Aurelia Butler

NEW YORK(Reuters) – “Sell” or “split” was the favorite word for activist investors across the world last year when their demands for companies to pursue some form of mergers and acquisition-related activity hit a new record and appeared in roughly half of their 2023 campaigns even as M&A activity dropped off, according to new data from Barclays.Hedge funds Elliott Investment Management, ValueAct Capital, Jana Partners and others urged target companies to merge, split off units or sell themselves, with these demands show up in 49% of all campaigns last year. In the previous four years, mergers and acquisitions requests averaged 42%, the data show.”The activists told corporations that this is the new reality and it is time to move on,” said Jim Rossman, global head of shareholder advisory at Barclays.But their requests came during a year takeover activity dropped to its lowest level in a decade, according to Dealogic data, leaving many with little to show for their calls.As total deal volume fell 18% to about $3 trillion, senior dealmakers described the year as one of the toughest in recent memory. Deals weren’t getting done because potential partners couldn’t agree on price and it was tougher to secure financing as interest rates rose. Still many seasoned activists summoned the self-confidence to make demands to corporate management even if they knew it would take longer than usual to get to the finish line, several fund managers and bankers said.Elliott, one of the industry’s busiest activists, called on wireless tower owner Crown Castle (NYSE:CCI) to consider selling the business while Jana Partners pushed Frontier Communications (OTC:FTRCQ) to launch a sales process and ValueAct pressed Seven & i Holdings to spin off its 7-Eleven convenience store chain. Irenic Capital Management and Starboard suggested News Corp (NASDAQ:NWSA) spin off its digital real estate division.While they might have to wait longer for a proposed outcome, activists described their demands last year when market conditions allowed them to build positions for less money.”Activists saw an opportunity to invest at really attractive points where markets featured depressed valuations,” Rossman said, explaining why activism remained very strong last year with 229 new campaigns around the world after 235 campaigns in 2022.Besides M&A, activists also asked for board changes, changes in strategy and operations and improved governance. Changes in management, where activists call for top executives to be replaced, were last on the list of demands last year, showing up in only 10% of all campaigns, the data show. In 2022 there had been a 46% year-on-year increase in activists targeting a company’s top brass, research firm Insightia found. More

(Reuters) -Futures tracking the S&P 500 and the Dow were subdued on Wednesday ahead of inflation reports and potentially weak earnings from major lenders later this week, while a dip in Treasury yields aided gains in the tech-laden Nasdaq.Equities have remained range-bound since the turn of the year, as investors reassess their expectations of the pace of monetary policy easing following contrasting economic data and mixed signals from Federal Reserve officials. After leading last year’s rally on optimism around early interest rate cuts, megacaps stocks have gyrated so far in 2024.”Early optimism seen throughout financial markets may be difficult to maintain given the uncertainty as we head into a crucial second half of the week,” said Joshua Mahony, chief market analyst at Scope Markets.Investors’ focus now remains squarely on the December consumer and producer inflation reports due on Thursday and Friday, respectively. A slew of government and corporate bond issuance are also due this week.”With both headline and core CPI unlikely to hit 2% by March, market expectations around a potential rate cut at that point looks to be built on the high likeliness of a return to target for the Fed’s favoured core PCE metric,” said Mahony.Market participants have scaled back expectations for at least a 25-basis-point rate cut in March, and currently see a 64% chance, down from around 86% in the last week of 2023, as per the CME FedWatch Tool.On Friday, banking giants JPMorgan Chase (NYSE:JPM), Bank of America, Citigroup and Wells Fargo are expected to report lower fourth-quarter profits, as they set money aside to cover souring loans and paid more to depositors. Some analysts fear the earnings season may not produce the results that justify the run up in stock valuations into the end of last year.At 7:12 a.m. ET, Dow e-minis were down 28 points, or 0.07%, S&P 500 e-minis were up 1.75 points, or 0.04%, and Nasdaq 100 e-minis were up 30 points, or 0.18%.Amazon.com (NASDAQ:AMZN), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) rose between 0.4% and 0.8% in premarket trading, as U.S. Treasury yields ticked lower, with those on the benchmark 10-year note slipping to 3.99%. [US/]Chip stocks Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) also gained between 0.5% and 1.1% as TSMC, the world’s largest contract chipmaker, beat fourth-quarter revenue expectations.Crypto stocks including Coinbase (NASDAQ:COIN), Bitfarms and Riot Platforms (NASDAQ:RIOT) fell between 2.2% and 3%, as prices of the world’s most valued cryptocurrency, Bitcoin, dipped after the U.S. securities regulator said a fake social media message was posted on its account regarding the eagerly awaited approval of exchange traded funds. Boeing (NYSE:BA) inched up 0.3%, recovering from a 9.3% tumble in the last two sessions. CEO Dave Calhoun acknowledged errors by the U.S. planemaker as more than 170 jets remained grounded for a fourth day.Dow Inc (NYSE:DOW) slipped 0.7% after Deutsche Bank downgraded the chemicals firm to “hold” from “buy”.Intuitive Surgical (NASDAQ:ISRG) climbed 5.1% after the medical device maker’s preliminary fourth-quarter revenue beat estimates. More

