Aurelia Butler

(Reuters) -Australia’s Insignia Financial has rejected Bain Capital’s A$2.67 billion ($1.69 billion) takeover bid, saying the offer does not provide fair value to its shareholders, creating a barrier for the buyout giant’s Asia expansion plans. Bain had earlier in the month offered A$4 apiece for the 178-year-old money manager, reigniting a strong sense of investor appetite for Australia-listed wealth managers that have seen their asset bases grow strongly. Insignia’s shares are currently trading 0.3% lower at A$3.59, well below Bain’s per share bid, after having slipped 2.8% during the session. Insignia turned down the Boston-based investment firm’s offer on Wednesday, saying it “does not adequately represent fair value for shareholders.””The ball is now in Bain’s court to either up the bid and give a reason to say yes or they can walk away,” said Henry Jennings, senior market analyst at marcustoday newsletter. “I would say that somewhere above A$4.20 per share would be enough to get them talking.”Bain has also been active in Japan, making improved offers for Fuji Soft amid a bidding war with KKR. Bain completed the final close of its fifth pan-Asian private equity fund at $7.1 billion in November last year. It also struck a deal to acquire Australian aged care operator Estia for A$838 million in August. KKR’s A$2.2 billion deal with Australia’s Perpetual also hangs in the balance after a tax bill blowout. The Australian wealth management sector has recently seen some mergers and acquisition activity. Regal Partners had made an offer for Platinum Asset Management in September, but the buyout talks failed.Insignia rejected Bain’s bid as it moves ahead with a strategy to restore confidence among shareholders, having already faced resistance from activist investor Tanarra Capital.”We regard the Bain proposal as highly opportunistic. We want the Insignia management team to remain focused on the business improvement plan they are in the early stages of delivering,” Tanarra said on Tuesday. ($1 = 1.5785 Australian dollars) More

The proposal will now head to President Luiz Inacio Lula da Silva for his signature.The bill sets rules needed to consolidate five existing taxes into a single consumption levy, also known as a value-added tax (VAT), with separate federal and regional rates. It also provide details on a new tax on products considered harmful to human health or the environment, such as cigarettes and alcoholic beverages. Lawmakers in the lower house added sweetened beverages back to the list after the senators removed it.Lawmaker Reginaldo Lopes, bill rapporteur in the lower house, said the changes approved by the house will set the overall consumption tax rate at 26.5%.The eagerly anticipated tax reform was approved by lawmakers last year and is a central pillar of Lula’s plans to boost productivity and economic growth in Latin America’s largest economy. Previous governments have attempted and failed to implement a tax reform of their own. Lula’s government has also sent to lawmakers a separate bill, which still requires Senate approval, regulating how the VAT would be managed at the state level. More

TOKYO (Reuters) – Japan’s exports rose for a second straight month in November, data showed on Wednesday, indicating strong global demand that businesses worry could be undermined by protectionist U.S. trade policies.The solid data, released just a day before the Bank of Japan’s policy decision, supports the central bank’s plans to gradually raise interest rates from near-zero levels. Total (EPA:TTEF) exports rose 3.8% year-on-year in November, more than a median market forecast for a 2.8% increase and following a 3.1% rise in October.Exports to China, Japan’s biggest trading partner, rose 4.1% in November from a year earlier, while those to the United States were down 8%, the data showed.Imports dropped 3.8% in November from a year earlier, compared with market forecasts for a 1% increase.As a result, Japan ran a trade deficit of 117.6 billion yen ($766.17 million) in November, compared with the forecast of a deficit of 688.9 billion yen.The outlook for exports is increasingly uncertain.Nearly three-quarters of Japanese companies expect Donald Trump’s next term as U.S. president to have a negative impact on their business environment, a Reuters survey showed.BOJ Governor Kazuo Ueda has said the bank will keep raising rates if the economy and prices move in line with projections.However, sources have told Reuters the central bank is leaning toward keeping interest rates steady this week as policymakers prefer to spend more time scrutinising overseas risks.($1 = 153.4900 yen) More

Human resources data firm Brightmine said the median pay award held at 4% for a fifth month running, down from 6% over 2023 as a whole.The survey added to signs of stubbornly high pay pressures in Britain’s economy. Official data on Tuesday showed an increase in the pace of earnings growth – something the Bank of England is likely to note on Thursday when it announces its December interest rate decision.All economists polled by Reuters think the BoE will keep rates on hold this week. The central bank has said the outlook for inflation will hinge in part on how companies respond to finance minister Rachel Reeves’ Oct. 30 budget.She increased the social security contributions paid by employers in order to finance more spending on investment and public services. The increase kicks in from April next year – just as the minimum wage is due to rise by nearly 7%.Brightmine – which previously forecast a median pay award of 3% for 2025, down from 4.5% for 2024 – said nearly 40% of the employers it surveyed expected to reduce salary budgets in response to the budget.”While it’s great to see pay awards are still being offered across all industries, there’s no doubt that businesses next year are facing a tough landscape and will have to make some difficult decisions,” said Sheila Attwood, Brightmine senior content manager. The latest data was based on 22 pay awards between Sept. 1 and Nov. 30, covering around 227,000 employees. More

