2024-05-15 12:34

BRASILIA, May 15 (Reuters) - Brazil's economy exhibited a higher-than-expected contraction in March but still managed to clinch a positive performance in the first quarter, central bank data showed on Wednesday. The country's IBC-Br economic activity index, considered a leading indicator of gross domestic product (GDP), posted a seasonally adjusted growth of 1.08% in the first quarter. The quarterly performance followed a 0.34% decrease in March from the previous month, compared with a 0.25% drop expected by economists polled by Reuters. On a non-seasonally adjusted basis, the IBC-Br index fell by 2.18% over March 2023 but increased by 1.68% in the 12-month period. Latin America's largest economy has been propelled by increased household consumption amid rising disposable income under policies of larger welfare cash handouts and real mininum wage gains implemented by leftist President Luiz Inacio Lula da Silva. This backdrop is also supported by a robust labor market, which has been driving growth in the service sector. However, GDP is expected to slowdown compared to last year's growth of 2.9%. While the government officially projects a 2.2% expansion for the economy this year, economists surveyed on a weekly basis by the central bank forecast a slightly lower rise of 2.09%. There are still uncertainties regarding how the historic flooding in Brazil's southernmost state of Rio Grande do Sul, which caused widespread destruction and displaced over half a million people, will impact economic activity. In the minutes of its latest decision released on Tuesday, the central bank acknowledged that the tragedy would affect the economy, stressing the commitment to monitoring the situation. Sign up here. https://www.reuters.com/world/americas/brazil-activity-posts-first-quarter-growth-despite-march-contraction-2024-05-15/

2024-05-15 12:08

May 15 (Reuters) - The recent surge in bitcoin prices has the phones at crypto wallet recovery firms ringing off the hook, as retail investors locked out of their digital vaults make frantic calls to regain access to their accounts. Cryptocurrencies exist on a decentralized digital ledger known as blockchain and investors may opt to access their holdings either through a locally stored software wallet or a hardware wallet, to avoid risks related to owning crypto with an exchange, as in the case of the former FTX. Losing access to a crypto wallet is a well-known problem. Investors forgetting their intricate passwords is a primary reason, but loss of access to two-factor authentication devices, unexpected shutdowns of cryptocurrency exchanges and cyberattacks are also common. Wallet passwords are usually alphanumeric and the wallet provider also offers a set of randomized words, known as "seed phrases", for additional security - both these are known only to the user. If investors lose the passwords and phrases, access to their wallets is cut off. With bitcoin prices regaining traction since last October and hitting a record high of $73,803.25 in March, investors seem to be suffering from a classic case of FOMO, or the fear of missing out. Reuters spoke to nearly a dozen retail investors who had lost access to their crypto wallets. Six of them contacted a recovery services firm and managed to regain access to their holdings. "What would be driving this trend is the fact that bitcoin prices are at $60,000, not $30,000... it's just pure economics," said Steve Sosnick, chief strategist at Interactive Brokers. "People who are missing their crypto for one reason or another, or those who don't have access to their crypto, are very much incentivized to get it back." The world's largest cryptocurrency has surged 161% in the past two quarters, on hopes of a cut in interest rates by the U.S. Federal Reserve and optimism around the launch of spot bitcoin exchange-traded funds (ETFs). BOOM IN RECOVERY REQUESTS A Switzerland-based firm that uses Nvidia's (NVDA.O) New Tab, opens new tab graphic processing unit cards to run artificial intelligence models to access stranded wallets saw requests jump tenfold in the first quarter, compared with the year-ago period. "We have seen a spike (in requests to unlock wallets) every time the price changes dramatically," said a top executive at the firm who did not want to be named. ReWallet, a Germany-based wallet recovery services provider, saw a 334% jump in requests in the previous quarter and logged a record-high number of requests in early March, when bitcoin prices touched an all-time peak. The firm estimates that about 20% of the total 19 million bitcoins in circulation, as of March 13, are likely inactive and now worth around $237 billion. U.S.-based Wallet Recovery Services saw a 30% bump in requests this year as of mid-April. Recovery services provided by firms do not come cheap. ReWallet and WRS charge a 20% fee on the wallets' contents, with the caveat being they get paid only upon retrieval. INVESTORS' WALLET RECOVERY ATTEMPTS "I was simply worried that I would no longer have access (to my wallet) and thus lose my bitcoins forever," said an investor living in Germany, who declined to be named. "Of course, the high bitcoin price was an incentive to finally tackle this." Another Switzerland-based investor, who also requested anonymity, said, "I had secured the wallet with passphrases and couldn't remember it. I tried again and again and created various lists with possible alternatives, but unfortunately without success." Recounting ReWallet's retrieval of his bitcoin holdings, now worth over $300,000, he said, "It was an indescribably great feeling. I'm retiring in one-and-a-half years and I now feel financially well positioned." Speaking about investors' struggles, Ralf Wintergerst, chief executive of German security technology firm Giesecke+Devrient said, "Looking ahead, there is a growing trend towards solutions that mitigate the key management problem inherent in self-custody." "This could entail the use of multi-signature wallets, or other decentralized recovery mechanisms to distribute responsibility and enhance security." Sign up here. https://www.reuters.com/technology/wallet-recovery-firms-buzz-locked-out-crypto-investors-panic-bitcoin-boom-2024-05-15/

