2023-11-23 17:18

Virgin Money sinks on FY profit miss British firms reported marginal return to growth in Nov. - PMIs Vodafone, National Grid fall as shares trade ex-dividend Barclays working on $1.25 bln cost plan - Reuters report FTSE 100 up 0.2%, FTSE 250 flat Nov 23 (Reuters) - The UK's FTSE 100 closed higher on Thursday as energy stocks gained, while investors parsed more economic data to gauge the state of the economy a day after Finance Minister Jeremy Hunt announced an interim budget. The commodities-heavy FTSE 100 (.FTSE) gained 0.2%, as heavyweight energy stocks (.FTNMX601010) added 1.3% after falling over 2% in the previous session. The midcap index (.FTMC) on the other hand, closed flat. Travel and leisure (.FTNMX405010) and personal goods (.FTNMX402040) were among the worst performing of the major FTSE 350 sectors. Trading volumes were thin in the absence of U.S. participants, as markets in the United States were closed for the Thanksgiving holiday. Meanwhile, a preliminary survey showed British companies reported a marginal return to growth in November after three months of contraction but the downturn in orders continued in the face of higher interest rates and weak demand. "To be fair, the economic news has been a little better of late: the improved PMIs add to the rise in payrolls and house prices that we have seen of late," wrote Elizabeth Martins, senior economist at HSBC. "However, even with this slight improvement, the PMIs show an economy stagnating at best." The pound rose to its highest against the dollar since early September, while British government bond prices fell sharply. The reading comes a day after Finance Minister Jeremy Hunt announced measures to boost weak economic growth. Among individual stocks, Virgin Money (VMUK.L) slid 6.5% after the British bank missed full-year profit forecasts. Telecoms group Vodafone (VOD.L) and energy utility company National Grid (NG.L) were among the top decliners on the FTSE 100, falling 5.4% and 2.8% respectively, as their shares traded ex-dividend. A Reuters report stated that Barclays (BARC.L) is working on plans to save as much as 1 billion pounds ($1.25 billion), which could involve cutting as many as 2,000 jobs. Shares of the lender were up 0.2%. https://www.reuters.com/world/uk/uks-ftse-100-rises-higher-energy-shares-2023-11-23/

2023-11-23 16:25

BUENOS AIRES, Nov 23 (Reuters) - Argentina's grains trade is largely "paralyzed" by a lack of soybeans due to drought and farmers holding onto produce, anticipating a devaluation of the peso under President-elect Javier Milei, the head of the main export chamber told Reuters. The comments were the first from the crushing and export body CIARA-CEC, which represents major grains firms in Argentina, including Cargill and Bunge, since the election of libertarian outsider Milei on Sunday. He takes office on Dec. 10. Argentina is normally the world's top exporter of processed soy and in the top three for corn. The South American country is also a major wheat and beef supplier. "Today the grains trade is paralyzed by the grain shortage, the worst in 60 years, and by an expectation after Milei's victory that there will soon be an adjustment to the official exchange rate," Gustavo Idigoras, head of CIARA-CEC, said late Wednesday. Argentina, battling triple-digit inflation and a sliding currency, has strict capital controls which have led to parallel exchange rates as high as 1,000 pesos per dollar, far away from the official one just over 350 peso. That hurts exporters who often have to bring most of their overseas sales back into the country at the official rate, getting fewer pesos for each dollar. While the government has rolled out exchange rate sweeteners for farmers, giving them a better rate, many producers are waiting to see what Milei does when he takes office. He has pledged to scrap the currency controls and cut taxes. Idigoras said the lack of beans for the huge crushing plants that turn soybeans into oil and meal along the Parana River meant the facilities were operating at greatly reduced capacity. "Today we are at 73% average idle capacity in the crushing plants and 75% idle capacity in the grain ports," he said. "We are going through the worst year and the worst quarter in history." He added that the crushing plants were bringing forward stoppages for technical maintenance due to the "impossibility" of being able to keep operating. "Most of them are already activating these technical stops on many production lines. There will be very few active production lines left in the coming months," he said. Idigoras called on Milei's government to quickly scrap trade restrictions on grains, including taxes, and access to foreign currency, and to lift export caps and red tape for import licenses. "Milei's government must be the government that has the greatest export focus in history, an aggressive export policy. For that they must first eliminate all restrictions on day one." https://www.reuters.com/markets/commodities/argentina-grains-trade-paralyzed-farmers-eye-fx-adjustment-bean-shortage-2023-11-23/

