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What on first glance looks like a hot new IPO is actually an established consumer products leader with its aluminum foil and Hefty bags. Reynolds cleared resistance at 31 on a big upside reversal.
What on first glance looks like a hot new IPO is actually an established consumer products leader with its aluminum foil and Hefty bags. Reynolds cleared resistance at 31 on a big upside reversal.
(Bloomberg) -- Zimbabwe is considering penalizing domestic banks, telecommunications operators and other businesses over what the government describes as profiteering off the hard currency it makes available at auctions.Lenders could face fines and suspensions, while companies that charge a premium for foreign exchange may be banned from participating in the auctions, central bank Governor John Mangudya said in a phone interview from the capital, Harare.“All the malpractices will be targeted,” he said. “There’s no need to chase foreign currency as if it will run out.”President Emmerson Mnangagwa on Monday threatened unspecified actions against “sharks in the financial sector,” according to the state-owned Herald newspaper, which said unidentified entities are profiteering at the public’s expense. The president’s comments were made during a wide-ranging interview he gave to state-owned television that will be aired on April 17 on the eve of Independence Day celebrations, the paper said.Exchange ClosedMnangagwa has previously issued warnings to private companies he blames for undermining his efforts to turn around an economy plagued by annual inflation of 241% and foreign-currency shortages.Last year, his government closed the Zimbabwe Stock Exchange for five weeks and singled out the largest mobile operator, Econet Wireless Zimbabwe Ltd., for undermining the nation’s currency through its mobile-money service. Econet denied the allegations.The impending action is an attempt to prevent manipulation of the foreign-currency auction system, according to the Herald. The system has provided over $800 million to companies since its introduction in June, though high demand for U.S. dollars by importers means that there is only a limited supply.Monetary authorities met with the Bankers Association of Zimbabwe on April 12 to discuss “due diligence and know-your-customer requirements” in order to ensure economic stability, Mangudya said.Ralph Watungwa, president of the Banker’s Association of Zimbabwe, didn’t immediately answer two calls to his mobile phone seeking comment.Zimbabwe reintroduced its own currency in 2019 after a 10-year hiatus and has been battling bouts of high inflation and shortages of everything from foreign currency to food. The local unit, which was pegged at parity to the U.S. dollar as recently as February 2019, has plunged to 84 per U.S. dollar.The gap between the official exchange rate and parallel market has widened by 36%, with a U.S. dollar selling for 115 Zimbabwean dollars on the streets of Harare.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Bond veteran Greg Wilensky has seen hype about a surge in inflation crushed too many times to get carried away with this year’s great reflation trade.“I’ve been managing bond portfolios for 25 years, through very large monetary programs, big deficits, and the Fed trying to raise inflation expectations,” the Janus Henderson money manager said in an interview. “As much as I can see legitimate reasons why it might happen this time -- I could have said that very often over the last 12 years too.”Wilensky’s skepticism epitomizes the cooling investor enthusiasm for bets linked to a rapid economic recovery and higher prices. Trades favoring economically-sensitive value stocks, steeper yield curves and a rebound in commodities have faltered after a stellar first quarter.The MSCI AC World Value Index has lagged its growth counterpart by about 6 percentage points since March 8. Benchmark Treasury yields have retreated some 13 basis points already this quarter, even as U.S. inflation data begin to beat expectations. And Tuesday’s strong 30-year Treasury auction suggested demand for even the most interest rate-exposed bonds is returning.One of the biggest questions money managers confront now is whether the stimulus-fueled rebound in growth and inflation -- in particular in the U.S. -- can transition to a sustainable expansion that will keep pushing equities and bond yields higher. The International Monetary Fund recently upgraded its 2021 global growth forecast to the strongest in four decades, but the outlook beyond that is less clear-cut.Envisaging a trajectory for price levels beyond this year is even harder for investors given the warping effect of coronavirus shutdowns, temporary supply bottlenecks and base effects from last year’s disinflation. A surge in five-year U.S. breakevens-- a gauge of inflation expectations -- has petered out since they hit their highest since 2008 in mid-March.Simple Math Is About to Cause an Inflation Problem: QuickTake“Inflation and rates, especially as a bond investor right now, is the call that you have to make,” said Elaine Stokes, fixed income portfolio manager at Loomis Sayles. “It’s the make-or-break call of your year.”The response to the stall for many investors has been to pare back some trades geared to the sharpest stage of the economic rebound. Vishal Khanduja, fixed income fund manager at Eaton Vance Management, has halved his portfolio’s overweight in U.S. inflation-linked bonds from the start of the year.