Trading Day: CSL setback weighs on ASX, index extends losses
Stocks at five-day low following wobble on Wall Street, as CSL lost 3pc after vaccine trials were halted and IGO jumped after a raising.
- Higher dividends likely for banks
- oOh!media revenue rebounds
- Asaleo shareholder rejects bid
- Brent oil tops $US50
That’s all from the Trading Day blog for Friday, December 11. Australia’s S&P/ASX 200 share index closed down 40 points, or 0.6pc, at a 5-day low of 6642.6 after hitting 6632.3 intraday. Wall Street had closed mixed, with the Dow and S&P 500 both down 0.1 per cent and the Nasdaq up 0.5 per cent. Brent oil topped $US50 for the first time since March and iron ore jumped 5 per cent. Locally, CSL fell after trials of its coronavirus vaccine with UQ were terminated.
6.48pm: Surging dollar poses threat to offshore earners
A surging exchange rate is set to be a significant headwind in the February reporting season as companies with big offshore operations expected to feel the heat.
The Australian dollar rose 2 per cent this week, topping US75c for the first time in 2½ years.
Since the end of June, the Aussie has climbed almost 10 per cent on a heady cocktail.
Elise Shaw 5.25pm: $A extends bull run
Commonwealth Bank’s Global Markets Research notes AUD/USD extended its bull run in the Asia session and is trading near US75.60c.
“Iron ore prices are uninterrupted by recent Australia‑China trade tensions, surging to $US160 per ton.
“Our commodity analyst expects strong Chinese demand will keep iron ore prices elevated in the coming months.
“Strong iron ore prices are very supportive of AUD. Australian products that are restricted by the Chinese government so far remain relatively small as a share of total Australian exports to China.”
4.36pm: ASX ends down 0.6pc at 5-day low
Australia’s S&P/ASX 200 share index closed down 40 points, or 0.6pc, at a 5-day low of 6642.6 after hitting 6632.3 intraday.
After hitting a 9-month high of 6745.3 in a 7-day winning streak that ended on Wednesday, the index has now fallen 2 days in a row and has also turned slightly negative year to date.
A 3.2pc fall in CSL wiped off 15 index points as the Australian dollar hit 2.5-year high and CSL was forced to scrap its coronavirus vaccine.
Cochlear, ResMed and Brambles also fell victim to the surging exchange rate with falls of more than 3 per cent.
Banks fell despite earnings upgrades in the sector from UBS, with the four major banks down 0.5-1pc.
Technology, Energy and Materials were standouts.
Afterpay rose 5pc on Canadian expansion plans, Woodside rose 2.6pc as crude oil rose 3pc, and IGO surged 25pc as investors applauded its bottom-of-the-cycle move into lithium.
Perry Williams 3.50pm: BHP and the China trade ban
BHP is likely to be a loser from China’s ban on Australian coal with the ongoing rift triggering profound shifts in global commodity trading, UBS said.
The stoush has shown no sign of subsiding with the amount of coal delivered to Chinese customers from Australia plummeting by 78 per cent in November to 1.4m tonnes.
BHP’s metallurgical coal exports estimates have been lowered by UBS to 40m tonnes for the 2021 financial year against market consensus of 42m tonnes and company guidance of 40-44m tonnes.
“BHP - who sells an estimated 30 per cent of its Australian mined coal to China - is likely to lose out and we have cut our expectation for volumes in FY21,” UBS said in a note.
“What we understand from channel checks is that production of low vol metallurgical coal has been slowed and we see risk to FY21 production guidance of 40-44m tonnes.”
Citi thinks the standoff could be resolved by mid-2021 but UBS said it was hard to predict how the ructions will play out.
“The breakdown in the Australian and Chinese trade relationship remains difficult to predict. The unofficial ban on Australian met coal imports is forcing profound shifts in global trade, and represents the greatest potential disruption since China began exerting greater influence over the trade in 2016,” UBS said.
“As Australian cargoes look for new homes and Chinese mills search for alternative sources, coal price differentials reach new highs. The winners seem to be those non-Australian producers that have spare tonnes which can be sold to China and take advantage of large pricing discrepancies.”
Canada’s Teck Resources appears an early beneficiary while the ASX-listed Coronado may boost production from its US mines.
“Teck for example announced on 23 Nov 20 that it had been able to restructure its sales book and was targeting 2021 sales to China of ~7.5Mt and that pricing would be
on a cfr basis China, which currently attracts a premium of ~US$60/t today,” UBS said. “Coronado should also be a net beneficiary in our view as while its Australian mine (Curragh) feels lower pricing, we expect CRN to be able to ramp up its US operations.”
Elise Shaw 2.51pm: What did we hoard during pandemic?
CommSec’s senior economist Ryan Felsman reports Aussies hoarded a huge amount of essential foodstuffs in the early months of the pandemic.
“Worried about the emerging health crisis and lockdowns - preventing some access to grocery and corner stores – we prepared for the worst.”
According to the Bureau of Statistics (ABS): “In 2019-20, an estimated 14.5 million tonnes of foods and non-alcoholic beverages were sold from supermarkets, grocery stores, convenience and specialty food stores, and fresh food markets. This was equivalent to a daily apparent consumption of 1548 grams per capita in 2019-20 an increase of 2.2 per cent (or 33 grams) on the 2018-19 apparent consumption (1,514 grams).”
Felsman notes the amount of food and non-alcoholic beverages surged by over half a million tonnes in 2019-20, according to the ABS data.
“While the consumption of most major food groups remained broadly unchanged from the previous fiscal year, soft drinks saw a lift in apparent consumption by weight of 5.7 grams or 3.8 per cent to 157.5 grams per capita in 2019-20.
Potatoes (up 4 grams or 9.5 per cent to 46 grams per capita) and flour, rice and other grains (up 4 grams or 13.5 per cent to 33.7 grams per capita) were also popular with consumers.”
2.35pm: ASX briefly erases weekly gain
Australia’s share market fell as much as 0.8pc to a 4-day low of 6632.3 by mid-afternoon at which point it was slightly down for the week. It seems to have attracted some buyers however, recovering smartly to be down 0.5pc at 6647.
The additional fall came as US share index futures turned down and the Australian dollar continued to rise. S&P 500 futures fell 0.2pc after rising 0.2pc in early trading.
AUD/USD rose 0.4pc to a 29-month high of 0.7566.
The exchange rate is set to be a significant headwind for offshore income earners in the February profit season. It has risen 2pc in the past 3 days, 5.6pc since September 30th and almost 10pc since June 30th.
2.28pm: Visa, Mastercard stop Pornhub payments
The ABC News website reports that Mastercard and Visa have said they will end the use of their cards on Pornhub — one of the world’s most-visited adult sites — after Mastercard said their investigation had confirmed the presence of “unlawful content”.
