Finance

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MUMBAI (Reuters) – SBI Life Insurance Co Ltd’s initial public offering to raise 84 billion rupees ($1.3 billion), India’s biggest IPO in seven years, was subscribed more than 3.5 times on the closing day, strengthening the outlook for share sales in what is expected to be a record year. Ahead of SBI Life’s IPO, companies have raised $4.4 billion from IPO sales so far in 2017, surpassing last year’s $4 billion fund-raising, data compiled by Thomson Reuters showed. With several more IPOs in the pipeline, some market participants expect IPO sales this year to exceed record $8.5 billion raked in 2010. Three more insurers — HDFC Standard Life Insurance Co Ltd, state-run GIC Re, and New India Assurance Co Ltd — have filed for IPOs, which bankers expect to raise a combined more than $4 billion, although all three may not list by December. Strong inflows from funds coupled with more retail participation in stocks have powered the main share index .NSEI to a string of record-highs this year. The index has gained nearly 22 percent so far in 2017. That optimism is also helping IPOs, analysts said, although they warned of high valuations. “There is liquidity in the system and money is chasing stocks…It is the right time for IPOs,” said Jignesh Shial, a vice president of equity research at brokerage Quant Capital. “Valuations for the insurance company IPOs are looking slightly stretched. So there may not be major listing gains,” Shial said. He noted that the scope to expand in the Indian market for insurance products made the stocks “very good” bets from a mid-to-long-term perspective. SBI Life, which will be the second life insurance company after ICICI Prudential Life Insurance Co. Ltd (ICIR.NS) to list, saw bids for about 29.5 million shares, or 3.56 times …read more

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(Repeats without change) By David Henry and Dan Freed NEW YORK, Sept 21 (Reuters) – U.S. consumer credit reporting bureau Equifax Inc risks losing support from banks unless it can show its database on millions of borrowers is secure from another cyber-attack. Banks are critical to Equifax’s operations as they give the company information on consumer debts and payments which it compiles into credit reports sold to other creditors, including mortgage and credit card lenders, landlords and hospitals. “If we don’t feel that they can do the job, then we will obviously look at whether we want to continue to do business with them,” said an executive at a large bank who declined to be quoted by name. But a withdrawal of support for Equifax by banks would come at the cost of further reliance on the other two major collectors of U.S. consumer credit and employment histories, Experian plc and TransUnion. U.S. financial industry practice usually involves collecting credit scores from all three credit agencies before bundling loans made on homes, autos and credit cards and selling the securities in debt markets. Government-backed mortgage finance companies Fannie Mae and Freddie Mac, for example, check with the three credit reporting agencies. The difficulty of ending such a practice could shelter Equifax from a sudden revolt by banks. “Given the level of interdependence between lenders and these data providers, they have a vested interest in there being more than two and would like Equifax to still exist,” said James Thomas, an analyst of corporate credit at Standard & Poor‘s. “If there’s only two players, then they have less ability to play them against one another” in negotiating prices for credit reports, Thomas said. Rick Smith, CEO of TriCo Bancshares, a Chico, California-based lender with $4.5 billion in assets, said it would …read more

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FLORENCE, Italy, Sept 22 (Reuters) – British Prime Minister Theresa May is setting out her plan for future ties with the European Union in a speech which she hopes will help spur negotiations over the country’s divorce from the bloc. Below are the highlights from her speech: MAY ON UK NOT FEELING AT HOME IN EU ”Throughout its membership, the United Kingdom has never totally felt at home being in the European Union. ”And, perhaps because of our history and geography, the European Union never felt to us like an integral part of our national story, in the way it does to so many elsewhere in Europe. It is a matter of choices. “The profound pooling of sovereignty that is a crucial feature of the European Union permits unprecedentedly deep cooperation which brings benefits but it also means that when countries are in the minority they must sometimes accept decisions they do not want, even affecting domestic matters with no market implications beyond their borders.” MAY ON OPTIMISM ”We are moving through a new and critical period in the history of the United Kingdom’s relationship with the European Union. The British people have decided to leave the EU and be a global free-trading nation able to chart our own way in the world. “For many, this is an exciting time full of promise. For others it is a worrying one. I look ahead with optimism.” MAY ON WORKING WITH EU ON DEFENCE, SECURITY “Our commitment to the defence and indeed the advance of our shared values is undimmed. Our determination to defend the stability, security and prosperity of our European neighbours and friends remains steadfast.” MAY ON PROGRESS SO FAR IN BREXIT TALKS “We have now conducted three rounds of negotiations and while at times those negotiations have been tough …read more

