2025-01-22 05:57
JAKARTA, Jan 22 (Reuters) - Indonesian companies are asking the government to consider adjustments to the new rule to retain all proceeds from natural resource exports onshore for a year, amid concerns it will further hurt their cashflows. On Tuesday, Jakarta announced the new rule will take effect on March 1 and applies to every export with a shipping document worth at least $250,000. Currently, exporters are only obliged to retain 30% of total proceeds for a minimum of three months, which already has pushed up interest expenses for some exporters. Jakarta said the move is needed to shore up U.S. dollar supply in the largest economy in Southeast Asia, helping its efforts to stabilise rupiah, which hit a 6-month low in January. "We're still assessing the impact, but this is extraordinary because one year is not short," Moshe Rizal, the head of investment committee at the Association of Oil and Gas Companies, told Reuters on Wednesday, asking for a gradual implementation of the rule. He said the association will ask for a meeting with the energy ministry to discuss the risks which could stem from the policy on their ability to fund operational costs, such as importing equipments and chemicals, which are paid for in U.S. dollars. The government has said to tackle the working capital issue, earnings could be used as collateral for a loan, but Rizal said it is still unfavorable as the company must bear the loan interest, adding to their expenses. Under the current 30% retention rule, the local cocoa industry has been paying up to a 6% interest rate gap as they are forced to take up loans at market rates, while the domestic deposit gave lower returns, Indonesian Employers Association (Apindo) said in its statement late on Tuesday. Of all exporters, cocoa and fishery businesses were among the most impacted by the current dollar retention rule, according to Apindo, and the group urged the government to consider applying the rule selectively, not across the board. "Our input and concerns have been received by the government so we are asking for more detailed explanation of the latest government position," Apindo Chairwoman Shinta Kamdani told Reuters on Wednesday. In support of the rule, Indonesia's central bank has said it will continue to offer term deposit instruments with a competitive return and to provide its FX-denominated securities as an alternative for the proceeds placement. Sign up here. https://www.reuters.com/markets/asia/indonesian-resources-exporters-want-adjustments-new-foreign-exchange-retention-2025-01-22/
2025-01-22 05:35
A look at the day ahead in European and global markets from Stella Qiu Day two of Donald Trump's second presidency culminated in an announcement that OpenAI, SoftBank Group (9984.T) , opens new tab and Oracle (ORCL.N) , opens new tab will form a venture called Stargate and invest $500 billion in AI infrastructure across the United States, though how much of that was already long planned is anyone's guess. It shares its name with a 1994 sci-fi movie and long-running TV series, in which Stargate is a device providing instantaneous travel between distant planets. Though its goals are likely more modest than interstellar teleportation, the project could help consolidate America's lead over China in the race to develop AI. Investors are not shy to agree, pushing SoftBank shares up 10% in Asia, helping lift the Nikkei (.N225) , opens new tab 1.7%. Taiwan stocks (.TWII) , opens new tab gained 1.3%. The region's under performers were China and Hong Kong, with the former's blue-chip index (.CSI300) , opens new tab falling 1% and the latter's Hang Seng (.HSI) , opens new tab sliding 1.6%. To be sure, that was in part due to Trump saying a 10% tariff on Chinese goods would commence on Feb. 1. Still, that's much lower than the 60% pledged during his election campaign. And it remains to be seen if the 10% tariff will happen at all now that Trump needs to negotiate with Beijing for the sale of part of TikTok to either Tesla (TSLA.O) , opens new tab CEO Elon Musk or Oracle Chairman Larry Ellison. In Europe, stock markets are set for a slightly higher open, with pan-European STOXX 50 futures up 0.2% and UK FTSE futures rising 0.1%. European Central Bank President Christine Lagarde will be at the World Economic Forum in Davos, Switzerland. Appearances by other ECB officials include Governing Council member Francois Villeroy de Galhau who will be speaking about interest rates. Market participants reckon the bank is all