2025-02-27 07:39
Feb 27 (Reuters) - Impala Platinum (Implats) (IMPJ.J) , opens new tab could wind down its palladium mine in Canada earlier than planned if there is no immediate recovery in metal prices, CEO Nico Muller said after a 43% slump in first-half profit. Palladium has registered the sharpest price decline of all platinum group metals (PGM), plunging from its March 2022 peak of about $3,440 an ounce to current levels around $921. Muller said that Implats could close the Canada mine before the end of its remaining two years, but no final decision has been taken yet. "I would not be surprised if, in the course of the next few months we come to a position that an accelerated and responsible wind down of that operation seems to be economically the most effective way to deal with (Impala) Canada," Muller said on a media call. First half profit slid to 1.85 billion rand ($100.15), hit by lower metal prices, prompting the miner to scrap dividend payments. Muller also said that Implats is assessing some of South African mines that are struggling to make a profit. ($1 = 18.4725 rand) Sign up here. https://www.reuters.com/markets/commodities/impala-platinum-half-year-profit-plunges-43-low-metal-prices-persist-2025-02-27/
2025-02-27 07:38
LONDON, Feb 27 (Reuters) - British power company Drax Group (DRX.L) , opens new tab on Thursday reported a 5.5% increase in annual profit, in line with forecasts and due to an increase in renewable power generation and an improved performance from its pellet division. Drax, which has converted coal plants to run on biomass, provides around 6% of Britain’s electricity. Earlier this month, the government extended subsidies for the biomass units that were due to expire in 2027 until 2031 but said they would be half the current level. Under the new subsidy system the plants will run less frequently and only when the power is needed, the government said. The new deal "is a major milestone for the business and provides the basis on which the site continues to generate electricity for the country,” CEO Will Gardiner said in the results statement. Biomass power production was 27% higher last year compared with 2023 with few maintenance outages, the company said. The company reported earnings before interest, tax, depreciation and amortization of 1.06 billion pounds ($1.34 billion) for 2024. Green groups opposing the use of biomass say production of the pellets can contribute to deforestation and question whether the process of burning the pellets is really sustainable. The company says its pellets come from wood residuals or byproducts from trees primarily used for lumber, and that sustainably managed forests can help to increase forest growth. ($1 = 0.7899 pounds) Sign up here. https://www.reuters.com/business/energy/uks-drax-reports-higher-annual-profit-helped-by-rising-renewable-power-2025-02-27/
2025-02-27 07:34
MADRID, Feb 27 (Reuters) - Europe's largest utility Iberdrola (IBE.MC) , opens new tab expects a mid- to high-single digit net profit growth this year after record investments pushed 2024 profit above analysts' expectations. Record investments and the sale of some assets propelled net profit to 5.61 billion euros ($5.87 billion) last year, a 17% increase from the 4.8 billion euros it posted in 2023. The median forecast by analysts polled by LSEG was 5.51 billion euros. The company invested a record 17 billion euros last year, 70% of which in the United States and Britain. Iberdrola proposed a dividend of 0.635 euros per share against 2024 results, a 15% increase. "A strengthened business profile and better market fundamentals contribute to a structural improvement in our outlook for 2025 and beyond," Executive Chairman Ignacio Galan said. ($1 = 0.9552 euros) Sign up here. https://www.reuters.com/business/energy/iberdrola-hikes-2025-outlook-after-profit-surpasses-expectations-2025-02-27/
2025-02-27 07:29
BEIJING, Feb 27 (Reuters) - China's commerce ministry on Thursday urged the United States to halt its tariff probe into copper imports as soon as possible, vowing to resolutely oppose it if U.S. goes ahead with the action. The potential U.S. move will undermine the rules-based multilateral trading system and disrupt stability of global supply chains, ministry spokesperson He Yadong told a regular press conference. Sign up here. https://www.reuters.com/markets/commodities/china-urges-us-halt-tariff-probe-into-copper-imports-2025-02-27/
2025-02-27 07:25
U.S. inflation expected to outpace euro zone on higher growth, tariffs European energy prices drop on potential Ukraine peace deal U.S. bond yields fall despite inflation concerns as investors eye tepid data LONDON, Feb 27 (Reuters) - Traders who bet on the future course of inflation foresee the sharpest divergence for three years between the U.S. and euro zone, driven by different growth paths, tariff threats and cheaper European energy after a potential Ukraine peace deal. That gap is not fully reflected in U.S. and euro zone bond yields, however, as investors are eyeing other factors including recent tepid U.S. economic data and expectations that European countries might need to spend more on defence. Inflation swap markets late last week pointed to U.S. consumer price index (CPI) inflation running at about 2.8% over the next two years, with euro zone inflation swaps at around 1.9%. That would mark a small fall from a current U.S. CPI rate of 3% and a sharper one from euro zone inflation of 2.5%. Pricing for both has fallen slightly since, but the gap between the two remains at its widest since early 2022. Yields on U.S. Treasury bonds have nevertheless fallen compared to those in Europe in recent weeks as some weaker-than-expected data releases have sown doubts about growth, even as sticky inflation remains a concern. "I think it's really, really hard to trade cross-markets when you have different drivers affecting the different markets," said Guillermo Felices, principal and global investment strategist at PGIM Fixed Income. STARK DIVIDE Inflation swaps are derivatives that allow parties to increase or reduce their exposure to inflation. Many in the market - from speculative traders to companies needing to hedge - expect U.S. President Donald Trump's planned trade tariffs to push up prices in the United States but hit European growth, dampening inflation pressures there. "Tariffs... are a one-off shock to the price level," said Blerina Uruci, chief U.S. economist in the fixed income division at T. Rowe Price. "What's different now is we have lived in a high-inflation environment, and businesses have discovered they have