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.
The following is a summary of top news stories Monday.
----------
COMPANIES
----------
Telecommunications firm Vodafone maintained annual guidance after a rise in first-quarter revenue. Vodafone said its first-quarter performance was in line with expectations, with continued growth seen in both Europe and Africa. For the three months to June 30, revenue was up 1.6% to €11.3 million from €11.1 million in the first quarter last year. Looking ahead, Vodafone said it was on track to deliver financial 2023 guidance, with adjusted earnings before interest, tax, depreciation and amortisation after leases expected to be between €15.0 billion and €15.5 billion and adjusted free cash flow of €5.3 billion. Vodafone said its Europe Consumer contract mobile average revenue per user grew by 0.7% year-on-year. It added 215,000 mobile contract customers, but lost 72,000 broadband customers in the quarter. Vodafone also said growth in Africa was supported by data revenue and financial services growth, as its M-Pesa customer base grew to almost 50 million in the quarter. ‘We have executed in line with our expectations, delivered another quarter of growth in both Europe and Africa, and seen an acceleration in business growth. Whilst we are not immune to the current macroeconomic challenges, we're on track to deliver financial results for the year in line with our guidance,’ said Chief Executive Officer Nick Read.
----------
Telecom groups Orange and Masmovil Ibercom announced plans to merge their Spanish businesses. The transaction is based on an enterprise value of €18.6 billion, the two companies announced on Saturday. The joint venture would create the largest Spanish telecoms group in terms of customers. Telefonica has been the largest so far, ahead of Orange, Vodafone and Masmovil. The company resulting from the merger, which first must be approved by antitrust authorities, is to be controlled equally by Orange and Masmovil. The companies expect the merger to be completed in the second half of next year.
----------
AstraZeneca said it won two recommendations for approval in the EU and one priority review in the US. AstraZeneca's and Daiichi Sankyo's breast cancer drug Enhertu won strategic priority review in the US for patients with some forms of breast cancer. ‘Enhertu is a specifically engineered HER2-directed antibody drug conjugate,’ AstraZeneca explained. HER2 stands for human epidermal growth factor receptor 2, a protein that promotes the growth of cancer cells. Enhertu was approved in the EU last Tuesday. The priority review in the US comes after Enhertu received breakthrough therapy designation in April in the country, which is granted for drugs that treat serious and life-threatening conditions.
----------
Royal Philips said its second quarter was hit by lockdowns in China and supply chain blockages, sending the company to a net loss, but it looks to the second half optimistically. In the three months that ended June 30, the Amsterdam-based health technology company said operating profit diminished year-on-year, coming in at €11 million, an 87% decrease from €85 million. On a net basis, the firm swung to a loss of €20 million, compared to net profit of €153 million a year prior. Comparable sales declined 7% year-on-year to €4.18 billion from €4.23 billion. For 2022 as a whole, Philips expects 1% to 3% comparable sales growth, and around 10% in adjusted earnings before interest, tax, depreciation and amortisation margin.
----------
Ryanair reported a sharp rise in first-quarter revenue, sending the budget airline back into profit, even as Easter bookings and fares were badly damaged by the Russian invasion of Ukraine in February. For the three months to June 30, revenue was €2.60 billion, multiplied from €370 million in the first quarter last year. This helped swing the Dublin-based carrier to a profit after tax of €170 million from a €273 million loss a year before. Looking ahead, Ryanair said it could not ‘ignore the risk’ of new Covid variants in Autumn. The airline said there are ‘clear signs of pent-up demand’. Average fares in the second quarter of its financial year are tracking ahead of pre-Covid levels by a low double-digit percentage, having been 4% down in the first quarter. However, bookings remain closer-in than normal, leaving the company with ‘almost zero visibility into H2’.
----------
Volkswagen Chief Executive Herbert Diess will step down from the board of the German auto giant to be replaced by the boss of sports car brand Porsche, VW said on Friday. Diess's departure from the top of the world's second-largest automaker was agreed ‘by mutual consent’ and would take effect on September 1, Volkswagen said in a statement. After four years as CEO, Diess will be replaced by Oliver Blume, the current boss of the Porsche sports cars, part of the Volkswagen family of 12 brands that also includes Skoda and Audi.
----------
Walt Disney announced a slew of Marvel superhero movies including two new ‘Avengers’ films at Comic-Con on Saturday, as it offered screaming fans an emotional first glimpse at its upcoming ‘Black Panther’ sequel. The record-breaking Marvel movies have dominated Hollywood and global box offices in recent years, with 2019's ‘Avengers: Endgame’ briefly becoming the highest-grossing film of all time at more than $2.79 billion. ‘Avengers: The Kang Dynasty’ and ‘Avengers: Secret Wars’ will hit theaters in 2025, studio president Kevin Feige announced. The films will aim to follow in the footsteps of ‘Avengers: Endgame,’ which built unprecedented hype by rounding off storylines presented in all the preceding Marvel films. Other Marvel films announced Saturday by Disney at the world's most famous pop culture gathering included ‘Thunderbolts’ and ‘Fantastic Four,’ both due in 2024.
