.
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French President Emmanuel Macron on Saturday ‘confirmed’ his confidence in Prime Minister Elisabeth Borne in an interview with AFP, after the premier came under fire for a wooden performance in an election that saw her boss fail to retain an overall majority in parliament. Macron said he had instructed Borne to conduct new consultations with parliamentary groups to form a ‘government of action’ for early July. ‘I decided today to confirm my confidence in Elisabeth Borne,’ Macron said.
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UK Prime Minister Boris Johnson has entered a new week hoping to put two tough by-election defeats behind him, as he seeks to bolster faith in his leadership for the time being if not into the next decade. Johnson is meeting counterparts at the G7 summit in Germany on the latest leg of a series of international gatherings which have kept him out of the UK, as questions loom over his future. An announcement on steel tariffs is also expected in the coming days, which the PM is reportedly plotting to please voters in Labour heartlands. Johnson has insisted the ‘golden rule’ is to ‘focus on what we are doing’ after raising eyebrows by revealing he has ambitions to remain in office into the 2030s.
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A UK government bill proposing an overhaul to a post-Brexit deal in Northern Ireland returns to Parliament on Monday, despite EU warnings it is illegal and could spark a trade war. Brussels threatened legal action after the UK government earlier this month introduced the Northern Ireland Protocol Bill to unilaterally change trading terms for the British province. A day before it gets its second reading in parliament the first opportunity for lawmakers to debate a proposal the EU's ambassador again warned London of reprisals if it is passed. ‘We think it is both illegal and unrealistic. It is illegal because it's a breach of international law, a breach of EU law and UK law,’ Joao Vale de Almeida told Sky News on Sunday. ‘We are committed to find the practical solutions on implementation, but we cannot start talking if the baseline is to say everything we have agreed before is to be put aside.’
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Bank of Japan members expect to see a recovery in the nation's economy as the pressure of the Covid-19 pandemic and supply-side constraints; however the rise in commodity and raw material prices will remain an issue, minutes from the central bank's June meeting showed. At the meeting, the Bank of Japan decided to keep in place its target rate of minus 0.1% part of a decade-old action plan aimed at boosting the world's third-largest economy bucking pressure to address the impact of a weaker yen. The decision was made by an 8-1 vote. Minutes from the June meeting showed that bank members remain bullish about Japan's prospects post-pandemic, already seeing a pickup in the private sector, particularly in services as hospitality firms look forward to government support measures.
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With inflation rising sharply, and the Federal Reserve raising interest rates, the US is facing an increased risk of a downturn, IMF Managing Director Kristalina Georgieva said Friday. The world's largest economy rebounded strongly from the pandemic downturn, but with the ‘unwelcome side effects’ of rising prices, she said. While the IMF is confident the Fed's rate hikes will bring down inflation, ‘We are conscious that there is a narrowing path to avoiding a recession,’ she said in a statement. The Fed last week implemented the biggest increase in its benchmark lending rate in nearly 30 years, as part of its aggressive effort to quell inflation that is at a four-decade high and squeezing American families struggling with rising prices for gasoline, food and housing.
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Central bank chiefs and economists gather Monday evening at their annual forum in southern Portugal to discuss the best approach to the inflationary challenges exacerbated by Russia's invasion of Ukraine. Some 200 delegates will attend the ECB Forum on Central Banking at a luxury hotel in Sintra, west of Lisbon, after two years of Covid-imposed virtual gatherings. When ECB President Christine Lagarde last attended this event, it was in her previous role as director general of the International Monetary Fund back in 2014. Also attending will be Jerome Powell, head of the US Federal Reserve, and Andrew Bailey, governor of the Bank of England. They will be joined by Agustin Carstens, general manager of the Bank for International Settlements and all four are set to discuss the issues at a seminar on Wednesday, the last day of the forum. In its annual report released on Sunday, the BIS warned that central banks must not let inflation become entrenched, with the threat of stagflation looming over the global economy.
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