pricing power (so) what could be a one-off shock to the price level could have more room to run." Growth differentials are another factor. The U.S. economy has expanded about 12% since just before the pandemic, while the 20-country euro zone has grown 5%. Trump's other major transatlantic policy focus, negotiating with Russia an end to the war in Ukraine, has startled European capitals but caused energy prices to drop. European natural gas prices - a key driver of euro zone inflation - have fallen 30% since mid-February . "That is definitely pushing down on front-end inflation swaps," said PGIM's Felices. "So you're getting this unusual divergence between the U.S. and Europe." VOLATILE MARKETS Differences in inflation pricing would usually be expected to lead U.S. bond yields higher compared to Europe. But the focus of investors recently has been on slowing U.S. growth even amid sticky inflation, highlighted by this week's slump in a key consumer confidence gauge. The likelihood that European governments will need to borrow more - perhaps jointly - to fund higher defence spending demanded by Trump is another new factor to consider. The gap between U.S. and German 10-year bond yields fell to its lowest since November on Tuesday at 182 basis points (bps) - down from a five-year high of 231 bps in December. Traders now expect about 55 bps of Federal Reserve rate cuts this year, after previously expecting just one 25 bp reduction. Pricing for the European Central Bank has changed less, with 85 bps of cuts anticipated. Some investors are sticking with the view that U.S. economic strength will keep borrowing costs there high. "The Fed has been very clear in saying they are still in restrictive territory, but they are happy to stay here if growth still remains," said Ales Koutny, head of international rates at Vanguard. "That limits how much bonds can rally." Lower returns have reduced the attractiveness of U.S. bonds and weighed on the dollar, helping the euro rise to $1.05 from a more than two-year low of $1.01 last month. Samuel Zief, head of global FX strategy at JPMorgan Private Bank, said he's wary of betting on a sustained rally in the common currency, however. "We think the uncertainty from trade and those headwinds are the real thing that need to be cleared before you can turn more cyclically bullish on the euro zone," he said. Felices at PGIM takes solace from the fact inflation expectations are not too far away from 2%, especially given the Fed targets the personal consumption expenditures index, which tends to be lower than CPI. "That these numbers are still pretty consistent with inflation targets is very reassuring," he said. Sign up here. https://www.reuters.com/markets/investors-bet-sharpest-us-europe-inflation-divergence-since-2022-2025-02-27/
2025-02-27 07:21
Revenues and profits beat expectations Trend funds struggle while multi-strategy fund outperforms Shares rally LONDON, Feb 27 (Reuters) - Man Group's (EMG.L) , opens new tab shares rose as much as 5.7% on Thursday after the hedge fund reported that its assets under management grew by around 1% to $168.6 billion in 2024 as markets whipsawed. The shares jumped as the company announced a $100 million buyback, twice the amount that analysts had expected, according to a note by JPMorgan (JPM.N) , opens new tab. Man Group's profit and revenue figures beat expectations while its asset growth was slightly below the anticipated level, said the note. "The market has fretted about Man’s investment performance but the delivery of better-than-expected performance fees suggests that the market cannot quite measure all it believes it can," said a note from Rae Maile at Panmure Liberum. Man Group's shares were up 3.7% by 0920 GMT. Against the backdrop of increased market volatility and a rapid rise in long-term rates to start the year, hedge funds levered up in 2024 to boost trading to new heights and trade on U.S. elections and volatility spikes. London-listed Man Group, which houses many different kinds of trading strategies under one roof, saw strong investment performance from its long-only strategies, which contributed an additional $10.9 billion to the firm-wide AUM, the firm said. Other strategies, particularly trend following strategies such as its AHL Alpha and AHL Evolution produced mixed returns of a positive 3.2% and negative 6.1%, respectively. "We were able to capture some quality trends in commodities including agriculturals and in the Mag 7 stocks," CEO Robyn Grew told Reuters, referring to the largest U.S. tech stocks. She confirmed that the hedge fund had a positive investment performance in cocoa, a large profit maker for trend funds last year as prices surged on supply constraints. Clear opportunity to catch market trends in sovereign bonds, however, were not there, she added. "We walked into 2024 with expectations of a number of rate cuts which decreased to two and then were shortly back up to seven in October. This saw markets whipsaw," said Grew, explaining this hampered trend following strategies generally. Trend following hedge funds buy into rising markets and sell falling ones, but they rely on prices to travel in one direction and not change. Trend funds tracked by Societe Generale returned roughly 3% in 2024. Hedge funds overall averaged just over a 10% return for the year, according to PivotalPath, versus 5.7% in the same period in 2023. Multi-strategy hedge funds with many different trading strategies all housed in the same company were the strongest cohort of hedge funds returning 13.6% in 2024, after being the 5th best performing master strategy in 2023. Man's multi-strategy fund 1783 returned 14.5%. 'NO SECRET' Core performance fees rose 72% to $310 million, an increase of money that clients pay to Man Group when its investments deliver positive returns. Firm revenues were hit by a $3.8 billion negative currency impact from the strong dollar and $2.1 billion in costs from the wind-down of the hedge fund's U.S. real estate business and capital returned from its packaged loan business. The firm recorded net outflows of $3.3 billion for 2024, driven by the $7.0 billion single client redemption in the third quarter of 2024, the company said in a statement. Asked if Man Group planned further acquisitions, with a European credit manager or direct lending firm, Grew said: "We have made no secret of our desire to grow credit, whether that is organically or inorganically," but added, the price had to be right. Sign up here. https://www.reuters.com/business/finance/man-group-assets-1686-billion-roughly-line-with-expectations-2025-02-27/
