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The following is a summary of top news stories Monday.
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COMPANIES
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US retail giant Walmart announced a potential offer to acquire remaining stake in Massmart, a South African retail and wholesale group, that it does not already own for R 62, around $3.70, per share. The boards of directors of both companies have reached an in principle agreement regarding the terms and conditions associated with the potential offer. As per the agreement, Walmart will buy the stake by way of a scheme of arrangement or a general offer if the scheme of arrangement does not become operational. The offer represents a premium of 53% to the closing share price and a 62% premium to the 90-day volume weighted average share price calculated at close of market on August 26. The potential offer, if finalized, will provide Massmart with needed access to ongoing financial and operational support from Walmart to sustain its turnaround.
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Facebook has reached a preliminary agreement in a long-running lawsuit seeking damages from the social network for allowing third parties, including the company Cambridge Analytica, to access users' private data. According to a document filed on Friday in a San Francisco court, Facebook says it is submitting a draft ‘agreement in principle’ and has requested a stay of proceedings for 60 days finalize it. The social network did not indicate the amount or terms of the agreement in the class action. When asked by AFP, Facebook's parent company Meta Platforms did not respond on Saturday. The deal comes as Meta boss Mark Zuckerberg and former chief operating officer Sheryl Sandberg, who announced her resignation in June, were due to testify in court in September as part of the scandal.
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Japanese giant Honda Motor Co and South Korean battery maker LG Energy Solution are establishing a joint venture to invest $4.4 billion in a new US electric car battery plant, the firms announced. Construction of the plant is expected to begin next year, aiming for ‘mass production of advanced lithium-ion battery cells by the end of 2025’, they said in a joint statement.
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New York-based pharmaceutical firm Pfizer, alongside BioNTech, completed a submission to the European Medicines Agency for a booster dose of an Omicron BA.4/BA/5-adapted bivalent Covid-19 vaccine for individuals 12 years old and over. The application follows guidance from the EMA and International Coalition of Medicines Regulatory Authorities to work towards introducing Omicron-adapted vaccines.
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Wilmington, Delaware-based biopharmaceutical company Incyte won approval from the US Food & Drug Administration for Pemazyre, a selective fibroblast growth factor receptor for treating adults with relapsed or refractory myeloid and lymphoid neoplasms with a FGFR1 rearrangement. MLNs with this rearrangement are considered extremely rare and aggressive blood cancers. US FDA approval was based on data from the phase two FIGHT-203 study, which evaluated the safety and efficacy of Pemazyre in 28 patients.
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In Spain, 92 domestic flights are being cancelled, affecting some 17,000 passengers, due to a ten-day strike by cabin crew working for Iberia Express, the budget airline that is part of the Iberia group, in turn part of International Consolidated Airlines. The flights that are being cancelled include connections from Madrid to Palma de Mallorca, Gran Canaria, Santiago de Compostela, Seville, Malaga and Tenerife, Spanish trade union USO said on Friday. They were due to depart between August 28 and September 6. The cabin crew are holding the strike demanding the company start negotiating on a collective agreement and raise salaries, frozen since 2015, to the higher cost of living. So far, only 24 flights between Sunday and Tuesday are definitely cancelled due to the industrial action, Iberia Express said, according to El Pais newspaper.
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Plans to dock a liquefied natural gas terminal on the Tuscan coast are becoming an increasingly divisive issue as Italian lawmakers campaign for upcoming elections. Gas grid operator Snam plans to use the Golar Tundra vessel to convert LNG into gas to be fed into the nation's energy network from 2023. However, the plans to dock the vessel in the port of the city of Piombino are proving controversial. The national government has said the Piombino site is needed to make sure Italy has fuel amid feared upcoming energy shortages. However, some locals oppose the plan, seeing it as a threat to their security, economy and tourism.
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MARKETS
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Europe's sell-off continued into the new week, with Wall Street also pointed to a lower open, as markets were spooked by hawkish remarks from US Federal Reserve Chair Jerome Powell on Friday. ‘His message was crystal clear: inflation must come down even if it means pain for households and businesses in the process,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. This Friday's monthly US jobs report will be closely watched, with a nonfarm payrolls beat likely to compound investor concerns over Fed monetary policy tightening.