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SANTIAGO (Reuters) – Chile’s central bank cut its benchmark interest rate by 25 basis points to 5.00% on Tuesday, extending an easing cycle that began last year while also warning of inflation risks in the short term.The unanimous decision was in line with forecasts from analysts and traders and comes amid cooling inflation, and as the world’s top copper producer faces challenges to rev up growth.Annual inflation in Chile eased to 4.2% in November, down from the 4.7% reported in October. That is still above the central bank’s target range of 2% to 4%.November’s inflation reading came in above the projections in the main scenario of the bank’s third-quarter monetary policy report. The short-term inflation outlook has become more challenging due to higher cost pressures, the bank said in a statement announcing the decision, adding that it sees inflation fluctuating around 5.0% in the first half of 2025. “The balance of risks for inflation is biased to the upside in the short term, which highlights the need for caution,” the central bank said. The bank said its board would gather information to evaluate the opportunity to reduce the benchmark rate in the coming quarters. Chile began cutting borrowing costs in July 2023 after holding its key rate steady at 11.25%, and has since brought the rate down by 625 basis points in line with falling inflation. Tuesday’s statement suggests a pause in the rate-cutting cycle in January, JPMorgan said in an analyst note after the announcement, underscoring its “base case scenario for the next 25 basis point policy rate cut to occur in March.”While the bank called for caution in the short term, it sees weaker domestic demand mitigating inflationary pressures in the medium term, which would contribute to a downward trajectory for the rate over the policy horizon. More

ORLANDO, Florida (Reuters) -As the classic market cliche goes, investors should worry most when the consensus is overwhelmingly optimistic and be bullish when it’s overwhelmingly bearish. If investors apply this logic to the 2025 U.S. stock market outlook, they should be running for the hills. By many measures – sentiment surveys, positioning, valuations – the helicopter view of Wall Street has rarely been rosier. This wave of ‘U.S. exceptionalism’ won’t catch anyone unawares. It has been building to a crescendo all year as the AI and tech boom steered the U.S. economy away from any kind of landing – hard or soft – and fueled the stock market’s eye-popping outperformance.But some of the numbers are flashing red and not just for the die-hard contrarians. In fact, the wave of optimism has been so powerful that it has swept away some of the Street’s most prominent bears. Even ‘Dr Doom’ Nouriel Roubini and David Rosenberg of Rosenberg Research have recently appeared to embrace the ‘TINA’ (There Is No Alternative) view on U.S. stocks.When the bears are capitulating, it’s definitely time to worry, right?Probably, unless it really is different this time. And the last three years suggest this could be the case, as the post-Covid world has been unlike anything found in economic textbooks and market playbooks. According to Dario Perkins at TS Lombard, U.S. market and macro bears have repeatedly misread the post-COVID “fake cycle”. They’ve been fooled by the inverted yield curve, put too much emphasis on (mis)leading indicators, and misinterpreted labor market normalization as weakness. “As the economy returns to more regular drivers, this sort of error should stop,” Perkins says. Hopefully, the bears are just “embracing reality, having been excessively pessimistic” for three years. That may turn out to be the case, but even so, it would hardly be a return to business as usual. Indeed, there’s a lot about the U.S. equity market right now that is highly unusual. The fact that the S&P 500 and Nasdaq are at record highs is not one of them. Stocks go up over time as the economy grows and productivity, innovation and company profits rise. But there are grounds for caution. The difference between U.S. and European equity valuations has never been wider; Wall Street’s share of the world equity market cap has never been bigger; and U.S. consumers’ stock market outlook for the coming 12 months has never been more optimistic.    Extreme valuations are no guarantee of an imminent crash or correction. But as AXA Investment Managers’ Chris Iggo rightly observes, they change the risk calculus. Still, a correction needs a trigger. What could that be this time around? Valuations may finally spook investors, and the unwind becomes an unraveling. Perhaps it’s U.S. President-elect Donald Trump’s policy agenda, the fragile political-economic axis in Europe, or China’s economic struggles. Or maybe some underlying risk that no one is paying attention to.The S&P 500 has delivered total returns of around 35% since the Fed’s last rate hike in July 2023 and is set to record two consecutive years with 25%+ total returns.As Iggo noted, “Given the backdrop, a third might be stretching it.”(The opinions expressed here are those of the author, a columnist for Reuters.)(By Jamie McGeever; Editing by Kirsten Donovan) More