2023-11-23 14:35

Nov 23 (Reuters) - Argentina on Thursday raised taxes on U.S. dollar purchases destined for savings or made with bank cards to protect the central bank's limited reserves, weeks before President-elect Javier Milei assumes office on Dec. 10. The measure was announced in Argentina's Official Gazette and stated that the advance payment of income tax increased to 100% from 45%. The change means that Argentines using dollar credit cards or buying foreign currency for savings will pay rates closer to those in alternative markets. The decision was guided by considerations of tax management and fairness, the statement said. This change comes after libertarian Milei, who proposes dollarizing Argentina's economy and eliminating the central bank, defeated the Peronist Economy Minister Sergio Massa in a presidential run-off on Sunday. The Argentine currency market is strained due to expectations of the peso's devaluation. To safeguard its limited foreign currency, Argentina set multiple exchange rates under strict controls in 2019. https://www.reuters.com/world/americas/argentina-hikes-taxes-dollar-savings-bank-card-purchases-ahead-milei-taking-2023-11-23/

2023-11-23 14:01

Nov 23 (Reuters) - Nigeria's naira, Kenya's shilling and Zambia's kwacha are expected to be under pressure in the next week to Thursday, while Ghana's cedi and Uganda's shilling will probably be stable, traders said. KENYA Kenya's shilling is expected to extend its gradual march lower as foreign-currency demand ramps up from all sectors before the end of the year. Commercial banks quoted the shilling at 152.70/90 per U.S. dollar, compared with last Thursday's closing rate of 152.20/40. The shilling hit a new record low on Thursday of 152.75/95, LSEG data showed. NIGERIA Nigeria's naira will likely lose ground on the parallel market , as the central bank is yet to clear outstanding foreign-currency amounts owed in forward deals. Nigeria has nearly $7 billion in forex forwards that have matured and which corporates bought from local banks. The naira sold for 1,160 to the dollar in street trading where it trades freely on Thursday, weaker than 1,130 naira a week ago. The unit traded around 800 naira per dollar in official trading on Thursday afternoon , after falling as low as 1,051 naira in early trade. "I expect (exchange) rates to hover between 1,160 naira and 1,200 naira on the parallel market next week," one trader said. "We had expected that the central bank will pay off outstanding forwards ... (but) they paid little in bits." GHANA Ghana's cedi is forecast to remain stable next week due to expected forex inflows from a cocoa syndicated loan, traders said. Ghana's cocoa marketing board COCOBOD plans to finalise an $800 million syndicated loan with banks by the end of the month. On Thursday the cedi was trading at 11.9000 to the dollar, compared to 11.9000 at last Thursday's close, LSEG data showed. "We expect it to be relatively stable in the coming week, following news that COCOBOD has completed the highly anticipated $800 million syndicated loan," said Sedem Dornoo, a senior trader at Absa Bank Ghana. "We expect the pair to remain range bound for the remainder of the year," he added. UGANDA The Ugandan shilling is seen trading in a stable range with inflows of hard-currency from remittances helping lend support. Commercial banks quoted the shilling at 3,785/3,795 to the dollar, compared to last Thursday's close of 3,775/3,785. "We have been seeing substantial amounts of (dollar) inflows from remittances coming in which I think will continue to provide support well into mid December," said an independent foreign exchange trader in the capital Kampala. He said the shilling was likely to oscillate in the 3,750-3,790 range in the coming days. ZAMBIA Zambia's kwacha is likely to remain under modest pressure as the market continues to experience subdued foreign-exchange supply and high demand. On Thursday, the currency was trading at 23.3500 to the dollar from 23.0695 at the close of business a week ago, according to LSEG data. Delays in restructuring the country's debt had affected expected foreign-exchange flows, weighing on the kwacha, Bank of Zambia Governor Denny Kalyalya said on Wednesday. https://www.reuters.com/markets/currencies/africa-fx-nigerian-kenyan-zambian-currencies-seen-under-pressure-2023-11-23/

