2024-11-05 10:08

MUMBAI, Nov 5 (Reuters) - The Indian rupee was nearly unchanged on Tuesday, wedged between likely foreign outflows from domestic equities and intervention by the central bank, while uncertainty about the U.S. election loomed with Americans heading to the polls later in the day. The rupee closed at 84.1075 against the dollar, compared to its previous close of 84.1150. While India's benchmark equity indexes were in the red for most of the session, they reversed course in later hours of traded, ending higher by about 0.9% each. Foreign banks were spotted bidding for dollars, likely on behalf of custodial clients, while dollar offers from state-run banks kept a lid on the rupee's losses, traders said. Routine interventions by the Reserve Bank of India via state-run banks, like on Tuesday, have kept the rupee's volatility markedly below its regional peers. For instance, the offshore Chinese yuan's 1-month implied volatility is 8.8%, while that of the rupee is 2.7%. The RBI is well-equipped to deal with heightened volatility related to the outcome of the U.S. presidential election, two sources familiar with the bank's thinking told Reuters last week. "FX options markets have priced in a respectful level of exceptionally high volatility over the coming week," ING Bank said in a note. The bank said it expects a Republican victory in the presidential and legislature races to boost the dollar, while a win for the Democrats may prove to be negative for the greenback. On the day, the dollar index was down 0.2% at 103.7 while most Asian currencies rose. Polls suggest that the U.S. election is virtually a coin toss, and the outcome may not be known for days after voting ends. Markets are, however, likely to take cues from early trends that are expected to begin tricking in on Wednesday morning for Asia. Sign up here. https://www.reuters.com/markets/currencies/rupee-holds-ground-cenbank-intervention-us-election-uncertainty-looms-2024-11-05/

2024-11-05 09:53

NAIROBI, Nov 5 (Reuters) - The International Monetary Fund has raised Ethiopia's net international reserves target to facilitate payments of upcoming hard currency bills, the Fund said. The East African nation secured a $3.4 billion, four-year financing program from the IMF in July after carrying out a series of reforms including floating its birr currency . It is also in the midst of a fresh push to put its debt restructuring back on track. "An increase in near-term target is warranted by Ethiopia's vulnerabilities and heightened uncertainty around outlook," the IMF said in a report published late on Monday. Lower-than-expected volumes of hard currency sales by the central bank through auctions and higher gold exports contributed to an over-performance of the net international reserves target for August, the IMF said. The net international reserves stood at $1.3 billion in mid-August, more than double the target of $630 million, the Fund said. It raised the end-June 2025 target by $300 million to $400 million, to help create a buffer for the country to settle maturing letters of credit for fuel imports issued before reforms started. The flotation of the birr currency resulted in the convergence of the official and the black market rates, the IMF said, but market activities had picked up at a slower pace than expected, leading to persistent unmet demand for dollars. Ethiopia plans to reach a deal with bilateral creditors by year-end, the Fund said, followed by a deal with its Eurobond investors "as soon as is feasible" after that. Bondholders have rejected the size of the proposed reduction in the principal amount, known as a haircut, indicated at 18% in a recent investor presentation, saying the government was ignoring the fact that Ethiopia faces a liquidity issue, not an insolvency one. "The authorities are making good faith efforts to agree terms with Eurobond holders," the IMF said. Sign up here. https://www.reuters.com/world/africa/imf-raises-ethiopias-international-reserves-target-after-first-review-2024-11-05/