The credit card giants said on Sunday they were investigating their business relationship with Pornhub and parent company MindGeek after an online petition alleging it hosted videos of rape and child sexual abuse gained over 2.1 million signatures.
The Traffickinghub petition — launched by anti-trafficking organisation Exodus Cry and supported by numerous child protection and women’s rights organisations — accused Pornhub of “enabling, hosting, and profiting from videos of child rape, sex trafficking, and other forms of non-consensual content exploiting women and minors”.
It calls for Pornhub to be “shut down and its executives held accountable”.
Pornhub said these allegations were “irresponsible and flagrantly untrue”. On Wednesday the site blocked the ability of users to download videos and limited user uploads.
John Durie 1.56pm: Change-ups for lawyers and economists
Herbert Smith Freehills has lured top ranking competition lawyer Linda Evans from Clayton Utz to its Sydney-based team, led by Liza Carver.
Evans is an infrastructure specialist, with recent work including advising Pacific National on its Aurizon rail acquisition. This was taken unsuccessfully by the ACCC to the High Court.
Evans’ partner Ed Willett was a long time ACCC commissioner.
The move comes as the government names two new commissioners to the ACCC including Frontier Economics economist Anna Brakey, who is an infrastructure specialist.
Another economist, Peter Crone, has also joined after an extensive career in government including 10 years as John Howard’s adviser and roles as chief economist for the BCA and Ernst &Young.
Crone has also served on Treasurer Josh Frydenberg’s staff, which was not mentioned in the
government release.
The seven member ACCC commission now has just three lawyers - Stephen Ridgeway, Delia Rickard and Sarah Court - with the rest, including chair Rod Sims, economists.
1.50pm: ASX extends falls as US futures dip
Australia’s share market extended its intraday fall as US futures turned down.
The S&P/ASX 200 fell 0.7pc to a four-day low of 6635.8, as S&P 500 futures fell 0.1pc after rising 0.2pc earlier.
The local index will turn negative for the week if it falls below 6634.08.
The Health Care sector continues to lead declines, with CSL down 3.2pc after abandoning its coronavirus vaccine.
Afterpay has surged 4.9pc and IGO remains up 25pc, but heavyweight stocks including NAB, ANZ, Woolworths, Wesfarmers , Goodman, Brambles and Transurban are weighing on the market.
Ben Wilmot 12.50pm: 360 Capital sweetens Evans Dixon offer
Tony Pitt’s acquisitive listed funds house 360 Capital has lifted its takeover offer for financial services company E&P Financial Group, formerly known as Evans Dixon, putting pressure back on the embattled target.
Mr Pitt is pitching to take the under-performing firm private and turn it around, and made an initial bid in October after earlier building a 19.55 per cent interest in the targett.
360 Capital’s October approach was via an off-market takeover for the remaining shares that it does not already own for 40c per E&P share, plus one 360 Capital share for every four EP1 shares.
360 Capital had originally required E&P to drop a resolution at its AGM to issue shares to staff and management, but it was instead passed.
The suitor has now come back with a fresh offer at 30c per E&P share plus two 360 Capital shares for every five E&P shares, which equates to an offer price of 69c per share.
360 Capital said its offer was compelling value as it was a 13 per cent increase to the first offer of 61c per share. It is also 32 per cent above where E&P was trading ahead of the approach.
E&P is separately fighting legal proceedings proceedings launched by ASIC against its Dixon Advisory and Superannuation Services Limited unit.
David Ross 12.43pm: Criminal risks in junkets: Austrac
Casino junket operations face “multiple criminal threats” and high money-laundering and terrorism-financing risks, a report from the financial crimes watchdog says.
The junket tour operations sector has been in the sights of Austrac in recent months, amid an inquiry into Crown casino operations in Sydney.
“A key vulnerability is the lack of transparency and level of anonymity created by the pooling of all players’ funds and transactions under the name of the (junket tour operator), and that the financial arrangements between the JTO and junket players are not disclosed to the casino,” Austrac’s report noted.
“There is a particular vulnerability associated with jurisdictions with currency flight and gambling restrictions in place as these measures create demand for covert money remittances which can be exploited by criminal groups.”
The report noted eight out of 13 casinos engaged in junket programs with more than 500 individual junket operators and representatives.
The financial crimes watchdog reported 387 suspicious matter reports with a collective value of $130.4m between April 2018 and March 2019.
Potential money laundering was highlighted as a key threat in 47 per cent of reports.
Joyce Moullakis 12.13pm: Westpac avoids another pay ‘strike’
Westpac shareholders have overwhelmingly supported its 2020 pay report, avoiding another strike.
Proxy voting disclosed at the banks annual general meeting on Friday showed 97.3 per cent of investors supported the bank’s remuneration report.
That comes after the bank’s record $1.3bn penalty for financial crimes legal breaches saw it axe short term bonuses for executives this year.
In fiery meetings in the prior two Westpac AGMs, the bank received a strike against its pay report. A strike occurs when 25 per cent of shareholders vote against the remuneration report.
Investors, though, stopped short last year of voting in favour of a motion to spill the board.
Shareholders also overwhelmingly signed off the granting of performance rights to Westpac chief executive Peter King.
12.10pm: ASX trims fall to 0.3pc at noon
Australia’s S&P/ASX 200 share index had trimmed its intraday fall to 0.3pc by midday after falling 0.5pc to a four-day low 6648 in early trading.
Heavyweight biotech CSL was down 3pc, accounting for more than half of the fall, after the government cancelled an order for 51 million doses of a COVID vaccine being developed by the company and the University of QLD after clinical trials hit a snag.
Other health care stocks including Cochlear and ResMed were down more than 2pc after the Australian dollar hit a 29-month high of US75.44c. Among other casualties of the dollar’s rise, Brambles was down 2.4pc.
Major banks were also on the back foot with CBA down 0.6pc despite a positive note on the outlook for dividends and buybacks from UBS analyst Jonathan Mott.
But market sectors were mixed, with Tech, Energy and Materials well into the green as the Nasdaq bounced and commodity prices surged.
IGO remained the standout with a 28pc gain after completing its capital raising for the acquisition of a 49pc stake in Tianqi’s Australian lithium assets.
Ben Wilmot 12.05pm: Cromwell EGM called after ‘strike’
The battle for control of the listed Cromwell Property Group is set to come to a head at an extraordinary general meeting in February, which will consider the future of three independent directors in the wake of a second remuneration “strike”.
The group’s plan to hold a virtual meeting appears to show the under-pressure property group’s board has decided against an immediate exit of long-serving chief executive Paul Weightman.
The $2.3bn property funds company has come under intense pressure from dissident shareholder ARA Asset Management after it was hit by a second strike over its remuneration report at its recent annual meeting.
