Finance

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JOHANNESBURG (Reuters) – South Africa will use its annual budget next year to outline “decisive” policy to strengthen its fiscal framework, the finance ministry said on Saturday after S&P Global Ratings cut its local currency debt to “junk” status. FILE PHOTO: A view shows the Standard & Poor’s building in New York’s financial district February 5, 2013. REUTERS/Brendan McDermid “The 2018 Budget will outline decisive and specific policy measures to strengthen the fiscal framework,” the finance ministry said in a statement, without giving more detail. S&P announced the downgrade on Friday, citing a further deterioration in the country’s economic outlook and public finances, and Moody’s placed South Africa on review for a downgrade. The downgrade by S&P comes after Finance Minister Malusi Gigaba shocked markets on Oct. 25 by flagging sharply weaker growth expectations, a wider budget deficit and rising government debt. The government has since appointed a judicial commission of inquiry into the causes of a 50 billion rand ($3.6 billion)revenue shortfall and to investigate a possible erosion into the nation’s revenue collection capability. Economic growth has slowed to near zero in recent years and business and consumer sentiment have plumbed multi-decade lows as political uncertainty weighs on Africa’s most industrialized economy. Infighting within the ruling African National Congress ahead of a conference in December to elect a successor to President Jacob Zuma as party chief has also sapped investor confidence. “Restoring business and consumer confidence, and catalyzing inclusive growth is the top priority of government,” the finance ministry said. Reporting by TJ Strydom; editing by Alexander SmithOur Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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(Repeats with no changes to text) JOHANNESBURG, Nov 25 (Reuters) – South Africa will use its annual budget next year to outline “decisive” policy to strengthen its fiscal framework, the finance ministry said on Saturday after S&P Global Ratings cut its local currency debt to “junk” status. “The 2018 Budget will outline decisive and specific policy measures to strengthen the fiscal framework,” the finance ministry said in a statement, without giving more detail. S&P announced the downgrade on Friday, citing a further deterioration in the country’s economic outlook and public finances, and Moody’s placed South Africa on review for a downgrade. (Reporting by TJ Strydom; editing by Alexander Smith)Our Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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JOHANNESBURG, Nov 25 (Reuters) – South Africa will use its annual budget next year to outline “decisive” policy to strengthen its fiscal framework, the finance ministry said on Saturday after S&P Global Ratings cut its local currency debt to “junk” status. “The 2018 Budget will outline decisive and specific policy measures to strengthen the fiscal framework,” the finance ministry said in a statement, without giving more detail. S&P announced the downgrade on Friday, citing a further deterioration in the country’s economic outlook and public finances, and Moody’s placed South Africa on review for a downgrade. (Reporting by TJ Strydom; editing by Alexander Smith)Our Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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BEIJING (Reuters) – The National Internet Finance Association of China issued a risk warning letter late on Friday telling “unqualified institutions” to immediately stop offering loans as Beijing steps up a crackdown on the micro-loan sector to fend off financial risks. The 1 trillion yuan ($151.5 billion) short-term, unsecured lending sector, known as “cash loan” in China, has been accused of charging exorbitant interest rates and violent debt collection practices. In Friday’s warning letter, the Internet Finance Association, a government-backed industry group, said the unqualified micro lenders are disrupting economic and social orders and must stop lending immediately. “Some institutions are not qualified to issue loans but have used false promotion to attract clients, conduct violent debt collection, and charge extremely high interest rates and fees, causing financial risks and social problems in some regions,” it said in the letter released on its website. Qualified lending institutions should also increase self-discipline, charge interest rates at a reasonable level, and increase information disclosure, the association added. The companies are not allowed to conduct violent debt collection or harass unrelated people, it said. China has started to take steps to rein in the loosely regulated lending market. On Tuesday, a top-level multi-ministry body, tasked by the central government to oversee the internet finance sector, issued an urgent notice to restrict granting of new approvals for micro-loan firms, Reuters reported on Wednesday. Shares of U.S.-listed Chinese online finance firms fell this week following the government crackdown. Reporting By Shu Zhang and Josephine Mason; Editing by Christian SchmollingerOur Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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SAO PAULO/LISBON (Reuters) – The chief executive of Oi SA has resigned, its largest shareholder said on Friday, as the Brazilian telecommunications firm enters a crucial phase in Latin America’s biggest-ever bankruptcy proceedings. The headquarters of the Brazil’s largest fixed-line telecoms group Oi, is pictured in Rio de Janeiro, Brazil, June 22, 2016. REUTERS/Sergio Moraes A spokeswoman for Portugal’s Pharol SGPS SA, which owns about 27.5 percent of Oi’s voting shares and is part of a controlling shareholder bloc, said it had been informed of Marco Schroeder’s resignation. The move reflects deepening fissures between Oi’s management and board, run by shareholders aligned with distressed debt tycoon Nelson Tanure. Schroeder has called in recent months for both shareholders and creditors to make concessions, while the board has stuck to a restructuring proposal rejected by major bondholder groups. An Oi spokeswoman declined to comment. Three sources with knowledge of the situation told Reuters earlier on Friday that Schroeder had offered to resign. Common shares in Oi extended losses after the Reuters report, closing 4 percent lower. Oi is two weeks away from a crucial creditor vote on a proposal to restructure 65 billion reais ($20 billion) of debt, with the fate of the nation’s largest fixed-line phone operator at stake and more than 100,000 jobs on the line. In October, telecoms regulator Anatel had threatened to intervene in the carrier if it changed management. However, a government source said Schroeder’s departure on Friday did not make intervention more likely. The person, who requested anonymity due to the sensitivity of the issue, said that talks to bring the debt-laden carrier out of bankruptcy protection will continue under new management. Any restructuring plan approved by management must still be approved by the regulator before being presented in bankruptcy court, the …read more