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CAC 40: down 1.6% at 6,173.30
DAX 40: down 1.2% at 12,811.38
UK financial markets shut for Summer Bank Holiday
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Hang Seng: closed down 0.7% at 20,023.22
Nikkei 225: closed down 2.7% at 27,878.96
S&P/ASX 200: closed down 2.0% at 6,965.50
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DJIA: called down 0.8%
S&P 500: called down 0.9%
Nasdaq Composite: called down 1.1%
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EUR: down at $0.9970 ($0.9997)
GBP: down at $1.1682 ($1.1764)
USD: up at JP¥138.52 (JP¥137.31)
GOLD: down at $1,722.76 per ounce ($1,736.54)
OIL (Brent): up at $101.56 a barrel ($99.59)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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German Chancellor Olaf Scholz expressed support for a closer European political community in a speech in Prague on Monday, and urged more cooperation between leaders. Stressing the ‘geopolitical dimension’ of the enlargement of the EU, he said ‘Realpolitik must mean involving friends and partners with shared values and supporting them in order to be strong in global competition through cooperation. ’This is, by the way, also my understanding of [French President] Emmanuel Macron's proposal for a European Political Community,‘ he said. ’What is lacking, however, is a regular exchange at the political level - a forum in which we heads of state and government of the EU and our European partners meet once or twice each year to discuss the key issues that affect our continent as a whole, such as security, energy, the climate and connectivity.‘
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German efforts to stock up on gas in light of Russian moves to block the flow of energy supplies are still ticking ahead at a faster clip than proscribed by the government, potentially giving Europe's biggest economy some breathing room. According to a Sunday report by gas storage regulators, storage levels were at 81.78% of full capacity on Thursday and had been expected to reach 82.2% by this past Friday. Like the rest of Europe, Germany has been scrambling to stock up on gas in recent weeks. Much of its gas is imported from Russia. However, after Germany laid sanctions on Russia and began actively supporting Ukraine after an invasion ordered by Moscow, Russia has steeply slashed the amount of gas it provides, which many see as an attempt to strong-arm Germany into backing away from Kiev. The efforts to fill up the storage have so far exceeded expectations. A decree had required the 75% mark to be reached only on September 1. Now officials hope to reach the 85%-by-October 1 mark by the start of September. The plan is to have 95% capacity by November 1.
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Power is gradually being restored in China's Sichuan province after shortages left the south-western region in crisis for about two weeks. Sichuan's power grid has largely recovered from shortages caused by a prolonged heat wave and drought, China's state broadcaster CCTV reported on Sunday. Falling temperatures in recent days have, among other things, led to a decline in the use of energy-intensive air-conditioning systems which had overwhelmed power supplies. Sichuan province normally generates nearly a third of the country's hydroelectric power. But the most severe heat wave in more than six decades has led to historically low water levels and, as a result, a massive drop in electricity production.
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The Chinese Foreign Ministry denounced the passage of two US Navy warships through the Taiwan Strait a ’provocation‘ aimed at ’sabotaging regional peace and stability.‘ Foreign Ministry spokesperson Zhao Lijian said Washington must observe the ’One China‘ policy, which is the position that there is only one Chinese government. Taiwan has had an independent government since 1949, but China considers the democratic island part of its territory and opposes any form of official contacts between Taiwan and others. On Sunday, the guided-missile cruisers USS Antietam and USS Chancellorsville made a ’routine‘ mission through international waters, the US Navy's 7th Fleet said. ’The ship's transit through the Taiwan Strait demonstrates the United States' commitment to a free and open Indo-Pacific. The US military flies, sails, and operates anywhere international law allows,‘ the statement said.
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Australian retail sales growth picked up in July, figures showed. Month-on-month, sales were up 1.3%, accelerating from June's 0.2% growth and comfortably beating consensus, according to FXStreet, of a 0.3% rise. July's outturn was the largest rise in four months, the Australian Bureau of Statistics said. ’After slowing growth in recent months, the 1.3% rise in July was the largest since the 1.6% rise in March 2022. Turnover rose in five of the six retail industries in July 2022. This shows that, despite cost-of-living pressures, households are continuing to spend,‘ said Ben Dorber, head of retail statistics at the ABS. Annually, sales rose 17%.
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