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COLOMBO, Sept 22 (Reuters) – Sri Lankan shares fell for a second straight session on Friday, as investors sold diversified and banking shares in thin trade that saw turnover slumping to a near four-week low. The Colombo stock index ended 0.38 percent weaker at 6,427.26, off its highest close since Aug. 14 hit on Wednesday. It however gained 0.4 percent on week, a second straight weekly gain. Shares of conglomerate John Keells Holdings Plc fell 1.5 percent, while biggest listed lender Commercial Bank of Ceylon Plc ended 1.4 percent weaker. Cargills (Ceylon) Plc dropped 3.5 percent, while Ceylon Tobacco Company Plc ended 0.5 percent lower. “It was a very dull day. Investors are adopting a wait-and-see approach ahead of the policy rate decision (by the central bank),” said Hussain Gani, deputy CEO of Softlogic Stockbrokers. Sri Lanka’s central bank is expected to keep key rates steady on Tuesday, a Reuters poll showed, to support a stuttering economy even as inflation accelerates amid strong credit growth. Turnover stood at 217.9 million rupees ($1.43 million), compared with this year’s daily average of around 920 million rupees. Foreign investors bought a net 31.1 million rupees (about $203,667) worth of shares, extending the year-to-date net foreign inflow to 17.7 billion rupees. ($1 = 152.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)Our Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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FRANKFURT (Reuters) – Germany’s financial regulator BaFin has taken a critical view of a settlement between Deutsche Boerse and Frankfurt prosecutors to clear up a months-long insider trading case, a person familiar with the matter said Friday. The stance is a blow to efforts by the exchange operator and its CEO to move on from the case, which has cast a shadow over the company since February. Neither Deutsche Boerse nor the Frankfurt public prosecutor would comment. A court in Frankfurt handling the case said it was not aware of a position by BaFin. The news was first reported by Bloomberg. Shares in Deutsche Boerse were down 2.6 percent at 1215 GMT, the biggest loser on the DAX share index of the nation’s largest companies. At issue is a 4.5 million euro purchase of Deutsche Boerse shares made by CEO Carsten Kengeter in December 2015, two months before Deutsche Boerse announced that it was in merger talks with London Stock Exchange, which sparked an investigation of possible insider trading. Last week, Deutsche Boerse agreed to demands to settle the case with prosecutors for 10.5 million euros ($12.56 million). Kengeter would also pay 500,000 euros in a personal settlement. That settlement is now in the hands of a judge, whose final ruling will be influenced by BaFin’s input. The negative stance from BaFin suggests that the judge may not approve the settlement. ($1 = 0.8358 euros) Additional reporting by Hans SeidenstueckerOur Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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FRANKFURT (Reuters) – A weakening link between prices and growth could make it more costly and difficult for central banks to control inflation, leaving policymakers with a serious problem, European Central Bank Vice President Vitor Constancio said on Friday. New research also shows that exchange rate fluctuations may have a smaller impact on prices than in the past, suggesting that the euro’s recent rally could be a more modest drag on prices than now expected, Constancio said in a largely academic speech. With major economies enjoying a relatively long period of healthy expansion, policymakers have been puzzled by paltry wage growth, which has kept a lid on inflation and force central banks to provide stimulus much longer than they expected. Indeed, having already bought over 2 trillion euros’ worth of bonds to depress borrowing costs, the ECB will debate next month whether to curb stimulus given 17 consecutive quarters of growth, accepting that is will simply take longer to raise inflation. “The apparent disconnect between inflation and economic slack seems to have made interpreting and controlling inflation dynamics more difficult, with significant consequences for the conduct of monetary policy,” Constancio said at a conference. “From a policymaker’s perspective, such an apparent breakdown is serious,” he said, arguing that fighting high inflation would have a bigger drag on the real economy, while a fight against low inflation would test the limits of policy tools, given the massive stimulus required. In challenging another accepted relationship – that between exchange rates and inflation – Constancio said that fresh research also showed a weakening link. “This insight is especially relevant for the euro area, as it suggests that the recent euro appreciation may have a more limited dampening effect on inflation than what would be implied by historical averages,” Constancio said. With …read more

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LONDON (Reuters) – A London High Court trial on the validity of a $700 million sukuk issued by the UAE’s Dana Gas will go ahead on Monday despite a UAE court injunction preventing the gas company and some of its creditors from taking part. Dana Gas said in June that it would not redeem its outstanding sukuk, or Islamic bonds, on the grounds that due to changes in interpretation of Islamic finance they’re no longer sharia-compliant and therefore unlawful in the UAE. It started proceedings in British and UAE courts because while the purchase undertaking, part of the bond contract, is regulated by English law, the mudarabah agreement underlying the sukuk structure is regulated by UAE law. The case has attracted the attention of the $2 trillion global Islamic finance industry because it could set a precedent for sukuk issuers to refuse to redeem their paper based on changes in the religious permissibility of the debt instrument. The British trial started on Tuesday but a last-minute anti-suit injunction obtained by some Dana Gas shareholders from the Sharjah court in the UAE prevented Dana Gas and the legal representatives of some of its creditors from participating. After several delays this week, British Judge George Leggatt ruled on Friday that the trial would continue next week, allowing BlackRock, which has some exposure to Dana Gas’ Islamic bonds, to present its case to the court on the enforceability of the purchase undertaking. He said the case would then adjourn until October 12 to see if the UAE court in Sharjah kept the injunction in place. The judge said Dana Gas bears a degree of responsibility for its inability to take part in the British proceedings. The company did not oppose the anti-suit injunction sought by Dana Gas shareholders in …read more