2023-11-23 12:06

LONDON, Nov 23 (Reuters) - Turkey's central bank delivered a larger-than-expected 500 basis point interest rate hike on Thursday, lifting its benchmark to 40% but also flagging that the pace of monetary tightening was set to slow down and the end of the cycle was in sight. Below reaction from analysts to the decision: LIAM PEACH, CAPITAL ECONOMICS, LONDON "(Turkey's central bank) suggested that it is very close to the end of the tightening cycle. A final 250bp hike in December now looks likely. For the central bank to have any chance of achieving single digit inflation this decade, rates will need to stay at this level for some time." "The past month has brought further signs that Turkey’s economy is rebalancing in response to the policy U-turn in May. Credit growth has slowed, retail sales have weakened and the current account deficit has narrowed. Inflation pressures have cooled too and inflation expectations have started to fall." BARTOSZ SAWICKI, CONOTOXIA FINTECH, WARSAW "In October the annual inflation rate inched lower and external price dynamics have turned a tad more favourable. At the same time, the macroeconomic backdrop remains extremely challenging. The risk of a sharp slowdown in activity points to less aggressive continuation of the tightening cycle. We see the one-week repo peaking around 45%. We expect slower hikes ahead as we get closer to this level and the policy stance became more restrictive." "The markets might remain uncertain if further hikes are on the table and fear the (central bank) might opt to pause the tightening until the local elections in March. In this context, the next couple of months will put the (central bank)'s independence and determination to stick to a more orthodox stance to the test." https://www.reuters.com/world/middle-east/view-turkey-central-bank-ramps-up-interest-rates-40-2023-11-23/

2023-11-23 12:04

Novo racing to meet demand for obesity drugs Obesity market to reach $100 billion by 2030-analysts New investment in France will boost capacity for obesity, diabetes drugs PARIS/LONDON Nov 23 (Reuters) - Novo Nordisk (NOVOb.CO) on Thursday announced a $2.3 billion investment to boost production of its wildly popular weight-loss and diabetes drugs at a site in Chartres, France as it races to meet soaring demand. The investment will significantly increase production capacity for current medicines including Ozempic and Wegovy as well as other obesity treatments that are being developed, the Danish drugmaker said. There is a growing crisis in Europe over supply of diabetes therapy Ozempic, which uses the same ingredient semaglutide as the hugely popular weight-loss drug Wegovy, which is not yet widely available in Europe. Novo this week introduced curbs on the use of Ozempic, which is also widely used for weight loss, in the European Union because of this 'off label' use. Germany is considering banning exports of the drug. Belgium has banned prescriptions of the weekly injection unless they are for type 2 diabetes patients. The British government tried in July to prevent Ozempic reaching people who want to lose weight but a Reuters report found people without diabetes are still buying the medicine for weight loss. Thursday's announcement comes after Novo earlier this month announced a $6 billion investment in its native Denmark to boost production. WIN FOR FRANCE'S MACRON It is also a boost for French President Emmanuel Macron as a global economic slowdown threatens to undo the progress made over the past few years in curbing French unemployment. Macron's office told journalists ahead of the announcement that he convinced Novo Nordisk CEO Lars Fruergaard Jorgensen to make the investment during his "Choose France" summit earlier this year. The company did not immediately comment on this. The investment mirrors a similar move by U.S. rival Eli Lilly (LLY.N), which last week laid out plans to build a $2.5 billion manufacturing site in Germany in response to soaring demand for its new diabetes and obesity therapies. Analysts have estimated the obesity drug market will be worth as much as $100 billion by 2030. Novo said the French investment will significantly increase its capacity for several types of manufacturing needed to make its weight-loss and diabetes drugs from the GLP-1 drug class. Those are the specialist work of filling the injection pens with the active ingredient semaglutide, and assembly and packaging of the injection pens. Novo said earlier this month that it is ramping up its in-house manufacturing capacity to fill injection pens for Ozempic and for the European version of Wegovy, but did not give details. The company employs nearly 2,000 people at the Chartres factory west of Paris. The investment is expected to create 500 more jobs, Novo said. Construction has begun and will be completed between 2026 and 2028. ($1 = 6.8320 Danish crowns) https://www.reuters.com/business/healthcare-pharmaceuticals/novo-nordisk-invests-23-mln-france-boost-output-2023-11-23/