2023-11-08 13:44

SAO PAULO, Nov 8 (Reuters) - Eletrobras (ELET6.SA) on Wednesday reported a third-quarter net profit slightly ahead of estimates, swinging back to the black after a small net loss a year earlier, as it said it has managed to speed up its post-privatization "value creation strategy". The Brazilian power company posted net income of 1.47 billion reais ($302 million) in the three months ended Sept. 30, up from the 88,000-real net loss a year earlier and above the 1.44 billion estimated by analysts polled by LSEG. Common shares of the firm , Latin America's largest utility, rose more than 2% on the news, among the top gainers on Brazil's benchmark stock index Bovespa (.BVSP), which was near flat. Eletrobras, formerly a state-run company, was privatized in June of last year when the Brazilian government diluted its stake in the firm in a transaction worth more than $6 billion, making it a company with dispersed ownership. Eletrobras said in a securities filing that the third-quarter results were driven by higher revenues in its power transmission unit, which led group net revenue up 9% in the quarter to 8.78 billion reais. The company dubbed it a "solid quarter" and said it had managed to "speed up a value creation strategy". Strong operational figures, stable leverage and a 14% cut in compulsory loans were the highlights of the quarter, said JPMorgan analysts led by Henrique Peretti, who rate Eletrobras as a "buy". "We believe this set of strong operational results should highlight the positive long term positive fundamentals of the case," they wrote in a note to clients. On top of the quarterly results, Eletrobras also said it was relaunching a voluntary redundancy program for 101 employees, adding that would provide additional cost savings of 61 million reais in the fourth quarter. ($1 = 4.8724 reais) https://www.reuters.com/business/energy/brazils-eletrobras-swings-back-net-profit-q3-2023-11-08/

2023-11-08 13:12

DUBLIN, Nov 8 (Reuters) - Bank of England Governor Andrew Bailey said on Wednesday that he hoped to see further close cooperation with Ireland on regulating investment funds, in order to limit financial stability risks and market fragmentation following Brexit. Since Britain left the European Union in 2020, its financial services industry has had reduced access to the bloc, but many ties remain. Investment funds operating from London are often domiciled in Ireland or Luxembourg, while London-based clearing services serve customers across the EU. However, the EU has declined to recognise most British financial regulation as being of the same standard as its own, despite very limited changes in rules since Brexit and in contrast to its approach to other major advanced economies. Bailey said it was in Britain and other EU countries' mutual interest to maintain strong cross-border regulatory relationships, rather than for EU countries to seek to limit London's role as an international financial centre. The BoE has previously argued that EU companies benefit from a deep financial services market in London, and that efforts to restrict it are more likely to drive activity to New York than to other European capitals. "It's a two-way street. The dependencies go many ways, and thus the incentives to coordinate and cooperate are much larger. In this world, fragmentation would be positively dangerous," told a conference hosted by the Central Bank of Ireland. Bailey thanked Irish regulators for their help last year when a slump in British government bond prices caused by then-Prime Minister Liz Truss' fiscal plans threatened the collapse of liability-driven investment funds used by pension companies. Bailey said both Britain and Ireland - where many LDI funds are domiciled - had agreed stronger resilience standards for these funds, as well as on the need to implement global guidelines for regulating money market funds. Upgrading standards of risk management for open-ended investment funds was another area of agreement, Bailey said. Funds listed in Ireland and Luxembourg, however, comply with rules written by the European Union, and the more root-and-branch changes the BoE would like to see probably need Brussels to make revisions. Bailey said that countries should seek similar financial stability outcomes based on standards jointly agreed through bodies like the Financial Stability Board, rather than expect identical rules which do not account for national differences. https://www.reuters.com/world/uk/boes-bailey-seeks-close-cooperation-ireland-fund-regulation-2023-11-08/

