Latest news updates: Nomura shares drop after writedown hits profits

Shares in Japanese bank Nomura fell on Monday, as markets reacted to an after-hours announcement that a surprise writedown had knocked the bank’s profits down by 95 per cent.

The bank’s chief executive refused to rule out further provisions at a press conference on Friday evening, sending shares in Nomura Holdings down as much as 7.8 per cent when markets reopened on Monday.

The company said the $345m charge was related to Nomura’s US-based transactions prior to the 2007-2009 global financial crisis, but did not provide further details. Nomura’s net income for the July to September quarter was ¥3.2bn ($28.1m), representing a 95 per cent fall compared with the same period in 2020.

The hit came just one quarter after Nomura suffered a heavy blow related to the collapse of Archegos Capital Management, the US-based investment fund. The Japanese bank was left with a combined $2.9bn dent from the scandal, making it the second most affected company after Credit Suisse, whose losses amounted to $5.5bn.

The board of Australian electricity company AusNet has backed a A$10.2bn ($7.7bn) buyout offer from Brookfield Asset Management, with the Canadian group outbidding an earlier offer from gas pipeline supplier APA.

The proposed takeover is the latest in a series of bids from global investors for Australian infrastructure after a KKR-led consortium bought Spark Infrastructure for $3.7bn in August and Sydney Airport’s board allowed Melbourne-based IFM investors to conduct due diligence on a $17.4bn bid in September.

Brookfield will buy AusNet for A$2.65 per share. The takeover will take AusNet out of the hands of its two major shareholders, Singapore Power Group and China State Grid, which own stakes of 32.7 per cent and 19.8 per cent, respectively. AusNet said that Singapore Power backed the latest bid.

Brookfield made a $7bn bid for AusNet in September. That bid was accepted by the company’s board but was bested by a $7.4bn offer from APA a day later. Brookfield’s sweetened bid values AusNet shares at a 7.3 per cent premium to their closing price on Friday.

AusNet said that it had terminated the due diligence it granted to APA when it made its offer, but noted that the company was “free to make a superior proposal”.

AusNet said its board would recommend the deal unanimously to shareholders, who will vote on it at a scheme meeting to be held before the end of March next year.

AusNet shares rose as much as 5.7 per cent on Monday.

Markets in Japan crept up at the open on Monday, after a weekend election in the country ensured the ruling Liberal Democratic party retained an outright majority, paving the way for further fiscal stimulus measures.

The LDP was set to retain its majority in the Diet’s lower house, according to state broadcaster NHK, sparing Fumio Kishida, the prime minister, a humiliation that would have jeopardised his leadership.

The country’s Topix was up 1.3 per cent at the open and later gained as much as 1.8 per cent. The Nikkei 225, meanwhile, gained as much as 2.2 per cent.

US futures also rose and the yield on 10-year Treasuries increased by two basis points to 1.57.

Elsewhere in Asia, investors looked to start the week on a positive note. Australia’s S&P/ASX 200 gained as much as 0.6 per cent and South Korea’s Kospi rose 0.6 per cent.

Futures in Hong Kong were down ahead of the open.

Joe Biden’s press secretary has tested positive for Covid-19, one of the highest-ranking members of his administration to contract coronavirus.

Jen Psaki said she last saw the US president five days ago, and dropped out of the delegation to the G20 meeting in Rome and COP26 summit in Glasgow after members of her household tested positive for the virus on Wednesday.

She and the president sat outdoors “more than six feet apart, and wore masks” on Tuesday, Psaki added.

Biden, who at 78 is in a high-risk bracket, has been fully vaccinated with the Pfizer jab and received a booster shot late last month.

He has so far met Pope Francis and European leaders including the UK’s Boris Johnson, France’s Emmanuel Macron and Italy’s Mario Draghi during his visit.

The White House did not immediately reply to a request about Biden’s most recent Covid-19 results.

Read more about Covid-19 and the Biden team here.

Fumio Kishida secured a bigger-than-expected victory for the Liberal Democrats in Japan’s general election despite a nationwide weariness against the ruling party’s near-decade-long grip on power.

The LDP was on Sunday evening set to retain majority control of the Diet’s lower house, according to state broadcaster NHK, sparing the new prime minister a humiliation that would have jeopardised his leadership.

But the races for many of the party’s leading figures were extremely close, a measure of the electorate’s frustration with the long LDP rule. Akira Amari, LDP party secretary-general and an architect of Japan’s new “economic security” strategy, lost his seat and has told Kishida he would resign his post, according to NHK.

As of 1am local time, NHK said the LDP had won 253 seats, down from 276 before the election but enough for it to hang on to single-party control of the 465-seat lower house. Its coalition partner Komeito took 28 seats, down from 29.

Read more about Japan’s election here.

The UK and France remained at odds on Sunday over the deepening diplomatic spat on post-Brexit fishing rights, as both countries said the onus was on the other to find a solution.

French president Emmanuel Macron and Boris Johnson, the UK prime minister, held a 30-minute tête-à-tête on the margins of the G20 summit in Rome, but Downing Street and the Elysée Palace released contrasting statements on the meeting.

Tensions over fishing rights have been simmering for months after the UK failed to issue permits for some small French boats to fish in British waters under the Brexit agreement.

Paris on Wednesday announced it would increase customs and sanitary controls on freight, make stricter checks of trucks coming in and leaving France, and ban trawlers from landing their catch in French ports if the dispute was not resolved by Tuesday.

Read more about the fishing rights dispute here.

Train services were cancelled from London Euston to Glasgow and passengers were advised to avoid all non-essential travel as transport chaos overshadowed arrivals on the eve of the COP26 climate summit.

With all eyes on Britain as host of the global climate talks, thousands of delegates saw their journeys curtailed because of storm damage in England’s midlands, thought to have been caused by fallen trees during weekend storms.

The UK rail network came under added pressure later on Sunday after a train collision near Salisbury left several people injured and blocked a line.

Among those caught in the large crowds stuck at the central London stations of Euston and King’s Cross was Lord Zac Goldsmith, the environment minister, who was trying to make his way to Glasgow for the summit.

Read more about the travel chaos here.

Manufacturing PMIs: Data will be reported from a number of countries including Indonesia, Vietnam, Taiwan and South Korea. The Caixin China Manufacturing Purchasing Managers’ Index will also be released, just after the country’s official PMI fell into contraction territory for a second consecutive month.

Official data: Hong Kong releases its third-quarter gross domestic product figures, while South Korea announces its October trade balance. Some economists see South Korean exports as a bellwether for international trade.

Thailand reopens: The country will begin to welcome back visitors from a total of 63 countries, including the UK, as it attempts to restart its crucial tourism sector. The first flight to arrive will be from Japan.

Hong Kong trial: The trial of media tycoon Jimmy Lai begins in Hong Kong today. Lai faces charges for illegal assembly over his alleged involvement in a banned memorial commemorating the students killed in the 1989 Tiananmen massacre.