It was a merchant sailor’s nightmare: armed men in balaclavas dropping from a helicopter before storming the ship’s bridge, ordering the civilian crew to lie down at gunpoint and cutting all communications. The scene played out late last year on the Galaxy Leader cargo ship, which was seized in the Red Sea by Houthi rebels who forced it to switch course to Yemen. It was one of the most audacious of more than two dozen attacks carried out by the Yemeni Islamist movement on merchant ships over the past two months.The assaults have disrupted shipping in the critical maritime trade route and drawn the US Navy into combat. The Islamist rebels have become one of the most active factions in Iran’s so-called Axis of Resistance since the war between Israel and Hamas erupted on October 7. By opening a front in the Red Sea, they have exposed the Iran-linked group’s ability to harm western interests, burnished the Houthis’ credentials as supporters of the Palestinian cause and projected them on to the regional and international stage, said analysts.The Houthis were “very good military entrepreneurs” who have jumped on the “opportunity” presented by the war, said Farea al-Muslimi, a Yemeni expert at the Chatham House think-tank.“They really believe the right opportunity came for them to defend Palestine and stand against Israel, and to show how hypocritical other Arab countries are [for not doing the same],” he said. “As long as the Gaza war goes on, the Houthis will escalate in the Red Sea.”In doing so, they have created a significant challenge to the US and its western allies, which want to protect the region’s shipping lanes but are also wary of the Israel-Hamas conflict triggering a broader regional war.US forces have come into conflict with the Houthis as they protect global shipping in the Red Sea through which about 15 per cent of global sea trade passes.On New Year’s Eve, US Navy helicopters returned fire against small Houthi boats that were attacking an AP Møller-Maersk container ship in the Red Sea, sinking three of the rebels’ vessels and killing their crews. Two days later they fired anti-ship ballistic missiles into the sea, the rebels’ 24th attack on merchant shipping in the region since they captured the Bahamas-flagged Galaxy Leader on November 19. The impact was felt by “multiple” commercial ships in the area, according to the US military, serving the Houthis’ aims of creating fear and disruption in the sea. The rebels have also fired drones and missiles at the southern Israeli port of Eilat. Late on Tuesday, the Houthis launched one of their biggest combined attacks so far, according to US Central Command, with US and UK warships and aircraft shooting down 18 drones, two anti-ship cruise missiles and one ballistic missile. Maersk, the Danish shipping company, recently suspended all transits through the Red Sea for the “foreseeable future”, joining about a dozen other companies including energy group BP in avoiding the route. Container ships and oil tankers instead have to take a 5,000-mile diversion around Africa to reach Europe.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.In a sign of growing western concern, the US and UK and 10 other states issued a joint statement this month warning the Houthis that they would bear the consequences “should they continue to threaten lives . . . and free flow of commerce in the region’s critical waterways”. The warning came amid speculation that US forces could launch strikes against the Houthis.Washington has announced plans to step up the Red Sea maritime task force, but there were still only five warships from the US, France, and the UK patrolling the southern Red Sea and the western Gulf of Aden.The US hopes other countries will deploy vessels, but it faces challenges in countering the threat. Sidharth Kaushal, a research fellow at the Rusi think-tank, said one issue was that western warships only had a finite stock of interceptor missiles used to destroy projectiles. Once these were expended, ships had to return to base to resupply. “The sheer tempo of activity means the Houthis can present the coalition with a challenge, even if the targets are quite simple,” said Kaushal. Even if the task force were to be able to provide security, the success or failure of a convoy operation “exists at the level of perception that private sector actors, and particularly the insurers, believe to be true”, he continued. And as insurers increased premiums, it would become more economical for shipping companies to reroute their vessels, Kaushal added.Houthi troops in Sana’a last year. Many Yemenis loathe the Houthis, but the cause of the Palestinians crosses factional divides in the country More