2024-05-15 11:53

BOGOTA, May 15 (Reuters) - Colombia's average daily oil output is closing in on 800,000 barrels per day (bpd) even as the Andean country increasingly looks to boost renewable energies, the president of the National Hydrocarbons Association (ANH) regulator said. The government of leftist President Gustavo Petro has said it wants to wean Colombia off of its dependence on oil and coal in favor of solar, wind, and geothermal energy, though many renewable energy projects are facing significant hurdles. The boost to Colombia's oil output from 777,000 bpd last year comes from better management of existing oil and gas contracts, ANH President Orlando Velandia said late on Tuesday. "Our goal this year is to very quickly reach close to 800,000 bpd," Velandia said, adding the figure could nearly be reached in May. Environmental licensing delays and the country's long-running conflict have led to the suspension of some 30 hydrocarbon contracts, Velandia said. "In the last three months we've managed to mitigate problems that would have generated at least 10 additional suspensions," he said. Petro's government has not held any new oil and gas licensing rounds. Signing more contracts is no guarantee of increasing resources, Velandia said, adding sometimes investments never appear. "Why don't the investments materialize? Because, unfortunately, we have found some cases of speculation with these contracts," he said. The ANH will examine existing contracts to clamp down on companies which are not fulfilling agreements, Velandia said. "We're going contract by contract to see where there really are good reasons to suspend these activities and where there aren't, to declare possible non-compliance due to negligence," he said. Industry critics have said no new licensing might affect energy self-sufficiency, but Velandia pointed to oil and gas reserves of about five to eight years. Statistics for reserves as of the end of 2023 will be released this week, he added. Colombia is set to hold its first-ever offshore wind auction, which majority state-owned energy company Ecopetrol (ECO.CN) New Tab, opens new tab could join. At least five companies have shown interest in bidding, Velandia said, while others have approached the regulator to request information. "A significant number of companies have shown their interest since the opening of the process and that makes us very optimistic," Velandia said. Sign up here. https://www.reuters.com/markets/commodities/colombia-oil-output-closing-800000-bpd-regulator-head-says-2024-05-15/

2024-05-15 11:52

FRANKFURT, May 15 (Reuters) - Stress in the euro zone market for home loans is "manageable" despite higher interest rates stretching borrowers and lax checks by some banks, the European Central Bank said on Wednesday. Record high interest rates, imposed by the ECB to bring down inflation, have taken a toll on house prices, particularly in countries where there had been boom when rates were low, such as Germany. The ECB reviewed the mortgage books of 37 euro zone banks, accounting for 40% of the sector's 3.7 trillion euros ($4.00 trillion) exposure to residential real estate (RRE). It found deficiencies in how mortgages are originated but still came away with a reassuring message. "While the review uncovered some challenges in the RRE sector, the overall outlook remains relatively positive," the ECB said in a newsletter. "Although RRE is under some stress, this appears manageable, and banks are actively engaged in addressing concerns." Of the 1.4 trillion euros worth of home loans outstanding as of last June, 412 billion euros were set to have their interest rate re-set - likely much higher - by June 2025, the ECB said. "This will entail a material risk for borrowers not able to meet higher interest rates," it added. The ECB's review also showed that lenders were still not adequately weighing up risks before granting a mortgage - 16 years after a global financial crisis that started in that market and a decade since the ECB took over bank supervision. For example, banks in certain countries did not apply limits on the ratio between a loan and the value of the property, or between the cost of servicing a mortgage and the borrower's income - or that those thresholds could be overruled. Specifically, 46.5% of mortgages originated in the 12 months to June 2023 had a loan-to-value ratio of more than 80%, and even exceeding the value of the property in 16.5% of the cases. Banks appeared to be taking more risks just before, or when, rates started rising: between June 2021 and June 2023, the share of mortgages extended to borrowers who spend more than 30% of their income on servicing the loan increased from 47% to nearly 53%. "The 30% threshold is not risky in itself but it is from that level onwards that deterioration might appear," the ECB said. For around 40% of new home loans originated between in the year to June 2022, collateral valuations were not carried out by a valuer. Banks also "seem to struggle" with assessing a borrower's repayment capacity. The ECB said banks have been "asked to remediate deficiencies" and the findings will not affect requirements. "Overall, while there are areas for improvement, the banking sector's response suggests there is a commitment to mitigating risks and maintaining stability in the RRE landscape," the ECB said. ($1 = 0.9240 euros) Sign up here. https://www.reuters.com/markets/europe/ecb-says-stress-home-loans-manageable-despite-high-rates-lax-checks-2024-05-15/