but certain to lower its policy interest rate by 25 basis points next week, but the question for many is how low can it go. Predicting the terminal rate won't be easy given inflation is still above the ECB's target but growth headwind is strengthening due to Trump putting friends and foes alike in his America-first firing line. So far, swaps imply four rate cuts this year to 2%. Over on Wall Street, Nasdaq futures gained 0.7%, lifted by a 14% jump in Netflix, which boasted a record gain in subscribers last quarter. Still, with Stargate becoming reality in one form or another, there will perhaps be less need to stream sci-fi in the coming years. Key developments that could influence markets on Wednesday: Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-01-22/
2025-01-22 05:25
CATL estimates revenue fell after it adjusted product prices Net profit growth in 2024 estimated to be slowest since 2019 Company pushes beyond batteries, eyes investments aboard BEIJING, Jan 22 (Reuters) - Shares in CATL (300750.SZ) , opens new tab, the world's largest battery maker, dropped nearly 4% on Wednesday after the Chinese company warned that its annual revenue fell for the first time last year and that profit grew at its slowest pace since 2019. CATL said in a securities filing late on Tuesday that its revenue fell between 8.7% and 11.2% last year after it adjusted product prices to reflect a decline in the price of raw materials such as lithium carbonate, leading to a decline in operating income although sales volumes grew. The annual revenue fall would be the first since CATL started releasing its operating figures in 2015. Net profit rose between 11.1% and 20.1% in 2024 from the previous year, marking its slowest profit growth since 2019. CATL is due to report its full-year results on March 15 but Chinese companies sometimes voluntarily disclose earnings estimates especially when there are significant changes. Shares in the company shed 3.8% in the morning session on Wednesday, its largest intraday decline since Oct. 11, while the ChiNext market in Shenzhen (.CNT) , opens new tab fell 0.6%. CATL intervened in the lithium market in 2022 when prices for the battery material were soaring by opening a huge lithium hub in the southern Chinese province of Jiangxi. Lithium prices have since tumbled by nearly 86% over the past two years from its peak in late 2022 and CATL's founder Robin Zeng told Reuters in November that they were stopping production at the mine as they had achieved their goal. The company has been pushing beyond batteries, launching a new EV chassis in December and strategising a pivot to power grids. It is also working on investments abroad, including a 100 GWh battery factory in Hungary to supply the likes of Mercedes-Benz (MBGn.DE) , opens new tab and BMW (BMWG.DE) , opens new tab, as well as a new jointly owned battery plant with Stellantis (STLAM.MI) , opens new tab in Spain. On Tuesday, CATL's co-chairman Pan Jian told the annual World Economic Forum in Davos that the company was hoping to announce other major joint venture efforts in Europe with other automakers. Reuters reported earlier in January that CATL has hired banks to work on a Hong Kong float, in what could be one of the city's largest offerings in 2025. The company had a 45.1% market share as measured by batteries in Chinese-made EVs last year, up 1.9 percentage points from the previous month. The combined market share of second-ranked BYD (002594.SZ) , opens new tab, and third-placed CALB (3931.HK) , opens new tab slid by 4.3 percentage points to 31.4%, according to data from the China Automotive Battery Innovation Alliance. Sign up here. https://www.reuters.com/technology/china-catls-shares-dip-after-it-warns-revenue-fall-slowing-profit-growth-2025-01-22/
2025-01-22 05:21
Jan 22 (Reuters) - Rio Tinto (RIO.L) , opens new tab is betting that U.S. President Donald Trump will finally give the green light to its giant copper mine in Arizona, the Financial Times reported on Wednesday. "I do think that we have really good chances now to progress that project," the miners top boss Jakob Stausholm told the newspaper in an interview published on Wednesday. The stalled Resolution copper mine that Rio is developing with BHP Group (BHP.AX) , opens new tab could supply more than one quarter of the United States' domestic copper needs for the highly conductive metal. Sign up here. https://www.reuters.com/markets/commodities/rio-tinto-bets-trump-will-give-green-light-us-copper-mine-ft-reports-2025-01-22/
