Tesla officials are set to meet with Indian government representatives over the coming days to discuss local procurement of parts. The discussions will take place a year after the electric car manufacturer placed plans to sell vehicles in India on hold, citing the country’s high import taxes. At the time, Tesla wanted to see lower tariffs to make it easier to test the local market, though it would later abandon its plans there altogether.
The Governor of the Russian Central Bank, Elvira Nabiullina, has said that Russian companies that leave the country should float a portion of acquired shares on the stock exchange. She is looking to help encourage foreign investment no matter whether it is from a friendly or unfriendly country. The central bank has proposed a plan whereby foreign companies selling their businesses to Russia will be required to list around 10-20% of shares on the market. No effect is going to happen from this proposal on previously concluded deals.
Mexican President Andres Manuel Lopez Obrador said that talks on the sale of Citibanamex, Citigroup’s retail bank, to mining and transport conglomerate Grupo Mexico are "going really well". The bank was first put up for sale over a year ago as part of Citigroup's efforts to simplify its global business. Grupo Mexico is thought to be in advanced discussions over a $7bn deal that would leave Citi with 10% of Banamex.
Trading firm IXM, owned by China’s CMOC, has reportedly built a dominant position in London Metal Exchange’s aluminium market. The high levels of aluminum deposited with IXM could allow them to pick up large volumes of aluminium from LME warehouses especially as the May contract expires, potentially strengthening its hand in the physical market if industrial demand starts to rebound. However, a large withdrawal of Indian aluminium from the exchange last week means that IXM would likely be taking ownership of Russian metal that some consumers are trying to avoid.
Japan's GDP figures for the first quarter are set to be the highlight for Asian markets on Wednesday, with expectations of annualised growth of 0.7%, the fastest rate in three quarters, leading to Tokyo stocks opening up 0.2%. China's weaker than expected economic data for April has resulted in slumps across Chinese financial assets, with April house prices also due on Wednesday. Although offshore investors have a new scheme to link Hong Kong with the mainland in order to access interest rate derivatives to help hedge their Chinese bond exposure, concerns about debt demand have cast extra doubt over the yuan's ability to gain reserve currency status.
The International Monetary Fund has expressed its support for Brazil's efforts to improve its fiscal position, whilst applauding the country's sustainable, inclusive and green economy. The IMF views that broadening the tax base and tackling spending rigidities will support sustainability and credibility. Brazil's finance ministry recently unveiled new fiscal rules to balance limits on spending growth under President Luiz Inacio Lula da Silva's administration.
Brazil's Finance Ministry is exploring new initiatives to increase tax revenue, including a review of income tax deductions and exemptions, according to anonymous sources. The potential measures are hoped to improve Brazil's fiscal stability, which has been threatened by leftist President Luiz Inacio Lula da Silva's aim to direct more money towards social projects. The potential initiatives would include taxing company profits and dividends and changing the tax laws on some investment funds. The government estimates that due to exemptions, it is set to lose BRL51.1 billion ($10.2 billion) and BRL31.3 billion from deductions in its 2024 budget bill.
China's yuan has weakened towards the 7-per-dollar threshold, its weakest this year, after weaker-than-expected economic data raised concerns about the country's growth prospects. Analysts predict that if it falls below 7, the currency could trigger retaliatory measures by US President Donald Trump, who has repeatedly accused Beijing of manipulating its currency. Some see a weaker yuan as a tool China could use to ease the effect of US tariffs and a slowing economy, but it also risks capital flight from the country.
India's Jindal Steel's Q4 profit down 70% as prices fall, expenses rise
Reuters
23-05-16 22:30
Jindal Steel and Power Ltd has reported a 69.5% fall in quarterly profit due to lower steel prices and higher costs of raw materials including iron; the weak steel prices are also affecting their rival Tata Steel. However, the slump could ease after Pokemon Go fever caused prices for the metal compounds needed to make smartphones jump. Additionally, India's Ministry of Steel is determined to ensure stable iron ore supplies and reduce prices so as to boost profitability for local steelmakers such as JSPL, Tata Steel and Steel Authority of India. The weak global steel prices are mainly due to a China-driven supply glut.
Uncertainty over the US debt ceiling is set to continue as traders brace for April inflation data for the eurozone, with European markets predicted to open lower. UBS Group AG is poised to release its financial statement detailing the $17bn hit it took from the takeover of Credit Suisse Group AG. Meanwhile, BlackRock is requesting its staff return to the office at least four days a week as pandemic restrictions are lifted globally. The recession in Japan has lifted as the country rebounds post-pandemic to offset global economic challenges, while Warren Buffett increased his influence in Capital One Financial Corp.
Despite operating at 78% of pre-Covid capacity and carrying almost 10 million fewer passengers, Singapore Airlines has reported record annual results. The carrier's airfares remain elevated and it has seen strong bookings for China, Japan and South Korea. Meanwhile, Hong Kong's Cathay Pacific still has a way to go before reaching pre-pandemic levels, with last year's revenue only about half of what it was before.