The move was part of a broader move against the company by ARA and Singapore’s powerful Tang family, which have rebelled against the company’s strategy, which has included a risky push into Polish retail assets as part of its $12bn empire in Australia and Europe.
The two groups drove votes of about 60 per cent against the directors up for re-election at the meeting, as well as against performance rights to Mr Weightman.
The dramatic outcome prompted reports that the long-serving Mr Weightman would depart the business as one means of heading off the extraordinary general meeting.
But now independent directors Tanya Cox, Lisa Scenna and Jane Tongs will face votes at any meeting on their board positions.
Proxy house ISS said last month there were “material concerns” that ARA was effectively taking control of the company without paying a control premium and called for a meeting to be held rather than Mr Weightman leave the company.
11.49am: Cohn giving to charity to resolve Goldman 1MDB impasse
Former Goldman Sachs president Gary Cohn will donate to charity rather than return past earnings that the company sought to reclaim after the 1MDB Malaysian bribery scandal, Goldman said.
The investment bank in October announced a plan to claw back compensation from former and current bank executives following a $US2.9 billion criminal settlement with the Justice Department over the massive international scandal.
The bank said it was seeking some $US174 million from a group of current and former bank leaders because of their role in “institutional failure” at Goldman, even though the executives were not involved in “any illicit activity,” the bank said in October.
But Cohn, who served as a White House economic adviser in the first two years of the Trump administration after leaving Goldman, resisted returning the funds.
Bloomberg News reported Thursday that Goldman had sought more than $US10 million in back compensation from Cohn, but it was not clear if he planned to donate that entire sum. The report said he was giving month to charities that work in pandemic relief and social justice.
Goldman applauded the move. “We are pleased that Gary has chosen to support charitable organizations that are doing important work and put this matter behind us,” a Goldman spokeswoman said.
AFP
David Ross 11.26am: Masketeers a hit for iCandy
ASX-listed video game and entertainment company iCandy Interactive has announced $1m in revenue from its newly-released game Masketeers.
The games developer said the strong revenue trend of the game, which delivered $1m in revenue in 63 days, would contribute positively in the year ahead.
The listed developer announced the successful $10.5m raising at $0.14 per share on Wednesday, with the additional funds to be used to growing the business.
iCandy recorded $2.2m in total revenue in its last audited financial year ending 31 December.
The developer said it has plans to expand Masketeers into other languages and markets, including current negotiations for a partnership in China.
11.14am: ASX remains near four-day low
Australia’s S&P/ASX 200 share index remained near a four-day low despite an uptick in US share index futures.
After the first hour of trading the S&P/ASX 200 was down 0.4pc at 6653 after falling as much as 0.5pc to a 4-day low of 6648.
S&P 500 and DJIA index futures rose 0.2pc and Nasdaq 100 futures were up 0.3pc in early APAC trading.
Health Care, Industrials, Real Estate, Financials, Consumer Discretionary, Utilities and Consumer Staples stocks remained the biggest drags.
CSL extended its fall to 3pc after the government cancelled an order for 51 million doses of a COVID vaccine being developed by the company and the University of Queensland after clinical trials hit a snag.
Energy, Tech, Materials and Communications stocks bucked the selloff, with IGO up 23pc after the capital raising for its lithium play was well received.
Perry Williams 11.01am: China coal bans set to ease: Citi
China’s ban on Australian metallurgical coal may be lifted by mid-2021, with the nation’s steel mills forced to resume buying due to their reliance on Australian grades, Citi said.
The stoush has shown no sign of subsiding, with the amount of coal delivered to Chinese customers from Australia plummeting by 78 per cent in November to 1.4m tonnes.
Still, the standoff may ease in around six months amid booming demand from China’s steel mills and a potential easing of geopolitical tensions.
“We expect Australian hard coking coal to flow into China again by mid-2021 as a result of eased China-Australian geopolitical tensions and Chinese steel mills’ heavy reliance on Australian coking coal grades. China doesn’t have enough domestic reserves of low volatility hard coking coal. China produced 28m tonnes of low-vol hard coking coal in 2019 and imported 15m tonnes,” Citi analyst Paul McTaggart said.
Assuming the China ban does lift, metallurgical coal prices may rise from $US102 a tonne to $US130 a tonne by mid-2021, then increasing to $US150 a tonne in 2022 and 2023.
Thermal coal remains a mixed picture, however, with China likely to tap Australia’s competitors for the fossil fuel used for power generation.
“Similar to previous years, controls on imported coal will likely be relatively loose in the beginning of 2021 before tightening into 2H21, when quotas start running short. The government will likely grant additional quotas when local prices stay above RMB600/t for a sustained period of time.
“China should continue raising imports from Indonesia and Russia to fill the gap of Australian coal while the verbal ban remains in place,” Mr McTaggart said.
10.21am: ASX falls to 4-day low
Australia’s S&P/ASX 200 share index fell 0.5pc to a four-day low of 6650, in line with overnight futures.
CSL dived 2.7pc on a double-whammy of its coronavirus vaccine blockage and exchange rate strength.
Health care was worst off as CSL dived, but the Industrials, Real Estate, Consumer Discretionary, Financials, Utilities and Consumer Staples sectors also underperformed.
In those sectors Transurban lost 2pc, Goodman fell 1.4pc, Wesfarmers fell 0.8pc, CBA fell 1.1pc, APA Group fell 1.4pc and Woolworths lost 1.3pc.
But the Resoruces and Tech stocks outperformed, with IGO up 24pc after a capital raise for its lithium foray, Woodside up 1.4pc after crude oil jumped 3.1pc, and Afterpay up 0.9pc as the Nasdaq bounced.
Eli Greenblat 10.10am: Car sales rebound: Eagers
The nation’s biggest car retailer, Eagers Automotive, says car sales have continued to increase as the country pulls out of COVID-19 restrictions, with the company forecasting a strong uplift in calendar 2020 earnings.
The car sales group, formerly known as AP Eagers, expects to deliver an underlying operating profit before tax from continuing operations in the range of $195 million to $205 million for 2020, compared to $100.4 million for the prior corresponding period.
The guidance reflects the first full year of trading for the enlarged company following the transformative $2 billion merger with Automotive Holdings Group.
Car sales have also improved in recent months.
“Vehicle sales have continued to rebound strongly from the historical lows experienced during April and May 2020 when nationwide COVID-19 restrictions were in place,” Eagers said.
“Customer orders have continued on their strong trajectory and supply constraints caused by global manufacturer factory closures during the June quarter have started to ease as demonstrated by the 12 per cent uptick in national vehicle deliveries recorded during November by the industry.”
The industry’s tight inventory position, combined with the company’s cost reduction initiatives implemented following the merger with AHG and in response to COVID-19, have driven Eagers Automotive’s strong underlying trading performance, the company said.
