2023-11-24 10:45

Nov 24 (Reuters) - U.S. equity funds continued to accumulate inflows in the week to Nov. 22 as investor sentiment was buoyed by expectations of a pause in U.S. interest rate hikes, with a concurrent decline in Treasury yields further fuelling risk appetite. LSEG data showed that U.S. equity funds received a net $6.27 billion, the third weekly inflow in a row. The 10-year U.S. Treasury yield dropped about 19 basis points last week, boosting demand in sectors such as technology. The yield hit a two-month low of 4.416% on Wednesday. Technology sector funds received $2.29 billion during the week, the biggest inflow since mid-December 2021. Investors, however, pulled out $382 million and $339 million, respectively from utilities and healthcare sectors. By segment, U.S. large-cap funds attracted $4.89 billion in inflows, continuing a five-week trend of net buying. Small- and multi-cap funds also saw inflows of about $1.45 billion and $1.43 billion, respectively, while mid-cap funds faced $824 million in outflows. Meanwhile, U.S. bond funds observed a net withdrawal of about $266 million, breaking a two-week streak of net purchases. U.S. short/intermediate government & Treasury funds experienced substantial withdrawals of $2.8 billion, the largest since Dec. 7, 2022. U.S. emerging markets debt funds and high-yield bond funds, however, received about $605 million and $319 million, respectively in inflows. U.S. investors also poured about $19.38 billion into money market funds, extending inflows into a fifth consecutive week. https://www.reuters.com/markets/us/us-equity-funds-see-third-weekly-inflow-rate-optimism-2023-11-24/

2023-11-24 10:31

MUMBAI, Nov 24 (Reuters) - The Indian rupee ended at a record closing low on Friday, weighed down by weakness in its Asian peers and dollar demand from foreign banks. The rupee ended at 83.3675 against the U.S. dollar, lower by 0.03% compared with its close at 83.3425 in the previous session. The rupee hovered in a narrow range of 83.3450 to 83.38 during the day's session and fell 0.1% this week. The dollar index last quoted steady at 103.7 but appeared on course for its second consecutive weekly loss. Foreign banks were seen bidding for U.S. dollars on Friday, likely on behalf of custodial clients, a foreign exchange trader at a private bank said. The local unit has become "sticky in the 5-10 paisa zone near 83.30" the trader added. Asian currencies edged lower as well, with the Thai baht and Korean won leading losses, falling 0.6% and 0.5%, respectively. U.S. Treasury yields rose in Asia with the 10-year yield climbing to 4.47% and the 2-year ticking higher to 4.94%. Broadly, the rupee is likely to stay rangebound but small depreciations can't be ruled out, Dilip Parmar, a foreign exchange research analyst at HDFC Securities, said. Equity inflows worth about $1.5 billion related to the rebalancing of MSCI index, effective from Nov. 30, may offer some support the rupee in the coming week, according to Nuvama Alternative & Quantitative Research. Investors await the release of October inflation data in the U.S. on Thursday. Core personal consumption expenditure inflation is expected to moderate to 0.2% month-on-month from 0.3% in September, according to a Reuters poll. A lower-than-expected inflation print could further cement expectations that the Federal Reserve is done hiking policy rates. https://www.reuters.com/markets/currencies/india-rupee-declines-record-closing-low-tad-down-week-2023-11-24/

2023-11-24 10:14

Nov 24 (Reuters) - Global equity funds attracted robust inflows in the seven days leading to Nov. 22, spurred by growing expectations that the U.S. Federal Reserve will stop raising interest rates amid signs of easing inflation. Investors purchased a net $9.13 billion worth of global equity funds during the week, after about $10.96 billion worth of net accumulations in the prior week, LSEG data showed. European equity funds saw substantial inflows, attracting about a net $4.28 billion, the highest weekly amount since February 1. U.S. funds also performed well, securing $6.27 billion, but there was a notable shift in Asia, where $2.24 billion was withdrawn, ending a 24-week buying streak. The technology sector continued to draw strong interest, with funds receiving $2.33 billion net, the highest since mid-December 2021. In contrast, healthcare and utilities sector funds saw outflows of $648 million and $379 million, respectively. Global bond funds, while still in demand, attracted a more modest $2.94 billion, the lowest in three weeks. Inflows were distributed across global government and corporate bond funds, which drew $1.75 billion and $1.32 billion, respectively. Demand for high yield bond funds, meanwhile, fizzled out during the week as they received just $1.13 billion, compared with over $5 billion worth of net purchases in each of the previous two weeks. Global money market funds received about $28.3 billion during the week, their fifth weekly inflow in a row. Data for commodity funds revealed energy funds had $154 million worth of outflows, the first weekly net selling in five weeks. Meanwhile, precious metal funds gained $512 million in inflows, the most in three weeks. Data for emerging markets, factoring in 28,665 funds, highlighted that bond funds received about $777 million, their second weekly inflow in three weeks. Equity funds, however, suffered a 15th straight week of outflow, with about $272 million in net outgo. https://www.reuters.com/markets/global-markets-flows-graphic-2023-11-24/

