|Bid||76.05 x 2200|
|Ask||76.06 x 900|
|Day's Range||74.87 - 76.11|
|52 Week Range||48.42 - 76.28|
|Beta (3Y Monthly)||1.81|
|PE Ratio (TTM)||10.09|
|Forward Dividend & Yield||2.04 (2.69%)|
|1y Target Est||N/A|
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterSouth Africa’s state power company intensified rolling blackouts to a record, signaling a deepening crisis at the debt-ridden utility and raising the risk of a second recession in as many years.Eskom Holdings SOC Ltd. said on Monday it will move to Stage 6 load-shedding from 6 p.m. local time, meaning it will cut 6,000 megawatts from the national grid, after a technical problem at the giant new Medupi Power Station curbed supply. That’s the biggest cut yet. The utility downgraded the status to Stage 4 as of 10 p.m.The utility is curbing power for a fifth straight day as it struggles with breakdowns at plants and heavy rains that have soaked coal used as fuel. The blackouts have a debilitating effect on the economy by curtailing mining and factory output and causing crippling traffic delays.“It does mean that the economy is heading for a recession,” Iraj Abedian, chief executive officer of Pan-African Investments and Research Services, said by phone from Johannesburg. “There’s no way that hot on the heels of the previous quarter’s negative growth in GDP with this type of humongous and material disruption to the continuity of business that the economy can register positive growth.”South Africa’s statistics office announced last week that gross domestic product shrank an annualized 0.6% in the three months through September. Power cuts also dented the economy in the first quarter, when it contracted the most in a decade, led by a drop in manufacturing, mining and agriculture outputEskom’s announcement marked the end of a torrid day on Twitter for South African President Cyril Ramaphosa. His weekly letter to the nation highlighting how Medupi is a fitting symbol of the importance of state-owned companies was derided on the social-media site.At 10 p.m. local time he issued a statement commiserating with his countrymen.“The ongoing load-shedding is devastating for the country. It is causing our economy great harm and disrupting the lives of citizens,” he said. “The anger and frustration that this load-shedding has caused is understandable.”Municipalities were also caught off guard, with Johannesburg electricity distributor City Power saying it has no load-shedding schedule for Stage 6.The one thing that could prevent GDP from dipping as deep as it did in the first quarter is the fact that many businesses are winding down as the Christmas holidays approach.Growth would have to rebound about 0.8% in the fourth quarter to reach the government’s forecast of a 0.5% expansion in the three-month period, said Gina Schoeman, an economist at Citigroup South Africa. The economy is unlikely to grow that much, she said.Weak economic growth could lead to a further deterioration in public finances and heighten the risk of South Africa losing its last investment-grade credit rating with Moody’s Investors Service. The company cut the outlook of the nation’s Baa3 assessments to negative last month.Load-shedding at Stage 6 is “no cause for alarm as the system is being effectively controlled,” Eskom said in a statement. “Eskom’s emergency response command centre and technical teams will be working through the night to restore units as soon as possible.”Mining companies say they are probably bearing the full brunt of load-shedding because they are among the heaviest users of electricity. Sibanye Gold Ltd., the country’s biggest private employer, has to reduce power use by 20% during load-shedding, said spokesman James Wellsted.“It’s concerning and if it continues for a long time it will impact on production and the entire industry, not to mention the economy,” he said before Stage 6 load-shedding was announced.(Updates with latest from Eskom in second paragraph)\--With assistance from Felix Njini, Antony Sguazzin and Paul Vecchiatto.To contact the reporters on this story: Prinesha Naidoo in Johannesburg at email@example.com;Rene Vollgraaff in Johannesburg at firstname.lastname@example.orgTo contact the editors responsible for this story: Rene Vollgraaff at email@example.com, Paul Richardson, Liezel HillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Art sales and auctions have been setting records, which could be another sign of the wealth gap, according to a Citi report
Now that the U.S. economy is expanding less quickly, stocks with the fastest and most sustainable dividend growth are worth considering, according to a recent research note by UBS.