“Inflation expectations were dislocated in 2020” in a “surgical recession,” Khanduja said. “The typical post-recession positioning that you see happen over multiple years is quickly going through the market.”Franklin Templeton’s Gulf Arab bond fund has removed its hedges against the risk of accelerating U.S. inflation, as it sees another spike in Treasury yields as “possible, not probable,” according to its Dubai-based manager.As for some traditional inflation hedges in the commodities markets, the story is about to get more complicated than the year-to-date rebound in oil and copper prices would suggest. Strategists at the BlackRock Investment Institute anticipate a divergence within the asset class, as factors such as climate risks are more fully captured in pricing.“The lift for oil from the economic restart is likely to be transitory, while some metals may benefit from structural trends such as the ‘green’ transition for years to come,” a team including Wei Li wrote in a note this week.Tremendous ChallengeMeanwhile, in the bond market, traders are not reacting to signs of inflation as one might expect. On Tuesday, data showed U.S. consumer prices climbed in March by the most in nearly nine years, yet 10-year Treasury yields fell five basis points to their lowest in three weeks.“The tremendous challenge right now, especially this year is that the quality of almost any of the numbers we’re looking at, whether it’s the short-term inflation numbers, the economic growth numbers, these things are being very much distorted by the economic volatility,” Janus Henderson’s Wilensky said.(Adds Franklin Templeton move in 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The S&P 500 and the Dow Jones indexes notched record highs on Thursday as upbeat earnings reports from several companies and a strong rebound in March retail sales bolstered hopes of a broader economic rebound. Apple Inc, Microsoft Corp Facebook Inc and Amazon.com Inc rose between 1.1% and 2.0%, taking the S&P technology sector to the top of pack in early trading. Both Bank of America and Citigroup offered optimistic views on an economic rebound, but shares of America's second-biggest lender fell 4% after it posted a profit that just about topped estimates.
TOKYO (Reuters) -Nissan Motor Co will slash production at severalfactories in Japan next month, three sources with direct knowledge of the plan told Reuters on Thursday, in the latest hit to an automaker from a global shortage of semiconductors. Japan's third-largest automaker will idle its factory inKyushu, southern Japan, for eight days between May 10 and 19,the sources said, declining to be identified because the plan isnot public. Two other domestic assembly plants, the Oppama plant and a Nissan Shatai factory in Kyushu, will cancel the night shift over 15 days between May 10-28, and a fourth factory in Tochigi, eastern Japan, will idle for 10 previously unplanned days next month, the sources said.
The supermarket giant says customers have swapped traditional loaves for speciality breads and wraps.
Grab’s record-breaking deal to merge with a special purpose acquisition company (SPAC) will raise an eye-popping $4.5 billion in cash. A quick recap: Singapore-based Grab is poised to have a market value of around $39.6 billion after it combines with a SPAC called Altimeter Growth. Altimeter is basically a $500 million pot of money listed on Nasdaq that was looking for a target to merge with (which is why SPACS are sometimes called “blank check” companies).
The dollar index edged higher on Thursday in choppy trading as investors balanced bullish data showing U.S. retail sales rebounded sharply in March against a continued drop in U.S. Treasury yields. Retail sales increased 9.8% last month, the Commerce Department said on Thursday, beating economists' expectations for a 5.9% increase. A separate report also showed that initial claims for state unemployment benefits totaled a seasonally adjusted 576,000 for the week ended April 10, compared with 769,000 in the prior week.
Major global stock indexes scaled new peaks on Wednesday before shedding gains that anticipated a strong recovery from the coronavirus pandemic, while the dollar dipped to three-week lows as Treasury yields held below recent highs. High-flying growth stocks declined on Wall Street, sending the benchmark S&P 500 and Nasdaq lower, while underpriced value stocks rose, lifting the Dow to a new record. U.S. import prices increased more than expected in March, fueled by higher costs for petroleum products and tight supply chains in the latest data to show inflation heating up as economies reopen.
Gold may have risen following the release of the CPI data, but it was not because of concerns over inflation.
The company behind the UK's Liberty Steel says it did nothing wrong when seeking government funds.
