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☆ BT pensions scheme lost $12 bln in assets after UK 'mini-budget' -annual report
▼ + stars: | 2022-10-18 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 18 (Reuters) - The British Telecom (BT.L) pension scheme, one of Britain's largest, lost around 11 billion pounds ($12.44 billion) in assets in recent weeks, it said in its annual report on Tuesday, as bond yields soared following the UK government's botched 'mini-budget'. "Prior to the Bank of England's gilt market intervention, there was an estimated 11 billion pound fall in the value of the scheme's assets." Register now for FREE unlimited access to Reuters.com RegisterThe hit to the scheme's assets underscores how dramatic the moves in financial markets were for pension fund users of so-called liability-driven investment. The Bank of England had to intervene to stabilise the bond market on Sept. 28 and stop some pension funds from running out of short-term cash. The BT pension scheme had already lost 10.4 billion pounds in assets to 46.9 billion pounds over its 2021/22 financial year, "largely driven by the performance of our liability hedging investments", it said in the annual report.

☆ Sasol, ArcelorMittal to jointly explore green hydrogen, carbon capture projects
▼ + stars: | 2022-10-18 | by ( ) www.reuters.com time to read: +2 min

Oct 18 (Reuters) - South African petrochemicals company Sasol (SOLJ.J) on Tuesday said it was partnering steelmaker ArcelorMittal South Africa (ACLJ.J) to explore carbon capture technology and steel production using green hydrogen. ArcelorMittal South Africa is Africa's biggest steel producer, with a significant carbon footprint. In a statement, Sasol said the two firms would jointly advance a green hydrogen and derivatives study on the Saldanha region's potential as an export hub for green hydrogen and derivatives, as well as green steel production. They will study the use of renewable electricity and green hydrogen to convert captured carbon from ArcelorMittal's Vanderbijlpark steel plant into sustainable fuels and chemicals, it said. "These studies are anchored by the local need for green hydrogen and sustainable products, cementing Sasol as the leading contributor to the development of southern Africa's green hydrogen economy," said Priscillah Mabelane, Executive Vice President for Energy.

☆ EU to propose extra energy measures, swerve immediate gas price cap
▼ + stars: | 2022-10-18 | by ( Kate Abnett | ) www.reuters.com time to read: +2 min

The measure must not affect EU security of gas supply, cause an increase in gas use, or disrupt the functioning of gas markets, it said. The move to curb TTF gas prices would require a separate proposal from Brussels and require approval from EU countries. The EU package is unlikely to placate all 27 EU countries - whose leaders will discuss the proposals at a summit on Oct. 20-21. Most EU countries have urged the Commission to urgently propose a gas price cap, but disagree on its design. EU energy regulators would also be changed with developing a new liquefied natural gas price benchmark by the end of March, and Brussels will launch a "tool" for EU countries to start jointly buying gas, according to the draft.

☆ Wall Street surges as market seeks bottoming signs
▼ + stars: | 2022-10-17 | by ( Reuters Staff | ) www.reuters.com time to read: +6 min

FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. That seems to be the daily MO for the market.”PHIL BLANCATO CEO OF CEO OF LADENBURG THALMANN ASSET MANAGEMENT“This is the turnaround week every single year. If you look for the single best turnaround week for the year, it’s always the second week of October. The fourth quarter is on average the best quarter every single year and on average the turnaround week happens the second week of October. You’re seeing earnings hold on so far.

☆ EU Commission to propose potential 'dynamic' gas price cap
▼ + stars: | 2022-10-17 | by ( ) www.reuters.com time to read: +3 min

Register now for FREE unlimited access to Reuters.com RegisterThe Commission is recommending potential interventions in the Dutch Title Transfer Facility (TTF) price that is widely used in Europe for contracts and hedging. The EU executive would "as a last resort" propose establishing a market "dynamic" price at which natural gas transactions can take place in the TTF spot market under specific conditions. Other EU gas trading hubs would be linked to the corrected TTF spot price via a dynamic price corridor. "As a result of falling gas prices, this proposal shows that the appetite for ambitious reform, such as a price cap, is fading," said Georg Zachmann, an energy expert at think tank Bruegel. The proposals will need approval by EU governments, which have bickered for more than a month since the Commission first proposed a price cap only on Russian gas in early September.

