2025-05-28 11:00

May 28 (Reuters) - Sterling was steady against the dollar on Wednesday, hovering near Monday's three-year high, as it continued to be supported by favourable economic data last week as well as Britain's recent trade deals. Investors also looked towards a multi-year spending review by finance minister Rachel Reeves in two weeks which will set the budgets for public services. Sign up here. Sterling was little changed at $1.3511 but stayed close to the three-year high of $1.3593 it touched on Monday. It was little changed against the euro, with the euro broadly flat at 83.86 pence in its seventh week of losses against the pound. "Sterling's done pretty well recently," Rabobank strategist Jane Foley said, pointing to stronger-than-expected inflation and slightly stronger retail sales data last week and trade deals that Britain struck with both India and the U.S. as reasons for the currency's resilience. However, the spending review is pushing attention back onto the challenges that Reeves faces around the fiscal situation in the country, Foley said, as the government, which had pledged not to increase taxes and keep spending tight while still fuelling economic growth, seems to be prepared to pour more money into defence and health, among other issues. Reeves is due to set out budgets for individual government departments for the next three years in a spending review on June 11, after the overall total was outlined in October. "There's obviously a bit of a conundrum for her to face, and that could create perhaps a few headwinds for sterling, given that it has had a reasonably good run for now," Foley said. Sterling has risen by 8% against the dollar so far this year, and has regained ground against the euro in the past weeks from its April lows at 87.38 pence. Last week's data showed that British retail sales jumped in April, while the inflation print erased market expectations for a cut at the Bank of England's next meeting in June. "The BoE is still trying to manage these dual elements of sticky inflation and sluggish growth," said Paul Hollingsworth, head of developed markets economics at BNP Paribas, during a call presenting the French bank's global economic outlook. Despite optimism around the "green shoots" from consumer spending data, Hollingsworth warned of supply-side woes and the prospect of further fiscal consolidation measures over the coming months. https://www.reuters.com/world/uk/sterling-steady-against-dollar-economic-data-trade-deals-offer-support-2025-05-28/

2025-05-28 10:10

MUMBAI, May 28 (Reuters) - The Indian rupee ended nearly flat on Wednesday, as the impact of month-end dollar demand from importers was offset by an uptick in regional peers. The rupee closed at 85.36 against the U.S. dollar from 85.33 in the previous session. The unit weakened to 85.70 earlier in the session, but recouped most losses as the dollar index eased. Sign up here. Traders built up intra-day shorts on the rupee in anticipation of outflows related to an equity block deal but the price action indicated that the flows did not materialise as expected, a trader at a Mumbai-based bank said. British American Tobacco sold a $1.5 billion stake in Indian consumer goods company ITC (ITC.NS) , opens new tab on Tuesday. India's benchmark equity indexes closed slightly in the red. The dollar index was last at 99.5, little changed on the day while the Korean won and Thai baht led gains in Asian currencies with a 0.4% rise. The minutes of the Federal Reserve's May policy meeting are due later in the day and will be in focus for cues on policymakers' thinking on the future trajectory of interest rates amid uncertainty spurred by U.S. trade policies. "The details will be important in providing a sense of the level of conviction on the Fed’s willingness to remain on the side-lines in order to assess the uncertainty created by trade tariffs," MUFG Bank said in a note. Interest rate futures are currently pricing in nearly two U.S. rate cuts over 2025. India's overnight index swaps have priced in at least two rate cuts by the Reserve Bank of India as well, supporting a bullish outlook for the country's sovereign bonds. https://www.reuters.com/world/india/rupee-ends-nearly-flat-wedged-between-importer-dollar-bids-asia-fx-uptick-2025-05-28/