Financial stocks got a big lift in premarket trading Friday, as much stronger-than-expected November jobs data provided a boost to the sector and the broader stock market. The SPDR Financial Select Sector ETF rallied 1.1%, after trading unchanged just before the data. Among the sector tracker's heavily weighted components, gains in the shares of Bank of America Corp. increased to 2.0% from 0.4%, Citigroup Inc. to 1.7% from 0.3%, J.P. Morgan Chase & Co. to 1.3% from less than 0.1% and Goldman Sachs Group Inc. to 1.3% from 0.3%. The U.S. Labor Department reported that nonfarm payrolls increased by 266,000 jobs in November and the unemployment rate returned to a 50-year low of 3.5% from 3.6%, compared with expectations of 180,000 jobs. Gains in the SPDR S&P 500 ETF to 0.7% from 0.2%, the SPDR Dow Jones Industrial Average ETF to 0.7% from 0.1% and the Invesco QQQ ETF to 0.8% from 0.2%.
Former Fed Governor Dan Tarullo said the repo-market turmoil seen in September raises some broad questions about the regulations put in place after the financial crisis.
(Bloomberg) -- Oil prices sputtered after OPEC failed to impress traders with what appeared to be a cosmetic revision to output quotas.Futures were unchanged in New York after gyrating throughout the session, at one point reaching the highest since September. A key committee recommended in Vienna that the group cut output targets by 500,000 barrels a day. While crucial details have yet to emerge, the latest move seems to formalize the extra supply reductions the group has already been making for most of this year.“This is a meaningless agreement since it doesn’t change supply of oil in market,” said Michael Hiley, head of OTC energy trading with LPS Partners. “Sure, its not wildly bullish but its not wildly bearish either, so that’s why the market is moving up and down.”The committee convened by the Organization of Petroleum Exporting Countries and its allies also agreed to leave condensates out of Russia’s quota from this month, Energy Minister Alexander Novak said in Vienna.Excluding condensate from the current deal would mean a new reference target that would exclude 1.4 million barrels a day of liquids, Citigroup Inc. analysts including Francesco Martoccia wrote in a note.West Texas Intermediate for January delivery settled unchanged at $58.43 a barrel on the New York Mercantile Exchange. Still, the benchmark is set for the largest weekly gain since September.Brent for February settlement advanced 39 cents to $63.39 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.05 premium to WTI for the same month.\--With assistance from Alex Longley.To contact the reporter on this story: Sheela Tobben in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Marino at email@example.com, Mike Jeffers, Joe CarrollFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
India’s central bank left its benchmark interest rate unchanged on Thursday as policymakers grapple with the need to boost a slowing economy while curbing a rise in inflation that risks spurring social unrest.
JPMorgan Chase & Co began internal discussions that would lead to immunity from prosecution over a troubled Australian capital raising two years before two rivals were charged with criminal cartel behaviour, a court heard on Thursday. A former JPMorgan banker gave the timeline as the first witness to testify in a legal battle that is being closely watched by investment bankers around the world because it may change the way they are permitted to conduct capital raising. JPMorgan, Citigroup Inc and Deutsche Bank AG worked on a A$2.5 billion ($1.70 billion) stock issue for Australia and New Zealand Banking Group Ltd (ANZ) in August 2015.
(Bloomberg) -- Starbucks Corp., for the first time, is disclosing how much less women at the coffee chain earn than men in the U.S.: zero dollars. That’s in contrast to the nation’s workforce overall, in which women make on average 19% less than men. Starbucks also says it has no racial pay gap.Starbucks joins Citigroup Inc. in reporting figures for median pay, a rarity among U.S. companies, which are not required to release diversity data publicly. The U.K. has required organizations to report such data for workers since 2018. There, women at Starbucks make 5% less than men. Globally, its female employees make 98.3% of what men do.“Starbucks has been focused on diversity and equity for a long time, and you can see it in their numbers,” said Natasha Lamb, managing partner at Arjuna Capital, which pressures companies to reveal pay data for greater gender equality. “But having little to no adjusted or unadjusted gender pay gaps really sets them apart.”Starbucks’ parity shows not only that women get “equal pay for equal work” but also that they have achieved as many high-paying roles as men.“Pay equity has long been a priority at Starbucks,” said Bailey Adkins, a spokesperson for the chain. “We’ve done serious work to ensure women and men are compensated fairly.”Pressured by Arjuna, some of the biggest banks and tech companies have disclosed the pay gap between men and women doing the same work—often referred to as pay equity. Companies have resisted sharing their median pay gaps, which could be embarrassing. After Citigroup reported that women at the bank earn 29% less than men, its peers chose not to follow. In the U.S., the bank also pays people of color 7% less than their white co-workers.On Wednesday, Microsoft Corp.’s shareholders voted down a measure calling for median pay disclosure. Arjuna says it will file resolutions at more than a dozen technology, financial and retail companies for the 2020 proxy season. It withdrew its proposal from Starbucks.