☆ These are Goldman's favorite options plays for a volatile earnings season
▼ + stars: | 2022-10-17 | by ( Jesse Pound | ) www.cnbc.com time to read: +2 min

With earnings season in full swing, many investors are looking toward the options market to find ways to bet on big one-day moves for stocks when their latest results are revealed. But given the volatility of markets in recent weeks and the souring economic outlook, options could be expensive. Still, Goldman analysts are well out of consensus on some stocks, making even those expensive options look attractive. The aerospace stock is one of Goldman's boldest calls, as the bank's earnings estimates are more than 20% above consensus. Goldman's earnings estimate is 20% below consensus for the company, and some industry rivals have already pre-announced weak results.

☆ Britain's political and market turmoil
▼ + stars: | 2022-10-17 | by ( ) www.reuters.com time to read: +2 min

People walk through the City of London financial district during rush hour in London, Britain, October 3, 2022. Following is a snapshot of related events, comments and explanations:Register now for FREE unlimited access to Reuters.com RegisterWHAT'S BEHIND THE CRISIS? * The Bank of England was forced into emergency bond-buying to stem a sharp sell-off in Britain's 2.1 trillion pound ($2.3 trillion) government bond market that threatened to wreak havoc in the pension industry and increase recession risks. * The BoE interventions have highlighted a growing segment of Britain's pensions sector - liability-driven investment. MARKET REACTION* Long-dated British government bonds rallied on Monday.

☆ Cevian slashes stake in Vodafone after calling for faster change, Financial Times reports
▼ + stars: | 2022-10-15 | by ( ) www.reuters.com time to read: +1 min

Oct 15 (Reuters) - Europe's largest activist investor Cevian Capital has slashed its stake in UK-based Vodafone as scepticism grows that the telecoms company will be able to reverse its sluggish performance, the Financial Times reported. Cevian built a significant but undisclosed stake in Vodafone last year through shares and derivatives, becoming one of the ten largest shareholders, the report said, citing people familiar with the matter. However, Cevian sold the vast majority of its stake by June, it added. Vodafone and Cevian Capital did not immediately respond to requests for comment. Earlier in January, the FT reported that another of Vodafone's biggest shareholders, Abrdn, supported Cevian's call for a restructuring.

LONDON, Oct 15 (Reuters) - It started out simply enough: British pension schemes were looking for a way to match their assets to future pension payments. But the strategy gradually became riskier, according to interviews with pension scheme trustees, consultants, industry experts and asset managers. Globally, investors are worrying about other financial products predicated on low interest rates, now that rates are rising. Nearly two-thirds of Britain's defined benefit pension schemes use LDI funds, according to TPR. "When people talked about interest rates, all they obsessed about was interest rates falling," said David Fogarty, an independent trustee at professional pension scheme trustee provider Dalriada Trustees.

☆ Here are all five parts of our series on how to analyze an earnings report
▼ + stars: | 2022-10-15 | by ( Jim Cramer | ) www.cnbc.com time to read: +85 min

Operating income Once we remove operating expenses from gross margin dollars , we are left with what is known as operating income. This is especially important from a cash flow perspective as many companies define free cash flow (a non-GAAP metric) as "operating cash flow less expenditures on property, plant and equipment." Part 3: Cash flow analysis The cash flow statement is the middle child in a financial report — it gets overlooked. Investors may look to use operating cash flow or free cash flow for this equation. AMC's cash flow Let's finish by taking a look at the cash flow statement.

☆ India's largest private lender HDFC Bank reports profit up 20%
▼ + stars: | 2022-10-15 | by ( Nupur Anand | ) www.reuters.com time to read: +2 min

MUMBAI, Oct 15 (Reuters) - India's largest private lender HDFC Bank (HDBK.NS) on Saturday reported a 20% rise in net profit in the September quarter of this financial year, buoyed by higher loan growth and rise in other income. Net profit rose to 106.05 billion rupees, beating estimates. Net interest income, the difference between interest earned and paid out, was at 210.21 billion rupees, a 18.9% jump. Within retail loans, two-wheeler advances saw a slight slip with total advances in the segment at 95.97 billion rupees compared to 97.13 billion rupees a year ago. Total provisions inched up slightly to 32.40 billion rupees in the September quarter compared to 31.87 billion rupees in the June quarter.

☆ Watch CNBC's full interview with Invesco's Brian Levitt and RBC Capital's Amy Wu Silverman
▼ + stars: | 2022-10-14 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Invesco's Brian Levitt and RBC Capital's Amy Wu SilvermanInvesco's Brian Levitt and RBC Capital Markets Head of Derivatives Strategy, Amy Wu Silverman, joins 'Squawk on the Street' to discuss the reasons behind incremental inflection points in the market, medium term prospects for equities, and bank earnings.