2025-05-28 09:29

Shein aims to file prospectus for Hong Kong IPO in coming weeks Company plans to go public in Hong Kong within this year Shein plans to change venue in absence of Chinese regulatory nod HONG KONG/DUBAI/LONDON, May 28 (Reuters) - Shein is working towards a listing in Hong Kong after the online fast-fashion retailer's proposed initial public offering (IPO) in London failed to secure the green light from Chinese regulators, said three sources with knowledge of the matter. The China-founded company aims to file a draft prospectus with Hong Kong's stock exchange in the coming weeks, one of the sources said. Shein plans to go public in the Asian financial hub within the year, two of the sources said. Sign up here. Shein plans to change the listing venue as it had not yet received approval for its London IPO from Chinese regulators, notably the China Securities Regulatory Commission (CSRC), the two sources said. The company, which sells products including $5 bike shorts and $18 sundresses, in March secured approval from Britain's Financial Conduct Authority (FCA) for its IPO in London, and soon informed the CSRC, one of the sources said. The company initially expected the green light from Chinese regulators to follow swiftly after the FCA but has since experienced an unexpected delay and limited communication from the CSRC, said the source. Details about Shein's Hong Kong listing plan have not been reported previously. All the sources spoke to Reuters on the condition of anonymity as they were not authorised to speak to the media. Shein and CSRC did not immediately respond to Reuters request for comment. A spokesperson for Hong Kong Exchanges and Clearing Ltd (HKEX) (0388.HK) , opens new tab declined to comment on individual companies. Before its attempt to list in London, Shein had pursued a listing in New York, as part of its efforts to gain legitimacy as a global, rather than a Chinese company, and access to a wide pool of large Western investors. A listing in Hong Kong would go against that strategy and could hurt its global credentials. Allegations that Shein's products contain cotton from China's Xinjiang region and a planned legal challenge to the London IPO by a non-governmental organisation campaigning against forced labour in China have complicated the London listing and risk embarrassment for the Chinese government, a separate source with direct knowledge of the matter said. Tensions with the U.S. over trade only exacerbate the wariness of Beijing and the CSRC, the source said. The United States and NGOs accuse China of human rights abuses in the Xinjiang Uyghur Autonomous Region, where they say Uyghur people are forced to work producing cotton and other goods. Beijing has denied any abuses. Shein, founded by China-born entrepreneur Sky Xu, says it has a zero tolerance policy over forced labour and child labour in its supply chain. The company moved its headquarters from Nanjing, China, to Singapore in 2022. As it awaited a response from the CSRC, Shein earlier this month dropped the communications firms Brunswick and FGS it had hired to help with public relations ahead of the London listing. IPO VALUATION Reuters could not determine if Shein had sought or received a nod from the CSRC for the Hong Kong listing. The company had sought Chinese regulatory approval for going ahead with processes to list in New York and later in London. Shein's filings with the CSRC make it subject to Beijing's listing rules for Chinese firms going public offshore, two sources have said. The rules are applied on "a substance over form" basis, giving the CSRC discretion on when and how to implement them, the sources added. Shein does not own or operate any factories, and instead sources its products from 7,000 third-party suppliers in China as well as some factories in other countries like Brazil and Turkey. Shein's aim was to go public in London in the first half of this year. But its business model of sending products straight from factories to shoppers around the world has been disrupted by the Trump administration ending duty-free access and slapping steep tariffs on e-commerce packages from China. The "de minimis" exemption allowed e-commerce packages from China worth less than $800 to enter the U.S. duty-free and helped Shein, Temu, and Amazon Haul sell clothes, gadgets and accessories extremely cheaply. Now, those parcels are subject to a minimum tariff of 30%. Regardless of where Shein lists, its eventual IPO valuation will hinge on the impact of the removal of the de minimis exemption, the sources have said. The U.S. exemption is still in place for goods that are not from China or Hong Kong. The European Union has also proposed changes to its duty exemption on parcels under 150 euros, adding to pressure on the business model. Reuters reported in February that Shein was set to cut its valuation in a potential London listing to around $50 billion, nearly a quarter less than the $66 billion valuation it had achieved in a $2 billion private fundraising in 2023. A revival in Hong Kong's capital market, with sizable recent listings including Chinese electric vehicle battery giant CATL's $5.3 billion float, the world's largest listing this year, augurs well for a potential Shein IPO in the city. Companies have raised $9.7 billion in Hong Kong through IPOs and second listings so far in 2025, compared to $1.05 billion at the same time last year, according to LSEG data. https://www.reuters.com/business/finance/shein-working-towards-hong-kong-listing-after-london-ipo-stalls-say-sources-2025-05-28/