2024-11-05 09:44

Euro, peso volatility hits highest since 2016 US election One-week, one-month volatility spikes across the board Price action to pick up as results emerge LONDON, Nov 5 (Reuters) - Currency traders rushed to hedge against big overnight price movements that might ensue as the results of the 2024 U.S. election trickle out, pushing options volatility for the euro and Mexican peso to the highest since the 2016 vote. The euro and the peso are seen as among the most sensitive to the outcome of the election, which has been too close to call for weeks between Democratic Vice President Kamala Harris and Republican former President Donald Trump. Harris and Trump remain virtually tied in opinion polls and the winner might not be known for days after voting ends. Analysts believe Trump's policies on immigration, tax cuts and tariffs would put upward pressure on inflation, and drive up bond yields and the dollar, while Harris is seen as the continuity candidate. Euro overnight implied volatility, which reflects demand for protection against very near-term price moves, surged to 26.4% , the highest since Nov. 9, 2016, a day after the U.S. election that year that Trump won, confounding previous polls. Overnight volatility on the Mexican peso soared above 87%, its highest since the day of the 2016 vote on Nov. 8. "Today’s election is closer than a coin toss, highlighting the uncertainty surrounding the outcome," Monex Europe strategists said in a daily note. "That fact is likely to keep market price action light today, with traders awaiting results in the early hours of tomorrow morning." Looking ahead, FX traders were not anticipating much of a cooling-down in volatility in the coming weeks either. One-week implied volatility for the euro hit 13.06%, its highest since March 2023, when the collapse of Swiss bank Credit Suisse rattled markets. One-month volatility is also around its highest since March last year . One-week peso volatility is at 44%, its highest since the COVID crisis in March 2020, and close to four times what it was at the time of the November 2020 U.S. election. Volatility on currencies of other key U.S. trading partners has also picked up sharply. Trump has threatened ever-more punitive tariffs on China and other nations should he win. One-week implied volatility on the offshore Chinese yuan on Tuesday was close to its highest since at least 2012, according to LSEG data, at 14.45%, from around 2.5% a week ago. Canadian dollar one-week options topped 8.5% on Tuesday, the most since March 2023. Strategists at ING said the fact that implied volatility has risen so much relative to realised volatility, particularly for euro and Canadian dollar volatility, shows how nervous the market is. "We think this makes sense and reflects the view that a Trump 2.0 would not merely punish China with tariffs, but also pursue universal tariffs which would very much hit open economies like the euro zone and Canada," ING strategist Chris Turner said. Sign up here. https://www.reuters.com/markets/currencies/fx-traders-brace-wild-moves-after-us-election-2024-11-05/

2024-11-05 08:02

Orsted flags higher costs at US offshore wind project Harris supports offshore wind; Trump has vowed to scrap projects Orsted's Q3 operating profit fell 14% COPENHAGEN, Nov 5 (Reuters) - Demand for green power in the United States will grow regardless of who ends up in the White House, renewable energy group Orsted (ORSTED.CO) , opens new tab said on Tuesday, even as it flagged construction problems and higher costs at a large U.S. offshore wind project. Offshore wind developers have seen profits thin in recent years due to rising raw material costs, high interest rates, inadequate grid connection, supply chain bottlenecks, and Chinese competition, prompting companies like BP (BP.L) , opens new tab and Equinor (EQNR.OL) , opens new tab to scale down their ambitions. In the United States, the nascent offshore wind industry has been roiled by cancelled projects, shelved lease sales and a construction accident at the country's first major offshore wind project. Democratic Vice President Kamala Harris has championed ambitious offshore wind targets as part of President Joe Biden's administration. She is in a tight race with Republican candidate Donald Trump, who has vowed to scrap offshore wind projects through an executive order on his first day in office if he retakes the White House, claiming wind turbines ruin the environment and kill birds and whales. "We see many - both corporates and states - having an increased demand from reshoring of industries and from the tech industry," Orsted CEO Mads Nipper told journalists on Tuesday. "We see it as an 'all boats rise' situation where all energy sources, not least for electricity, are needed no matter who ends up in the White House." Shares of Vestas (VWS.CO) , opens new tab, the world's largest wind turbine manufacturer, slumped on Tuesday after the company warned of lower profit margins this year. Orsted, the world's biggest offshore wind farm developer, last year booked massive impairments for cancelled U.S. offshore projects due to rising inflation, higher interest rates and supply chain delays. "It's an industry being built from scratch and it is being very strongly supported by not least the northeastern states, where the alternatives for energy supply and especially green energy supply are difficult," Nipper said. Orsted said scarce installation vessels and problems with installing an offshore substation at the 704 megawatt (MW) Revolution Wind project attributed to costs rising by another 1.7 billion Danish crowns ($248 million) in the third quarter. Group operating profit fell 14% to 4.44 billion crowns in the quarter. Analysts had on average forecast 4.61 billion in a company-provided poll. Profits were helped by a reversal of some of the losses Orsted booked last year in the United States. Its shares were up 0.7% at 1029 GMT. They have risen 12% this year but are down more than a third from their peak in early 2021. ($1 = 6.8472 Danish crowns) Sign up here. https://www.reuters.com/business/energy/orsted-q3-operating-profit-falls-slightly-below-expectations-2024-11-05/

