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☆ High cost of capital a bane for energy transition ahead of COP28
▼ + stars: | 2023-11-28 | by ( Divya Chowdhury | ) www.reuters.com time to read: +2 min

REUTERS/Rula Rouhana Acquire Licensing RightsMUMBAI, Nov 28 (Reuters) - Advocates for the energy transition are concerned ahead of the COP28 summit in Dubai about the high cost of capital available to make change happen, as policymakers ratchet up their rhetoric on the need for tight monetary policy. COP28 is widely expected to focus on climate finance, specifically to build on the G20 nations' commitment to triple renewables deployment to about 11,000 gigawatts by 2030, which will need funds of around $4.5 trillion. Climate finance is going to be the "Achilles' heel" of COP28, said Vaibhav Chaturvedi, fellow at the Council on Energy, Environment and Water (CEEW). Linda-Eling Lee, head of the MSCI Sustainability Institute, said companies and investors cannot be expected to commit long-term capital to the energy transition if policymakers change track suddenly. Agreements on greater transparency in disclosures, along with innovations in finance, will help mobilise more private sector funds, Lee said.

Persons: Rula, Gauri Singh, IRENA, Vaibhav Chaturvedi, Chaturvedi, Linda, Eling Lee, Lee, Divya Chowdhury, Jan Harvey Organizations: Abu Dhabi Sustainability, REUTERS, Rights, International Renewable Energy Agency, Reuters Global Markets, Council, Energy, Bridgetown Initiative, World Bank, Bank, MSCI Sustainability Institute, Finance, Thomson Locations: UAE, Abu Dhabi, Rights MUMBAI, Dubai, Barbados, Bridgetown, Mumbai

REUTERS/Thomas White/Illustration Acquire Licensing RightsMUMBAI, Sept 22 (Reuters) - Indian bond markets won't see a jump in volatility in the near-term after JPMorgan (JPM.N) announced India's inclusion in its widely tracked emerging market debt index, BlackRock's head of Asia Pacific fixed income said on Friday. JPMorgan said 23 Indian Government Bonds (IGBs) with a combined notional value of $330 billion were eligible for inclusion in its Government Bond Index-Emerging Markets (GBI-EM) index and index suite, benchmarked by about $236 billion in global funds. Given the size of the $2 trillion global government bond market, it may add only a little bit to the volatility in Indian bond markets, Seth told the Reuters Global Markets Forum. Foreign investor buying in Indian bonds has remained tepid with net purchases of $3.4 billion so far in 2023. He also pointed to investment-grade credit in Asia and higher quality emerging market bonds, in a "tilt towards quality" as macro uncertainties persist.

Persons: Thomas White, Neeraj Seth, Seth, Divya Chowdhury, Savio Shetty, Alex Richardson Organizations: REUTERS, Rights, JPMorgan, Asia Pacific, Government, BlackRock, Reuters Global Markets, Thomson Locations: India, Rights MUMBAI, Asia, Mumbai

☆ No strong case for jacking up bank charges: ECB's Wunsch
▼ + stars: | 2023-09-21 | by ( ) www.reuters.com time to read: +2 min

Sept 21 (Reuters) - There are no strong arguments for the European Central Bank to increase mandatory reserves for banks, Belgian central bank chief Pierre Wunsch said on Thursday, weighing in on a key debate about a potential move to tighten policy further. The ECB cut to zero the rate it pays to banks on mandatory reserves earlier this year. Some policymakers are now pushing for an increase in the reserve requirement, in part to reduce losses associated with the multi-trillion-euro pool of excess liquidity sloshing around banks. "I don't see any strong argument for using movements in the reserve requirements when we still have this huge portfolio (of bonds) that we can reduce," Wunsch told the Reuters Global Markets Forum. But Wunsch said that reducing central bank losses should not be the objective of monetary policy and changing the rules now could make commercial banks wary of taking part in future stimulus schemes.