2023-11-24 10:10

ANKARA, Nov 24 (Reuters) - Turkey must forge ahead with its new and more sustainable economic strategy in order to draw back foreign investors, EBRD President Odile Renaud-Basso told Reuters as the bank itself invested record levels in the country. Since June, a new-look cabinet and central bank have sought to ditch years of unorthodox policymaking by embracing aggressive interest rate hikes and beginning to unwind the state's heavy-handed financial market regulations. The new policy path "needs to carry on" as a long-term strategy, Renaud-Basso said in an interview on Thursday, just before meeting Central Bank Governor Hafize Gaye Erkan who earlier in the day delivered another 500-point rate hike. Asked what would finally convince foreign investors to feel confident after a years-long exodus from Turkey, she said: "There needs to be a bit of time to see a persistent and durable policy strategy." The latest rate hike to 40% reflects this, Renaud-Basso said, adding the policy rate "will need to remain at a high level for quite a long time to really rebuild confidence". The European Bank for Reconstruction and Development (EBRD) invests more in Turkey than in any other country and this year is on track to deliver at least 2.5 billion euros, an all-time high. Much centers on the southeast, where earthquakes in February killed more than 50,000 people and flattened cities and towns. EBRD plans to invest 1.5 billion euros over two years with a focus on repairing water, electricity and other infrastructure. ERDOGAN RISK At EBRD's Ankara office, Renaud-Basso said the bank had been winding down investments in Turkey heading into this year. "But seeing the policy shift, which is very important, and also with the impact of the earthquake we have increased it again and reached the highest historical level for investment," she said. Ankara says it aims to attract outside bond investors and foreign direct investment (FDI) to help bolster depleted FX reserves, underpinning an effort to cool inflation that is above 61% and expected to climb into next year. The central bank said on Thursday it will maintain tight policy "as long as needed to ensure sustained price stability." But after years of President Tayyip Erdogan's unorthodox and sometimes erratic policymaking - including his abrupt firing of four central bank chiefs in the last four years - investors are hesitant. Foreigners hold less than 1% of Turkish bonds. "In the past indeed there have been some turnarounds," said Renaud-Basso, who also met Finance Minister Mehmet Simsek on her four-day visit to Turkey. But "listening to the authorities, I am confident that they know this needs to be sustainable." The funds for earthquake recovery could rise but the first priority is disbursing the allotted 1.5 billion euros, she said, after having also visited the disaster zone this week. Winter "is going to be very difficult for people...particularly in (the hardest-hit province of) Hatay where living conditions and shelters are minimal," she said. https://www.reuters.com/world/middle-east/ebrd-head-says-turkeys-u-turn-must-carry-entice-investors-2023-11-24/