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LONDON/SINGAPORE (Reuters) -Japanese stocks hit a 34-year high on Wednesday while global equities, the dollar and bonds held steady ahead of U.S. inflation data on Thursday.Bitcoin stabilised after spiking when an unauthorised post from the U.S. Securities and Exchange Commission’s X account said it had approved bitcoin exchange-traded funds.Japan’s Nikkei – which had its best year in a decade in 2023 – climbed 2% to break above 34,000 for the first time since 1990. Exporters led the charge, helped by a softening yen after data showed Japanese real wages shrank for a 20th month in November.Futures for the U.S. S&P 500 were flat after the index dipped 0.15% on Tuesday, as investors also waited for big U.S. banks to kick off earnings season on Friday. Nasdaq 100 futures were 0.16% higher.”Japan is really interesting,” said Duncan MacInnes, an investment director at British firm Ruffer. “The problems have been corporate governance, which is definitely improving, (and) it has tended to be a very cyclical market, so it gets hit especially hard when the market turns down.”The pan-European Stoxx 600 index was last down 0.2%, while Britain’s FTSE 100 was 0.32% lower and Germany’s DAX index was unchanged.U.S. and European markets surged at the end of 2023 as inflation cooled quicker than expected and central banks struck a softer tone, encouraging investors to bet on big rate cuts this year.The optimism about falling borrowing costs has waned slightly in January and the S&P 500 is down around 0.3% so far after rallying 24% last year.The index which tracks the U.S. dollar was very slightly lower. The U.S. currency has risen around 2% since hitting a five-month low in late December.Bitcoin was last down 1.2% at $45,558 after spiking as high as $47,897 on the false reports of ETF approvals. The SEC said it had not yet approved a spot bitcoin ETF and that someone had accessed its X social media account without authorisation.INFLATION IN FOCUSThe crucial event for markets this week is U.S. consumer price index inflation data. Economists polled by Reuters see year-on-year inflation at 3.2% in December, up from 3.1% in December. But they think core inflation likely fell to 3.8%, its lowest since mid-2021, from 4%.Interest rate futures are pricing around 140 basis points of U.S. rate cuts this year. The probability of a move in March has been pared somewhat to a still-high 68%.Benchmark 10-year Treasury yields were last down 2 basis points in European trading on Wednesday at 3.999%. They move inversely to prices and have risen this year after plunging in November and December.”Market pricing… has gotten a little bit ahead of itself,” Jeff Klingelhofer, co-head of investments and managing director at Thornburg Investment Management, said on Wednesday.”If you look at history – five (25 bp) cuts is very consistent with a recession, but markets aren’t pricing in a recession.”Geopolitical tensions were also on the radar as disruptions in the Red Sea and a production outage in Libya raised oil prices, and an election looms in Taiwan.Brent crude oil futures rose 1.9% on Tuesday and were up 0.18% to $77.73 a barrel early on Wednesday. [O/R]The euro was up 0.14% at $1.095, while the dollar was 0.4% higher against the yen. More

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BlackRock (NYSE:BLK), VanEck, Ark Investments/21Shares and Bitwise, among others, said in filings with the U.S. Securities and Exchange Commission (SEC) that they expect to significantly undercut the average market rate for ETFs.Their rates were well below the average rate analysts had anticipated as well as the range that some issuers had indicated. Analysts and academics noted that since all the ETFs would likely deliver the same return, their fees will be an important tool in attracting inflows of new assets.A spot crypto ETF would track the market price of the underlying crypto asset, giving investors exposure to the token without having to buy the currency. The SEC is expected to announce its decision on spot bitcoin ETF applications as early as this week. It had previously denied all such applications, citing potential for fraud. Here are the fees disclosed by the companies: Company Trust/ETF Fees Notes name disclosed BlackRock 0.25% Co says fees will iShares be 0.12% for the Bitcoin first $5 bln in Trust assets for 12 months Grayscale 1.5% Investments Grayscale Bitcoin Trust Fidelity 0.39% Wise Origin Bitcoin Trust Ark Invest and 0.21% Will waive all fees 21Shares ARK for six months or 21Shares first $1 bln in Bitcoin assets ETF VanEck 0.25% VanEck Bitcoin Trust WisdomTree 0.50% WisdomTre e Bitcoin Trust Valkyrie Digital 0.80% Co says it may Assets Valkyrie temporarily waive Bitcoin all or a portion of Fund the fee “at its discretion for stated periods of time” but that it doesn’t intend to do that “presently” Invesco and 0.59% Will waive on first Galaxy Digital Invesco $5 bln in assets Galaxy for six months Bitcoin ETF Franklin 0.29% Templeton Franklin Templeton Digital Holdings Trust Bitwise Asset 0.20% Co says it will Management Bitwise waive fees on the Bitcoin first $1 bln in ETF assets Hashdex 0.94%* Fees on current Hashdex product; Co has Bitcoin filed to convert Futures bitcoin futures ETF ETF into a spot bitcoin ETF Source: Regulatory filings with the U.S. SEC More