Persons: Pierre Wunsch, Wunsch, Banks, Divya Chowdhury, Balazs Koranyi, Jane Merriman, Chizu Organizations: European Central Bank, ECB, Reuters Global Markets, Thomson Locations: Belgian, Mumbai

☆ Policymakers see darker days ahead in China as growth sputters
▼ + stars: | 2023-09-07 | by ( Divya Chowdhury | ) www.reuters.com time to read: +3 min

MUMBAI, Sept 6 (Reuters) - Policymakers expect persistently slower growth in China, perhaps even more sluggish than current consensus estimates, seeing its transition from an infrastructure- and investment-led economy to becoming consumption-driven as "difficult". "The inflation rate in China is around 0% - that means distortion of domestic demand and domestic supply," he said. This follows economic growth in 2022 recorded at one of its worst levels in nearly half a century. The Croatian central bank chief sees narrowing room for expansionary policies in China, adding, "We have to be careful." The RBNZ has already factored in "a pretty subdued period" for commodity prices within their projections, before they see them beginning to rise again, Hawkesby said.

Persons: Takahide Kiuchi, Goushi Kataoka, Boris Vujcic, Robert Holzmann, Christian Hawkesby, Hawkesby, Divya Chowdhury, Savio Shetty, Lisa Mattackal, Mehnaz Yasmin, Mark Heinrich Our Organizations: Former Bank of Japan, Reuters Global Markets, European Central Bank, ECB, Reserve Bank of New Zealand, Thomson Locations: MUMBAI, China, Europe, Croatian, Austrian, United States, Mumbai, Bengaluru

☆ Reaching 2% inflation goal necessary for BOJ easy policy exit, says ex-board member Kataoka
▼ + stars: | 2023-09-04 | by ( Divya Chowdhury | ) www.reuters.com time to read: +2 min

MUMBAI, Sept 4 (Reuters) - The Bank of Japan (BOJ) will be able to gradually shift away from its easy monetary policy only after ensuring its 2% inflation goal has been sustainably achieved, former board member Goushi Kataoka said on Monday. Kataoka expected the Spring 2024 wage negotiations to be key for the BOJ's inflation mission, Kataoka, currently chief economist at PwC Japan, told the Reuters Global Markets Forum. Once it begins exiting policy, Kataoka expects the BOJ to first remove the peg on the 10-year Japanese government bond (JGB) yield, then exit its negative interest rate policy, and finally scrap the YCC policy. "Allowing the guide rate to effectively go as low as 1% would not be possible until the 2% (inflation) target is achieved," Kataoka said. "I'm worried about the stance of Kishida cabinet," he said, describing the previous administrations' tax hikes in 2014 and 2019 as undermining the Kuroda's bold monetary policy experiment.

Persons: Goushi Kataoka, Kataoka, Haruhiko Kuroda, BOJ, I'm, Divya Chowdhury, Savio Shetty, Anisha, Christina Fincher Organizations: Bank of Japan, Reuters Global Markets, Thomson Locations: MUMBAI, Mumbai, Bengaluru

☆ Full impact of Fed hikes still to be seen in real economy, ex-vice chair Blinder says
▼ + stars: | 2023-09-01 | by ( Lisa Pauline Mattackal | ) www.reuters.com time to read: +2 min

The Fed has cumulatively raised its target rate by 525 basis points to 5.25%-5.50% over the last 17 months. "I think there's a lot more to be seen," Alan Blinder, Fed vice chairman between 1994 and 1996, told the Reuters Global Markets Forum (GMF). So against that, if it's three months or four months faster, that's not a big deal, and suggests there's still plenty to come," Blinder added. Blinder also said core inflation tends to react to monetary policy action at a slower pace than headline inflation, and that coupled with the transmission lags means the Fed should consider pausing rates for some time from here. Reuters Graphics Reuters GraphicsThe 'last mile' of bringing inflation down may prove difficult for the Fed, Blinder said, adding that the central bank won't be "stubborn" if inflation settles somewhat above its stated 2% goal.