The pandemic has created the wrong sort of decoupling for emerging markets, hurting their performance over the past three years, warns John Authers in Bloomberg Opinion. However, he added "none of this means that there won’t be a decoupling; but it’s not going to be the panacea that many have long wanted it to be". If China becomes the pole of what is effectively a different financial system, reshoring and deglobalisation will create opportunities in the emerging world, but it will also make them much harder to take advantage of, warns Authers. Nevertheless, these markets are experiencing some signs of recovery after a decade of underperformance, following the brief bull market which came to an end in the Global Financial Crisis in 2008.
Meanwhile, there is concern over the budget strategies of the US. Ted Decker, CEO of Home Depot, expects comparable sales to drop as much as 5% this fiscal year — the first annual decline in 14 years. Despite problems so far being driven by unusual conditions such as the price of lumber falling, according to Authers, if the recession risks loom larger over the US economy, and workforces normalize with new return-to-office policies, then support will fade for such firms that have been doing so well during the pandemic’s economic conditions. This would spell the end of the trends that Authers calls the home-building boom, e-commerce and working from home/home improvement.
VinFast, Vietnam's electric automaker, plans to launch an electric pickup truck and a city car model in addition to its current model lineup. The company also expects to break even by the end of 2024, according to founder Pham Nhat Vuong. VinFast will list in the US through a merger with a special purpose acquisition company (SPAC), Black Spade Acquisition Co. The deal is expected to close in the second half of 2023, and VinFast has received funding pledges of $2.5bn from Vingroup and Vuong.
No Singapore Airlines group A320neos with Pratt engines grounded - exec
Reuters
23-05-17 03:55
The Airbus A320neo planes in the Singapore Airlines group powered by Pratt & Whitney engines are not being grounded for lack of spares, said Leslie Thng, the CEO of Scoot. His remarks on the subject came during an earnings call for Singapore Airlines, which announced positive results for 2019-20. The Pratt engines were in the news this month due to Go Airlines' bankruptcy, blamed on "faulty" power units. While Pratt denies any allegations of engine issues, IBA Aviation said earlier this month that 12% of neos with Pratt GTF engines were inactive, compared with 4% of those with rival engines made by CFM International.
Indian yogurt maker Epigamia, which is backed by Danone and Belgian investor Verlinvest, has abandoned plans to sell its business following struggles in a market hit by inflation. The plans change comes as a number of Indian start-ups focus on profits in the face of a funding squeeze and increased scrutiny from investors. Epigamia has opted to launch products in the Middle East market by 2025-26.
The Czech government has stated that there is no room for further increases to the minimum wage this year, amid calls from unions for a 5.8% hike from July. The minimum monthly wage increased to CZK 17,300 ($814.42) in January, with unions seeking another CZK 1,000 in the summer and an additional CZK 1,200 from January 2023. The country's main employers' association has already rejected any rise. Meanwhile, the central bank's policymakers are watching wage growth as industrial pay is expected to increase by around 10% this year, with fears of a wage-price spiral emerging.
India's Sterlite Tech swings to profit in Q4 on optical networking boost
Reuters
23-05-17 08:58
Indian firm Sterlite Technologies has reported consolidated net profit of INR650m ($8m) for Q4 2022, compared to a net loss of INR220m in the same period a year ago. Consolidated revenue from operations increased by 25% to INR18.72bn. The company provides end-to-end data connectivity solutions, produces optical fibres, and builds infrastructure for cable and mobile networks, including 5G, such as for Bharti Airtel, UK company Netomnia and Australia's Vocus Group. Sterlite's board has also approved demerging its global services business arm into a to-be-listed unit called STL Networks.
Renewable fuels from a second Neste facility in Singapore, along with the completion of two further phases of progress at the company's US renewable diesel joint venture with Marathon Oil, will drive growth despite falls in oil product margins in Q2 of this year, according to CEO Matti Lehmus. Neste has ramped up production at its Singapore plant, opened a joint venture fuel storage scheme for sustainable aviation fuel for Singapore's Changi Airport, and has supplied such fuel to numerous airports in Japan and New Zealand.
Devyani International, the KFC restaurant operator, has reported a 21% slump in Q4 profit due to a surge in expenses despite revenue from operations surging 28% as it opened 66 new stores. Devyani, which is also the sole franchisee for the Costa Coffee brand in India, reported consolidated net profit was £7.4m ($9.68m) for the period to March 2017. Despite a surge in revenue its Pizza Hut stores are facing intense competition from local brands offering cheaper options and Domino's Pizza.
Italian Prime Minister Giorgia Meloni will discuss whether or not Italy should withdraw from China's Belt and Road Initiative with the Group of Seven allies. Italy signaled its intent to quit the initiative with $900bn of funded infrastructure projects worldwide only this month, despite being the only G7 country to sign onto the initiative in 2019. As Beijing's relationship with Moscow continues to grow, business leaders are calling for a de-escalation of dependencies on China, whilst neither Europe nor America wants to incite the harsh decoupling that would detrimentally affect the western economies.