10.02am: Higher dividends, buybacks likely for banks: UBS
UBS says higher dividends and share buybacks are likely for Australian banks, as it boosts its earnings forecasts in response to an improved economic outlook.
EPS estimates have been increased by 10, 15 and 9 per cent on average for the banks in FY21, FY22 and FY23 respectively.
Sharply lower credit impairment changes are expected to boost banks’ regulatory capital, allowing dividend payout ratios to rise back towards historical levels of 75-80pc and the return of excess capital.
UBS analyst Jon Mott now sees share buybacks of 4.3pc of shares on issue for ANZ, 5.4pc for CBA, 3.8pc for NAB, and 2.6pc for WBC in the first half of FY22.
He notes that home lending, building approvals, retail sales, car sales, international trade and GDP data have surprised on the upside in the past month, while new COVID-19 cases across Australia are near zero, outside hotel quarantine, allowing many restrictions to be removed and most interstate travel to be re-opened, and consumer and business confidence have rebounded solidly. Corporate collapses have been few and equity and debt capital raisings have improved the credit outcome.
While not all small businesses are out of the woods, the outlook for SMEs appears to have turned the corner and house prices are rallying given record housing lending volumes and near zero rates.
And recent RBA comments indicate Australian regulators are not considering implementing macro-prudential policies yet, in contrast to the RBNZ. This implies mortgage losses are likely to be manageable despite elevated unemployment.
“Given the improved environment, we are becoming increasingly comfortable with the outlook for credit impairment charges for the banks in Australia and NZ,” Mr Mott says.
“Further, we anticipate that the current restrictions on dividend payout ratios by APRA are likely to be wound back in coming months.”
Mr Mott therefore remains positive on the banks for the cyclical recovery, attractive dividend yields and potential capital returns.
“However, we are very cautious on the structural headwinds facing the banks with falling revenue and pre-provision operating profit from sustained near zero rates,” he cautions.
Despite his higher earnings forecasts for the banks, Mr Mott hasn’t changed his price targets,as his long-term return on equity assumptions haven’t materially changed.
Joyce Moullakis 9.52am: Westpac offers hope on dividends
Westpac chairman John McFarlane says the embattled bank hopes to return to paying a “more consistent dividend” every six months, as it accelerates plans to fix compliance failings and endures the impact of COVID-19.
In a speech to be made to shareholders at the bank’s online annual general meeting, Mr McFarlane says he’s conscious of the importance of dividends to individual shareholders, and that many were unhappy the bank opted not to pay a first-half dividend as well as the lower dividend for the year.
“Going forward, I’m hopeful we will return to a more consistent dividend each half,” he added. “The past seven months has seen a great deal of change inside the company that will provide a stronger foundation.”
Like its rivals, Westpac’s dividends have been constrained by guidance from the banking regulator that payments are capped at 50 per cent of statutory profits.
Westpac’s performance has been marred by the impact of COVID-19 and a string of compliance failures that saw it agree to a record $1.3bn penalty to the financial crimes regulator Austrac.
Last week, Westpac entered a court enforceable undertaking in which the banking regulator hit out at its slow progress in remediating issues. The bank’s lax approach had seen “new and significant prudential concerns to surface”, the Australian Prudential Regulation Authority said at the time.
Mr McFarlane admitted the need for real change at Westpac in light of its governance issues.
“2020 has been like no other year in my lifetime, with natural disasters and a global pandemic. Westpac itself has also faced tough realities, particularly the shortcomings in our management of risk and compliance,” he said.
“Australia’s oldest company now needs to change, and fortunately, we have acted quickly.
We have reset our strategy, made a number of changes to senior management, including the CEO, and launched a program to reform the way we do things at Westpac.
“We are also in the process of renewing the board, its committees and its approach to oversight. However, I know from past experience, implementing meaningful change takes time and persistence, and I ask for your patience as we work through it.”
Ben Wilmot 9.51am: HomeCo REIT in Bunnings deal
Recently-listed Retail property trust HomeCo Daily Needs REIT has snapped up Bunnings Seven Hills for $56m as it continues to expand.
The trust was spun out of property investors and funds house HomeCo and the purchase was on a passing yield of 5.1 per cent.
Bunnings Seven Hills is a 22,300sqm site about 30km northwest of the Sydney CBD. The acquisition is proposed to be fully debt funded and is expected to be immediately accretive to fiscal 2021 funds from operations per unit.
Gearing will remain within the target 30-40 per cent range after the deal.
Cameron Stewart 9.47am: US FDA recommends approval for Pfizer vaccine
Americans will almost certainly begin receiving coronavirus vaccinations within days after the FDA’s advisory board recommended that Pfizer’s COVID-19 vaccine be cleared for use.
The board’s advice is likely to be accepted by the FDA which would mean shots for older Americans and health workers could begin by early next week.
The 23 member FDA advisory board voted that ‘on the totality of scientific evidence available’ the benefits of the Pfizer vaccine ‘outweighed its risks for use in individuals 16 years of age and older.”
The momentous development is a bittersweet moment for the US. While it marks the beginning of the end of the pandemic, it will come too late for more than 100,000 Americans who are expected to become infected and die in the months ahead before the vaccine reaches them.
The news comes as the country is living through an ever-escalating health nightmare which is toppling grim new milestones each day.
Within days the death toll will top 300,000, dwarfing that of any other country in the world. This week saw a new daily record with 3,253 deaths on Thursday (AEDT) and a new record number of 106,219 people in hospital with Covid. The total number of coronavirus infections also passed 15 million this week with daily new infections running at a record average of more than 210,000 a day, four times the level in mid-October.
David Ross 9.40am: Hartley named AMP Australia CEO
Scott Hartley has been confirmed as AMP Australia’ new CEO and is set to take the reins in the role on January 11, 2021.
Mr Hartley, who was CEO at Sunsuper from 2014 to 2019, takes over from Blair Vernon, who has been acting as CEO of AMP Australia after Alex Wade stepped down in August.
Mr Wade resigned after a series of complaints and came amid tumult at the top of AMP.
AMP chief executive Francesco de Ferrari said Mr Hartley’s appointment would strengthen the wealth manager’s executive leadership.
“Scott will build on the high-quality work that Blair Vernon has performed in his four months as acting CEO. Blair stepped into the role at short notice and has been decisive in keeping our transformation activity moving and managing the complex legacy issues of the business,” Mr de Ferrari said.
Mr Hartley said he was excited to join AMP “in the midst of a transformation”.
“AMP has played an important role in the lives of many Australians for over 170 years and I look forward to working with and developing the entire AMP Australia team to fulfill AMP’s purpose of helping its clients realise their ambitions,” he said.
Ben Wilmot 9.38am: 360 Capital flags hotel expansion
Tony Pitt’s 360 Capital Group has flagged an interest in expanding into the busy hotel sector by taking a 70 per cent stake in boutique adviser Hotel Capital Partners.
