The following is a summary of top news stories Monday.
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COMPANIES
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Volkswagen said it will list its premium sports car brand Porsche on the stock market in Frankfurt at a value of between nearly €70 billion and €75 billion and will pay a special dividend to shareholders with some of the proceeds. The indicative price for the initial public offering will fall between €76.50 and €82.50 per share, said a company statement. Porsche, whose full name is Dr Ing hc F Porsche AG, is due to be listed on Thursday next week. Up to 113.9 million preferred shares in Porsche, 25% of Volkswagen’s current holding, will be placed with investors, bringing in €9.39 billion to VW at the top of the IPO price range. At the same time, Volkswagen will transfer a 25% stake plus one share in the ordinary share capital of Porsche AG to its own major shareholder Porsche Automobil Holding. Porsche Automobil, which owns 53.3% of Volkswagen ordinary shares and a 31.9% total stake, will pay the IPO price plus a 7.5% premium for the Porsche AG shares. This will equate to up to €10.10 billion. Volkswagen said it will pay a special dividend at the beginning of 2023 equal to 49% of the total gross proceeds of the placing of preferred shares in the IPO and the sale of the ordinary shares to Porsche Automobil. This suggests a payout worth up to €9.55 billion.
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TotalEnergies said it has approved the final investment decision for the Fenix gas project off southern Argentina. The Fenix field lies 60 kilometres off the coast of Tierra del Fuego. Paris-based oil major TotalEnergies is the operator with a 37.5% stake in the project. Kassel, Germany-based Wintershall Dea also holds 37.5%, while Pan American Sur has a 25% stake. TotalEnergies said the Fenix development represents investment of about $706 million. Production is expected to start in early 2025 at 10 million cubic meters per day of gas, which is 70,000 barrels of oil equivalent.
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AbbVie, a Chicago-based biopharmaceutical firm, said the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended approval of Skyrizi, whose generic name is risankizumab, for treatment of adults with moderately to severely active Crohn’s disease. A decision by the European Commission is expected in the fourth quarter.
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Investment manager abrdn will return an additional £400 million to £500 million to shareholders before the end of 2022, with cash raised from selling down holdings in other companies, the Financial Times reported, citing ‘people with knowledge of the situation’. The board is discussing the best mechanism for the cash return, and it could be in the form of a special dividend, one person said, according to the newspaper.
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MARKETS
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Stock markets were lower, while the dollar was rising, at the start of a week set to be dominated by central bank decisions. The US Federal Reserve announces its latest interest rate move on Wednesday. This is followed on Thursday by policy announcements by the Bank of Japan and Bank of England.
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CAC 40: down1.6% at 5,980.40
DAX 40: down 0.9% at 12,622.62
London closed for funeral of Queen Elizabeth II.
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Hang Seng: closed down 1.0% at 18,565.97
Tokyo closed for Respect for the Aged Day.
S&P/ASX 200: closed down 0.3% at 6,719.90
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DJIA: called down 0.9%
S&P 500: called down 0.9%
Nasdaq Composite: called down 1.0%
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EUR: down at $0.9974 ($1.0025)
GBP: down at $1.1358 ($1.1431)
USD: up at JP¥143.48 (JP¥142.93)
GOLD: down at $1,662.80 per ounce ($1,677.01)
OIL (Brent): down at $89.67 a barrel ($92.24)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tens of thousands of mourners have thronged to the UK capital to say goodbye to their Queen on the day she is laid to rest following 70 years as monarch. King Charles III is leading the nation in paying its last respects to his mother, who fulfilled her pledge, made as a young woman, to devote her life to the service of others when she became head of state. Her great-grandchildren, future king Prince George and his sister Princess Charlotte, will join their parents at the state funeral where world leaders and national figures from UK life will gather. After four days of lying in state beneath the symbols of the monarchy the Imperial State Crown, the Orb and the Sceptre the Queen will be carried from Westminster Hall where a continuous stream of public have flowed past her coffin after waiting many hours.
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Liz Truss’s UK premiership will swing into action this week after a political pause to mark the Queen’s death, with a packed schedule of policy and diplomacy to follow the state funeral. Normal activity in Parliament has been put on ice since the late monarch died, with business in both Houses halted for a period of mourning. Truss is expected to fly to New York for the United Nations General Assembly following the funeral, where she has a key bilateral meeting lined up with US President Joe Biden. Back in the UK, MPs will return to Westminster on Wednesday, where those who wish to do so can take a new oath or affirmation to the King. The PA news agency understands that Business Secretary Jacob Rees-Mogg will also set out further details of the government’s plans to help firms through the energy crisis. Chancellor Kwasi Kwarteng’s mini-budget, focused on tackling the cost-of-living crisis and boosting growth, will then be delivered on Friday.
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Millions of people in the Chinese megacity of Chengdu emerged Monday from a Covid-19 lockdown that had closed schools, disrupted businesses and forced residents to stay home for over two weeks. With a population of 21 million, southwest China’s Chengdu is the largest Chinese city to shut down since global finance hub Shanghai imposed a strict two-month lockdown in April, leaving many residents scrambling for food. Government departments, public transport services and companies were able to resume work on Monday, the statement said, after shutting down on September 1.