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WASHINGTON (Reuters) – U.S. President Donald Trump has designated White House Budget Director Mick Mulvaney acting director of the Consumer Financial Protection Bureau until a permanent director is nominated and confirmed, the White House said on Friday. Office of Management and Budget Director Mick Mulvaney attends the daily briefing at the White House in Washington, U.S., July 20, 2017. REUTERS/Carlos Barria The action came hours after Richard Cordray submitted his formal resignation and named a deputy director as his replacement, setting the stage for a political and legal battle over the regulator’s leadership. “The president looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities,” the White House said in its statement. Democratic lawmakers are eager to preserve the regulator for as long as possible while Republicans want to put in place new leadership to chart a drastically different course. The six-year-old bureau has policed consumer financial markets, drafting aggressive rules curbing products like payday loans, while issuing multimillion dollar fines against large financial institutions like Wells Fargo. But Republicans have consistently complained the agency is too powerful and lacks oversight from Congress on its operations, and they are eager to take control. Mulvaney, who has criticized the bureau in the past, said, “I look forward to working with the expert personnel within the agency to identify how the bureau can transition to be more effective in its mission, while becoming more accountable to the taxpayer.” FILE PHOTO: Consumer Financial Protection Bureau Director Richard Cordray arrives to testify before House Financial Services Oversight and Investigations Subcommittee hearing on “Allegations of Discrimination and Retaliation and the CFPB Management Culture” on Capitol Hill in Washington, U.S. …read more

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WASHINGTON (Reuters) – U.S. President Donald Trump has designated White House Budget Director Mick Mulvaney acting director of the Consumer Financial Protection Bureau until a permanent director is nominated and confirmed, the White House said on Friday. Office of Management and Budget Director Mick Mulvaney attends the daily briefing at the White House in Washington, U.S., July 20, 2017. REUTERS/Carlos Barria The action came hours after Richard Cordray submitted his formal resignation and named a deputy director as his replacement, setting the stage for a political and legal battle over the regulator’s leadership. “The president looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities,” the White House said in its statement. Democratic lawmakers are eager to preserve the regulator for as long as possible while Republicans want to put in place new leadership to chart a drastically different course. The six-year-old bureau has policed consumer financial markets, drafting aggressive rules curbing products like payday loans, while issuing multimillion dollar fines against large financial institutions like Wells Fargo. But Republicans have consistently complained the agency is too powerful and lacks oversight from Congress on its operations, and they are eager to take control. Mulvaney, who has criticized the bureau in the past, said, “I look forward to working with the expert personnel within the agency to identify how the bureau can transition to be more effective in its mission, while becoming more accountable to the taxpayer.” FILE PHOTO: Consumer Financial Protection Bureau Director Richard Cordray arrives to testify before House Financial Services Oversight and Investigations Subcommittee hearing on “Allegations of Discrimination and Retaliation and the CFPB Management Culture” on Capitol Hill in Washington, U.S. …read more