2024-05-15 11:23

LONDON, May 15 (Reuters) - The British government is driving billions of pounds of investment away from the UK by failing to provide clear policies to support the transition to a low-carbon economy, a survey of 100 financial services firms showed on Wednesday. Britain has positioned itself as a world leader in sustainable finance but its leadership is under threat from a lack of clear policymaker support, the UK Sustainable Investment and Finance Association (UKSIF) said. Two-thirds of the firms, which represent in all around 1 trillion pounds ($1.26 trillion) in annual turnover and 200 billion pounds in green investments, said they have already moved or plan to move investments out of the country to a market that is more supportive of their sustainability goals. James Alexander, CEO at UKSIF, said Britain was at a "crucial inflection point" that could see it benefit from billions of pounds of investment, or "drive away much needed private capital in the UK". Delays in implementing the UK's green taxonomy - a list of climate friendly activities - and slow progress on adopting global standards for corporate climate reporting from the International Sustainability Standards Board were examples of where investors wanted to see faster action, UKSIF said. Alexander called for the introduction of mandatory corporate transition plans, greater clarify on the fiduciary duty of pension schemes as it relates to climate finance and a push to embed biodiversity into the regulatory framework. Actions like these, UKSIF said, could unlock some 100 billion pounds of investment in the national economy, with 95% of respondents to the survey saying they would increase investment if favourable government policies were implemented. ($1 = 0.7930 pounds) Sign up here. https://www.reuters.com/world/uk/uk-policy-inertia-puts-risk-billions-climate-capital-survey-shows-2024-05-15/

2024-05-15 11:17

May 15 (Reuters) - Singapore Airlines (SIAL.SI) New Tab, opens new tab posted its highest-ever annual profit on Wednesday on a rebound in demand for air travel, and said it expects this trend to continue into the first quarter of fiscal 2024. The flag carrier's upbeat results come as the broader aviation industry grapples with supply chain bottlenecks and a more cautious outlook in Asia as China's international travel rebounds from the pandemic at a slower pace than anticipated. "The demand for air travel remains healthy in the first quarter of FY2024/25, supported by a strong pickup in forward bookings to North Asia and Southeast Asia," it said. The airline cautioned that passenger yields would likely continue to moderate as airlines bring more capacity online, especially in the Asia-Pacific region. SIA Group saw a higher demand for air freight from Asia in the second half of the year, as security concerns in the Red Sea region aided a change in mode of transportation. Passenger load factor — a measure of how many seats are filled on planes — for the group as a whole was 88% for the year, compared with 85.4% in the previous year. The airline posted a net profit of S$2.68 billion ($1.99 billion) for the year ended March 31, compared with a previous record S$2.16 billion a year ago, which ended three years of losses. SIA, which is set to be a 25.1% owner of Air India following a merger of its Vistara joint venture with the Tata Group-controlled airline, said annual revenue rose 7% from a year earlier to S$19.01 billion. The company proposed a final dividend of 38 Singapore cents per share, up from 28 Singapore cents declared last year. Singapore Airlines Group operates Singapore Airlines, its flag carrier, and Scoot, its low-cost subsidiary. ($1 = 1.3486 Singapore dollars) Sign up here. https://www.reuters.com/business/aerospace-defense/singapore-airlines-posts-record-annual-profit-2024-05-15/