HCP will set up hotel debt and equity funds and take on mandates to invest the sector, which has seen major deals with the sale of the $175m AccorInvest portfolio and the pending sale of the Travelodge portfolio for more than $600m.
HCP was initially established in 2000 by well regarded hotel executive, Stephen Burt, as a specialist hotel investor utilising third party capital to invest in hotels, hotel debt and management companies.
Mr Burt has joined 360 Capital as a joint venture partner and managing director of Hotel Capital Partners, which will be built up into a significant hotel investment and operational platform.
9.30am: ASX set for four-day low
Australia’s share market is expected to fall for a second day running, even as Wall Street’s S&P 500 declined just 0.1pc and commodity prices surged.
The S&P/ASX 200 ended a seven-day winning streak on Thursday with a 0.7pc fall to 6683.1 points after hitting a nine-month high of 6745.3 on Wednesday.
Overnight futures fell 0.5pc, suggesting the index may hit a four-day low around 6650.
Exchange rate sensitive stocks like Cochlear and CSL may be among the weakest after the Australian dollar rose 1.2pc to a 29-month high of US75.40.
The Australian dollar rose alongside the euro against a weaker US dollar after the ECB delivered a widely anticipated EUR500bn increase in its QE program and an extension through March 2022, while US initial jobless claims rose more than expected and fiscal stimulus talks wavered.
The British pound plunged across the board in US trade last night, after UK Prime Minister Boris Johnson announced that he sees it more likely than not that Brexit occurs without a trade deal at the end of the month.
AUD appreciation may help retailers like Premier Investments, Adairs, Wesfarmers, Supercheap and Harvey Norman, as well as auto parts importers like GUD and Babcor.
The resources sector should buck the selloff after commodity price gains.
Spot iron ore rose 5pc to a fresh 7.5pc high of $US158.25 and WTI crude rose 3.2pc to $US46.97 - a nine-month high of $US46.97, while the LME index rose 1.1pc with copper up 2pc and nickel up 4.4pc, though gold fell 0.4pc.
BHP ADR’s equivalent close at $42.95 was 1.1pc above its Sydney close, while London listed BHP and RIO rose 3.2pc and 2.9pc respectively.
9.17am: Macquarie gets a piece of AirBnb
Among names behind AirBnb’s stunning debut overnight is Macquarie Group, which appears with a $5.31 million stake.
The near 37,000 shares held by Macquarie appear to be via its US funds management arm Delaware.
Overnight AirBNB shares more than doubled in their trading debut - pushing the US-based holiday rental company to a $US100bn valuation.
The shares closed Thursday at $144.71, up 113 per cent from the initial public offer price.
The debut gave AirBNB founder Brian Chesky a paper holding of $11.4bn and co-founders Joe Gebbia and Nathan Blecharczyk a net worth of $10.4bn.
8.48am: oOh!media revenue rebounds
Outdoor advertising company oOh!media said its revenue rebounded in the fourth quarter of the 2020 fiscal year, as mobility increased in key markets following lockdowns to contain the spread of coronavirus.
Management said revenue in the 12 months through December is likely to total between $420m and $430m, with oOh!media also benefiting from rent abatements of around $54 million.
“In Australia, Road and Retail Out of Home audience volumes were tracking in late November at 87pc of their 2019 levels, up from a low of approximately 50pc in mid-April 2020 versus the prior corresponding period,” oOh!media said in a filing to the Australian Securities Exchange.
“New Zealand is now at or above FY 2019 audience volumes.”
The company said it expects net debt of $120m-$130m at the end of December, and it had refinanced its debt facilities through 2023.
Dow Jones Newswires
Rhiannon Hoyle 8.45am: Rio fallout could hit iron ore output
It’s hard to yet quantify the impact recommendations from an inquiry into Rio Tinto’s Juukan Gorge calamity will have on iron-ore production from Rio and others in the Pilbara, says Jefferies.
But the bank thinks there is a risk of a significant decline in volumes in 2021 and beyond--especially for Rio--beyond what the market expects.
Spot iron ore shot up another 5pc on Thursday to $US158.25/tonne as traders digested the possible implications at a time when China’s demand for the steel ingredient is booming.
“Rio’s destruction of the Juukan rock shelters in Australia will go down as a low point in the long history of the company,” Jefferies says.
Dow Jones
John Durie 8.38am: ACCC to probe abuse in chicken, horticulture
The ACCC will investigate claims of market abuse with unfair contract terms in the chicken meat and horticultural markets, following its review of the perishable goods supply chain.
The report released this week “found that a number of features of perishable agricultural goods supply chains have the potential to cause harm to suppliers and the efficiency of markets more generally,” ACCC Deputy Chair Mick Keogh said in a statement .
The ACCC said the report also highlighted the need for tougher unfair trading practices laws in business to business as well as business to consumer markets.
The report said the problem was there were many farmers, fewer processors and even fewer supermarket chains, which impacted bargaining power.
“This makes farmers particularly vulnerable to issues stemming from limited competition at the wholesale or retail level. In addition, the more perishable a product is, the weaker the farmer’s bargaining power often is,” Mr Keogh said.
The report says a lack of price transparency in markets for perishable goods can also weaken bargaining power. This is particularly the case for farmers, who are typically not in a position to influence the prices they receive for their goods.
8.26am: What’s impressing analysts?
Appen cut to Accumulate: Baillieu
Appen raised to Overweight: JPMorgan
Appen cut to Sector Perform: RBC
Lynas cut to Lighten: Ord Minnett
Seven West raised to Buy: Jefferies
Australian Pharmaceutical started at Outperform; $1.47 price target: Macquarie
Sigma Pharmaceutical started at Neutral: $0.64 price target: Macquarie
Appen price target cut $19pc to $27.50; Hold rating kept: Bell Potter
PWR Group cut to Hold: Bell Potter
8.19am: Wall Street wobbles as eco picture dims
US stocks wobbled, with major indexes hovering between small gains and losses.
The Dow Jones Industrial Average fell 71 points, or 0.1 per cent, to 29998 as of the 4pm close of trading in New York. The S&P 500 lost 0.1 per cent, while the Nasdaq Composite rose 0.5 per cent.
Markets slipped to start the trading day, with all three major indexes opening lower. But a jump in oil prices helped propel shares of energy producers higher and partially offset losses across other sectors.
Earlier in the day, Labour Department data showed unemployment claims rose sharply last week -- a worrying sign for the labor market. Analysts and money managers are hoping a fragile economic picture will ramp up pressure on Congress to pass a fresh fiscal-stimulus spending bill to support businesses and households. Lawmakers have broadly agreed with the White House that the aid package should total around $US900 billion, but key points of contention remain.