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China’s government has reacted angrily to US President Biden’s pledge of support for Taiwan in the event of a Chinese attack. The remarks are a ‘serious violation’ of the ‘One China Principle’ and the commitments the US has made to Beijing, Foreign Ministry spokeswoman Mao Ning told the press in Beijing on Monday. She said the US side was sending ‘the completely wrong signal’ to the independence forces in Taiwan. Biden had assured the self-governing democratic island republic of military support, including US troops, in the event of an attack, during a TV interview broadcast on Sunday. When asked if US troops would defend Taiwan in the event of a Beijing invasion, Biden simply replied ‘yes’.
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Biden said in the interview that he has yet to decide whether he will seek a second term in 2024, despite previously having stated he will run again. Biden, who turns 80 in November, told CBS’ ‘60 Minutes’ program that re-election is his ‘intention’. ‘But it’s just an intention. But is it a firm decision that I run again? That remains to be seen,’ he said. ‘It’s much too early,’ Biden said, calling himself ‘a great respecter of fate’. When it was pointed out that he was already the oldest person ever in the job, Biden shot back: ‘pretty good shape, huh?’ To the question of whether he was fit, Biden said simply: ‘Watch me,’ arguing that the way to judge him was by his actions. But Biden acknowledged that his low approval ratings reflected that the country is in ‘a really difficult time’. Previously, the White House said repeatedly that Biden will run again in 2024.
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Iranian President Ebrahim Raisi demanded US ‘guarantees’ it will not withdraw again from a nuclear deal if it is revived ahead of his debut visit to the United Nations. With Western hopes fading for restoration of the landmark 2015 agreement with world powers, the hardline cleric said in a US television interview that he would still back a ‘good deal and a fair deal’. But he said: ‘It needs to be lasting. There needs to be guarantees.’
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The output of the construction sector in the eurozone increased in July from both the month before and a year before, according to figures released by eurostat. Seasonally adjusted production rose by 0.3% in July from June and by 1.5% from July 2021. In June, construction production had fallen by 1.2% from May but had risen 1.3% from a year before.
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Bolstered by the continued success of the Ukrainian military’s counteroffensive, President Volodymyr Zelensky pledged on Sunday evening to recapture all Russian-occupied territory in Ukraine. ‘Perhaps it seems to someone that after a series of victories we have a certain lull,’ Zelensky said in his daily video address, adding that this was in fact ‘preparation’ for the recapture of the key cities of Mariupol, Melitopol and Kherson, the next stage of the counteroffensive. ‘Because Ukraine must be free – the whole of it,’ the Ukrainian army would not only seek to recapture the territory it controlled before the Russian invasion began, but also territory in the Donbass and Crimea that has been in the hands of Moscow-backed separatists since 2014, Zelensky said.The Ukrainian military announced it had successfully crossed the Oskil River earlier on Sunday, creating a vital bridgehead on its left bank. A video shows a tank crossing the river and being met by Ukrainian soldiers on the other side.
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German firm Deutsche ReGas plans to start work on the construction of a liquefied natural gas terminal in Lubmin in the north-east of the country on Tuesday. Lubmin is one of several coastal locations where LNG delivered by ship is to arrive on land in order to replace the supply of Russian natural gas, which has been completely cut off due to the repercussions of the war in Ukraine. The construction will be aimed at upgrading the industrial port, which has so far only been used by smaller ships, and creating a secure berth. The first gas is to be delivered via the privately financed terminal as early as December, the firm said.
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One person was confirmed dead in Japan on Monday after Typhoon Nanmadol slammed into the country, injuring dozens, but authorities downgraded warnings as the storm weakened after landfall. The storm system, which made landfall in southern Kyushu’s Kagoshima on Sunday night, was moving off the western coast of Japan by Monday afternoon. Nearly six million people were still under evacuation warnings and authorities said in some areas ‘even a tiny amount of additional rainfall’ could trigger flooding and landslides. Prime Minister Fumio Kishida, who had been scheduled to leave Monday for the United Nations General Assembly, announced he would delay his trip by a day to assess the damage.
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Hurricane Fiona knocked out power across Puerto Rico on Sunday before making landfall, dumping torrential rain and wreaking ‘catastrophic’ damage in several areas of the US island territory before spinning off towards the Dominican Republic. Landslides, blocked roads, fallen trees and power lines, as well as a collapsed bridge in the town of Utuado in the central mountainous region were among the destruction already levied by Fiona, Governor Pedro Pierluisi told an evening press conference. In addition, the entire territory of more than three million people lost power as the hurricane neared, with Pierluisi reporting the electrical system out of service. Although the hurricane’s eye is now off the territory’s coast, destructive rain and devastating flash floods are expected to buffet the islands overnight before dealing a blow to the Dominican Republic on Monday.
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