2024-09-03 05:14

Sept 3 (Reuters) - Last October, Matthew Hougan told an industry panel that he expected spot bitcoin exchange-traded funds (ETFs) to attract $55 billion of assets in their first five years. As of late August this year, about eight months after their debut, the 10 new funds approved by U.S. regulators collectively boasted more than $52 billion, according to data from TrackInsight. "Clearly, I wasn't being bullish enough," Hougan, CEO of crypto firm Bitwise Investments, reflected wryly. "This is going to be an area that we measure in hundreds of billions of dollars." That remains to be seen. These products track the price of bitcoin, which has whipsawed repeatedly since its birth 16 years ago kicked off the crypto era. Some market players say bitcoin is inherently speculative, more akin to art or fine wine than gold and commodities, driving volatility and risk. The path to wide acceptance as a mainstream asset may be slow and twisting. One milestone came in August. That's when Morgan Stanley (MS.N) , opens new tab decided to allow its 15,000-strong network of financial advisers to actively recommend at least two of the new bitcoin ETFs - the iShares Bitcoin Trust (IBIT.O) , opens new tab and the Fidelity Wise Origin Bitcoin Fund (FBTC.Z) , opens new tab - to clients. "It is now unacceptable not to do due diligence and the work of understanding these products," said John Hoffman, head of distribution and partnerships at Grayscale Funds, whose firm's Grayscale Bitcoin Trust (GBTC.P) , opens new tab wasn't part of the first wave of products added to Morgan Stanley's platform. "The risk has kind of flipped for the wealth management channel to the risk of not moving forward." Retail investors have dominated flows into the new ETFs. Only a handful of large institutions, like the state of Wisconsin's investment board and a number of hedge funds, have publicly disclosed positions in regulatory filings. "The first 50 billion has come from people who understand bitcoin well," said Sui Chung, CEO of CF Benchmarks, which has developed the bitcoin index underpinning several of the ETFs. "Now we're seeing the next stage: people on the risk committee at Morgan Stanley being dragged, kicking and screaming, to this decision when advisers can't tell their clients 'no' any longer." But the fact that first movers like Morgan Stanley are getting so much attention points to how much ground crypto ETFs must cover to become part of the investment mainstream. "They're being hailed as cutting edge for doing this, and that reminds us that by being early movers they're also being seen as being risky," said Andrew Lom, an attorney at Norton Rose Fulbright whose practice includes fintech. For Lom, the real test of whether the new ETFs will reach mainstream status will be not just their size but their liquidity. "We may already be there," he said. "At some point, people start to think and talk about it as part of the normal investable universe, and then you'll see the modern portfolio theory folks start considering what allocation to give it." That's when the next test will arrive: whether model portfolios, one-stop investment products that financial advisers increasingly rely on when making asset allocation decisions, will add them to the mix. Even some of bitcoin's staunchest adherents admit that lies at least six to 12 months ahead. WHAT ABOUT ETHER ETFs? If bitcoin ETFs are at least on their way to emerging as part of the investment mainstream, the future is murkier for spot ethereum ETFs. A month after their July 23 launch, assets in the ether group totaled nearly $7 billion, according to TrackInsight. BlackRock's iShares Ethereum Trust (ETHA.O) , opens new tab has hit $900 million in assets, outstripping ETF launches as a whole, yet suffering by comparison to BlackRock's bitcoin product which reached $1 billion in its first four days of trading. "A lot of people were excited until the launch, and then it became a kind of 'sell the news' event," said Adrian Fritz, head of research at 21Shares, one of the firms to roll out a spot ether ETF in late July. "With more education and time, you'll see more excitement around ether as well." Others remain more cautious, noting that ether isn't just a smaller cryptocurrency but a very different one. "If bitcoin is digital gold, then ether is digital oil," said Chung of CF Benchmarks. "The reason ethereum might increase in value is that people might need it to move assets around the digital network, just as people use oil to make the real world work." That hybrid nature also requires both regulators and investors to undertake more research and due diligence, he and others say. "The sales pitch will be longer and more complicated," Chung said. Sign up here. https://www.reuters.com/markets/currencies/cryptoverse-bitcoin-etfs-take-50-billion-baby-steps-toward-big-time-2024-09-03/