2025-01-22 02:59
MUMBAI, Jan 22 (Reuters) - The Indian rupee will likely inch up at the open on Wednesday, tracking an uptick in most of its Asian peers, following which it is expected to have to contend with demand for the U.S. dollar from importers and speculators. The 1-month non-deliverable forward indicated that the rupee will open at 86.50-86.52 per dollar, compared with its close of 86.5775 in the previous session. Most Asian currencies were higher against the greenback, building on the previous day's advance. In the wake of Donald Trump's inauguration as U.S. president, the dollar index has been choppy, while Asian currencies have recovered. The rupee, on Tuesday, managed to rally past 86.30 in opening trade, helped by Asian cues, before slipping. It is "amply evident from yesterday's session" that "people are aching to buy dips (on dollar/rupee) pair, a currency trader at a bank said. "Odds are that we have a similar session today, with good support (for dollar/rupee) on pullbacks." The direction for Asian currencies largely depends on what Trump does with regard to tariffs. He did not immediately impose tariffs when he took office on Monday, a relief for Asia. That may not last. On Tuesday, Trump vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports. The offshore Chinese yuan declined to 7.2850 to the dollar. "You can be sure that big changes are coming as far as U.S. trade is concerned, even if we didn't get any new tariffs on President Trump's first day in office," ING Bank said in a note. FOREIGN OUTFLOWS, HEDGING Outflows from Indian equities, alongside increasing interest in hedging, have been a burden on the rupee in addition to the tariff uncertainty. Foreigners have taken out $6 billion from Indian equities so far this month, per data from the securities depository NSDL. KEY INDICATORS: ** One-month non-deliverable rupee forward at 86.80; onshore one-month forward premium at 23.5 paisa ** Dollar index down at 108.07 ** Brent crude futures at $79.3 per barrel; dropped 1% on Tuesday to log fourth straight daily decline ** Ten-year U.S. note yield at 4.59% ** As per NSDL data, foreign investors sold a net $430.4 mln worth of Indian shares on Jan. 20 ** NSDL data shows foreign investors bought a net $13.3 mln worth of Indian bonds on Jan. 20 Sign up here. https://www.reuters.com/markets/currencies/rupee-set-rise-open-alongside-asian-peers-before-facing-resistance-2025-01-22/
2025-01-22 00:42
Canadian dollar weakens 0.2% against the greenback Touches its weakest since March 2020 at 1.4515 Canada's annual inflation rate slows to 1.8% 10-year yield falls for fifth straight day TORONTO, Jan 21 (Reuters) - The Canadian dollar recouped much of its earlier decline against the greenback on Tuesday as investors assessed the chances of U.S. President Donald Trump carrying out a threat to impose a hefty tax on imports from Canada next month. The loonie was trading 0.2% lower at 1.4340 per U.S. dollar, or 69.74 U.S. cents, clawing back most of its losses after it tumbled to its weakest intraday level since March 2020 at 1.4515. Trump did not immediately impose tariffs on Monday as previously promised but said he was thinking about imposing 25% duties on imports from Canada and Mexico on Feb. 1 over concerns about fentanyl crossing into the U.S. and illegal migration. "The market is a little bit skeptical that he's going to follow through with it," said Marc Chandler, chief market strategist at Bannockburn Global Forex. "It might be a way to claim victory since immigration and fentanyl is not really much of a problem for the (U.S.) northern border." Canadian Prime Minister Justin Trudeau reiterated that his government is ready to respond to all scenarios if Trump imposes tariffs on Canada, adding that Trump's promised prosperity for the United States will require Canadian resources to fuel it. "Separating the signal from the noise with Trump is incredibly difficult," said Adam Button, chief currency analyst at ForexLive. "Our base case is that he's not serious about tariffs with Canada." Canadian inflation slowed to an annual rate of 1.8% in December, helped by a sales tax break, supporting bets that the Bank of Canada will cut its benchmark interest rate by a further 25 basis points on Jan. 29. Canadian bond yields moved lower across a flatter curve. The 10-year was down 3.6 basis points at 3.242%, its fifth straight day of declines. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-pares-decline-us-tariff-skepticism-2025-01-21/