2024-11-05 07:44

LONDON, Nov 5 (Reuters) - Associated British Foods (ABF.L) , opens new tab reported a 32% rise in full-year profit, with a robust performance from its grocery division and a solid outcome from its Primark clothing business partially offset by accelerating weakness in its sugar operations. In the year to Sept. 14, the group's adjusted operating profit, its preferred earnings measure, rose to 1.998 billion pounds ($2.6 billion) from 1.51 billion pounds in 2023/24. Revenue climbed 2% to 20.1 billion pounds. Looking ahead, the group said that overall it is "well-positioned". However, it reiterated its caution on sugar due to a recent reduction in European sugar pricing. It forecast adjusted operating profit for sugar in 2024/25 to fall to between 50 million and 75 million pounds from the 199 million pounds made in 2023/24, before recovering in the following year. The group said Primark is targeting mid-single percentage digit sales growth in 2024/25, with adjusted operating margin in line with the 11.7% achieved in 2023/24. ($1 = 0.7712 pounds) (This story has been corrected to say 'accelerating weakness' in sugar business, not 'falling profits', in paragraph 1) Sign up here. https://www.reuters.com/business/retail-consumer/primark-owner-ab-foods-profit-up-32-sugar-weighs-outlook-2024-11-05/

2024-11-05 07:24

BENGALURU, Nov 5 (Reuters) - India's Apollo Green Energy, an engineering and construction firm, plans to set up a 500 megawatt (MW) solar module plant in the next two-three years and tap domestic public markets in 2025 to execute new projects, its chief executive said on Tuesday. The company, which focuses on constructing renewable energy projects, currently has an order book of 35 billion rupees ($416 million), and is looking to expand so that it can triple the size to 100 billion rupees by the end of this financial year, CEO Sanjay Gupta told Reuters. "We are actively following market trends and collaborating with financial consultants to determine a fair valuation (for the initial public offering)," Gupta said. The company plans to finalise the IPO size within the next three to four months, he added. The fundraising plan come amid a boom in Indian IPOs and the government's focus on clean energy as the country looks to add 500 gigawatt of renewable energy by 2030, up from 154 GW currently. India's stock market scaled record highs until September this year. So far in 2024, 288 companies have raised $14 billion from domestic IPOs, eclipsing the $7.42 billion raised in all of 2023, per LSEG data. Apollo Green Energy is also executing 400 MW of solar installations and other engineering, procurement and construction projects and is seeking to expand into building wind, green hydrogen and battery storage solutions, Gupta said. The company has identified a site to set up a 500 MW solar module production facility in the Indian state of Madhya Pradesh to supply components to its projects, with plans to increase the capacity, the CEO said without elaborating. Apollo Green Energy's revenue jumped about 71% year-on-year to 11.75 billion rupees in the fiscal year ended March 2024. Its long-term debt is rated 'BBB/Stable' by Crisil. ($1 = 84.1130 Indian rupees) Sign up here. https://www.reuters.com/world/india/indias-apollo-green-energy-plans-solar-module-plant-targets-ipo-2025-ceo-says-2024-11-05/