2023-12-18 21:02

BUENOS AIRES, Dec 18 (Reuters) - Argentina's central bank on Monday said it would switch its benchmark interest rate to the overnight reverse repo rate of 100% from the previous 28-day Leliq rate at 133%, a move aimed at simplifying monetary policy amid an economic crisis. "Starting from tomorrow, the bank's monetary policy interest rate will become the rate for one-day reverse repos, a rate that since Dec. 13 has been established at 100%," the bank said in a statement. The move, days after libertarian President Javier Milei took office as South America's No. 2 economy battles inflation nearing 200%, aims to clarify monetary policy decisions but analysts said it could push up the cost of U.S. dollars. Fund Corp economist Roberto Geretto said the measures would push banks and savers toward treasury bills with an aim to indirectly cut the fiscal deficit, but could push up the cost of dollars in parallel foreign exchange markets. Invenomica director Pablo Besmedrisnik added that if successful, the move could cut public debt and lead to more breathing space to gradually redirect loans to companies. "There will be incentives to redirect funds towards dollarized assets, putting pressure on their prices," Besmedrisnik said. "We will have to wait for the reaction." "It's a strong bet," said Maria Castiglioni, director at C&T Asesores Economicos. "The bet only works if the government achieves a financial fiscal balance so it does not have to keep placing debt, or this scenario will be very hard to manage." The central bank, under the new presidency of Santiago Bausili, added that it considered it "prudent" to maintain a minimum 110% interest rate for fixed-term deposits. In terms of liquidity injections, the bank said it would continue to carry out certain operations on Treasury instruments which the bank considers appropriate. Milei's campaign pledges include dollarizing the economy and eventually shutting down the central bank. https://www.reuters.com/markets/rates-bonds/argentina-switch-benchmark-interest-rate-1-day-reverse-repo-2023-12-18/

2023-12-18 20:46

Canadian dollar weakens 0.1% against the greenback Trades in a range of 1.3351 to 1.3409 Price of U.S. oil settles 1.5% higher 10-year yield rises 6.5 basis points TORONTO, Dec 18 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Monday but was holding near its strongest level in four months as oil prices rose and investors awaited domestic inflation data. The loonie was trading 0.1% lower at 1.3390 to the greenback, or 74.68 U.S. cents after moving in a range of 1.3351 to 1.3409. On Friday, it touched its strongest level since Aug. 4 at 1.3347 as the Federal Reserve's move to signal the possibility of interest rate cuts next year pressured the U.S. dollar (.DXY). Increased risk appetite in anticipation of central bank interest rate cuts in 2024 has helped underpin the Canadian dollar, Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc, said in a note. Economists expect the Canadian consumer price index report, due on Tuesday, to show inflation slowing to an annual rate of 2.9% in November from 3.1% in October. "A higher inflation number would force the Bank of Canada to maintain current interest rate levels for a prolonged time frame and strengthen the loonie," Richardson said. The Canadian central bank has left the door open to further tightening even as it expresses increasing optimism about returning inflation to its 2% target. The price of oil, one of Canada's major exports, settled 1.5% higher at $72.47 a barrel as attacks by the Iran-aligned Yemeni Houthi militant group on ships in the Red Sea disrupted maritime trade and pushed up costs of supply. Canadian government bond yields rose across the curve. The 10-year was up 6.5 basis points at 3.187% after touching on Friday a seven-month low at 3.102%. The gap between the Canadian and U.S. 10-year yields narrowed by 4.2 basis points to a level that was 76.4 basis points in favor of the U.S. note. https://www.reuters.com/markets/currencies/canadian-dollar-retreats-4-month-high-ahead-cpi-data-2023-12-18/

2023-12-18 20:45

Dec 18 (Reuters) - Adobe (ADBE.O) on Monday shelved its $20 billion deal for cloud-based designer platform Figma, pointing to "no clear path" for antitrust approvals in Europe and the UK for what would have been among the biggest buyouts of a software startup. The cash-and-stock deal, announced in September last year, was the latest to draw tough scrutiny from regulators worried about Big Tech acquisitions that boost the market power of dominant companies or involve startups seen as nascent rivals. Adobe will pay a termination fee of $1 billion to San Francisco-based Figma, whose web-based collaborative platform for designs and brainstorming is used by Uber (UBER.N), Coinbase (COIN.O), Zoom Video Communications (ZM.O) and many other firms. Figma has expanded its team from 800 to 1300 people in the past year, and is expected to grow its annual recurring revenue by 40% to over $600 million this year, a source familiar with the matter said. The company has also been cash-flow positive, an important metric for public market investors to evaluate potential IPO candidates. Both Figma and Adobe have benefited from the generative AI craze, as Figma launched new features as it expands into software development, and Adobe has released generative photo tools such as Adobe Firefly. Britain's Competition and Markets Authority (CMA) last month said the deal would harm innovation for software used by the vast majority of UK digital designers, echoing similar concerns from the EU on the potential reduction of competition. Sources familiar with the matter said that while the two companies had been in constant touch with antitrust agencies in the UK, EU, and United States to work out a path to close the deal, the UK regulators have in recent weeks indicated that it would require remedies for Adobe to divest Figma design, a core asset of the acquisition. Adobe, whose shares rose about 1%, had refused to offer fixes to the CMA on grounds that no remedy that preserved the benefits of the deal would be sufficient to ease its concerns. The Photoshop maker had argued that it does not compete with Figma in any meaningful way. It said in November its only product relevant to the antitrust question was the Adobe XD design tool, which lost $25 million as a standalone app over the last three years. Adobe CEO Shantanu Narayen on Monday said the firms "strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently." The European Commission did not immediately respond to a request for comment, while the CMA said it will cancel its probe. The CMA has been in the spotlight in recent months due to its moves against high-profile deals including Microsoft's (MSFT.O) $69 billion purchase of Activision-Blizzard. Several analysts said the termination underscores how tougher scrutiny of M&As could also scuttle opportunities for startups. "The effects will be felt not only amongst big tech, but also by smaller technology companies who may not be able to command as favorable exit premiums," said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors. "In the case of Figma, it had accepted an offer from Adobe at twice its valuation." The Figma deal was seen as a bet on "the future of work" but investor concerns over the rich price tag and potential erosion of margins had wiped out more than $30 billion in Adobe's market value when it was announced. It was also a major win for Figma's venture capital backers, including Index Ventures, Sequoia Capital, Greylock Partners and Kleiner Perkins. Figma "will thrive as an independent company with an incredible team, clear mission and focus," Index Ventures partner Danny Rimer said in an emailed statement. https://www.reuters.com/technology/adobe-figma-terminate-20-bln-deal-2023-12-18/