\--With assistance from Leslie Patton.To contact the reporter on this story: Jeff Green in Southfield, Michigan at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Greenfield at email@example.com, Philip GrayFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- As part of Europe’s promise to become the first “climate-neutral” continent by 2050, the region is emerging as a leader in creating standards for green investments. But the push to get its banks to back sustainable assets needs careful scrutiny.At the core of the European Union’s project is the creation of a single set of definitions to determine what economic activities are sustainable and should count as green. To take just one example, for a transport project to be labeled green the passenger trains would have to have no direct emissions or they must be below a certain threshold. The initial aim is for these classifications to form the basis for framing green bond issues, but they will go beyond that: They might well shape government spending and central bank stimulus programs.In the world of finance, Brussels is especially eager to encourage green loans as well as bonds. The European Commission is examining whether banks should be encouraged to fund sustainable industries via a potential softening of the EU’s rules on capital charges on their lending. In Europe, where businesses use bank credit (rather than bond and stock markets) for much of their financing, addressing where these loans go will be critical in tackling global warming.But anything that encourages European banks to increase their risky lending will have industry regulators fretting, and rightly so. The wounds of the financial and sovereign debt crises are still fresh.Banks have, of course, become more resilient to shocks in recent years, By some metrics Europe’s lenders have more than doubled the capital they hold against their assets, when the latter are weighted by their riskiness. But negative interest rates, sluggish economic growth and the need to spend on technology mean profitability is still lackluster.Europe’s bankers are already chasing risky lending to try to boost returns, the European Banking Authority warned last week. This explains a headlong rush into commercial real estate, small and medium-sized businesses (SMEs) and consumer credit.So it’s no surprise that the idea of setting aside less capital for green loans is a red flag for supervisors. While it might improve short-term returns, it could stoke the return of excessive leverage. “Any capital relief for green assets must be based on clear evidence that they are less risky than non-green assets,” Andrea Enria, Europe’s chief banking regulator said last month.Valdis Dombrovskis, a vice-president at the Commission, favors a similar mechanism for lowering capital charges on green loans as is used for lending to SMEs. Recent data show such relief does spur credit expansion. Bank lending to smaller companies has increased by more than 20% since 2014, while loans to large companies have dropped 9%, according to EBA figures.But lending to SMEs is a risky endeavor, while banks’ vulnerability has yet to be tested by a sharp economic downturn. Incentives for green loans would add another source of potential weakness by adding exposure to new types of assets.And banks cannot yet be fully trusted in how they judge the riskiness of their assets, which isn’t subject to external audit. Rules drafted by the Basel Committee on Banking Supervision will tackle some of this by limiting how far lenders can reduce their capital needs by using their own internal models, but they won’t be implemented fully until 2027.Lenders’ reporting of metrics including capital adequacy have shown worrying signs of fragility recently. In Britain, regulators found that Citigroup Inc. underestimated its risk-weighted assets in part because of governance failings, leading to a $57 million fine. The U.K. has now asked all deposit-taking institutions for details of any interpretations in their numbers and how they oversee reporting.While the climate emergency is naturally at the top of the EU’s agenda, loosening rules for the region’s lenders should not be done lightly. A stable financial system is essential too for a transition to a greener economy. To contact the author of this story: Elisa Martinuzzi at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Financial stocks suffered a broad selloff in morning trading Tuesday, as trade-war fears sent the 10-year Treasury yield toward the biggest decline in over three years. The SPDR Financial Select Sector ETF slid 2.0%, with 65 of 67 equity components losing ground. That financial ETF (XLF) was the weakest of the ETFs tracking the S&P 500's 11 key sectors. The S&P 500 dropped 1.2%. Among the XLF's most active components, shares of Bank of America Corp. lost 2.5%, Citigroup Inc. shed 2.5%, J.P. Morgan Chase & Co. gave up 2.1%, Wells Fargo & Co. dropped 2.5% and Morgan Stanley declined 3.1%. The 10-year Treasury yield fell 13.2 basis points (0.132 percentage points) to 1.704%, putting it on track for the biggest one-day basis-point decline since it fell 16.0 basis points on June 24, 2016, according to FactSet data. The yield decline comes after President Donald Trump said it might be better to hold off a trade deal with China until after the presidential election. Lower long-term rates can hurt bank earnings, as that could cause the spread between what banks earn from funding longer-term assets, such as loans, with short-term liabilities.
