2024-02-21 15:36

LONDON, Feb 21 (Reuters) - Global debt levels hit a new record high of $313 trillion in 2023, with developing economies scaling a fresh peak for the ratio of debt to their gross domestic product, a study showed. The Institute of International Finance (IIF), a financial services trade group, said on Wednesday that global debt surged by over $15 trillion in the last quarter of 2023 year-on-year. The figure stood at around $210 trillion almost a decade ago, according to the data. "Around 55% of this rise originated from mature markets, mainly driven by the U.S., France, and Germany," said the IIF in its Global Debt Monitor, adding the global debt-to-GDP ratio declined by around 2 percentage points to nearly 330% in 2023. While the reduction in this ratio was "particularly notable" in developed countries, some emerging markets saw fresh high in the reading that indicates a country's ability to pay back debts. India, Argentina, China, Russia, Malaysia and South Africa registered the largest increases, signalling potential growing challenges in debt repayments. "With Fed rate cuts on the horizon, uncertainty surrounding the trajectory of U.S. policy rates and the U.S. dollar could further increase market volatility and induce tighter funding conditions for countries with relatively high reliance on external borrowing," the report said. The IIF added that global economy is proving "resilient" to the volatility in borrowing costs, leading to a rebound in investor sentiment. The appetite for borrowing is growing particularly in emerging markets in 2024, as international sovereign bond issuance volumes have increased. The start of the year - generally a busy time for debt sales of all sorts - has seen Saudi Arabia, Mexico, Hungary, Romania and a raft of others deliver some big ticket bond issuance, which hit an all-time record for January at $47 billion. "If sustained, this upbeat sentiment should also reverse the ongoing deleveraging by European governments and non-financial corporates in mature markets, both of which are now less indebted than in the run-up to the pandemic." The IIF, however, voiced its concern over a potential revival of inflationary pressures, which could result in higher borrowing costs. Also, geopolitics had rapidly emerged as a "structural market risk", the IIF said, with deeper fragmentation raising concerns about fiscal discipline across the globe. "Government budget deficits are still running well above pre-pandemic levels, and an acceleration in regional conflicts could trigger an abrupt surge in defense spending." https://www.reuters.com/business/global-debt-hits-new-record-high-313-trillion-iif-2024-02-21/

2024-02-21 14:47

WASHINGTON, Feb 21 (Reuters) - Inflation data in January, with consumer and wholesale prices rising faster than anticipated, complicate upcoming U.S. central bank interest rate decisions, Richmond Federal Reserve President Thomas Barkin said on Wednesday. The reports released last week "underline the challenge we have had in the recent data," with a slowdown of inflation dependent on falling goods prices, while shelter and services inflation has remained sticky, Barkin said in an interview with Sirius XM. Though he said he was reluctant to put "too much weight" on January data, in particular because of seasonal measurement issues, "it definitely did not make things easier. It made things harder." "You do worry that when the goods price deflation cycle ends you are going to be left with shelter and services higher than you like," Barkin said. The pace of overall consumer price inflation eased in January, to a 3.1% year-over-year pace compared to 3.4% in December. But an underlying "core" measure, stripped of volatile food and energy components, remained unchanged at 3.9%; producer price inflation was also stronger than anticipated over the month, as was job and wage growth. Those numbers were released after the Fed's Jan. 30-31 meeting at which officials held the benchmark overnight interest rate steady in the 5.25%-5.50% range that was set in July, but also opened the door to rate cuts once they had gained "greater confidence" that inflation was "moving sustainably" back to their 2% target. Minutes of that meeting, due to be released at 2 p.m. on Wednesday, will be read carefully for further details on what those phrases might mean, and how deeply policymakers may have been split among those ready to cut rates sooner rather than later. Comments by Fed Chair Jerome Powell after last month's policy meeting all but ruled out a rate cut at the March 19-20 gathering. If there was a constituency for an immediate rate reduction, the minutes of the January meeting would reflect that. The detailed account of that meeting may also outline the start of a discussion about how and when to end the ongoing drawdown of Fed asset holdings that were increased during the depths of the coronavirus pandemic as a way to keep interest rates anchored at low levels. Barkin, a voter on interest rate policy this year, did not offer details in his interview on how long he feels the current policy rate may need to remain in place. While saying he found the last year of falling inflation and continued low unemployment a "remarkable" outcome, he said he also felt it was too early to say that a "soft landing" in which inflation falls without triggering a painful recession and large job losses was assured. "We still have a ways to go," he said. "We are not on the ground yet." https://www.reuters.com/markets/us/us-inflation-data-january-made-feds-job-harder-barkin-says-2024-02-21/

2024-02-21 12:46

Feb 21 (Reuters) - Social media platform Reddit plans to sell a chunk of its IPO shares to its platform's users, the Wall Street Journal reported , opens new tab on Wednesday. It aims to reserve an as-yet-undetermined number of shares for 75,000 of its most prolific so-called redditors when it goes public next month, the report said, citing people familiar with the matter. The users will have the opportunity to buy Reddit shares at its initial public offering (IPO) price before the stock starts trading, a privilege normally reserved only for big investors. The San Francisco-based company, which was valued at about $10 billion in a funding round in 2021, did not immediately respnd to Reuters request for comment. Reuters in January reported that Reddit has drawn up detailed plans for its IPO in March. It had filed confidentially for its IPO back in December 2021. The IPO market has not yet fully recovered as it has been struggling for the last two years with low volumes while several new entrants trade below their IPO prices. Reddit's IPO, which has been in the works for more than three years now, would be the first from a major social media company since Pinterest's (PINS.N) , opens new tab debut in 2019. https://www.reuters.com/markets/deals/reddit-plans-reserve-shares-its-big-users-ipo-wsj-reports-2024-02-21/