2025-05-28 08:42

May 28 (Reuters) - Chile's SQM (SQMA.SN) , opens new tab, the world's second-largest lithium producer, on Wednesday missed quarterly profit estimates and warned of lower realized prices in the next quarter due to oversupply of lithium, a critical component of electric vehicle batteries. The company posted first-quarter net profit of $137.5 million, or 48 cents a share, compared with analysts' estimates of $171.20 million, or 63 cents a share, according to LSEG data. Sign up here. The miner said its revenue for the January to March period came in at $1.04 billion, in line with analysts' estimate of $1.045 billion, according to LSEG data. Miners worldwide have been hit by a nearly 90% drop in lithium prices since their peak in late 2022 due to weaker-than-expected demand for electric vehicles and excess supply. After posting a drop in net profit in the fourth quarter last year due to weak prices, SQM had said it expected lithium prices to dip further at the start of 2025. SQM, one of only two companies producing lithium in Chile, also makes fertilizers and industrial chemicals. SQM is awaiting final regulatory approvals to close a partnership with Chilean state-run copper miner Codelco in the Atacama salt flat, the world's most lithium-rich brine deposit. It expects to secure approval from Chinese regulators in the second half of the year. Asked about recent critiques of the deal from presidential hopefuls on both the right and the left, CEO Ricardo Ramos said Chile's political environment ahead of the November election was stirring up debate without fundamentals. "In the end it's just noise," he said. Ramos said that SQM's low operational costs and efforts to reduce them further during this year and next would help the company hold out for better lithium prices. "I don't have a crystal ball, but my view is positive for next year – I think prices will go back to a reasonable price environment," he said. https://www.reuters.com/world/americas/chiles-sqm-misses-profit-estimates-lithium-prices-remain-under-pressure-2025-05-28/

2025-05-28 08:31

STOCKHOLM, May 28 (Reuters) - Risks to financial stability in Sweden have increased as a result of U.S. President Donald Trump's tariffs and the administration's foreign policy agenda, the central bank said on Wednesday. "The sharp shifts in U.S. trade and security policy have caused substantial market movements during the spring and entail greater uncertainty than usual," the Riksbank said in a statement accompanying its bi-annual financial stability report. Sign up here. "The risk of financial instability has increased," it said. The Riksbank said Sweden's starting point for dealing with increased uncertainty was good, with a robust policy framework, strong public finances and profitable banks that had strong capital and liquidity buffers. But it also pointed to vulnerabilities related to the interlinked banking system and heavily indebted property companies and households. Donald Trump's on-again, off-again tariffs have already hit Sweden's economy, which stalled in the first quarter, according to flash figures. Final GDP figures are due on Friday. The government recently cut its full-year growth forecast to 1.8% from 2.3%, and Finance Minister Elisabeth Svantesson said risks were that the outcome could be worse. The central bank has said it could cut the policy rate in the months ahead if growth slows and price pressures continue to ease. https://www.reuters.com/business/finance/risks-financial-stability-sweden-have-increased-riksbank-says-2025-05-28/

2025-05-28 07:57

GENEVA, May 28 (Reuters) - The world is expected to experience more record temperatures over the next five years, with Arctic warming predicted at more than three times the global average, a new report by the U.N. weather agency said on Wednesday. There is an 80% chance that at least one of the next five years will see record heat, with a high likelihood that average warming will exceed 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels, according to the report by the World Meteorological Organization (WMO). Sign up here. Last year, the hottest year on record, saw the first breach of the 2015 Paris climate agreement, which committed countries to avoid global warming of more than 1.5 C. From this year until the end of 2029, the mean near-surface temperature globally is forecast to be between 1.2 C and 1.9 C higher than pre-industrial levels of the years 1850-1900, the WMO said, adding that this would fuel more extreme weather. "Every additional fraction of a degree of warming drives more harmful heatwaves, extreme rainfall events, intense droughts, melting of ice sheets, sea ice, and glaciers, heating of the ocean, and rising sea levels," it said in a statement. In the Arctic, the above-average projected warming will accelerate ice melt in the Arctic and northwest Pacific Ocean. The report said Arctic warming was predicted to be more than three-and-a-half times the global average, at 2.4 C above the average temperature during the most recent 30-year baseline period over the next five winters. Overall global temperatures will remain at or near record levels until the end of the decade, the WMO report said. Above-average rainfall is forecast in parts of the world including the Sahel, northern Europe, Alaska and northern Siberia, for the months between May and September between 2025 and 2029, while drier-than-average conditions are foreseen this season over the Amazon, according to the weather agency. https://www.reuters.com/sustainability/cop/arctic-warming-seen-three-times-global-average-years-ahead-un-weather-agency-2025-05-28/