Tag Archives: Finance (Legacy)

Italy’s MPS seeks to reduce legal risks as the EU considers the viability of the bank | Instant News


FILE PHOTO: The logo of the Monte dei Paschi bank in Siena is seen at the entrance of a bank in Rome, Italy, 16 August 2018. REUTERS / Max Rossi

MILAN (Reuters) – Italy’s Monte dei Paschi (MPS) said on Thursday it was working to reduce its legal risk as the European Union assessed the ability of state-owned banks to stay in business before opening up more public aid.

Italy saved the MPS in 2017 at a cost of 5.4 billion euros ($ 6.6 billion) to taxpayers. Now it stands ready to cover at least part of the 2.5 billion euro shortfall in lenders, but wants to first find a buyer for it.

MPS said it would proceed with a cash call if the merger failed to materialize.

In a statement on Thursday, it said that significant uncertainty was clouding its planned capital increase due to an assessment by the EU competition authority on the bank’s ability to stand on its own.

($ 1 = 0.8212 euros)

Reporting by Valentina Za; Edited by Gareth Jones

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UPDATE 1-Telefonica is in exclusive talks with investors for the Brazilian fiber unit | Instant News


(Write with COO comments)

MADRID, February 25 (Reuters) – Telefonica is in exclusive talks with financial investors about setting up a joint fiber optic venture in Brazil, Chief Operating Officer Angel Vila said Thursday.

The Spanish telecommunications group plans to expand high-speed fiber-optic coverage to more cities in Brazil, following a similar project launched in Germany in partnership with insurance company Allianz.

“Brazil is the size of a continent. Our capital expenditure (capex) will not reach everything, “Vila told Reuters.

After speaking with many potential partners, the company has held exclusive talks with “international operators with a financial and infrastructure profile”, said Vila, declining to name investors.

Talks have progressed, he added, but “in this situation you can never say 100% that you will sign.”

Previously Vila told analysts that the second phase of development could be done through agreements with fiber owners such as the American Tower.

Telefonica is already using the infrastructure of larger US companies in the Brazilian states of Minas Gerais and Vila said they “may be interested in consolidating” the agreement.

Vila said she could not confirm a Bloomberg News report that exclusive talks were held with Canadian pension fund Caisse de depot el placement du Quebec (CDPQ), due to a confidentiality agreement.

“CDPQ is a top class long-term global investor, that would be very attractive,” he added.

American Tower did not immediately respond to a request for comment. CDPQ could not be reached immediately.

Telefonica plans to hold half of the business through Telefonica and its local branch Telefonica Brasil.

Vila told analysts by conference call that it could expand the unit later through acquisitions.

Telefonica cut its dividend after reporting a 10% drop in previous 2020 earnings on Thursday, although it expects business to stabilize this year. (Reporting by Isla Binnie, Eid by Inti Landauro, Kirsten Donovan)

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British owners Primark warned that sales closed at 1.1 billion pounds | Instant News


FILE PHOTOS: Signs displayed outside the Primark store on Oxford Street, in London, England July 2, 2020. REUTERS / Hannah McKay

LONDON (Reuters) – Associated British Foods warned on Thursday that it is expected to lose 1.1 billion pounds ($ 1.6 billion) of sales from the lockdown of its stores in fast fashion chain Primark in the first half of its financial year.

The group said it expects Primark sales in the first half to February 27 to be around 2.2 billion pounds and an adjusted operating profit slightly above break-even.

Due to restrictions imposed on Primark in the UK and across Europe, Primark expects sales, adjusted operating profit and adjusted earnings per share for the group as a whole to be lower than last year.

But the group said it was looking forward to reopening Primark stores and by Thursday a possible reopening date for 233 stores in addition to the 77 stores already open. About 83% of its retail space will be traded on April 26.

“We expect the period after reopening to be very money-making,” he said.

AB Foods also has a wholesale division, whose brands include Kingsmill bread and Twinings tea, as well as its sugar, agricultural and key ingredients businesses.

It expects revenue and profit in all of these units to be ahead of expectations and in the first half of last year.

AB Foods shares closed Wednesday at 2,437 pence, valuing the business at 19.3 billion pounds.

($ 1 = 0.7064 pounds)

Reporting by James Davey; Edited by Kate Holton

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UPDATE 2-New Zealand’s central bank to consider the impact of monetary policy on housing | Instant News


* Housing is added to RBNZ authority, but not mandate

* The RBNZ needs to explain its impact on housing on a regular basis

* Mortgage debt-to-income and interest-only ratio considered (Adding background, comments from analysts and opposition leaders)

WELLINGTON / SYDNEY, February 25 (Reuters) – The New Zealand government on Thursday tasked the country’s central bank with considering the impact of its monetary and financial policy decisions on housing prices, a move to help calm the country’s fiery property market.

Finance Minister Grant Robertson said the Reserve Bank of New Zealand (RBNZ) should consider government policies regarding more sustainable housing prices.

“Today’s announcement is just the first step as the government weighs broader suggestions on how to cool the housing market,” Robertson said in a statement. “We know the rapid improvements we’ve seen in recent months are not sustainable, which means many first-time home buyers have a hard time accessing the market.”

The government’s authority ceases to impose new monetary policy objectives in the RBNZ, the first step in the world that RBNZ Governor Adrian Orr warned late last year when the government first pitched the idea.

Orr argued that adding housing to the bank’s mandate could make monetary policy less effective and affect the efficiency of financial markets, adding that monetary policy alone cannot fix the housing problem.

Orr on Thursday welcomed the addition of remits, which take effect March 1, noting that monetary and financial policy is one of the “many influences on house prices.” He also stressed the monetary policy committee’s targets – maintaining price stability and maximizing sustainable employment – remain unchanged.

Prime Minister Jacinda Arden’s government is under pressure to fix the country’s housing crisis, especially after the failure of its flagship public housing program failed. Property prices have skyrocketed in the past six months due to severe housing shortages and low interest rates.

Like many central banks during the coronavirus pandemic, the RBNZ has pushed interest rates to record lows, relaxed mortgage lending restrictions and incorporated NZ $ 100 billion ($ 70.4 billion) into quantitative easing programs.

These measures, while boosting the economy, have sparked an unprecedented housing market boom. In its latest forecast, the RBNZ sees house price inflation rising to 22.4% by the middle of this year, much higher than the November forecast of 7.9% for this year to June.

POLICY REGULATION

The New Zealand dollar touched its highest level since August 2017 following the government’s announcement, as it reinforces the view that monetary policy will be tighter. The ten-year New Zealand government bond yield was 1.82%, the highest since May 2019.

“Paying attention to housing may make the Reserve Bank more inclined towards meeting its inflation and employment targets … that means monetary policy is tighter than expected in the near term,” said Westpac senior economist Michael Gordon.

An immediate impact on the housing market itself is unlikely, said Gordon.

“The thing that is going to lower house prices are higher interest rates,” said Gordon. “It’s still cheaper to borrow now because it’s been going on for decades.”

Under the amendment, the RBNZ will retain autonomy over how its decisions take into account potential housing consequences, but will need to explain regularly how it takes into account the housing market outcomes.

Banks should also consider the government’s goals to support more sustainable housing prices, including by reducing investor demand for existing housing stocks to help increase the affordability of first-home buyers.

The RBNZ said it was investigating government requests for advice on implementation tools such as debt-to-income ratios and interest-specific mortgages. (Reporting by Renju Jose and Praveen Menon; editing by Jonathan Oatis, Rosalba O’Brien and Jane Wardell)

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