2024-03-04 10:39

March 3 (Reuters) - Arkhouse Management, a real-estate-focused investing firm said on Sunday it and Brigade Capital Management have raised their offer for Macy's (M.N) , opens new tab after the department store chain rebuffed their prior proposal as too low. The firms are now offering to acquire Macy's stock they don't already own for $24 per share, about 14% more than its previous offer of $21 per share. The new offer for the company represents a premium of about 33% to its last close on Friday at $18.01 and values the company at $6.6 billion. "We continue to offer the company an attractive alternative solution through a sale of the company at a substantial premium. This would provide Macy's stockholders with significant value and immediate liquidity," Arkhouse said. "The Macy's Inc Board will carefully review and evaluate the latest proposal," Macy's said in a separate statement. The two investment firms had submitted a proposal in December last year to acquire the shares of Macy's they don't already own for $21 a share but the offer was rejected by the department store operator due to concerns over the deal's financing and valuation. Like other legacy department store operators, Macy's has struggled to compete against younger, online competitors or peers with smaller brick-and-mortar footprints. This has given Arkhouse and Brigade an opening to put pressure on Macy's to explore a sale. Macy's is also facing a board challenge from Arkhouse Management after the investment firm nominated nine director candidates including executives with retail, real estate and capital markets experience, to the department store's 14-member board last month. https://www.reuters.com/business/retail-consumer/investors-raise-macys-buyout-bid-wsj-2024-03-03/

2024-03-04 10:14

BEIJING/SINGAPORE, March 4 (Reuters) - China should adopt measures to tackle overcapacity in the lithium battery material industry, the chairman of Zhejiang Huayou Cobalt (603799.SS) , opens new tab proposed ahead of the country's annual parliamentary meeting, state media reported on Monday. Overinvestment led to "severe overcapacity" in the last year, said Chen Xuehua, who is a delegate to China's National People's Congress (NPC), which gathers in Beijing from Tuesday. Chen cited "significant declines" in industry capacity utilisation. "Some companies' operations are facing great difficulties, there are suspended operations, falling prices, idled equipment and staff layoffs," Chen said, according to a report by Shanghai Securities News. China's lithium iron phosphate capacity will reach 5.75 million metric tons in 2025, while global demand for the cathode material widely used in batteries is pegged at about 2.67 million tons that year, he added, citing industry data. Chen, whose company is a major producer of battery materials nickel and cobalt, proposed that the government publish timely industry information, establish an alerting system to flag mismatch of resources, capacity and demand, and provide guidance on investment and development. Regulations in Europe and the United States have made it harder to source waste batteries and recycled raw materials, posing challenges to China's leading role in the lithium battery chain, said Chen, whose company recycles used batteries. China should encourage more imports of used battery materials, especially hydroxide intermediate made from waste lithium batteries, including by lowering tariffs, he said. China bans imports of used lithium batteries and black mass, the shredded material which comes from used batteries, which can include lithium, cobalt and nickel. These metals can then be extracted and used to make new batteries. https://www.reuters.com/markets/commodities/chinas-huayou-cobalt-chief-proposes-battery-material-policy-tackle-overcapacity-2024-03-04/

2024-03-04 09:49

FRANKFURT, March 4 (Reuters) - Investor morale in the euro zone improved for the fifth consecutive month in March to its highest level since April 2023, a survey showed on Monday, but economists warned of a "persistent" recession in Germany. However, Sentix's index for the euro zone remained in negative territory. It rose to -10.5 points in March from -12.9 in February, beating a reading of -11.0 estimated in a Reuters poll of analysts. Sentix pointed to Germany - the region's largest economy - as a pocket of particular weakness, with a decline in sentiment. "Although the data points in the right direction, there can be no talk of a classic spring revival" for the euro zone, Sentix said. It pointed to German economic policy as "preventing a thorough economic recovery in the heartland of Europe. The recession remains in place," it said. For the euro zone, the expectations index rose to -2.3 points from -5.5 in February, a sixth consecutive month of rises and the highest value since February 2022. The index on the current situation in the euro zone also rose, increasing to -18.5 in March from -20.0 the previous month, the fifth monthly increase in a row. The poll of 1,267 investors was conducted between Feb. 29 and March 2. https://www.reuters.com/markets/europe/euro-zone-investor-morale-gains-march-no-sign-spring-revival-2024-03-04/

2024-03-04 07:49

March 4 (Reuters) - BofA Global Research has lifted its year-end target for the S&P 500 index (.SPX) , opens new tab to 5,400, from 5,000 earlier, representing an upside of about 5% from current levels. The brokerage has joined peers Barclays, UBS, and Goldman Sachs in predicting the index would finish the year in a range of 5,200 to 5,400. U.S. stocks closed at record highs on Friday as technology stocks rallied on continued enthusiasm for artificial intelligence, with further support from declining Treasury yields. BofA's revised target reflects its view that risk premium to equities is likely to be lower as expectation of higher and "more predictable" earnings have increased this year. The index's debt having halved since 1980s, lower earnings-per-share (EPS) volatility, and a shift to asset-light companies also add to the bullish view, the brokerage said in a note dated Sunday. "We see potential for improved margin stability from here as companies shift from global cost arbitrage and free capital-driven growth to efficiency/productivity," Savita Subramanian, BofA's chief U.S. equity strategist, said. While themes such as AI, weight-loss drugs of GLP-1 category will continue to drive sentiments, the market would broaden beyond these, Subramanian said. Meanwhile, passive inflows could continue to drive momentum in U.S. mega-cap stocks, she said. A 5% pullback in the market is seen as likely in 2024, as such moves have historically have occurred thrice every year, while 10% corrections occur once per year, according to the strategist. The market could see a year-end rally, once uncertainty surrounding the outcome of presidential elections is removed, she said. https://www.reuters.com/markets/us/bofa-raises-sp-500-year-end-target-5400-2024-03-04/