“Concerns persist about the potential near-term impact of fiscal relief measures to combat the spike in new virus cases in the U.S. and abroad,” said Richard Flynn, a managing director at Charles Schwab. “The question that is now being asked is, will any further disappointing jobs data add urgency for an additional stimulus package to pass Congress or, will we see negotiations spillover into the first part of 2021.”
The novel coronavirus has continued to spread at a rapid pace, with the U.S. death toll hitting a new single-day record at 3,100.
Energy shares led gains in the S&P 500, with Exxon Mobil rising 3.5pc and Chevron adding 4.1pc. Meanwhile, U.S. crude oil climbed 4.4pc to $US47.53 a barrel, on track to snap a three-session streak of losses.
Oil prices had taken a hit on weakened demand this year, but more recently recouped some of their losses as investors turned more hopeful about vaccines helping ease the fallout from the pandemic.
Facebook dropped 1.1pc after the Federal Trade Commission and a group of 48 attorneys general filed antitrust lawsuits against the company Wednesday.
Overseas, the pan-continental Stoxx Europe 600 slipped 0.4pc, weighed down by shares of banks and auto makers.
The European Central Bank on Thursday expanded a key bond-buying program by EUR500 billion to EUR1.85 trillion and extended the program to at least the end of March 2022. It also increased support to the banking system through a series of ramped-up measures to boost liquidity and extended a key program until June 2022.
Dow Jones Newswires
Eli Greenblat 8.16am: Asalaeo shareholder rejects offer
Asaleo Care’s second biggest shareholder, funds manager Allan Gray, has rejected the $1.26 takeover offer from Swedish consumer goods giant Essity.
The funds manager has called on Essity to abandon its offer.
Allan Gray chief executive and chief investment officer Simon Mawhinney told The Australian on Friday he wouldn’t be selling to Essity’s offer.
“We will not be accepting an offer priced at $1.26 unless unforeseeable circumstances eventuate. At this price, I think it is everyone’s interests that Essity abandon their ambitions to control Asaleo. The status quo is attractive,” he said.
Allan Gray has an 18.23 per cent stake in Asaleo. Essity is the company’s biggest shareholder with a 36.6 per cent stake.
On Thursday Essity announced it had pitched a non-binding indicative proposal at $1.26 per share.
It is understood the Swedish group wants to lift its stake to 50 per cent, in keeping with the typical capital ownership structure Essity has in other countries.
Jared Lynch 7.36am: CSL says to halt coronavirus vaccine trials
The Morrison government has terminated a deal to by 50 million doses of Australia’s homegrown COVID-19 vaccine from CSL after the company detected false positive HIV test results in clinical trials.
The termination of the agreement - part of a $1.7bn deal to secure four types of COVID-19 vaccine to inoculate Australians - is despite the positive HIV results being false and not putting the health of any of the trial participants at risk.
Trial participants were also “fully informed” before clinical trials began that there was a possibility of a false positive HIV result being recorded. But the Morrison government reportedly scotched the deal, fearing it would undermine public confidence in the COVID-19 vaccine.
“There were no serious adverse events or safety concerns reported in the 216 trial participants. However, following agreement with the Australian Government, CSL will not progress the vaccine candidate to phase 2/3 clinical trials,” CSL said in a statement.
The false positives were detected as CSL was analysing data from the phase one clinical trials, which were completed in July. It has been working on developing the vaccine, which uses a “molecular clamp” rather than a live virus, with the University of Queensland since the start of the year.
“The Phase 1 data showed the generation of antibodies directed towards the “molecular
clamp” component of the vaccine. These antibodies interfere with certain HIV diagnostic assays,” CSL said.
“The potential for this cross-reaction had been anticipated prior to the commencement of the trial. Participants were fully informed prior to their involvement that this could occur.”
Jared Lynch 7.22am: CSL-UQ Covid vaccine deal ‘terminated’
The Morrison government has reportedly terminated a deal to buy 50 million doses of Australia’s homegrown COVID-19 vaccine after its developers CSL and University of Queensland detected false positive HIV test results in clinical trials.
Nine newspapers are reporting that while the HIV positives were in fact false and the health of the participants has not been put at risk, the government has walked away from purchasing the vaccines - which are part of a $1.7bn deal - because it would undermine public confidence in a COVID-19 vaccine.
CSL - the biggest company on the ASX - declined to comment but is expected to make an announcement shortly on the vaccine’s clinical trials.
The government has secured four different types of COVID-19 vaccines, including 30 million doses from AstraZeneca and 10 million doses from Pfizer. The Pfizer vaccine will be the first offered to Australians, with the first injections scheduled for March.
CSL will also manufacture the AstraZeneca vaccine, which it was planning to produce in parallel with the University of Queensland vaccine. The Commonwealth had paid CSL $300m to help prepare its advanced manufacturing facility at Broadmeadows in Melbourne’s north to produce the two types of vaccines.
Russell Basser, senior vice president research and development at CSL’s vaccine arm Seqirus said in September the company was approaching the vaccine development with “a sense of urgency” and it was “not cutting corners” to provide a safe and effective vaccine.
Clinical trials are risky and go through a robust process to ensure their safety and effectiveness. AstraZeneca has halted its phase three trials twice after participants developed neurological illnesses after being injected.
The University of Queensland vaccine used a “molecular clamp” rather than a live virus as the basis for its vaccine.
The Bill Gates backed Coalition for Epidemic Preparedness Innovations (CEPI), which is based in Oslo, provided UQ up to $US10.6m ($14.07m) to develop its “molecular clamp” vaccine platform, a transformative technology patented by UniQuest, UQ’s technology transfer company, that enables rapid vaccine design and production.
7.00am: ASX to slip as Wall Street wavers
Australian stocks are set to open lower as Wall Street hovered between gains and losses.
Around 7am (AEDT) the SPI futures index was down 38 points, or 0.6 per cent.
Yesterday, Australia’s sharemarket ended a seven-day winning streak, closing down 0.6pc.
The Australian dollar is higher at US75.3c.
Iron ore continued its stellar rise, up 5 per cent to $US158.25.
Brent oil is up 2.8 per cent to $US50.25.
6.50am: Brent tops $US50 as oil’s turnaround continues
Brent crude prices topped $US50 a barrel for the first time since early March, the latest milestone in a remarkable oil-market recovery fueled by supply curtailments and drivers returning to the road.
The global gauge of oil prices advanced 2.8 per cent to $US50.25 a barrel, continuing a monthslong rebound from its April lows around $US19 during global economic shutdowns. While Brent started the year above $US65, its recent rally shows how hopes for coronavirus-vaccine distribution and economic-stimulus programs are helping to heal global energy markets.
Oil has risen in tandem with stocks and other commodities in recent weeks, part of a broad market rally fueled by investors’ anticipation for a 2021 global economic resurgence. Buoyant demand from China also is boosting oil prices after the world’s largest commodity consumer largely contained the pandemic.