Apr.15 -- Richard Byworth, chief executive officer of Diginex Ltd. a Nasdaq-listed digital asset financial services company, discusses the initial public offering of Cryptocurrency exchange Coinbase Global Inc. and the outlook for Bitcoins. Coinbase soared above a $112 billion valuation in its trading debut Wednesday, then slipped back below its opening price as Bitcoin fell from record highs. Byworth speaks on "Bloomberg Markets: Asia."
Qantas Airways Ltd said it expected domestic travel would top pre-pandemic levels next financial year as it raised its forecast for the current quarter on the back of strong demand in a country nearly free of COVID-19. A return to 90% of pre-pandemic domestic capacity in the fourth quarter ending June 30 will allow it to report positive cashflow and begin repairing a balance sheet burdened by extra debt that helped get it through the pandemic, Chief Executive Alan Joyce said on Thursday. The airline entered the crisis with one of the industry's strongest balance sheets, though its biggest domestic rival, Virgin Australia, benefited from a bankruptcy restructuring that allowed it to cut fixed costs more than Qantas.
(Bloomberg) -- As Japan’s life insurers lay out their annual strategies this month, traders will be looking for the answer to one question -- what do some of the world’s biggest investors plan to do about Treasuries?With the path of Treasury yields set to determine investments across the financial world, the intentions of a large cohort of the biggest foreign holders of U.S. government debt will be a crucial input. Japanese investors were on track to be net sellers of Treasuries for the sixth year in seven in their fiscal year to March, according to U.S. Treasury data through January. Some predict a return to purchases in 2021.With combined assets equivalent to $3.6 trillion, and one-quarter of this in foreign securities, even minor shifts in Japanese insurer allocations can impact markets. Furious selling by Japanese funds in February helped fuel the biggest monthly decline in Treasuries since 2016, and with benchmark yields close to their highest in a year, bond investors are keen to know at what levels lifers will become more inclined to buy.“Life insurers are expected to be aggressive about investing in foreign bonds, and are probably looking for the right timing to buy when markets settle down,” said Hiroshi Yokotani, managing director and portfolio strategist for fixed income and currencies at State Street Global Advisors. “The U.S is seen to be the most attractive destination taking account of hedge costs.”Life insurers will start announcing their allocation plans for the new fiscal year later this month. Among them are the nation’s leading Nippon Life Insurance Co. and Japan Post, which is also known as Kampo Life.Treasuries AttractionAfter reaching a record closing low of around 0.5% last August, the 10-year Treasury yield has rebounded and traded at just over 1.60% on Wednesday. That increase makes Treasuries relatively more attractive to some of the credit products which have been preferred by Japan’s life insurers in recent years, where spreads have tumbled close to historic lows.“Credit investment has depressed spreads to historically expensive levels, so investing in Treasuries looks safer in the longer run,” said Akio Kato, general manager of strategic research and investment at Mitsubishi UFJ Kokusai Asset Management. “Abundant cash held by investors will keep money flowing into credit but it’s doubtful if the size will be big.”Given the recent flattening of the U.S. 10-year/30-year yield curve -- where the spread was about 68 basis points on Wednesday -- lifers may wait until it steepens back toward 100 basis points before buying Treasuries, Kato added.For State Street’s Yokotani, Treasuries are also more attractive than agency bonds -- such as those of Freddie Mac or Fannie Mae -- which tend to be more volatile when yields are rising.Hedge CallAside from choosing where to invest, Japanese investors also have to decide whether to hedge out their currency risk or not. The yen was the worst-performing Group-of-10 currency in the first quarter of 2021 and is down over 5% against the dollar year-to-date.Short-term rates pinned at low levels have kept hedging costs near historic lows, providing a favorable environment. Japanese investors currently get a yield of almost 1.3% from a 10-year Treasury note after taking account of hedging costs, compared to just 0.65% for local 30-year government bonds.