2023-11-08 13:11

BENGALURU, Nov 8 (Reuters) - The Indian rupee will trade near record lows against the dollar over the coming months, according to a Reuters poll of FX strategists who also said the Reserve Bank of India would likely intervene less in the coming year to support the currency. India's economy is expected to expand 6.3% this fiscal year, the fastest-growing major economy in the world. But the rupee is not reflecting that optimism, having hit a record low of 83.29/$ earlier this month. Thanks to the RBI's regular interventions in currency markets to arrest any sudden moves, the rupee has fared better than most of its Asian peers and was down just 0.6% for the year. Although the recent decline in U.S. Treasury yields and weaker-than-expected U.S. economic data took some of the strength out of the dollar, the rupee was not expected to benefit much yet. The latest Reuters poll of 42 foreign exchange analysts taken Nov. 3-7 suggested the rupee would trade around its current level of 83.25/$ in a month and 83.00/$ in three months. However, over 30% of strategists, 13 of 42, still expect the rupee to touch a new low by end-January. "We're not expecting it to rally as strongly as some of the other currencies that would be more freely-floating... because it's already stronger than perhaps fundamentally it would have been," said Robert Carnell, regional head of research, Asia Pacific at ING. The rupee was then forecast to gain nearly 1% to 82.50/$ in six months and around 1.5% to 82.00/$ in a year. Forecasts for the 12-month period ranged from 80.00/$ to 85.67/$. With most major central banks likely done with their policy tightening cycles, analysts said the dollar's dream run over the past couple of years may have come to an end, putting less pressure on the RBI to intervene in currency markets. Last month, RBI Governor Shaktikanta Das defended the regular use of its $586 billion in foreign exchange reserves saying it was necessary to prevent excessive volatility. The central bank sold about $23 billion in the last four months. A near 70% majority of strategists, 16 of 23, who answered an additional question said RBI intervention would decrease over the coming year. The rest said it would increase. "With a reversal of capital flows next year, the RBI's intervention in the currency market should reduce," said Suman Chowdhury, chief economist at Acuite Ratings and Research. "Once you have a little more clarity on the Fed rate trajectory, U.S. Treasury yields are likely to come down further. If oil prices also don't see any further escalation then we are expecting that the (rupee) rate will stabilize." (For other stories from the November Reuters foreign exchange poll:) (This story has been refiled to remove an incorrect picture) https://www.reuters.com/markets/currencies/indian-rupee-trade-near-record-lows-despite-surging-growth-2023-11-08/

2023-11-08 12:27

TORONTO, Nov 8 (Reuters) - The Canadian dollar is set to strengthen less than previously expected over the coming year once a slowdown in the domestic economy opens the door to Bank of Canada interest rate cuts, a Reuters poll found. Money markets expect the Canadian central bank to begin easing its benchmark interest rate as soon as April after leaving it on hold at a 22-year high of 5% for a second straight time at a policy meeting in October. "They will probably cut pretty meaningfully next year," said Erik Nelson, a macro strategist at Wells Fargo Securities in London. "The economy has clearly started to weaken and you could end up with a technical recession as early as this quarter." Last week, Statistics Canada officials said a preliminary estimate for September GDP together with earlier data translates into an annualized 0.1% decline for the economy in the third quarter. Quarterly GDP data is due for release at the end of the month. The BoC expects economic growth to remain muted until the end of 2024, before picking up in 2025. The median forecast of 36 foreign exchange analysts surveyed Nov. 3-7 was for the Canadian dollar to strengthen 2.3% to 1.345 per U.S. dollar in three months, compared with 1.340 in an October poll. It was then expected to advance to 1.30 in a year, versus 1.29 in the prior month's forecast. An expected slowdown in the global economy could also be a headwind for the currency, particularly if a deterioration in investor sentiment leads to support for the U.S. dollar, said Olivia Cross, North America economist at Capital Economics. Canada is a major exporter of commodities, including oil, so the loonie tends to be sensitive to shifts in risk appetite. U.S. crude oil futures fell on Tuesday to their lowest since late July as mixed Chinese data added to concerns about the demand outlook. The International Monetary Fund last month said global growth remained low and uneven. It forecast growth slowing to 2.9% in 2024 from an expected 3.0% this year. (For other stories from the November Reuters foreign exchange poll:) https://www.reuters.com/markets/currencies/analysts-clip-their-bullish-canadian-dollar-forecasts-economy-weakens-2023-11-08/