Persons: Alan Blinder, there's, Blinder, Lisa Mattackal, Divya Chowdhury, Savio Shetty, Andrea Ricci Organizations: U.S, Reuters Global Markets, Reuters Graphics Reuters, Fed, Thomson Locations: U.S . Federal, Bangalore, Mumbai

☆ Privacy, market maturity hurdles facing Brazil's CBDC rollout -cenbank official
▼ + stars: | 2023-08-29 | by ( Lisa Pauline Mattackal | ) www.reuters.com time to read: +2 min

Aug 29 (Reuters) - Maintaining privacy and increasing understanding of blockchain technology are primary issues to solve before Brazil's central bank digital currency (CBDC) is ready for widespread use, the central bank's coordinator of the project said on Tuesday. Named DREX, the digital real is set for a first phase launch aimed at financial institutions in May 2024, though postponed from an initial planned launch in February. "We need to ensure that the privacy is compatible with the law," he told the Reuters Global Markets Forum. Market maturity is another important issue to solve as the central bank wants businesses to develop new use cases for the technology, Araujo said. The Atlantic Council says 130 countries are in some process of exploring a CBDC, with 21 in the pilot stage.

Persons: Fabio Araujo, Araujo, Lisa Mattackal, Divya Chowdhury, Marcela Ayers, Lincoln Organizations: Machine, Banco Central, Reuters Global Markets, Atlantic Council, Bank for International, Thomson Locations: Brazil, Mexico, Singapore, Bangalore, Mumbai

☆ Investors manoeuvre, warily, for long-shot BOJ policy move
▼ + stars: | 2023-07-27 | by ( Kevin Buckland | ) www.reuters.com time to read: +5 min

SLOWLY, STEADILYBOJ sources say the central bank is leaning towards keeping its yield control policy unchanged as policymakers wait for data to affirm wages and inflation will keep rising. The benchmark 10-year JGB yield also retreated to 0.445% from as high as 0.485%. "We don't short the JGB market. In part, it's an expensive thing to do - as you know, the Bank of Japan owns 110% of the 10-year JGB market," he said. "Nobody's calling for them to hike aggressively, just bringing some function back to the JGB market, allowing themselves to step away because the data has given them an opportunity to do so.

Persons: Jimmy Lim, Lim, Kazuo Ueda, Nigel Foo, Haruhiko Kuroda, Jim Leaviss, Leaviss, Michael Michaelides, Ales Koutny, James Athey, Athey, Kevin Buckland, Ankur Banerjee, Summer Zhen, Alun John, Divya Chowdhury, Harry Robertson, Vidya Ranganathan, Edmund Klamann Organizations: Bank of Japan, Management, ING, Investors, G Investments, Vanguard, Thomson Locations: TOKYO, Singapore, FSI, abrdn

Investors now expect China markets to stage a recovery in the second half of 2023. "(China) markets have baked in a lot of the doom and gloom in the economy given the declines since January's peak," said macroeconomist Aidan Yao. If it is the case, spreads will start to tighten across the board," said Monchau, adding that China is under-represented in portfolios. Franklin Templeton expects the recovery in Chinese markets to happen in stages, with opportunities in the industrial equipment and banking sectors. "China (is) at the nadir of its business and profits cycle, but also offering what we consider compelling valuations."

Persons: Aidan Yao, Yao, Goldman Sachs, Charles, Henry Monchau, Mark Haefele, Franklin Templeton, Anisha, Divya Chowdhury, Hugh Lawson Organizations: Investors, Reuters Global Markets, Syz, UBS, Thomson Locations: COVID, U.S, Japan, Germany, China, Asia, Bengaluru

☆ 'Great Resignation' continues as quarter of workers look to change jobs - PwC
▼ + stars: | 2023-06-19 | by ( Divya Chowdhury | ) www.reuters.com time to read: +2 min

MUMBAI, June 20 (Reuters) - A quarter of workers surveyed by PwC expect to change jobs in the next 12 months, up from 19% last year, as they are increasingly left cash-strapped in a cooling economy while dealing with inflationary pressures. Even as the 'Great Resignation' continues, around 42% of the employees surveyed by PwC in its new study of the global workforce said they are planning to demand payrises to cope with the higher cost of living, up from 35% last year. "With the ongoing economic uncertainty, we see a global workforce that wants more pay and more meaning from their work," said Bhushan Sethi, joint global leader of PwC's people & organization practice. Around one worker in five is doing multiple jobs, with 69% of those saying they were doing so for additional income. Among the workers surveyed who were doing better financially, more than one-third said AI will improve their productivity, while a quarter expected AI to create new job opportunities.