“Returns generated from currency-hedged U.S. Treasuries investment could be too attractive to resist,” said Satoshi Nagami, head of the global strategies investment group at Sumitomo Mitsui DS Asset Management Co. Japanese investors “wouldn’t be too aggressive early in the new fiscal year, but I don’t think they feel negative about allocating funds into overseas debt this year.”Life insurers extended a net sale of foreign bonds for a ninth consecutive month in March, the longest ever streak in Ministry of Finance data going back to 2001. That made them a net foreign bond seller for a fiscal year for the first time in seven years.Still, not everyone is convinced Japan’s investors will rush back into Treasuries given the risk yields could continue to rise -- Masahiko Loo, fixed-income portfolio manager at AllianceBernstein Japan in Tokyo sees credit continuing to attract more interest. But a consensus does seem to have formed on where they will invest.“This year, Japanese investor strategy will be simple, to focus on the U.S.,” Loo said.(Corrects timing of announcements in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Turkey’s central bank is likely to leave its benchmark interest rate unchanged in the first monetary policy meeting of its newly appointed governor.Installed after President Recep Tayyip Erdogan abruptly fired his predecessor following a bigger-than-expected rate increase, Sahap Kavcioglu is under pressure to reduce rates but has so far signaled he would not rush to loosen the stance he inherited.All but two respondents in a Bloomberg survey of 25 analysts expect the central bank to keep the one-week repo policy rate at 19% on Thursday. The dissenters, HSBC Bank PLC and Capital Economics Ltd, predict the meeting will deliver a reduction of 50 and 200 basis points, respectively.“Kavcioglu’s initial communication to markets has done enough to alleviate apprehensions about a major policy reversal at the April meeting,” said Ehsan Khoman, Head of Emerging Market Research for Europe, Middle East and Africa at MUFG Bank in Dubai. Turkey “does not have the policy room to lower rates this year given the elevated inflation outlook” but Kavcioglu’s dovish views suggest the central bank will eventually take a more accommodative stance.In a written interview with Bloomberg after his appointment last month, Kavcioglu said markets shouldn’t view a rate cut at the April 15 Monetary Policy Committee meeting as a given, easing some concerns among investors.Turkey raised its benchmark one-week repo rate by 200 basis points on March 18, at Naci Agbal’s final rate-setting meeting as governor, citing concerns about inflation. A professor of banking, Kavcioglu was among the critics of that move, saying it could damage economic growth.Last week, Erdogan said the government was determined to both reduce inflation and cut interest rates to single digits, prompting a slide in the lira. The currency has weakened more than 10% against the dollar since the unexpected appointment of Kavcioglu.What Our Economists Say:“Turkey President Recep Tayyip Erdogan would like the new-look central bank to lower interest rates, but market forces will likely delay the delivery of his orders. With inflation rising and the lira weakening, we expect the monetary policy committee to keep rates on hold when it meets on Thursday.” --Ziad Daoud, Bloomberg Economics (Read More: Market Forces to Keep Turkey Central Bank on Hold)Inflation accelerated to an annual 16.2% through March, up from 15.6% the previous month because of a global oil rally and weaker currency, leaving the new central bank chief little room to enact the interest-rate cuts that would mollify Erdogan, who holds the unorthodox view that high interest rates cause inflation.Among the dissenters, Jason Tuvey, senior emerging markets economist at Capital Economics, said they are basing their forecast of a big rate cut more “on the basis of pressure from Erdogan.”“If I was governor, I would hike interest rates,” he said, “but I’d probably get sacked the next day.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
It’s official: Gary Gensler is the new chair of the Securities and Exchange Commission (SEC), after a 53-45 vote by the U.S. Senate on Wednesday. Gensler, who was nominated to the position by President Joe Biden in January, previously ran the federal Commodity Futures Trading Commission (CFTC), overseeing the implementation of new regulations around derivatives […]
Ahead of the Asia-Pacific opening, key global stock indexes scaled new peaks after upbeat U.S. and European earnings pointed to a strong recovery.
MILAN (Reuters) -Andrea Orcel on Thursday fulfilled his dream of becoming a bank boss, but disquiet over how much the veteran dealmaker will earn as the new UniCredit chief executive means his tenure begins on the defensive. Orcel, 57, only narrowly defeated a shareholder revolt over the terms and size of his up to 7.5 million euro ($9 million)remuneration package, securing just 54.1% of votes at a general meeting. The package, which is double that of former CEO Jean Pierre Mustier, puts Orcel ahead of most European peers at a time when regulators are calling for restraint as the extent of the damage wrought by the pandemic slowly emerges.