2024-09-03 05:08

WARSAW, Sept 3 (Reuters) - Poland needs less than a year to prepare a model to spin off coal assets from state-controlled utilities as it is analysing the lifespans of dozens of power units that meet most of the country's electricity demand, the state assets minister said. Poland's government has yet to announce an alternative after a plan was scrapped last year to spin off coal-fired power plants from state-controlled utilities to increase the focus on green energy, and as banks seek to avoid financing coal-dependent companies. Jakub Jaworowski in an interview with a small group of journalists said the coal-asset spin-off was still a priority but more time is needed to determine when the ageing coal-fired power units could be decommissioned, while also taking into account the financial and social impact. "Of course something has to happen in the next 12 months, that's definitely the horizon," Jaworowski said, adding that he could not yet say what the outcome of the analysis might be. "But it's definitely less than a year for something to become clear." The state assets ministry is considering a "middle ground" solution and is analysing the future of each power unit rather than considering the spin-off of entire power generation subsidiaries that consist of several plants, he said. Under the former administration's plan, the subsidiaries of PGE, Tauron and Enea that operate coal-fired power plants were to be bundled into a new state-owned company NABE that would pay their debts. "NABE was a somewhat nuclear option," Jaworowski said, adding there were several less extreme alternatives, rather than the previous, all or nothing solution. PGE and Tauron have been urging the government to come up with a rapid plan for their coal-fired power plants as their profitability is declining. Fitch Ratings said in March that Polish utilities risked credit downgrades unless the government delivered an alternative to the previous administration's solution. Sign up here. https://www.reuters.com/sustainability/climate-energy/poland-needs-less-than-year-shape-coal-asset-spin-off-minister-says-2024-09-03/

2024-09-03 04:39

A look at the day ahead in European and global markets from Tom Westbrook Today's U.S. ISM manufacturing survey is the first major indicator out in a big week for U.S. data and, likely, the dollar. Investors and the Federal Reserve are looking for reassurance that the path is clear to cut interest rates, and to gauge how quickly to cut. Traders have recently pared expectations for a 50-basis-point cut this month, and the dollar has steadied after a two-month selloff. Economists see the ISM (USPMI=ECI) , opens new tab at 47.5, an improvement from the previous month but still in contractionary territory below 50. The job market is seen adding 160,000 jobs (USNFAR=ECI) , opens new tab and the jobless rate (USUNR=ECI) , opens new tab ticking down to 4.2%. Surprises on the low side will likely have the dollar testing recent lows, though in Asia caution and short covering had the dollar extending its recent rebound. Asian currencies had rallied particularly strongly in anticipation of U.S. rate cuts giving regional economies more room to ease policy themselves and encourage growth. Data in the Asia session showed Australian government spending rose in the June quarter, prompting National Australia Bank to upgrade its forecast for Wednesday's gross domestic product figure. South Korean inflation slowed to a three-and-a-half-year low, paving the way for imminent rate cuts. In company news, Cathay Pacific (0293.HK) , opens new tab cancelled flights while it inspected its Airbus (AIR.PA) , opens new tab A350 fleet following the failure of a Rolls Royce (RR.L) , opens new tab engine component. And in Japan, a senior finance ministry official pushed back at speculation retail giant Seven & i Holdings (3382.T) , opens new tab was seeking national security classification to fend off a buyout bid from Canada's Alimentation Couche-Tard (ATD.TO) , opens new tab. Key developments that could influence markets on Tuesday: Economics: U.S. ISM manufacturing PMI Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-09-03/