2023-11-24 10:07

Barclays working on $1.25 billion cost savings plan Bank considering job cuts at Barclays Execution Services Unit aimed at improving efficiency has become bloated Barclays' share price has fallen 26% under CEO's tenure LONDON, Nov 24 (Reuters) - Barclays (BARC.L) is working on plans to save up to 1 billion pounds ($1.25 billion), which could involve cutting as many as 2,000 jobs, mainly in the British bank's back office, a person with direct knowledge of the proposals told Reuters. Managers at Barclays, led by Chief Executive C.S. Venkatakrishnan who is known within the bank as Venkat, are reviewing proposals aimed at boosting profitability. As part of these, 1,500 to 2,000 jobs could be cut if the plans are implemented in full, the person said. A spokesperson for Barclays declined to comment on Thursday. The potential cuts would primarily be at Barclays Execution Services, known internally as 'BX', and would form part of an overall target of reducing expenses by up to 1 billion pounds across the group over several years, the person added. Analysts said the scale of the potential savings could reassure investors, given market forecasts had ranged from 500 million to 1.5 billion pounds in restructuring costs for the bank without much sense of how that would translate to savings. "Before today the market knew roughly how much this might cost but not what the benefits are, which now becomes clearer," said Benjamin Toms, an analyst at RBC. "This will be viewed as a net positive for investors, but we now need to see more detail on how long the benefits will take to appear," he said. Barclays has made efforts to reduce expenses in recent years by slashing bonuses, as well as jobs in its retail and investment banking businesses, but moves to shrink BX and the potential savings have not been reported before. Created in 2017 to consolidate support functions for the bank's two main business divisions, UK retail banking and international, BX was designed to eliminate duplication and implement post-crisis risk management rules. Barclays' 1 billion pound cost saving target would represent about 7% of the bank's underlying annual operating expenses of 15 billion pounds in 2022. The BX headcount discussions are ongoing and Barclays could decided to prioritise layoffs in other areas, the source said. BX's staffing and costs have grown significantly in recent years. Its headcount rose to about 22,300 as of the end of 2022, from 20,000 at end-2017, and now accounts for more than a quarter of Barclays staff, regulatory filings show. Meanwhile, annual staff costs at BX have risen to 2 billion pounds, from 1.8 billion pounds. Venkat is under pressure to find ways to boost Barclays' tumbling book value ahead of an investor presentation in February when he will unveil a fresh strategy. Since taking over as CEO, the veteran banker has grappled with the fallout from a trading blunder that cost the bank hundreds of millions of dollars. He also faces a prolonged battle to maintain morale across Barclays' investment bank, where a talent exodus is hindering attempts to compete with European rivals such as Deutsche Bank (DBKGn.DE), BNP Paribas (BNPP.PA) and UBS (UBSG.S). Barclays' shares gained 0.3% on Friday morning following Reuters' first reporting the potential cuts late on Thursday, the only major British bank shares to rise on the day with the benchmark FTSE index (.FTSE) down 0.3%. Barclays' share price has fallen 26% since Venkat took charge on Nov. 1, 2021, while Deutsche's shares are little changed and HSBC's (HSBA.L) have gained 37%. ACTIONS Managers across teams within BX have been working with effectively frozen budgets this year and told that costs must be reduced in 2024, a second source in the division told Reuters. Venkat signalled on Oct. 23 that Barclays will embark on further restructuring in preparation for its Feb. 20 presentation, which is seen as a key opportunity for the bank to convince shareholders that it has a plan to lift its valuation. Barclays is "evaluating material structural cost actions", Venkat said when it reported disappointing third-quarter results in October. Barclays has been working with Boston Consulting Group on a strategy review, focused on which parts of the business to invest in and which should be reduced or sold. It is also reviewing options for its payments business among other measures, Reuters reported in July. ($1 = 0.8025 pounds) https://www.reuters.com/business/finance/barclays-working-125-bln-cost-plan-could-cut-up-2000-jobs-source-2023-11-23/

2023-11-24 10:01

LONDON, Nov 24 (Reuters) - Two British insurers on Friday struck deals to take on a combined 8.8 billion pounds ($11 billion) of company pension liabilities, including the largest such UK deal so far, as pension schemes strive to limit their risks in volatile markets. Legal & General (LGEN.L) said it had agreed a so-called full buy-in to the Boots Pension Scheme worth 4.8 billion pounds, in what it said was the largest such deal in Britain by premium size. Pension insurance specialist Rothesay, meanwhile, said it had concluded a 4 billion pound buy-in with a section of the pension scheme sponsored by Co-operative group, whose businesses include food, funerals, insurance and legal services. Also known as bulk annuity deals - where trustees of pension schemes pay a premium for the insurers to assume some of the liabilities - the agreements form part of what is set to be a record year for such transactions. The market has been running at around 30 billion pounds a year in Britain, but consultants expect 2023 to top that. Regulators have expressed concerns about the trend, with the Bank of England's Prudential Regulation Authority warning last week that life insurance companies involved in such business should limit exposure to reinsurers due to risk that those businesses - sometimes based overseas - run into trouble. Insurers often sell on some liabilities to reinsurers. Rising funding ratios for pension schemes are driving unprecedented demand, Legal & General (L&G) said, as funds scramble to protect schemes against the vagaries of market movements amid rising interest rates worldwide. L&G has written a total of 13.4 billion pounds worth of pension risk transfer deals this year globally, up from 9.5 billion pounds last year. Its solvency ratio of an estimated 224% puts it in a strong position to pursue more such business, the company said. Health and beauty products provider Boots, with over 2,000 stores and 52,000 staff, is one of Britain's oldest and best known high street brands. ($1 = 0.8025 pounds) https://www.reuters.com/markets/deals/legal-general-agrees-about-6-bln-buy-in-boots-pension-scheme-2023-11-24/