☆ FTX's Sam Bankman-Fried regrets 'dumb quote' about giving $1 billion to political races
▼ + stars: | 2022-10-14 | by ( Mackenzie Sigalos | ) www.cnbc.com time to read: +3 min

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during the Institute of International Finance (IIF) annual membership meeting in Washington, DC, on Thursday, Oct. 13, 2022. Crypto billionaire Sam Bankman-Fried is backing down from a previous comment suggesting he could spend $1 billion or more in races from now through the 2024 election. In an interview with Politico's Morning Money this week, however, the founder of the global cryptocurrency exchange FTX called it a "dumb quote." The crypto market has tanked since Bankman-Fried first pledged to spend hundreds of millions of dollars earlier this year. Meanwhile, the crypto market as a whole went from a market cap of around $3 trillion less than a year ago, to less than $1 trillion today.

☆ October's wild trading could give way to a new stock rally, as earnings roll out in the week ahead
▼ + stars: | 2022-10-14 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

But Emanuel sees the chance for a 17% to 20% rally in the S & P 500. The S & P 500 was down about 0.9% for the week, as of Friday afternoon, and it was hovering just above 3,600. S & P 500 earnings are expected to grow by 3.6% for the third quarter, based on actual reports and estimates, according to Refinitiv. Without the boost from more than doubling profits from energy companies, S & P earnings would decline by 3.1%. Week ahead calendar Monday Earnings: Bank of America , Bank of NY Mellon, Charles Schwab 8:30 a.m.

☆ Midterm elections could help remove uncertainty for markets, says Invesco's Brian Levitt
▼ + stars: | 2022-10-14 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMidterm elections could help remove uncertainty for markets, says Invesco's Brian LevittInvesco's Brian Levitt and RBC Capital Markets Head of Derivatives Strategy Amy Wu Silverman joins 'Squawk on the Street' to discuss the reasons behind incremental inflection points in the market, medium term prospects for equities, and bank earnings.

☆ As Bond Investors’ Bets Blow Up, They Might Usher In Era of Higher Rates
▼ + stars: | 2022-10-13 | by ( Greg Ip | ) www.wsj.com time to read: 1 min

In 2018, the Bank of England investigated whether a big rise in interest rates would trigger a cascade of forced selling by bond investors, destabilizing the financial system. The answer was no, even if long-term rates rose a full percentage point in a week, which had never happened in records going back to 1990. In the days surrounding the British government’s tax-cut announcement on Sept. 23, yields on British government bonds, called gilts, gyrated as much as 1.27 points in a single day as pension funds dumped bonds and closed out bond-linked derivatives positions to meet margin calls. The Bank of England was forced to step in and buy bonds to stem the selloff.

☆ Volatile sterling surges on reports of potential UK fiscal plan U-turn
▼ + stars: | 2022-10-13 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

However, the central bank later officially reiterated that its programme of temporary gilt purchases will end on Oct. 14. UK pension schemes are racing to raise hundreds of billions of pounds to shore up derivatives positions before the BoE's Friday deadline. The yen "has lost its safe haven appeal," said Rodrigo Catril, a senior currency strategist at National Australia Bank. Investors were focusing on U.S. core inflation data due later, which is projected at 6.5% year-on-year in September. Minutes from the Federal Reserve's policy meeting last month showed that officials agreed they needed to raise interest rates to a more restrictive level - and then keep them there for some time - to meet their goal of lowering "broad-based and unacceptably high" inflation.

☆ Sterling volatile ahead of BoE deadline, fragile yen tests 1998 low
▼ + stars: | 2022-10-13 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

LONDON, Oct 13 (Reuters) - Sterling rose on Thursday in volatile trade as investors awaited the impending deadline for the Bank of England to end an emergency bond-buying programme. Sterling was up 0.44% at $1.1147 at 1054 GMT in a volatile week. "We can expect potential market take-up to continue to increase as market participants prepare for the BoE to exit the market. Sterling volatilityElsewhere, the yen struggled against the U.S. dollar trading 0.1% lower at 146.8. Investors were focusing on U.S. core inflation data due later today, which is projected to rise 6.5% year-on-year in September.

A fragile yen languished near a fresh 24-year low, while markets were also on edge ahead of U.S. inflation data due later in the day for possible clues on how much higher the Federal Reserve will push interest rates. On Thursday, BoE saidUK pension schemes are racing to raise hundreds of billions of pounds to shore up derivatives positions before the BoE's Friday deadline. "We can expect potential market take-up to continue to increase as market participants prepare for the BoE to exit the market. Another currency struggling against the U.S. dollar was the yen , which traded 0.1% lower at 146.8. The yen "has lost its safe haven appeal," said Rodrigo Catril, a senior currency strategist at National Australia Bank.