Persons: Bhushan Sethi, Gen, Divya Chowdhury, Jan Harvey Organizations: PwC, Survey, Workers, Reuters Global, Thomson Locations: MUMBAI, Mumbai

MUMBAI, May 19 (Reuters) - Investors are looking beyond the U.S. technology sector's bounceback this year for longer-term returns, as higher interest rates and an uncertain macroeconomic picture could present further headwinds, fund managers and strategists said. "The tendency is that ... the sector that leads in one cycle doesn't tend to lead in the following cycle," Yoder told the Reuters Global Markets Forum. "We are staying away from the more interest rate-sensitive sectors such as tech," said Jonathan Mondillo, head of North American fixed income at abrdn. Anticipating an economic slowdown in the second half, more cautious and selective positioning across fixed income portfolios is a better bet, said Jonathan Duensing, head of U.S. fixed income at Amundi. "We've always felt that the tech sector in general is one where you need to be very selective," Duensing said.

May 18 (Reuters) - Equity markets in North Asia will outperform the broader region this year, buoyed by China's reopening and a post-pandemic recovery-led earnings rebound, investors and strategists said. Liquidity from easing monetary and fiscal policy, along with Asian central banks' early victory on inflation, is expected to defend against an incoming downtrend, keeping North Asian equities resilient. Grace Tam, chief investment officer-Asia at BNP Paribas Wealth Management, expects North Asia to outperform this year following a strong 2022 from South Asian equities. Goldman Sachs sees the north versus south disparity in Asia as a top investment theme in 2023. "China's growth recovery and North Asia's earnings rebound in 2024 remain our key investment themes and overweight areas," it said in its second-quarter outlook.

☆ Asian shares ride high in Q1 but keep vigil on inflation
▼ + stars: | 2023-03-31 | by ( Stella Qiu | ) www.reuters.com time to read: +5 min

The buoyant mood is likely to run into resistance in Europe, with caution setting in ahead of the euro zone inflation data. The pan-region Euro Stoxx 50 futures was flat, while S&P 500 futures eked out a gain of 0.2%. It is on course for a quarterly gain of 3.6%, after surging 12% in the three months that ended in December. Japan's Nikkei (.N225) also leaped 1%，as inflation data for the capital Tokyo highlighted broadening price pressures. That compared with an overwhelming bet on a 25 basis point hike a month ago before the banking volatility started.

DAVOS, Switzerland, Jan 20 (Reuters) - Kenya's central bank expects inflation to fall within its target range during the first quarter of 2023 and is comfortable with its trajectory, Governor Patrick Njoroge said at the World Economic Forum in Davos, Switzerland. Kenya's inflation in December dipped to 9.1%, still above the bank's target range of 2.5% to 7.5%. With that in mind, the bank expects the Kenyan economy to grow 6.2% this year, Njoroge said, and does not expect a potential global recession to be "unmanageable". The bank is also not worried about depreciation of the Kenyan shilling, and expects more external financing to support the government budget, Njoroge said. The Kenyan shilling has slipped 0.54% against the U.S. dollar this year after falling over 9% in 2022.

"At the same time, we're estimating a mild recession in Europe and the United States that offset it. Ngozi Okonjo-Iweala, director-general of the World Trade Organization, pointed out that the reopening could help supply chains work better and also boost consumer demand. CHINA-US TENSIONSAdjacent to the discussions on China's reopening was what it could mean for its existing tensions with the United States over issues such as technology, trade and Taiwan, which several WEF delegates expressed concern over. "I think both the U.S. and China will be hurt, which doesn't just mean the national entities but workforces, people will be hurt." For daily Davos updates in your inbox sign up for the Reuters Daily Briefing here.