2024-03-04 07:32

JOHANNESBURG, March 4 (Reuters) - South Africa's rand firmed on Monday, ahead of gross domestic product (GDP) figures and a whole-economy purchasing managers' index (PMI) survey. At 1514 GMT, the rand traded at 19.02 against the U.S. dollar , about 0.4% higher than its closing level on Friday. The dollar was last down 0.08% against a basket of global currencies. Statistics South Africa will release fourth-quarter GDP figures on Tuesday, which are expected to show growth after the economy recorded a minor contraction in the third quarter of last year. Investor focus will also be on the S&P Global South Africa PMI out on Tuesday, which will shed light on business conditions in Africa's most industrialised economy in February. Gold and forex reserves and current account data will also be released later this week. Shares on the Johannesburg Stock Exchange ended slightly lower, with the blue-chip Top-40 index (.JTOPI) , opens new tab closing down 0.24%. South Africa's benchmark 2030 government bond slipped marginally, with the yield up 1 basis point at 10.120%. https://www.reuters.com/markets/currencies/south-african-rand-unchanged-early-trade-2024-03-04/

2024-03-04 07:11

LONDON, March 4 (Reuters) - The Bank of Japan, long the outlier as other major economies jacked up interest rates to curb inflation, is expected to end its negative interest rate policy soon. Inflation has exceeded 2% for well over a year and markets anticipate a BOJ shift by April. But uncertainty is high and BOJ Governor Kazuo Ueda said last week it's too early to conclude inflation was close to sustainably meeting its target. While Japanese stocks have hit record highs, breaching a peak last seen in 1989, the yen remains weak and the economy slipped into a recession last year. Four hedge funds shared four ideas on how to trade Japan. Their views do not represent recommendations or trading positions, which they cannot reveal for regulatory reasons. 1/ GRAHAM CAPITAL MANAGEMENT * Systematic and actively managed macroeconomic funds * Size: $18 billion * Founded in 1994 * Key trade: Long Japanese stocks, particularly banks Graham CIO Pablo Calderini favors mainly Japan's banks stocks as the BOJ is likely to normalize policy. Banks are particularly likely to benefit from a steeper yield curve, where longer-dated bonds yield significantly more than shorter-dated ones, said Calderini. Banks borrow in the short term and lend in the long term, at higher rates. "Japan's monetary policy has been a headwind for banks and it will become a tailwind," he said. An index of Japanese bank stocks (.IBNKS.T) , opens new tab is up 22% so far this year, broadly in line with the blue-chip Nikkei (.N225) , opens new tab. 2/ BLUEBAY ASSET MANAGEMENT * Macro economic fund * Size: part of the $432 billion RBC Global Asset Management * Founded in 2001 * Key trade: short Japanese bonds Mark Dowding, CIO for BlueBay fixed income, favors shorting Japanese government bonds (JGBs), expecting JGB yields to rise. "With wage inflation continuing to accelerate, helped by companies delivering strong profits, we see the BOJ raising rates in the coming months and then again as we move through 2024, with cash rates rising to 0.50% by the end of the year," he said. The BOJ currently guides short-term rates at minus 0.1%. It has held off on a policy move, waiting for wages to rise, said Dowding. He expects wages to increase by about 1% after the upcoming March "Shunto wage round," when Japan's largest employers announce annual wage settlements. Ueda has stressed the need to scrutinize more data on the wages outlook. Japan's two-year bond yield hit a near 13-year high last week. Still, at just 0.18%, two-year yields are well below U.S. peers . 3/ UNLIMITED FUNDS * Investment firm replicating hedge fund strategies through ETFs * Size: $68 million * Founded in 2022 * Key trade: short yen/long U.S. dollar and long Japanese stocks Unlimited CIO Bob Elliott reckons Japanese rates will remain near zero given economic growth is struggling to gain momentum. "Japan will have to run very loose monetary policy for longer than most people expect," said Elliott. That means the yen could depreciate further against the dollar, he added. Conversely, this environment could be good for global Japanese companies with revenues in strong currencies outside the country, as it could boost profits, he said. The yen is the worst performing currency versus the dollar so far this year, down 6% at around 150 yen per dollar . 4/ Union Bancaire Privée - U Access Long/Short Japan Corporate Governance Fund * Japan equity long/short hedge fund strategy, market-neutral, governance focused * Size: Roughly $100 million, part of $160 billion UBP * Founded in 2020 * Key trade: Long blue-chip Japanese companies, short Japan companies with big China exposure Zuhair Khan, senior portfolio manager at UBP Investments, believes the biggest Nikkei 225 and TOPIX 100 companies will continue to lead the market. Even after recent gains, foreign investors remain underweight Japan, Khan noted. "(Many of) these investors are new to the Japan market and thus are focused on the large-cap, liquid, blue chip names," he added. Foreign holdings in Japanese stocks reached their highest levels in nine years last year, after three years of net outflows, exchange data showed. Cash-rich companies targeted by activists would also prove attractive, said Khan, especially if they pursue management buyouts with this excess cash. Companies reliant on China demand meanwhile would be good candidates for short positions given China's economic weakness, he said. https://www.reuters.com/markets/asia/hedge-funds-spot-money-be-made-japan-2024-03-04/