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Nov 24 (Reuters) – Food retailer Sobeys Inc, owned by Empire Company Ltd, is cutting more than 800 jobs across Canada, according to reports in the Canadian media. The job cuts include about 20 percent of Sobeys’ staff across Canada, the Globe and Mail reported on Friday. About 150 jobs will be lost in the eastern Canadian province of Nova Scotia, the company told CBC News. Sobeys and Empire did not respond to a request for comment outside regular business hours. The move comes as part of a change in the company’s operating model according to which the Sobeys’ collection of five regional businesses will become one national organization, CBC News reported. bit.ly/2Bk77LG“We have a lot on our plates – we had to reorganize, we’re taking costs out so we can be efficient and compete,” said Empire Chief Executive Michael Medline in a statement cited in the Globe and Mail. In the fourth quarter of fiscal year 2017, Empire had launched a three-year transformation project to simplify its organization structure and cut costs. The company had said it expected C$500 million ($393.42 million) in annualized cost savings by fiscal 2020 as a result of the plan called Project Sunrise. $1 = 1.2709 Canadian dollars
Reporting by Kanishka Singh; Editing by Lisa ShumakerOur Standards:The Thomson Reuters Trust Principles.Let’s block ads! (Why?) …read more

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(Adds analyst quote on ETF vs active mutual fund flows, byline)
By Jennifer Ablan
NEW YORK, Nov 24 (Reuters) – Investors poured $9.4 billion
into U.S.-based stock exchange-traded funds (ETFs) in the week
ended Wednesday, the group’s eighth consecutive week of inflows,
against a backdrop of record closing highs on major markets,
Lipper data showed on Friday.
Retail investors, however, yanked money out of U.S.-based
stock mutual funds, pulling $3.5 billion during the same period,
continuing a heavy streak of outflows that has persisted in all
but two weekly periods in 2017, Lipper data showed.
ETFs are generally believed to represent the investment
behavior of institutional investors including hedge funds, while
mutual funds are thought to represent the mom-and-pop retail
investor.
“Increasingly advisors and retail investors are choosing
lower-cost ETFs over active equity mutual funds in an effort to
put more money to work, because ETFs have performed better and
as regulations for advisors have favored index-based
strategies,” said Todd Rosenbluth, director of ETF and Mutual
Fund Research at CFRA.
Risk-taking was also on display in parts of the U.S.
corporate credit markets. U.S.-based investment-grade corporate
bond funds attracted $2.6 billion of inflows in the latest week,
their 10th consecutive week of inflows, Lipper said.
At the lower end of the credit-quality spectrum, junk bonds
were avoided again by investors. U.S.-based high-yield bond
funds posted $209 million of outflows in the week ended
Wednesday.
U.S.-based international equities attracted $2 billion in
the latest week, the sector’s 14th consecutive week of inflows,
Lipper added. For their part, emerging-market debt funds posted
inflows of $322 million and emerging-market equities posted
outflows of $68 million, according to Lipper data.
U.S.-based domestic equities funds saw $3.88 billion of
inflows in the latest week ended Wednesday, following $2.35
billion of outflows the …read more

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SAN FRANCISCO/NEW YORK (Reuters) – Uber Technologies Inc [UBER.UL] plans to move ahead with a deal to bring in Japanese technology company SoftBank Group Corp (9984.T) as a major investor by disclosing the pricing early next week in formal tender offers to the ride-hailing service’s investors, two people familiar with the plans said on Friday. FILE PHOTO: A man arrives at the Uber offices in Queens, New York, U.S., February 2, 2017. REUTERS/Brendan McDermid/File Photo The start of the tender follows Uber’s disclosure on Tuesday that it covered up a 2016 data breach which compromised data of some 57 million customers and drivers. That revelation prompted governments around the world to launch probes into the breach and Uber’s handling of the matter. The people familiar with the plans did not say how much investors would be offered for the shares, or say if the price had been cut do to the breach or governments’ response to the disclosure. Investors will have 20 business days, or about a month, to respond to emails and letters to be sent early next week, said one of the sources, who declined to be named because they were not authorized to discuss terms before they are public. SoftBank and Dragoneer Investment Group agreed on Nov. 12 to lead a group that would invest as much as $10 billion in Uber, people familiar with the deal previously told Reuters. They plan to directly invest $1 billion to $1.25 billion in Uber, then buy as much as 17 percent of shares held by existing investors and employees. Selling shareholders must be accredited investors as defined by U.S. regulations and hold at least 10,000 shares of the firm, Uber said in ads published Wednesday in the New York Times …read more

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JOHANNESBURG, Nov 25 (Reuters) - South Africa will use its annual budget next year to outline “decisive” policy to strengthen its fiscal framework, the...