☆ Davos 2023: Big oil comes in from the cold on energy transition
▼ + stars: | 2023-01-20 | by ( Maha El Dahan | ) www.reuters.com time to read: +6 min

CHINA OUT./File Photo/File PhotoSummarySummary Companies Energy transition front and centre at Davos meetingEurope energy crisis forces moment of reckoningClimate activists sceptical of oil industry inclusionDAVOS, Switzerland, Jan 20 (Reuters) - A different type of energy transition has taken place at this year's World Economic Forum (WEF) meeting. Unlike 2021's COP26 climate conference in Glasgow, where oil and gas executives were personae non gratae, fossil fuel chiefs and renewable energy bosses sat cheek by jowl in Davos. Thunberg's was not the only voice at Davos with strong objections to the industry's new mantra that the energy crisis justifies new oil investments. Like Birol, British opposition leader Keir Starmer said the oil and gas sector has a role to play in the energy transition. Jaber, who is the founding CEO of Abu Dhabi’s renewable energy firm Masdar and has overseen the UAE's mandate to adopt renewables is not without green credentials.

DAVOS, Switzerland, Jan 19 (Reuters) - International Energy Agency (IEA) head Fatih Birol said on Thursday that energy markets could be tighter in 2023, adding he hoped prices would not rise further in order to ease the pressure on energy-importing developing countries. "I wouldn't be too relaxed about the markets and 2023 may well be a year where we see tighter markets than some colleagues may think," IEA Executive Director Birol said in an interview with the Reuters Global Markets Forum in Davos. Two Gulf OPEC+ producers, UAE energy minister Suhail al-Mazrouei and Saudi Aramco chief Amin Nasser, have said this week they see oil markets as balanced. Birol said Russian oil exports seemed to be more "resilient" than predicted at the beginning of last year, but that they were correct in terms of "the direction of travel". On Russian product price caps which may come into effect next month, Birol said he was concerned about diesel supply.

[1/4] People stand in front of the Blockchain Hub Davos 2023 at the Promenade road during the World Economic Forum (WEF) 2023, in the Alpine resort of Davos, Switzerland, January 16, 2023. REUTERS/Arnd WiegmannDAVOS, Switzerland, Jan 19 (Reuters) - In the snow and ice on the main drag in Davos, the impact of the crypto winter is plain for WEF attendees to see. Executives in Davos said they are now all about blockchain technology, proper controls and regulation, and the promise of disruption that it holds for financial services and beyond. Colm Kelleher, chairman of Swiss bank UBS (UBSG.S), told a WEF panel that blockchain technology will help reduce costs for banks. "We kind of dodged a bullet," Kelleher said, noting that the collapse in the value of crypto currencies had not caused systemic problems.

☆ Davos 2023: Global trade rethink: 'race of the big pockets'?
▼ + stars: | 2023-01-19 | by ( Mark John | ) www.reuters.com time to read: +5 min

SummarySummary Companies US climate bill concerns dominate Davos trade talkSome fear "rich-country game" of rising state subsidiesRevamped globalisation must benefit all, Davos toldDAVOS, Switzerland, Jan 19 (Reuters) - The United States pitched its vision of "worker-centric" trade. "I am very concerned," World Trade Organization (WTO) chief Ngozi Okonjo-Iweala told Reuters on the sidelines of the meeting in Davos, Switzerland. Three decades of free global trade have, the International Monetary Fund estimates, lifted more than a billion people out of extreme poverty. The United States notably built into its trade pact with Mexico a mechanism for identifying and dealing with the denial of worker rights. U.S. Trade Representative Tai told a panel on Wednesday the United States wanted to "lead a conversation" on a new version of globalisation.

☆ Davos 2023: LME CEO says nickel reforms to be implemented 'relatively quickly'
▼ + stars: | 2023-01-18 | by ( Divya Chowdhury | ) www.reuters.com time to read: +2 min

DAVOS, Switzerland, Jan 18 (Reuters) - The London Metal Exchange (LME) will implement recommendations on accountability and position limits "relatively quickly" from an independent review of last year's nickel crisis to prevent market distortions and improve risk monitoring, its chief executive officer said on Wednesday. "The recommendations around accountability levels and position limits are particularly important, are broadly rules-based, so could be brought about quite quickly," LME CEO Matthew Chamberlain said on the sidelines of the World Economic Forum's annual meeting in Davos, Switzerland. The LME, the world's largest and oldest metals forum, annulled all nickel trades on that day, for which it is facing legal action, and suspended the market for the first time since 1988. Independent consultancy Oliver Wyman was appointed by the LME to carry out a review of the debacle. He said the LME plans to make its platform more attractive to traders by not increasing fees in 2023 "even with inflation".