2024-09-03 00:49

TOKYO, Sept 3 (Reuters) - Mizuho (8411.T) , opens new tab subsidiary Asset Management One aims to raise half a trillion yen ($3.4 billion) for its first Japanese stocks fund investing in big companies, in a bet global investors will stick with Japanese equities even after a market collapse in early August. The new fund will invest in 50 of Japan's largest firms and is the first at Asset Management One to focus on large domestic companies, President and CEO Noriyuki Sugihara told Reuters in an interview. AM-One, which manages over 69 trillion yen ($470 billion) as of end-July, aims to eventually draw 500 billion yen in investor contributions to the fund, he said, without giving a time frame. The fund manager has also launched a crossover fund that supports not only listed companies but also unlisted ones, from the unlisted stage and after they go public. The moves point to confidence that a sparkling rally in Japanese equities can extend, after recouping most of August's wipeout, and that global interest will remain. "Focusing on Japanese stocks means that we are committed to the transformation of the Japanese market," Sugihara said. On August 5, Japan's Nikkei suffered its biggest rout since Black Monday in 1987, dropping 12.4% as a sudden surge in the Japanese yen spooked investors. It has since recouped that fall and on Monday sat at levels where it traded in late July. Sugihara said the sharp decline was mostly a result of adjustments of holdings by short-term momentum traders and the fundamentals of the market have not changed. Japanese stocks scaled record highs in July thanks mostly to inflows from foreign investors drawn in by a recovering economy and a corporate governance push to improve shareholder returns. Sugihara said Japanese equities are still somewhat under-rated, have momentum, and in local currency terms have outperformed U.S. stocks over the last three years. "Investors are beginning to notice," he said. ($1 = 146.7400 yen) Sign up here. https://www.reuters.com/business/finance/japans-am-one-aims-raise-34-bln-new-large-cap-japan-fund-2024-09-03/

2024-09-03 00:25

All 30 economists expect BNM to hold rates at 3.00% on Sept. 5 BENGALURU, Sept 3 (Reuters) - Bank Negara Malaysia (BNM) will leave its key interest rate unchanged on Thursday and keep it there at least through 2025 as growth remains robust and inflation stays under control, according to a Reuters poll of economists. While BNM has managed to keep inflation in check, currently at 2.0%, the Malaysian ringgit has flipped from being one of the worst performing Asian currencies to one of the strongest in recent weeks. That suggests the central bank will be in no rush to cut rates anytime soon, aiming to avoid weakening the currency and importing inflation. All 30 economists in the Aug. 27-Sept. 2 Reuters poll predicted BNM would leave its overnight policy rate (MYINTR=ECI) , opens new tab at 3.00% on Sept. 5. A median from a smaller sample showed rates would remain at the current level until at least 2026, a view unchanged since the beginning of the year. Those predictions were in contrast to major central banks which were expected to cut rates at least once in 2024. "There is no reason for BNM to change the policy rate right now...as growth is at the higher end of expectations and inflation has been surprisingly benign," said Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank. Malaysia's gross domestic product (GDP) grew 5.9% last quarter, the fastest pace in 18 months, driven by strong household spending, exports and investment. Inflation is expected to trend higher in the second half of 2024 amid uncertainties emanating from a recent policy on reducing diesel subsidies, suggesting a rate cut from the central bank is unlikely over the coming months. "There is still uncertainty about the timing of further fuel subsidy rationalisation and the bank is probably keeping an eye out for second-round effects from the previous diesel fuel subsidy removal, so a cut would appear premature," said Moorthy Krshnan, senior Asia economist at Pantheon Macroeconomics. The central bank said in a statement that inflation would continue to remain manageable even if it trended higher following diesel subsidy cuts in June. , opens new tab The Malaysian ringgit has appreciated by about 6% this year, as increased expectations that the Federal Reserve will cut interest rates as early as this month have weakened the U.S. dollar. This suggests a rate cut from the central bank now is unwarranted and would likely be inflationary. "The more significant determinant for the ringgit has been a weaker dollar story, as U.S. growth concerns have increased. With the Fed poised to make cuts, the narrowing interest differential should be a positive for the ringgit," added Krshnan. Sign up here. https://www.reuters.com/markets/asia/malaysia-central-bank-hold-rates-30-until-least-2026-2024-09-03/

2024-09-03 00:06

BEIJING, Sept 3 (Reuters) - China and South Africa, whose top leaders met in Beijing, signed cooperation documents that cover trade and other areas, and discussed encouraging their business communities to increase two-way investments, a joint statement on Tuesday showed. The signings included the application of a satellite navigation system, housing and settlement and export requirements for dairy products and raw wool from South Africa to China, according to the statement published by the official Xinhua news agency. Sign up here. https://www.reuters.com/markets/china-south-africa-sign-cooperation-documents-trade-more-investments-2024-09-03/