2025-01-23 13:35
LONDON, Jan 23 (Reuters) - Hedge funds have turned optimistic about European companies that sell things people want but don't necessarily need, especially luxury goods, according to a Goldman Sachs (GS.N) , opens new tab note on Wednesday seen by Reuters on Thursday. Consumer discretionary stocks in Europe like household appliances, luxury items and leisure have sparked renewed buying interest in hedge funds. However, they have sold short those stocks exposed to U.S. President Donald Trump's potential tariffs, the note said. "As the tariff landscape evolves, hedge funds have increasingly shorted tariff-exposed names," the note said. Disclosed short positions in Italian spirits group Campari (CPRI.MI) , opens new tab reached an all-time high, according to a separate report from research firm Breakout Point. Campari has three production sites in Mexico, the main one producing tequila under its Espolon brand, and one in Canada that produces local whisky brand Forty Creek, according to its latest sustainability report. According to Citi, Campari imports 27% of its U.S. sales from Mexico and Canada, Reuters reported on Monday. Hedge funds with disclosed positions in Campari included Citadel and investment managers Arrowstreet Capital and Gladstone Capital a regulatory filing from the Italian markets authority showed. Citadel declined to comment. Arrowstreet Capital, Gladstone Capital and Campari did not immediately respond for a request for comment. A trader shorts an asset expecting its value to fall. Most of this activity since mid-December has focused on stocks in Europe, whereas activity in UK equities remained relatively muted, the note said. In 2024, luxury was a prime short target for hedge funds. But since this most recent earnings season kicked off, speculators have changed their bearish tune. The number of hedge funds buying makers of European cars and car parts compared to those who are selling has shrunk to a "multi-year low," the note said. Sign up here. https://www.reuters.com/markets/europe/hedge-flow-hedge-funds-buy-luxury-short-drink-driving-europe-says-goldman-sachs-2025-01-23/
2025-01-23 12:43
LAGOS, Jan 23 (Reuters) - Nigeria's central bank expects the economy to expand by 4.17% this year, Governor Olayemi Cardoso said on Thursday, driven by ongoing reforms and stabilising inflation. Reforms instituted by President Bola Tinubu in 2023, including scrapping a subsidy on petrol and twice devaluing the naira currency, have stoked inflation in Africa's most populous country. Inflation, currently at 34.8%, is expected to decline as the reforms starts to yield results, Cardoso said at a conference. He also said foreign exchange reserves were seen rising gradually, driven by increased oil production. Oil output is forecast to reach 2.3 million barrels per day by mid-year, Cardoso said. Nigeria recorded foreign exchange inflows exceeding $6 billion in 2024, Cardoso said, taking its foreign exchange reserves to more than $40 billion. Cardoso said the central bank's priority remained maintaining price stability and bolstering market confidence. To this end, the bank aims to enhance transparency and efficiency within the foreign exchange market. "With limited opportunities for FX arbitrage, we expect that there will be more appetite for real sector development," he added. Sign up here. https://www.reuters.com/world/africa/nigerias-central-bank-says-gdp-grow-417-2025-inflation-ease-2025-01-23/
2025-01-23 12:18
TSX ends up 0.5% at 25,434.08 Posts its eighth straight day of gains Consumer-related stocks lead gains Flash estimate shows jump in retail sales Jan 23 (Reuters) - Canada's main stock index extended its recent winning streak on Thursday, led by gains for industrials and consumer-related stocks, as the prospect of a business friendly U.S. government continued to underpin investor sentiment. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab was up 122.58 points, or 0.5%, at 25,434.08, its highest closing level since Dec. 11 and the eighth straight day of gains. That's the longest daily winning streak since August. U.S. stocks also notched gains as investors assessed a mixed bag of corporate earnings and digested comments from President Donald Trump, including a call for cuts in interest rates and oil prices. "I think what Trump is telling the world is that the U.S. is open for business and in the first few days of his presidency, he has done away with a lot of restrictive policy and rules in the U.S.," said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth. Canadian businesses, such as banks, that have major U.S. operations, could benefit from Trump's proposed measures to cut taxes and loosen regulations, investors say. The consumer discretionary sector rose 1.3%, helped by a gain of 4.4% for Canadian Tire Corporation (CTCa.TO) , opens new tab. Consumer staples was also up 1.3%. Canadian retail sales were unchanged in November. That missed estimates of a 0.2% gain but preliminary data showed sales jumping 1.6% in December when a sales tax holiday began. Industrials added 1.1%, with Badger Infrastructure Solutions Ltd (BDGI.TO) , opens new tab up 8.8% and Aecon Group Inc (ARE.TO) , opens new tab ending 7.3% higher. The utilities sector, which could particularly benefit from lower interest rates, was up 1.1% and heavily weighted financials gained 0.6%. Sign up here. https://www.reuters.com/markets/tsx-futures-edge-higher-ahead-us-domestic-data-2025-01-23/
2025-01-23 12:17