DAVOS, Switzerland, Jan 18 (Reuters) - The European Bank for Reconstruction and Development expects a record loss in 2022, primarily due to losses from its portfolio holdings in Russia and Belarus, EBRD President Odile Renaud-Basso said on Wednesday. The bank earlier reported record investments in 2022 of about 13.1 billion euros ($14.1 billion), and expects to continue investments targeted around food and energy security, Renaud-Basso said. It may make record investments in Tunisia. Renaud-Basso reiterated the bank's commitment to send 3 billion euros to Ukraine by the end of this year, particularly to help rebuild infrastructure. That would mean an expected deployment of around 1.3 billion euros in 2023, following last year's disbursement of 1.7 billion euros.

DAVOS, Switzerland, Jan 18 (Reuters) - Heavy electrical company ABB Ltd (ABBN.S) Chairman Peter Voser sees his firm acquiring between five to 10 small-to-medium enterprises a year to add to the company's organic business, he said on Monday. "Each division of ABB should be active in organic and inorganic strategies, which would see ABB acquiring between five to 10 small-to-medium business every year," Voser told the Reuters Global Markets Forum on the sidelines of the World Economic Forum's annual meeting at Davos. Zurich-based ABB raised around 200 million Swiss francs in November, which at the time was around $209 million, from selling an 8% stake in its EV charging business. "We are constantly looking at both opportunities of further private placements and/or floating, but we are under no pressure," Voser said. That's fair to say, given the population and the economies there, but I wouldn't underestimate the growth potential in the U.S.," Voser said.

"The idea that somehow cryptos are going to maintain value, while the fiat currencies collapse. That's nonsense," Rajan said on the sidelines of the World Economic Forum's annual meeting in Davos, Switzerland. The wider crypto market shrank by $1.4 trillion in 2022 with bitcoin losing 60% of its value. One cause for worry, however, could be that labor markets were tight as nobody wanted to fire people, given how hard it was to hire them to begin with, he said. For daily Davos updates in your inbox sign up for the Reuters Daily Briefing here(Join GMF, a chat room hosted on Refinitiv Messenger: https://refini.tv/33uoFoQ)Reporting by Divya Chowdhury in Davos and Savio Shetty in Mumbai; editing by Jonathan OatisOur Standards: The Thomson Reuters Trust Principles.

Jan 17 (Reuters) - EY Global expects favourable market conditions by the end of this year or early 2024 to list its consulting and a part of the tax business if a proposed split of its accounting and consultancy arms is approved, a company official said on Tuesday. "(The split) will involve a debt raise, and a form of capital transaction - both of those are influenced by market conditions," said Andy Baldwin, global managing partner-client service at EY. The vote, which will take place in around 77 countries, is "probably one of the most complex in corporate history", Baldwin said. He also said that the exchanges to list the business were still under consideration, adding that it was expected to be a "$25 billion plus start-up from the get go". Reporting by Divya Chowdhury in Davos, Savio Shetty in Mumbai and Anisha Sircar in Bengaluru; Editing by Nick MacfieOur Standards: The Thomson Reuters Trust Principles.

DAVOS, Switzerland, Jan 16 (Reuters) - Job cuts are not "top of mind" for Manulife Financial Corp (MFC.TO), Canada's largest insurer, as it sees significant growth opportunities, fuelled particularly by Asia, CEO Roy Gori said on Monday. "We are in growth mode," Gori told the Reuters Global Markets Forum on the sidelines of the World Economic Forum's annual meeting in Davos, adding that his firm has been increasing headcount. "We are growing at more than double or triple the GDP in most of the markets that we operate in. That means that we're investing organically to grow our business and ... possibly looking at inorganic opportunities for growth as well." The prospect of an imminent global recession cast a long shadow over Davos on Monday as participants counted the likely cost for their economies and businesses.

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