Investing.com – Netflix (NASDAQ:NFLX) needs to up its subscription prices in order to justify its current valuation, which is running too hot, Citigroup (NYSE:C) said as it cut its outlook on the streaming-media giant.
(Bloomberg Opinion) -- Three years ago Tidjane Thiam stirred hopes that the banking industry was looking at new ways to tackle its bloated cost base. The chief executive officer of Credit Suisse Group AG said his company was working on a common platform with another lender to share expenses.The project has made little visible progress since then, and it’s not because the pressure on banks to become more efficient has eased; there’s a deeper resistance at play here to the notion of combining or outsourcing certain functions. Neither is Thiam’s false start the exception. Citigroup Inc. and Clearstream Banking SA announced a shared settlement and custody system in 2016, but UBS Group AG is the only other bank to have joined.Trying to share costs with your rivals rivals does present difficulties, but they shouldn’t be insurmountable. For a sector whose revenue outlook and profitability is deteriorating, the possible gains from outsourcing aren’t trivial, as was highlighted in a recent report from the management consultancy McKinsey & Co.Almost half of banks’ costs come from doing stuff that doesn’t set them apart from their competitors, McKinsey finds. Much like the car industry in the 1990s, the consultants argue that banks could outsource much of their “production” to third parties. Trade processing, collateral management and “know-your-customer” functions are just some of the things that could be farmed out.While one should bear in mind that consultants are always eager to promote outsourcing projects, seeing as it’s a service they offer, the financial benefits for the industry are tempting: Lenders could see their cost-to-income ratios improve by 4 percentage points and their return on equity (a key measure of profitability) could increase by as much as 1 percentage point, according to McKinsey. The industry’s average ROE has plateaued at about 10.5%.In Europe especially, where bank valuations are much lower than during the 1990s, every penny counts. So why have bankers not pushed harder on sharing costs?There are some practical reasons. Because financial services are exempt largely from value-added tax, they wouldn’t be able to recover the VAT they’d pay on outsourced services. That could offset some efficiency gains and potentially make some shared services less appealing.Then there are the regulatory concerns and demands. As much as 12% of a bank’s costs are soaked up by anti-money laundering processes and the monitoring of customers, making it a possibly fruitful area for cost savings. But sharing these processes with other banks wouldn’t shelter a lender from its legal duties. If anything went wrong, the responsibility would still lie with the individual bank. As such, it would still feel beholden to check this information even if it’s held on a common platform.That said, a raft of money-laundering scandals in Europe — and the hefty fines that will almost certainly follow — have added a sense of urgency. Six Nordic banks are creating a joint company to handle “know-your-customer” data.Generally, the biggest obstacle to shared services is getting buy-in from banks, with the efficiency gains often not deemed enough to offset the loss of control and flexibility.Until a year ago, executives were counting instead on a possible increase in interest rates to improve revenue. And for wholesale banks, saving a little here and there through complicated outsourcing projects is less attractive than trying to push their bankers to win a big-ticket initial public offering or a merger that can pay tens of millions in fees.But the industry outlook — especially in Europe — has become sufficiently grim to warrant a rethink. More than one-third of the world’s banks are sub-scale, according to McKinsey, while their business models are broken and they may have no option but to sell themselves in an economic downturn. With such a background, any chance to cut expenses shouldn’t be ignored.“Some banks would rather die than cooperate,” one senior bank executive told me recently. Too often they’re not willing to give up autonomy or write off legacy assets. While technology advances should make sharing easier, a round of banking M&A may come sooner than a reckoning on costs.To contact the author of this story: Elisa Martinuzzi at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
from the Bank of England this week was a sobering reminder that, more than 10 years on from the depths of the financial crisis, conduct risk is still very costly for Wall Street. Such rules were drawn up to ensure that banks could keep trading through the most severe of market crashes. Part of the problem identified by the BoE was that Citigroup relied on teams in Budapest and Mumbai, which often manually input data into detailed reports.
Wells Fargo Senior Analyst Mike Mayo joins Yahoo Finance’s The Final Round to discuss what he expects from the Fed and big banks in the year ahead.