2023-11-08 11:52

2023 'virtually certain' to be warmest year on record Would rank as world's hottest year in 125,000 years Climate change and El Nino fuel temperature extremes BRUSSELS, Nov 8 (Reuters) - This year is set to be the world's warmest in 125,000 years, European Union scientists said on Wednesday, after data showed last month was the hottest October on record by a massive margin. Last month exceeded the previous highest October average temperature, from 2019, by 0.4 degrees Celsius, the EU's Copernicus Climate Change Service (C3S) Deputy Director Samantha Burgess said, describing the temperature anomaly as "very extreme". That has made 2023 as a whole "virtually certain" to be the warmest year recorded, C3S said in a statement. The heat is a result of continued greenhouse gas emissions from the burning of fossil fuels, combined with the emergence this year of the naturally occurring El Nino climate pattern, which warms the surface waters in the eastern Pacific Ocean. The current hottest year on record is 2016 — another El Nino year — although 2023 is on course to overtake that. Copernicus' dataset goes back to 1940. "When we combine our data with the IPCC, then we can say that this is the warmest year for the last 125,000 years," Burgess said. The longer-term data from U.N. climate science panel IPCC includes readings from sources such as ice cores, tree rings and coral deposits. Climate change is fuelling increasingly destructive extremes. In 2023, that includes floods that killed thousands of people in Libya, severe heatwaves in South America, and Canada's worst wildfire season on record. Globally, the average surface air temperature in October of 15.3 Celsius (59.5 degrees Fahrenheit), was 1.7 degrees Celsius warmer than the average for October in 1850-1900, which Copernicus defines as the pre-industrial period. The only other month to breach the temperature record by such a large margin was September 2023. "September really, really surprised us," Burgess said. "So after last month, it's hard to determine whether we're in a new climate state. But now records keep tumbling and they're surprising me less than they did a month ago." EL NINO EFFECT The combination of human-caused climate change and the naturally occurring El Nino is stoking concerns of more heat-fuelled destruction to come - including in Australia, which is bracing for a severe bushfire season amid hot and dry conditions. The ongoing El Nino weather pattern is set to last until at least April 2024, the World Meteorological Organization said on Wednesday. "Most El Nino years are now record-breakers because the extra global warmth of El Nino adds to the steady ramp of human-caused warming," said Michael Mann, a climate scientist at University of Pennsylvania. The scientists' findings come three weeks before governments meet in Dubai for this year's U.N. climate negotiations, known as COP28. There, nearly 200 countries will negotiate stronger action to fight climate change. A central issue at COP28 will be whether governments agree — for the first time — to phase out the burning of carbon dioxide-emitting fossil fuels. Under fossil fuel producers' current plans to extract coal, oil and gas, by 2030 global fossil fuel production would be more than double the levels that are deemed consistent with meeting globally agreed goals to limit climate change, the United Nations and researchers said in a report on Wednesday. Despite countries setting increasingly ambitious targets to gradually cut emissions, so far that has not happened. Global CO2 emissions hit a record high in 2022. "We must not let the devastating floods, wildfires, storms, and heatwaves seen this year become the new normal," said Piers Forster, climate scientist at University of Leeds. "By rapidly reducing greenhouse gas emissions over the next decade, we can halve the rate of warming," he added. https://www.reuters.com/business/environment/this-year-set-be-warmest-125000-years-eu-scientists-say-2023-11-08/

2023-11-08 11:51

First to get EU certification for lab-grown meat in pet food Aims for products to hit market next year, boost production Believes it has commercially viable cost for pet products PRAGUE, Nov 8 (Reuters) - Czech start-up Bene Meat Technologies is the first to win European Union registration for laboratory-grown meat for use in pet food and plans to boost production to make up to several metric tons per day next year, the company said on Wednesday. A number of firms are racing globally to develop commercially viable lab-grown meat and fish products to appeal to consumers concerned about ethical issues and the environmental impact of livestock farming, a major source of greenhouse gas emissions. In the United States, Upside Foods and Good Meat won regulatory approval in June for their so-called cultivated meat, made from animal cells, for human consumption, a second place after Singapore. But large-scale production is yet to begin. Bene Meat has turned its focus to the pet food sector to deliver a product that can be marketed to global pet food makers as a raw material for inclusion in their final products. "Today we have become the first company globally that has an official authorisation for the production and sale of cultivated meat for cats and dogs," Managing Director Roman Kriz told Reuters. The product received certification in the European Feed Materials Register, the company said. Kriz said the firm was able to scale up production and offer prices to make the product commercially viable. He said Bene Meat's costs would allow final products to sell around the price level of premium and super-premium pet food products on the market. Bene Meat next plans to test how the product tastes to animals, while scaling up production at its current Prague lab and at new premises it is looking for. "Right now we are in the order of kilograms per day," Kriz said. "We expect that during next year we will get to the level of hundreds of kilograms to single tonnes every day." The start-up, set up in 2020 and owned by Czech medical devices producer BTL group, has more than 80 researchers and developers and has invested "high single millions" of euros into development, Kriz said. It expects to become financially self-sufficient in the course of next year, Kriz said. Meat for human consumption also remains among its goals, Kriz said. Kriz said the firm, like others, used cells from live animals, which grow in a vessel known as a bioreactor, fed by a supply of nutrients. He declined to comment on details. He said apart from ethical and environmental issues, another benefit was that lab-grown meat was made under full control, while a consumer could not be 100% certain about what a farm animal ate all its life. The company is in talks with pet food makers on supplies, but also aims to work with them to potentially set up production lines at their current facilities. It also plans to develop its own brand of final pet food products. https://www.reuters.com/markets/europe/czech-firm-bene-meat-gets-eu-approval-lab-grown-meat-pet-food-2023-11-08/