MILAN, Jan 23 (Reuters) - The European Commission is investigating the extent to which EU rules on crypto assets protect the redemption rights of the bloc's investors in identical e-money tokens (EMTs), the value of which is pegged to that of a single official currency. France's Autorité de contrôle prudentiel et de résolution (ACPR), the country's banking and insurance supervisor, last year asked the European Banking Authority to establish , opens new tab whether it would be possible to have technically identical and fully fungible EMTs issued by both an entity licensed in the European Union and by another elsewhere not subject to EU rules. The EBA then turned the matter over to the EU Commission as it is a matter of interpretation of EU law. The EU in 2023 adopted an extensive set of rules for crypto assets, known as MiCAR, under which issuers of EMTs must receive supervisory clearance to operate and hold reserves, including as bank deposits, against tokens sold to ensure they can repay investors when required to. In the United States, President Donald Trump has vowed to ease the regulatory burden faced by cryptocurrency companies, with the U.S. Securities and Exchange Commission this week creating a task force to work on new rules. Some issuers operate both within and outside the EU. For example, Circle, whose U.S. dollar-pegged 'USDC' is the world's second largest stablecoin by market value, operates in the EU as Circle SAS. USDC issued by Circle SAS are fully fungible , opens new tab with those issued by Circle LLC. France's ACPR also asked whether, in case of identical EMT issuance both within and outside the EU, it would be possible to allow only EU customers to present redemption requests to the EU-based entity. ACPR declined to comment further. "The MiCA regulation already has quite a bit of flexibility built in, to avoid stifling innovation," said Andrea Resti, a finance professor at Milan's Bocconi University. "To start interpreting the rules in ways that have not been clearly spelled out in the text could engender risks and weaken the effectiveness of the newly minted rules." Sign up here. https://www.reuters.com/markets/europe/eu-commission-investigates-depth-eu-safety-net-stablecoin-holders-2025-01-23/
2025-01-23 11:59
LONDON, Jan 23 (Reuters) - U.S. investment bank JPMorgan has downgraded its recommendation on Panama's bonds after U.S. President Donald Trump ramped up his threat this week to "take back" the Panama canal. The Central American country's bonds have been struggling since Trump made the pledge during his election campaign, but JPMorgan's analysts said its prominence during his inauguration speech on Monday had ratcheted up the stakes. The canal, which was once owned by the United States but was handed over to Panama decades ago, gives vessels a much shorter route between the Caribbean Sea and Pacific Ocean. While the two countries could end up resolving the issue, "the potential noise associated to the path that could get us there should cause markets to be increasingly sensitive to headline risks," the analysts warned. Combined with "little clarity on the endgame" for Trump, they cut Panama's bonds to "market weight" from "overweight" - effectively a signal to exposed investors to scale back. Others have also warned that Trump's threat may have serious consequences for Panama. Research firm Tellimer has highlighted that canal-related transfers are the country's main earner, providing just over 13% general government revenues. Though they were curbed last year by drought which limited the number of ships that could travel through the 82-km (51-mile) channel, in 2023 they reached an all-time high of $2.54 billion, equivalent to 3.2% of the country's GDP. At full capacity the waterway allows up to 14,000 ships to cross per year and accounts for 2.5% of global seaborne trade. For bond investors, the worry is that if Trump's tactics end up reducing the amount of money Panama earns from the canal its already-teetering sovereign credit rating could be downgraded. Fitch has already cut its Panama score to 'junk' and if either Moody's, which has it on a downgrade warning, or S&P Global follow suit, Panama's bonds would get ejected from key investment grade-only bond indexes. That in turn is likely to trigger further sell-offs. JPMorgan's said that "all things equal" and given that Panama's economy is expected to grow almost 5% this year, its rating should avoid that fate. Although with the canal now squarely in Trump's crosshairs they acknowledged that "all things aren’t equal". Sign up here. https://www.reuters.com/markets/us/jpmorgan-cuts-panama-view-trumps-threat-take-back-canal-2025-01-23/
2025-01-23 11:36
MOSCOW, Jan 23 (Reuters) - Russian gas giant Gazprom (GAZP.MM) , opens new tab, squeezed by plunging sales abroad as the Ukraine conflict prompts European buyers to turn away, is seeking to raise regulated prices at home to fund investment, Interfax news agency reported on Thursday. Gazprom incurred losses of almost $7 billion in 2023, its first annual loss in more than 20 years, amid dwindling gas trade with Europe, once its main sales market. The company is now focused on boosting gas exports to Asia, especially to China, as a part of Moscow's pivot to the East. President Vladimir Putin announced last week that Gazprom planned to supply Iran with up to 55 billion cubic metres of gas per year, on par with the damaged Nord Stream 1 pipeline capacity. At home, Russia's domestic gas prices are regulated by the government. "The current level of regulated wholesale gas prices does not ensure the formation of financial resources in amounts sufficient to make the necessary capital investments in the maintenance and development of gas infrastructure in the interests of Russian consumers," Interfax cited Alexei Sakharov, a Gazprom senior manager, as saying. Speaking at a parliamentary panel of experts, he said Gazprom also wanted to retain its monopoly rights over Russian gas exported via pipeline. "Despite the decline in gas export volumes to Europe... this point remains relevant in connection with the redirection of Russian gas export flows to the East and countries of the global South," Sakharov was quoted as saying. Sign up here. https://www.reuters.com/business/energy/gazprom-seeks-raise-russias-domestic-gas-prices-interfax-reports-2025-01-23/