----------
MARKETS
----------
European equities bounced back from a lower start on Monday to trade positively ahead of the New York open. Meanwhile, the dollar was giving back its earlier gains against the euro and pound. The market focus for the week ahead is a key policy decision by the US Federal Reserve on Wednesday, as well as high-profile earnings reports in both the US and Europe, including Alphabet and Microsoft on Tuesday.
----------
CAC 40: up 0.2% at 6,226.96
DAX 40: up 0.2% at 13,273.59
FTSE 100: up 0.2% at 7,290.36
----------
Hang Seng: closed down 0.2% at 20,562.94
Nikkei 225: closed down 0.8% at 27,699.25
S&P/ASX 200: closed marginally lower, down 1.60 points at 6,789.90
----------
DJIA: called up 0.3%
S&P 500: called up 0.3%
Nasdaq Composite: called up 0.4%
----------
EUR: flat at $1.0227 ($1.0223)
GBP: flat at $1.2025 ($1.2028)
USD: firm at JP¥136.40 (JP¥136.11)
GOLD: down at $1,729.55 per ounce ($1,731.12)
OIL (Brent): down at $103.23 a barrel ($104.74)
(currency and commodities changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
The German Ifo business climate index fell to 88.6 points in July from a revised reading of 92.2 in June and missed expectations of a score of 90.1. ‘The further decline in the [index] adds to the evidence that the German economy is on the brink of a recession as high energy prices and worries about energy security in particular take their toll on firms' expectations for the months ahead,’ commented Capital Economics.
----------
The Kremlin said that Russian strikes on Ukraine's Black Sea port of Odessa ‘should not affect’ a UN-brokered deal between Moscow and Kyiv to unblock grain exports. ‘This cannot and should not affect the start of shipment,’ Kremlin spokesman Dmitry Peskov told reporters, two days after Moscow hit the port. He said Moscow's strikes targeted ‘exclusively’ military infrastructure and were ‘not connected with the agreement on the export of grain.’
----------
Russia is seeking to overthrow the Ukrainian government, Foreign Minister Sergei Lavrov said on Sunday, going back on earlier statements that the leadership question was up to the Ukrainian people. ‘We will definitely help the Ukrainian people to free themselves from the regime that is absolutely anti-people and anti-history,’ Lavrov said on Sunday, five months to the day since the start of Russia's invasion of Ukraine. The Russian and Ukrainian people will live together in the future, he said in Cairo at the start of a diplomatic trip to Egypt, Ethiopia, Uganda and the Democratic Republic of Congo, to shore up support for Russia's war. His remark came as the Russian leadership has publicly toughened its position in the Ukraine war in recent days. On Wednesday, Lavrov threatened to occupy further territories outside the eastern Donbass region where most of the fighting is currently concentrated.
----------
US President Joe Biden continues to ‘improve significantly’ despite a lingering sore throat from his coronavirus infection, according to an update on Sunday from his doctor. ‘The president is responding to therapy as expected,’ wrote Kevin O'Connor in his latest note. Biden has been taking Paxlovid, an antiviral drug that helps reduce the chance of severe illness. O'Connor wrote that Biden still has a sore throat, though other symptoms, including a cough, runny nose and body aches, ‘have diminished considerably’. Biden tested positive for the coronavirus on Thursday morning. O'Connor said on Saturday that the president likely became infected with a highly contagious variant, known as BA.5, that is spreading throughout the country.
----------
European countries not dependent on Russian gas need to show solidarity with those that are being forced into conservation efforts due to impending cut-offs of the fuel, argues European Commission President Ursula von der Leyen. ‘Even member states that hardly purchase any Russian gas cannot escape the effects of a potential supply stop on our internal market,’ von der Leyen told dpa ahead of a special meeting of the bloc's energy ministers planned for Tuesday. The comments came in the wake of criticism voiced by both Spain and Portugal of a Commission-proposed gas emergency plan. The Portuguese government called the plan ‘untenable’ and said that its gas consumption was an ‘absolute necessity’. The EU Commission's plan calls for all EU states to voluntarily reduce their gas consumption by at least 15% between August 1 and March 31, while also making it possible to order further reductions in consumption in the event of a serious gas crisis.
----------
Cities across China were on red alert for heatwaves on Monday, as tens of millions of people were warned to stay indoors and record temperatures strained energy supply. Swathes of the planet have been hit by extreme and deadly heatwaves in recent months, from Western Europe in July to India in March to April. Scientists say the extreme weather has become more frequent due to climate change, and will likely grow more intense as global temperatures continue to rise. China is no exception and is sweating through one of its hottest summers on record. In the eastern provinces of Zhejiang and Fujian, the mercury rose above 41 degrees Celsius over the weekend, reaching all-time highs in two cities.
----------
Copyright 2022 Alliance News Limited. All Rights Reserved.