2023-12-15 12:25
LONDON, Dec 15 (Reuters) - Investors dumped cash and bought stocks in the week to Wednesday, according to BofA Global Research, as hopes of interest rate cuts drove equity and bond prices higher. Investors pulled $31 billion from cash in the week, the first week of outflows in eight weeks, and put $25.3 billion into stocks, BofA said in a report released on Friday, citing EFPR data. Inflows to equities in the past eight weeks totalled $74 billion, the most in an eight-week period since March 2022, the report said, describing markets as being "all-in on infallible Fed". The Federal Reserve held interest rates at its meeting on Wednesday, as expected, but policymakers pencilled in 75 basis points of rate cuts for 2024 as Chair Jerome Powell said the historic tightening of monetary policy was likely over with inflation falling faster than expected. BofA noted that there have only been five occasions in the past 90 years when the Fed has cut rates when core consumer inflation - now 4% - is higher than the unemployment rate - currently 3.7%. Those were in 1942, during the Second World War, and in four recessions between 1969 and 1981. The Fed's policy decision on Wednesday added major impetus to a global rally in stocks and bonds. MSCI's world share index (.MIWD00000PUS) is at its highest since April 2022 and set for a weekly gain of 2.7%, its best week since the start of November and on track for its seventh successive weekly gain. Benchmark 10-year U.S. Treasury yields are down 32 basis points on the week, their biggest such fall in more than a year. https://www.reuters.com/markets/investors-go-all-in-infallible-fed-dumping-cash-buying-stocks-bofa-2023-12-15/
2023-12-15 11:24
More data needed to show CPI on sustained downward path - cbank Philippines narrows growth target range for 2024 Philippines will seek 6.0% increase in 2025 budget MANILA, Dec 15 (Reuters) - The Philippine central bank needs more data to be convinced that the downward trend in inflation will hold before it considers policy easing, its governor said on Friday. "The data are not so convincing yet about when it is a good time to start easing," Governor Eli Remolona told CNBC TV. The Bangko Sentral ng Pilipinas (BSP) kept its benchmark interest rate steady for a second straight meeting at 6.5% on Thursday, and said policy would have to stay "sufficiently tight" to bring inflation back to target. While inflation eased for a second straight month to 4.1% in November from 4.9% in October and 6.1% in September, Remolona said "we are not so convinced that the trend will hold." "We need more data to be convinced that we will be within target by 2024," Remolona said. Last month's inflation outcome, which marked the slowest pace of consumer price increases in 20 months in November, brought the average rate over the 11-month period to 6.2%, which was still well outside the central bank's 2%-4% target. "For now we are hawkish," Remolona said. Economists in the a Dec. 5-11 Reuters poll believed the central bank was done hiking rates, with median forecasts showing policy on hold until the end of the second quarter of 2024, with the next move likely to be a cut. Despite a series of rate hikes totaling 450 basis points since May 2022, including two off-cycle rate increases, Remolona said he did not think the central bank had "overstepped in terms of tightening" given that the "economy has remained firm." The government announced on Friday it had abandoned next year's 6.5% to 8.0% GDP growth target range and narrowed it to 6.5% to 7.5%, due in part to the impact of the El Nino weather phenomenon. It kept its 6.5%-8.0% growth and 2.0%-4.0% inflation targets for 2025-2028. For 2025, the government said it was proposing a budget of 6.21 trillion pesos ($111.58 billion), equal to 20.5% of gross domestic product, and 6.0% higher than the yet-to-be-signed 5.77 trillion pesos budget bill for 2024 as it aims fund more infrastructure to boost growth. ($1 = 55.6550 Philippine pesos) https://www.reuters.com/markets/asia/philippines-october-inflation-likely-within-51-59-central-bank-2023-10-31/
2023-12-15 11:21
LONDON, Dec 15 (Reuters) - Indian businessman Prateek Gupta on Friday failed in his attempt to get a London court to lift a global freezing order on his personal and business assets in a fraud case brought by Trafigura about nickel cargoes. Trafigura filed a lawsuit against Gupta in February and a London court imposed the freezing order after the Geneva-based commodity trader alleged seven companies owned or linked to Gupta carried out a systematic fraud. Gupta has said in his defence that Trafigura staff devised the scheme at the centre of the case to substitute low-value metals such as scrap for high-grade nickel. Trafigura and its employees have denied knowing about any such fraud. During a two-day London court hearing last week Gupta asked a judge to lift the freezing order, alleging Trafigura did not disclose important information. "There was no failure to disclose," Justice Robert Bright said in a ruling. "It follows that the application fails." Hundreds of pages of new documents were released in connection with the hearing including WhatsApp messages and emails that Gupta says show Trafigura staff, including head of nickel trading Sokratis Oikonomou, came up with the fraud. Reuters was unable to contact Oikonomou for comment, who has denied the allegations and no longer works for Trafigura. "I am not satisfied that the materials shown to me... should have put Trafigura on notice that there was a real possibility that Mr Oikonomou was involved in or knew about the alleged fraud," Justice Bright said. Bright also said, however, the ruling on the freezing order will have no bearing on the trial. "By that stage, the evidence available may present an entirely different picture." A spokesperson for Gupta said: "We now look forward to advancing our case and proving at trial the involvement of senior Trafigura representatives in the alleged arrangement." Trafigura said in a statement: "We are pleased that the court found in our favour. In particular, the court decision notes that none of the evidence indicated knowledge by Trafigura that the contents of the containers was not nickel." In court papers submitted previously, Trafigura had said it began to suspect in October last year that around 25,000 metric tons of metal sold by Gupta's firms may not be high-grade nickel, and started inspecting more than 1,000 shipping containers, some of which contained carbon steel, worth a fraction of the price of nickel. https://www.reuters.com/markets/commodities/gupta-loses-bid-lift-freezing-order-trafigura-fraud-case-2023-12-15/