Traders are now hoping that travel picks up in the U.S. and Europe next year, boosting energy consumption while large suppliers in the Organization of the Petroleum Exporting Countries remain disciplined with production cuts.
U.S. crude futures added 2.8pc to $US46.78 a barrel Thursday, also extending their recent advance.
Dow Jones
6.45am: CSL set to comment on vaccine ‘termination’
CSL is expected to make an announcement this morning after reports a deal for the government to buy the biotech’s coronavirus vaccine in development with the University of Queensland have been terminated.
According to Nine newspapers, the termination comes after several trial participants returned false positive HIV test results.
The federal government had signed a billion-dollar deal to buy more than 50 million doses of the potential vaccine.
UQ reportedly informed the federal government of the initial data on Monday, which was then referred to health authorities for urgent medical advice.
CSL has scheduled a press conference for 9am (AEDT).
Agriculture Minister David Littleproud says he will not write off the University of Queensland and CSL vaccine just yet.
“Look, this is why we didn’t put all our eggs in one basket,” Mr Littleproud told the Nine Network’s Today show. “This is why we made sure there were four contracts we signed to make sure that we got a vaccine and this is intrinsically very difficult science that UQ and around the world is trying to break,” he said.
“We actually spread our risk and made sure if there was a vaccine we got it and got it quickly.
“I think UQ, I wouldn’t write them off yet but I think this backs what the government has done in making sure that we said we will spread our risk and we will make sure we have multiple agencies that are looking at this and gave us the vaccine that is safe.”
5.45am: Airbnb shares soar on market debut
Airbnb’s shares more than doubled in their debut on Thursday, reflecting a soaring market for new stock listings and the home-sharing company’s ability to navigate the coronavirus-induced downturn in travel this year.
The stock began trading at $US146 on the Nasdaq Stock Market, higher than its initial-public-offering price of $US68 a share.
The opening trade valued Airbnb at $US101.6 billion, higher than its IPO valuation of roughly $US47 billion, based on a fully diluted share count and proceeds from the offering.
More recently, the stock traded at $US150.
Co-founded in 2008 by now-Chief Executive Brian Chesky, Airbnb changed the hospitality industry by demonstrating that millions of people were willing to skip hotel stays and book spaces offered by hosts on its platform. The company says it has built a powerful brand for short-term rentals, reporting that both hosts and guests find their way to the Airbnb-booking platform organically.
As of the end of September, the company had more than 7 million active listings of homes and experiences, such as guided activities, in more than 220 places globally, according to a prospectus about the IPO.
Airbnb’s listing caps a difficult year that saw the company whipsawed by a sharp decline in travel caused by the spread of Covid-19. The pandemic upended vacations and work-related trips, forcing Airbnb and other companies -- including airlines, hotel chains and cruise operators -- to retrench.
This spring, as consumers sheltered in place, Airbnb borrowed $US2 billion to shore up its cash reserves. In May, the company said it would cut 1900 jobs, or a quarter of its staff, and pause investments in noncore operations. Airbnb slashed other big expenses, including for marketing.
But the company was able to latch on to demand from people looking for trips closer to home during the pandemic, fueled by consumers wanting a change of location.
Airbnb’s debut comes a day after DoorDash’s shares jumped 86% on their first day of trading , a gain that came on top of increases in the share price during the run-up to the offering.
Dow Jones Newswires
5.20am: US stocks wobble as economic picture dims
US stocks wobbled, leaving major indexes hovering between small gains and losses.
The Dow Jones Industrial Average fell 0.2 per cent, while the S&P 500 lost 0.1 per cent. The Nasdaq Composite rose 0.4 per cent.
Markets slipped to start the trading day, with all three major indexes opening lower. But a jump in oil prices helped propel shares of energy producers higher and partially offset losses across other sectors.
Earlier in the day, Labor Department data showed unemployment claims rose sharply last week -- a worrying sign for the labour market. Analysts and money managers are hoping a fragile economic picture will ramp up pressure on Congress to pass a fresh fiscal-stimulus spending bill to support businesses and households. Lawmakers have broadly agreed with the White House that the aid package should total around $US900 billion, but key points of contention remain.
“Concerns persist about the potential near-term impact of fiscal relief measures to combat the spike in new virus cases in the US and abroad,” said Richard Flynn, a managing director at Charles Schwab. “The question that is now being asked is, will any further disappointing jobs data add urgency for an additional stimulus package to pass Congress or, will we see negotiations spillover into the first part of 2021.”
The novel coronavirus has continued to spread at a rapid pace, with the U.S. death toll hitting a new single-day record at 3100.
Energy shares led gains in the S&P 500, with Exxon Mobil rising 3.5pc and Chevron adding 4.1pc. Meanwhile, U.S. crude oil climbed 4.4pc to $US47.53 a barrel, on track to snap a three-session streak of losses.
Oil prices had taken a hit on weakened demand this year, but more recently recouped some of their losses as investors turned more hopeful about vaccines helping ease the fallout from the pandemic.
Facebook dropped 1.1pc after the Federal Trade Commission and a group of 48 attorneys general filed antitrust lawsuits against the company Wednesday.
Overseas, the pan-continental Stoxx Europe 600 slipped 0.4pc, weighed down by shares of banks and automakers.
In Asia, most major benchmarks ended the day lower. Japan’s Nikkei 225 slipped 0.2pc and Hong Kong’s Hang Seng Index fell 0.4pc. The Shanghai Composite Index was relatively flat.
Dow Jones Newswires
5.15am: Immutep ADRs up 185pc
Immutep ADRs nearly tripled, up 185pc to $US6.17, after the Australian biotechnology company said it reported statistically significant survival benefit for key patient groups in the ongoing Phase IIb AIPAC study in metastatic breast cancer.
The company said it had encouraging first overall survival, or OS, follow-up data from the ongoing study of its lead product candidate eftilagimod alpha. The study evaluated eftilagimod alpha in combination with paclitaxel chemotherapy in comparison to a combination of placebo and paclitaxel chemotherapy in patients with HER2-negative/HR positive metastatic breast cancer.
“Although the progression free survival data in the efti group did not show a significant improvement versus the comparator arm in AIPAC earlier this year, the OS data in general looks already very interesting and will mature further. The OS data in subgroups such as those below age 65 years are highly encouraging and may lead to more effective treatment options for metastatic breast cancer patients,” said principal investigator Hans Wildiers of University Hospital Leuven, Leuven, Belgium.
Dow Jones Newswires
5.10am: European stocks mixed, pound sinks
European stock markets were mostly higher as oil surged, and the British pound fell on the growing risk of a no-deal Brexit, dealers said.
Oil prices leapt higher as traders looked for economic activity to pick up in the wake of coronavirus vaccines being rolled out, and the enlarged OPEC+ group stuck to its deal for a smaller output hike.