2023-12-18 20:36

CARACAS, Dec 18 (Reuters) - Venezuelan state oil company PDVSA and Spain's Repsol (REP.MC) on Monday signed an agreement amending the terms of their Venezuelan joint venture, aiming to ramp up its crude and gas output and accelerate debt repayment. The agreement for Petroquiriquire, which includes the fields Quiriquire, Mene Grande and Barua-Motatan, was signed in Caracas by Venezuela's oil minister Pedro Tellechea and executives from Repsol. "We are going to lift production. We have completed the planning of the agreements we are signing. They all have output forecasts and plans for operation expansions," Tellechea said. PDVSA and Chevron (CVX.N) last week received approval from the country's National Assembly to extend two separate joint ventures for 15 years. The U.S. in October temporarily lifted oil sanctions on the South American country, allowing exports, imports and investments through April. The Petroquiriquire joint venture, in which PDVSA has a 60% interest and Repsol the remaining 40%, operates in several areas of the country, including the Monagas North region. Its total production has been about 20,000 barrels per day (bpd) of crude and 40 million cubic feet per day of gas so far this year, according to independent calculations. Details of the changes to its operating agreement were not immediately disclosed by the companies. Two sources with knowledge of the negotiations said the term changes were expected to allow Repsol a faster repayment of pending debt and dividends in Venezuela by exporting the oil Petroquiriquire is producing, which is expected to increase to some 40,000 bpd in two years. PDVSA, Repsol and Italy's Eni (ENI.MI) earlier this year expanded an oil swap that is allowing Venezuelan crude exports to Europe and other destinations, and fuel imports for Venezuela. In an arrangement similar to previous deals that PDVSA struck with Chevron and France's Maurel & Prom (MAUP.PA), Repsol is also set to have more governance and operational control of the three fields that are part of the joint venture. Repsol and PDVSA continue in talks to negotiate the terms of other projects, particularly of those that could allow gas exports, one of the sources said. "This agreement boosts the industry, the partnership and the relationship between Repsol and PDVSA, between Spain and Venezuela," said Francisco Gea from Repsol's Exploration division, during the signing event. https://www.reuters.com/markets/commodities/venezuelas-pdvsa-spains-repsol-agree-revive-oil-joint-venture-2023-12-18/

2023-12-18 19:57

Dec 18 (Reuters) - Amazon is in talks to invest in regional-sports programmer Diamond Sports, a move that would advance the e-commerce giant's aggressive push into sports content, the Wall Street Journal reported on Monday, citing people familiar with the matter. Diamond Sports Group, which carries the games of more than 40 major sports teams across the United States and filed for bankruptcy earlier this year, is actively negotiating with Amazon about a strategic investment and a multi-year streaming partnership, according to the report. If an agreement is reached, Amazon's (AMZN.O) Prime Video platform would eventually become the streaming home for Diamond's games, the Wall Street Journal reported. Diamond, which has the local rights to about half the teams in Major League Baseball and the National Basketball Association and about a third of the National Hockey League teams, would continue operating its cable networks through its existing partnerships, according to the report. It isn't clear how much money Amazon is planning to invest or at what valuation, and Diamond has received support from a select group of creditors for proceeding with the talks, the Wall Street Journal said. Diamond Sports' parent company Sinclair Broadcast (SBGI.O) declined to comment, while Amazon and Diamond Sports did not immediately respond to Reuters' requests for comment. https://www.reuters.com/markets/deals/amazon-talks-invest-diamond-sports-wsj-2023-12-18/

2023-12-18 19:54

Dec 18 (Reuters) - The Abu Dhabi National Oil Co (ADNOC) is preparing to submit a fresh proposal of about 60 euros ($65.53) per share for Covestro AG (1COV.DE), which could value the German plastics and chemicals maker at around 11.3 billion euros, Bloomberg News reported on Monday citing people familiar with the matter. The state oil giant aims to submit the bid in the coming days and also plans to pledge job guarantees for several years as well as about $8 billion of investments after closing the deal, the report said. ADNOC's deliberations are ongoing and it could opt to wait until 2024 to send its revised bid, the report added. Covestro declined to comment, while ADNOC did not immediately respond to a Reuters request for comment. Reuters had reported in August that ADNOC had verbally signaled to Covestro it could raise its informal offer to 60 euros per share if the German company agrees to enter formal talks. A combination with Covestro would give energy giant ADNOC, also a maker of refined products and petrochemicals, access to more advanced materials that go into electric vehicles, thermal insulation for buildings as well as coatings, adhesives and engineering plastics. ($1 = 0.9157 euros) https://www.reuters.com/markets/deals/adnoc-preparing-increase-takeover-offer-covestro-bloomberg-news-2023-12-18/