(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. warned that a global shortage of semiconductors across industries from automaking to consumer electronics may extend into 2022, prompting the linchpin chipmaker to lift targets on spending and growth for this year.The world’s largest contract chipmaker said Thursday that its auto industry clients can expect chip shortages to begin easing next quarter, alleviating some of the supply disruptions that have forced the likes of General Motors Co. and Ford Motor Co. to curtail production. But overall deficits of critical semiconductors will last throughout 2021 and potentially into next year, Chief Executive Officer C.C. Wei told analysts on a conference call.TSMC now expects investments of about $30 billion on capacity expansions and upgrades this year, after spending $8.8 billion in the first three months, Chief Financial Officer Wendell Huang said. The company had previously forecast spending of as much as $28 billion. Sales in the June quarter may be between $12.9 billion and $13.2 billion, beating the average $12.8 billion seen by analysts, though its target for gross margin came in below expectations at 49.5% to 51.5%. Full-year revenue may climb 20% in dollar terms, ahead of the “mid-teens” growth predicted in January.“We see the demand continue to be high,” Wei said. “In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.”TSMC joins a growing number of industry giants from Continental AG to Renesas Electronics Corp. and Foxconn Technology Group that warned of longer-than-anticipated deficits thanks to unprecedented demand for everything from cars to game consoles and mobile devices. While Taiwan’s largest chipmaker has kept its fabs running at “over 100% utilization,” the firm doesn’t have enough capacity to satisfy all its customers and it has pledged to invest $100 billion over the next three years to expand.Read more: See How a Chip Shortage Snarled Everything From Phones to CarsSemiconductor shortages are cascading through the global economy. Automakers like Ford, Nissan Motor Co.and Volkswagen AG have already scaled back production, leading to estimates for more than $60 billion in lost revenue for the industry this year. The situation is likely get worse before it gets better: a rare winter storm in Texas knocked out swaths of U.S. production, while a fire at a key Japan factory will shut the facility for a month. Rival chipmaker Samsung Electronics Co. warned of a “serious imbalance” in the industry.With major American carmakers and other gadget suppliers facing a prolonged shortage of chips, U.S. President Joe Biden has proposed $50 billion to bolster semiconductor research and manufacturing at home. The initiative could aid TSMC’s plan to build a cutting-edge fab in Arizona this year that could cost $12 billion.TSMC is “happy” to support chip manufacturing in the U.S., though research and development and the majority of production will continue to remain in Taiwan, executives said on Thursday. They reiterated that construction of their plant in Arizona will begin this year.Read more: Why Shortages of a $1 Chip Sparked Crisis in Global EconomyNet income for the January-March period climbed 19% to NT$139.7 billion ($4.9 billion), beating the average analyst estimate of NT$136.2 billion, buoyed by demand for high-performance computing (HPC) equipment and a milder seasonal effect on smartphone demand. Gross margin for the quarter eased to 52.4% from 54% in the three months prior, due in part to relatively lower levels of utilization and exchange-rate fluctuations. First-quarter revenue rose 17% to NT$362.4 billion, according to a company statement last week.The company said Thursday it now expects to be able to achieve the higher end of its compound annual growth rate target of 10% to 15% for the five years to 2025, citing its investment spending plans.“TSMC’s statement that the chip crunch may spill into 2022 will smooth over concerns that chip demand may fall on overbooking later this year and further boost investors’ confidence in the overall semiconductor demand in the long run,” said Elsa Cheng, an analyst at GF Securities.Shares of TSMC have more than doubled over the past year. The stock advanced 1.1% on Thursday, before the company reported earnings.TSMC’s most-advanced technologies continued to account for nearly half of revenue in the March quarter, with 5-nanometer and 7-nanometer processes contributing 14% and 35% of sales, respectively. By business segment, its smartphone business amounted for about 45% of revenue, while HPC increased to more than a third, reflecting sustained demand for devices and internet servers even as economies start to emerge from the pandemic.“We are seeing stronger engagement with more customers on 5-nm and 3-nm, in fact the engagement is so strong that we have to really prepare the capacity for it,” Wei said. Smartphones and HPC will be the main drivers for demand of 5-nm, which will contribute around 20% of wafer revenue this year.TSMC Is On Fire. Just Beware of the Flames: Tim Culpan(Updates with company comments throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The IRS commissioner says the child credit payments will arrive on time after all.
The IRS sent out COVID-19 relief checks to nearly 2M more Americans, including over 700,000 'plus-up' payments for people eligible for more money.