The contract for Brent crude rose to $US50 for the first time since March 6. Meanwhile, the European Central Bank unveiled its latest economic forecasts after providing more stimulus to help eurozone members withstand the impact of the coronavirus pandemic.
Equity gains were curbed, however, by politicians’ inability to reach agreements on post-Brexit trade arrangements, and surging COVID-19 cases offset to some extent the effect of the vaccine rollout.
Sterling slid against the euro and dollar after British Prime Minister Boris Johnson and European Commission chief Ursula von der Leyen failed to find common ground in Wednesday’s crunch talks.
However, the ECB made good on chief Christine Lagarde’s indications that extra support was on the way.
The central bank boosted its main virus-fighting tool, the pandemic emergency bond-buying program (PEPP), by 500 billion euros ($US600 billion) to 1.85 trillion euros and extended the scheme from June 2021 to March 2022. The ECB also kept its main interest rates at historic lows.
London was up by 0.5 per cent at the close, with the weaker pound boosting the FTSE 100 index because it lifts share prices of multinationals like oil companies that earn much of their profits in dollars. Frankfurt lost 0.3 per cent and Paris rose less than 0.1 per cent.
AFP
5.05am: ECB unveils new growth projections to 2023
The European Central Bank unveiled fresh growth and inflation forecasts, making predictions for the first time into 2023, with the pandemic expected to cast a long shadow over the eurozone economy.
ECB president Christine Lagarde warned that the impact from COVID-19 was “uneven” across sectors, as activity in the manufacturing industry was recovering but the services sector was “bearing the brunt” of social distancing and travel restrictions.
The Frankfurt institution upgraded its euro area economic growth figures for 2020 and 2022, but is now expecting a smaller rebound than before for 2021.
Inflation, already well below the ECB’s target of just under two per cent, remained “disappointingly low”, Lagarde said.
AFP
5.00am: Brent oil hits $US50 for first time in 9 months
The price of Brent oil, the main international oil contract, hit $US50 for the first time in nine months on greater economic confidence as the roll out of COVID-19 vaccines gets underway.
The price of Brent for February delivery was up by 2.4 per cent to $US50.05.
Meanwhile, the main US contract, WTI for January delivery, hit its highest level since March 5 at $US46.71.
AFP
4.58am: Slight uptick in US inflation not enough to move Fed
Inflation rose slightly more than expected in November, according to US government data, but nowhere near enough for the Federal Reserve to shift from its zero-rate stance next week.
The Labor Department’s consumer price index rose 0.2 per cent last month, seasonally adjusted, a hair more than expected after remaining flat in October.
The increase was not driven by any item in particular, the report said, though some categories that declined sharply as the COVID-19 pandemic began continued to see prices recover.
The Fed in March slashed rates to zero as the pandemic struck, and later unveiled a new inflation-targeting policy that means rates will stay lower for longer to promote maximum employment.
No rate increase is foreseen before inflation nears the 2.0 per cent mark. Though the November CPI increase was slightly better than expected, Rubeela Farooqi of High Frequency Economics said it is not likely to last.
AFP
4.55am: New US jobless claims surge
New applications for unemployment benefits in the US surged last week by 137,000, according to government data, far higher than economists had been expecting.
The massive rebound was the biggest since March 28 in the early days of the coronavirus pandemic, and took the total number of initial claims to 853,000, the Labor Department reported.
Applications fell in the prior week which included the Thanksgiving holiday, and though economists had been expecting a rebound the consensus was for a much more modest increase.
Claims for special Pandemic Unemployment Assistance jumped 139,000 in the week ended December 5.
For the week ended November 21, the holiday week, the total number of workers receiving some form of assistance, including from two pandemic emergency programs, fell 1.1 million to 19 million, according to the report.
AFP
4.50am: ECB injects more stimulus to fight virus
The European Central Bank injected more stimulus to help the eurozone weather a second wave of the coronavirus, as it warned of an outlook fraught with uncertainty over the pandemic’s evolution and the rollout of vaccines.
At its final meeting of the year, the 25-member governing council agreed a rash of new measures to shore up the ailing eurozone economy after a flare-up in COVID-19 cases halted a summer recovery and forced renewed restrictions in many countries.
ECB chief Christine Lagarde had in October all but promised that extra support was under way, and the newest moves fell within market expectations.
The ECB boosted its main virus-fighting tool, its pandemic emergency bond-buying program (PEPP), by 500 billion euros ($US600 billion) to 1.85 trillion euros and extended the scheme from June 2021 to March 2022.
The corporate and government bond purchases are aimed at keeping borrowing costs low to encourage spending and investment, in the hopes of boosting growth and driving up inflation.
The ECB also said it would offer three further rounds of ultra-cheap loans to banks next year and extend the scheme’s most generous terms to June 2022.
Under so-called Targeted Long-Term Refinancing Operations (TLTRO), banks get more generous rates the more they lend on to the real economy.
For lenders giving credit to small firms, hard-hit in the current crisis, the rate can go as low as minus one per cent.
As expected, ECB governors left interest rates unchanged at historic lows. They also made no tweaks to their pre-pandemic asset purchasing, keeping the current pace of 20 billion a month.
AFP
4.45am: Sterling extends losses on no-deal Brexit fears
Sterling deepened losses to drop more than one per cent against the euro and dollar, as traders fretted over the increasing risk of no trade deal between Brussels and London.
At about 1200 GMT, the pound slumped 1.05 per cent versus the dollar and was down 1.1 per cent against the euro, one day after trade talks floundered between Prime Minister Boris Johnson and European Commission chief Ursula von der Leyen.
AFP
4.40am: France fines Google, Amazon €135m
France’s CNIL data privacy watchdog slapped 135 million euros in fines on US tech titans Google and Amazon for placing advertising cookies on users’ computers without consent.
The 100-million-euro fine against Google is the largest sanction the regulator has ever imposed, which it justified by the fact 90 per cent of French internet users use the firm’s search engine.
The 35-million-euro fine is on the Amazon Europe Core subsidiary.
CNIL said the fines were “for having placed advertising cookies on the computers of users ... without obtaining prior consent and without providing adequate information.”
A cookie is a small piece of data stored on a user’s computer browser that allows websites to identify users and remember their previous activity. They are important for providing targeted advertising as well as improving user experience on websites.
The CNIL said when a user visited the website google.fr, several cookies used for advertising purposes were automatically placed on his or her computer, without any action required on the user’s part.
It said a similar thing happened when visiting one page on the amazon.fr website.
The regulator said “no matter what path the users used to visit the website, they were either insufficiently informed or never informed of the fact that cookies were placed on their computer.”
CNIL said the type of cookie used “can only be placed after the user has expressed his or her consent” and thus violated regulations on receiving prior consent.
AFP
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