☆ Real-Estate Companies Grapple With High Interest Rate Hedging Costs
▼ + stars: | 2022-10-13 | by ( Mark Maurer | ) www.wsj.com time to read: +7 min

Banks and other lenders often require real-estate firms relying on floating rate debt to hedge their exposure with so-called interest-rate caps. Real-estate companies are struggling with cost increases for labor and building materials as well as slowing demand. The company since March recorded a significant increase in derivatives costs, Mr. Barnes-Smith said, but declined to provide specifics. The company held about $643.8 million in variable rate debt as of June 30, or a little over half of its total debt, Mr. Barnes-Smith said. “These hedging cost issues make something that’s already expensive even more expensive for companies,” Mr. Dhargalkar said.

☆ Fragile yen tests 1998 low, sterling holds its breath
▼ + stars: | 2022-10-13 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The yen hit a trough of 146.98 per dollar overnight and last traded at 146.87. Register now for FREE unlimited access to Reuters.com RegisterIt is a whisker away from its August 1998 low of 147.64 per dollar, and well past last month's low of 145.90 per dollar which prompted Japanese authorities to intervene to buy the yen. "It has lost its safe haven appeal," said Rodrigo Catril, a senior currency strategist at National Australia Bank. The Aussie was up 0.02% at $0.6279, after sliding to a 2-1/2-year low of $0.62355 in the previous session. Overnight, data showed that U.S. producer prices increased more than expected last month.

But it is unclear how many lenders are tapping the facility and whether pension funds are willing to shell out additional fees for what is a temporary solution, sources told Reuters. Banks are reluctant to increase their lending to LDI funds through the repo facility, according to one official at a European bank. BRIDGING THE GAPLDI is an investment strategy sold by asset managers like BlackRock, Legal & General Investment Management and Insight Investment to pension schemes to help them match their assets and liabilities. Governor Andrew Bailey has rejected calls to continue buying bonds from pension funds which say they still need support beyond Friday. "It's a bridging tool that they can still use to keep the dialogue with the market and the pension funds going."

☆ Fragile yen tests 1998 low, sterling cautiously steady
▼ + stars: | 2022-10-13 | by ( ) www.cnbc.com time to read: +3 min

The yen floundered near a fresh 24-year low on Thursday, while sterling held onto overnight gains as investors skittishly await an impending deadline for the end of the Bank of England's emergency bond-buying program. The yen hit a trough of 146.98 per dollar overnight — its lowest since August 1998 — and last traded at 146.82. The yen is within a whisker away from its August 1998 low of 147.64 per dollar, and well past last month's low of 145.90 per dollar which prompted Japanese authorities to intervene to buy the yen. The Aussie was up 0.14% at $0.6287, after sliding to a 2½-year low of $0.62355 in the previous session. Overnight, data showed that U.S. producer prices increased more than expected last month.

HONG KONG, Oct 13 (Reuters Breakingviews) - Leaders from the West’s biggest financial firms will land in Hong Kong next month — in most cases their first trip to the city in three years — with some tough questions for their hosts. They arrive amid the worst U.S.-Sino ties in decades, with Hong Kong unhappily stuck in the middle, bringing frustration for companies who have invested much capital and time in the country. Investment banking fees have dried up everywhere, but it’s particularly bad in mainland China and Hong Kong. Hong Kong has been a big beneficiary of their ambitions. Reuters GraphicsFollow @ywchen1 on TwitterCONTEXT NEWSThe Hong Kong Monetary Authority will host the Global Financial Leaders’ Investment Summit on Nov. 2.

☆ Asian economies may have to brace for rising debt and capital flight, IMF warns
▼ + stars: | 2022-10-13 | by ( Su-Lin Tan | ) www.cnbc.com time to read: +4 min

watch nowAsia's biggest economic challenges will be rising debt and capital flight as interest rates continue to rise, the International Monetary Fund has warned. The warnings come as the IMF trimmed its global growth predictions in its latest economic outlook this week and warned the new year would feel like a recession for many parts of the world. "Debt has gone up in Asia," IMF Deputy Director of Asia and Pacific Department Anne-Marie Gulde told CNBC's "Squawk Box Asia" on Wednesday. "First, private sector debt has gone up since the global financial crisis but afterwards since Covid, public sector debt has gone up. The crisis in the U.K stemmed from rising yields and plunging bond prices, which sparked collateral calls for pension funds to cover their LDI-related derivatives.

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