2023-12-15 11:17
COPENHAGEN, Dec 15 (Reuters) - Denmark on Friday agreed to impose a tax on air passengers to help finance the airline industry's transition to greener practices, which will be gradually phased in from 2025, the government said. The government in November proposed imposing an average tax of 100 Danish crowns ($14.35) on air travel to help finance the industry's green transition, which aims to enable all domestic flights to use 100% sustainable fuels by 2030. Under Friday's agreement, the tax will by 2030 reach around 50 Danish crowns ($7.35) per passenger for intra-European flights, 310 crowns for medium-distance flights, and 410 for long-distance, according to a statement from the taxation ministry. Transit flights leaving after a stop-over in a Danish airport will be exempted, according to the statement. ($1 = 6.8003 Danish crowns) https://www.reuters.com/business/aerospace-defense/denmark-introduces-green-passenger-tax-air-travel-2023-12-15/
2023-12-15 11:14
Dec 15 (Reuters) - Investors pulled back sharply from global bond funds in the seven days through Dec. 13, amid caution ahead of the U.S. Federal Reserve's monetary policy decision and uncertainty over the timing of rate cuts. Investors withdrew a net $6.91 billion, logging the biggest weekly net selling in global bond funds since Nov. 1. They sold $4.41 billion worth of U.S. bond funds, extending outflows into a third week. European funds also had $2.99 billion worth of outflows, but Asian funds still attracted $177 million in inflows. A significant uptick in U.S. Treasury yields last week followed the Labor Department's report of strong job growth in November, altering expectations about future rate reductions. However, this week the 10-year Treasury yield has dropped about 27 basis points in the last two trading sessions after the Fed held rates unchanged and hinted at ending its tight monetary policy. Global equity funds, meanwhile, secured $1.18 billion worth of inflows, a rebound from the $2.15 billion outflow observed the previous week. Technology sector funds attracted $1.94 billion, the highest in three weeks, and consumer discretionary sector funds gained $811 million. However, healthcare sector funds saw net disposals of $994 million. Global money market funds broke a seven-week-long streak of inflows, with $32.87 billion worth of net disposals during the week. Among commodity funds, precious metal funds attracted $626 million, the most significant inflow in a week since November 1. Energy funds also drew $152 million, witnessing a third straight week of net buying. Data encompassing 29,140 emerging markets funds showed equity funds remained under pressure for an 18th consecutive week with outflows totalling a net $2.11 billion during the week. Emerging markets bond funds also witnessed $551 million worth of net selling. https://www.reuters.com/markets/global-markets-flows-graphic-2023-12-15/
2023-12-15 11:11
Deal expected to close in H1 2024 Eni, Rosneft have pre-emptive rights Prax CEO: deal further expands European presence FRANKFURT, Dec 15 (Reuters) - Shell (SHEL.L) has agreed to sell its 37.5% stake in the PCK Schwedt oil refinery, which supplies most of Berlin's fuel, to Britain's Prax Group, hoping to draw a line under its co-ownership in an asset majority-owned by Russia's Rosneft. Shell restarted efforts to sell the stake earlier this year after the German government put the local units of Rosneft (ROSN.MM), which owns 54.17% of the refinery, under trusteeship in the wake of Russia's full-scale invasion of Ukraine. Under the move, Rosneft remains the legal owner of the stake but was stripped of its ability to exert control. The trusteeship was extended in September due to the lack of progress in talks between Berlin and Rosneft over how an exit by the Russian oil firm from Germany's fourth-largest refinery could be arranged, sources said at the time. At the same time, Poland was pushing Germany to force Rosneft out to clear the way for investors like Polish refiner PKN Orlen (PKN.WA), which had expressed interest in a controlling stake. Shell said on Friday it expected the deal with Prax to close in the first half of 2024, pending regulatory clearance and pre-emption rights by co-owners Rosneft and Italy's Eni (ENI.MI), which owns 8.33% in PCK Schwedt. No financial details were disclosed. Rosneft was not available for comment. Prax did not reply to a request for comment on whether it might be interested in Rosneft's stake. "This is another important milestone towards a more focused refining portfolio and the development of high-value integrated sites, such as the Energy & Chemicals Park Rheinland," said Machteld de Haan, Shell's executive vice president for chemicals and products, referring to another project in Germany. Shell said the planned sale was part of the oil major's efforts to reduce its global network of refineries to core sites that are integrated with its trading hubs and chemicals activities. Prax, whose founders started out by buying a single petrol station in 1999 when still in their twenties, deals in crude oil, petroleum products and biofuels. The Shell deal marks its latest expansion in Europe after completing the purchase of the OIL! petrol station network from mineral oil dealer Mabanaft GmbH & Co KG earlier this month. Sanjeev Kumar Soosaipillai, CEO and co-owner of Prax, said the deal marked another key step in the group's push "to diversify geographically and enhance our European market presence." https://www.reuters.com/business/energy/shell-agrees-sell-stake-germanys-schwedt-refinery-prax-group-2023-12-15/