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ZURICH (Reuters) – U.S. central banker John Williams said on Friday he does not expect any market turbulence as the Fed gets under way with reducing the huge balance sheet built during its campaign to stimulate the U.S. economy. “I don’t anticipate any sudden or large effects on rates or spreads or things like that as we normalize,” Williams, president of the San Francisco Federal Reserve, told reporters in Zurich. “Obviously we’ve talked about this endlessly. We’ve announced it and the markets have taken totally taken this in stride. But it’s still an open question as we actually implement this next month and over the next several years – ‘how will markets react?’ We’ll obviously be following that very carefully.” Normalization was the key theme at the Fed, said Williams. The Fed said on Wednesday it would begin the years-long process of trimming its $4.5 trillion in assets, most of them amassed to encourage investment and growth in the wake of the 2007-09 financial crisis and recession. It also signaled it will likely raise rates again later this year and three more times next year, despite low inflation that has surprised policymakers and has traders convinced the Fed will need to slow its pace of rate hikes. Williams said the Fed could indeed increase rates again this year and three more times next year, but the exact timing was not important, with a gradual increase in interest rates now under way. Provided the U.S. economy continues to progress and inflation was on track to reach the Fed’s 2 percent goal, “I would ascribe to a gradual pace of rate increases, which assuming all that’s happening, could have another rate increase this year and three next year,” Williams said. “But honestly … the exact timing of that is not …read more

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WARSAW (Reuters) – U.S. bank JPMorgan Chase (JPM.N) has chosen Warsaw to host a new global operations center that will employ several thousand people over the next couple of years, Polish Deputy Prime Minister Mateusz Morawiecki said on Friday. Possible other contenders to host the center were Budapest and the Polish city of Wroclaw, though Reuters reported in April that Warsaw was the front-runner. It will, among others, employ “people …with competences such as in data management, risk management, credit risk management, supply chain management,” Morawiecki told Polish public radio. JPMorgan was not immediately available for comment. Poland, the EU’s largest eastern economy, has already established itself as a major offshoring, or near-shoring, site for banks. The estimates of financial services jobs moved from all Western countries to Poland range from 35,000 to 45,000, with Britain’s decision to exit the EU seen accelerating the process. “This is a huge success because this (JPMorgan) is a sort of Mercedes in the financial services sector,” Morawiecki added. Reporting by Marcin Goettig; Additional reporting by Andrew MacAskill in LONDON; editing by John StonestreetOur Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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(The opinions expressed here are those of the author, a columnist for Reuters.) * China’s aluminium production: tmsnrt.rs/2xT2pWKBy Andy Home LONDON, Sept 22 (Reuters) – Christmas has come early for aluminium bulls. In London the price of aluminium for three-months delivery hit a five-year high of $2,199.00 per tonne on Thursday. In Shanghai the most active contract went one better, hitting a six-year high of 17,250 yuan per tonne. Speculators are piling into both markets. Market open interest on the Shanghai Futures Exchange aluminium contract is currently at an all-time high of 1.09 million contracts with volumes elevated since the middle of August. On the London Metal Exchange (LME), according to LME broker Marex Spectron, aluminium “exhibits the largest speculative long of the complex at 23 percent of open interest.” Why all the excitement? Well, it’s not exactly Christmas, but in China winter has come early with the first aluminium smelters now powering down ahead of the mandated cuts over the “winter heating season”. POWERING DOWN China’s “Air Pollution Control” regulation, formally approved in February, requires industrial sectors in the four provinces around Beijing to cut output over the November-March period. The winter cuts are part and parcel of Beijing’s war on smog, which can be particularly acute over the winter months. In the case of aluminium, smelters, alumina refineries and anode plants will all be affected to varying degrees. Smelters and alumina refineries are mandated to take cuts of at least 30 percent, implying a collective metal production hit in excess of a million tonnes. At least a couple of aluminium operators have started powering down early in Jiaozuo city in the province of Henan, according to local industry website SMM, citing a notice from the municipal environmental protection office. Chalco’s Zhongzhou alumina refinery and the Jiaozuo Wanfang smelter …read more

RANDOM POSTS

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Few people showed up at Apple stores in China when the iPhone 8 and 8 Plus arrived, forcing staff to remove crowd control barricades. ...