2024-02-21 12:04

NICOSIA, Feb 21 (Reuters) - A top court in the European Union on Wednesday rejected an attempt to drop the protected status of Halloumi, staving off a challenge on the prized cheese that is one of Cyprus's top exports. Halloumi has a Protected Designation of Origin (PDO) status, meaning that only approved producers from Cyprus can market the cheese under that name. But official product specifications has triggered a backlash from the Cypriot dairy industry. Authorities say the cheese should be manufactured with a blend of cow, ewe and goat milk, gradually displacing cow's milk which had in recent years been the dominant ingredient. In a judgement posted on its website, the General Court of the EU dismissed a petition to strip Halloumi of its PDO, petitioned by Cyprus cattle breeders and their affiliated dairy company. The petition had argued that Cyprus submitted erroneous specifications on Halloumi ingredients in applying for a PDO in 2014. Known for its versatility, the soft rubbery cheese can be eaten raw, grilled, boiled or fried without losing its shape. It is the island's largest export after pharmaceuticals. Halloumi won a PDO from the EU in 2021. Under product specifications, Cyprus intends to gradually increase the amount of ewe and goat's milk in the mix to equal that of cow's milk. This move has sparked fierce debate from industry stakeholders who say ewe and goat's milk is highly seasonal, and could therefore have an impact on production capacity. "We don't want our exports to fall, its one of our top exports but this (specifications) will cause problems in production," said Nicos Papakypriakou, general manager of the Cyprus Cattlebreeders Association. At present 10% ewe and goat milk goes into the mix. When authorities decreed a rise to 19% last October, cheesemakers threatened to shut their dairies as there was not enough milk available to sustain unhindered production of all dairy products. https://www.reuters.com/world/europe/eu-top-court-dismisses-bid-drop-halloumi-protected-status-2024-02-21/

2024-02-21 11:54

Half-year headline EPS up 18.6% Net revenue up 24% to $6 billion JOHANNESBURG, Feb 21 (Reuters) - South African food services company Bid Corporation (Bidcorp) (BIDJ.J) , opens new tab is stocking buffer inventory to help offset delays caused by disruption to Red Sea shipping and congestion at local ports, its chief executive said. The company reported an 18.6% jump in half-year headline earnings per share on Wednesday while its net revenue grew 24% to 113.8 billion rand ($6 billion). South Africa-based Bidcorp has operations across Europe, Australasia and emerging markets like Middle East and China. "It's a broad spectrum of products that we move from Europe to the rest of the world," CEO Bernard Berson told Reuters, adding that diverting cargo ships was resulting in delivery delays of a few weeks. "The impact is that shipping costs are higher but they're nowhere close to what they were during the disruptions we had a year ago when there was a shortage of vessels and coming out of COVID, which was much more severe than this." Bidcorp is stocking buffer inventory to help mitigate the impact. South African port congestion owing to infrastructure decay and bad weather is stretching out lead times by possibly months, Berson said. In response the firm is sourcing alternative products for its customers where possible but the major problem is sourcing raw materials which are only imported from certain countries such as ingredients used for isolating casein, he added. ($1 = 18.8729 rand) https://www.reuters.com/business/retail-consumer/south-africas-bidcorp-profit-jumps-186-strong-european-business-2024-02-21/

2024-02-21 11:47

JAKARTA, Feb 21 (Reuters) - A plan by Indonesia's likely new president Prabowo Subianto to provide free school lunches and milk will cost up to 120 trillion rupiah ($7.68 billion) in its first year, his team said on Wednesday. Prabowo has declared victory in last week's presidential election in the world's third biggest democracy, after quick ballot counts by independent pollsters in sample polling stations showed he had won nearly 60% of votes. The election commission is due to announce the formal result by March 20 and a new government will take office in October. Some analysts have warned the cost for Prabowo's signature campaign pledge, free meals for 82.9 million children, is high and could undermine Indonesia's track record of fiscal discipline. His team has said the programme would cost 450 trillion rupiah ($28.79 billion) when it reached its final stage in 2029. During Prabowo's first year, however, the programme would require between 100 trillion to 120 trillion rupiah in expenditure to provide well-balanced and healthy meals, said Budiman Sudjatmiko, a senior member of Prabowo's team of experts, without providing further detail. Prabowo's team has estimated that at the final stage, the programme per year would require 6.7 million tonnes of rice, 1.2 million tonnes of chicken, 500,000 tonnes of beef, 1 million tonnes of fish, 4 million kilolitres of milk as well as vegetables and fruits, Budiman said. The current design of the programme includes collaboration with farmers cooperatives and small businesses, which Budiman said could cut the programme's total cost further. Investors are paying close attention to the details of the programme. Bank Indonesia Governor Perry Warjiyo was asked about risks from expansionary fiscal plans by the incoming government during Wednesday's regular investor conference call, which the central bank hosted after deciding to keep interest rates unchanged in its policy meeting. Warjiyo said laws banning Indonesia's annual fiscal deficit from exceeding 3% of GDP would ensure prudent fiscal policy management. ($1 = 15,630.0000 rupiah) https://www.reuters.com/world/asia-pacific/indonesia-prabowos-school-meal-programme-cost-77-bln-first-year-2024-02-21/