Aurelia Butler

McDonald’s restaurants in the UK are raising the price of their signature 99p cheeseburger for the first time in more than a decade, as the fast-food chain becomes the latest company to pass on surging inflation to customers. The 99p cheeseburger will now be sold for £1.19 following the first price rise on the product in 14 years, the US group said on Wednesday. McDonald’s will also increase the price of other products — such as McNugget share boxes, breakfast meals, large coffees and some burgers — which will rise by between 10p and 20p. Price rises for single and double cheeseburgers will take effect on Wednesday, with the rest staggered over summer.“We know things are tough right now. We’re living through incredibly challenging times and we’re all seeing the cost of everyday items, such as food and energy, increase in a way many of us have never experienced,” said McDonald’s UK and Ireland chief executive Alistair Macrow. “Just like you, our company, our franchisees who own and operate our restaurants, and our suppliers are all feeling the impact of rising inflation.”He acknowledged that “any price increases are not good news”, stressing that the chain had “delayed and minimised these changes for as long as we could” in its 1,300 UK outlets. Prices for a select number of products will “remain unaffected”.Many of the world’s largest consumer goods groups including Unilever and Coca-Cola have announced hefty price rises to cope with inflationary cost pressures.Energy and food cost rises resulting from Russia’s invasion of Ukraine as well as a labour shortage in the wake of the pandemic have heaped inflationary pressure on companies. The cost of Unilever’s products — which include Hellmann’s mayonnaise, Cif cleaning products and Wall’s ice cream — rose an average of 11.2 per cent in the second quarter and are set to grow further, the UK group said on Tuesday. Coca-Cola reported a similar trend, with prices of its products rising about 5 per cent.

Earlier this week McDonald’s reported a 9.7 per cent increase in global sales in the 13 weeks to June 30. In the US, where the chain has more than 13,000 outlets, McDonald’s said sales growth had been “driven by strategic menu price increases” and that inflation was pushing customers to seek discounted options. Globally the chain has around 36,000 restaurants — a combination of company-owned and franchised outlets — in more than 100 countries. More

SINGAPORE (Reuters) – Asia-focused lenders HSBC, Standard Chartered (OTC:SCBFF) and their Southeast Asian peers such as DBS are set to report an improvement in second-quarter net interest income, a key source of revenue, benefiting from higher interest rates.But analysts warn that rising credit impairments and weak financial markets could weigh on banks’ performance as the macro environment deteriorates.Singapore banks are expected to report 10 basis points net interest margin expansion on a quarter-to-quarter basis, the highest over the last eight quarters, outperforming Asian peers, according to JPMorgan (NYSE:JPM) analyst Harsh Wardhan Modi.”We are seeing the highest pace of rate hikes in the shortest span of time in at least 20 years,” he said. “My sense is that not only will second quarter numbers meet our expectations but guidance from managements will reaffirm much better net interest margin outlook for the second half of the year.”United Overseas Bank (OTC:UOVEY), the smallest-listed Singapore lender, unveils results this Friday, followed by Overseas-Chinese Banking Corp on Aug 3, and DBS a day later.Singapore’s central bank tightened its monetary policy this month, saying the action would slow inflation. It expects the city-state’s growth to come in at the lower half of the 3-5% forecast range for 2022. Morgan Stanley (NYSE:MS) analysts said their earnings estimates upgrades for Singapore banks were mainly due to higher net interest income, driven by faster than expected rate hikes.”However, higher net interest income estimates are offset by lower non-interest income estimates, as we expect headwinds for fee income and trading income to remain for a while,” the analysts said.Refinitiv data shows analysts on average expect OCBC’s Q2 net profit to rise by 10% from a year ago, UOB’s to rise by 9%, while DBS’ profit is set to ease by 1%.CHINA PROPERTY IMPACTAnalysts will also pay attention to banks exposure to China’s property sector, which has seen a string of debt defaults by developers and protests by homebuyers threatening to stop mortgage payments.Chinese banks report their half-yearly results next month.London-listed HSBC and StanChart, both of which make the bulk of their revenue in Asia, are set to report strong underlying net interest income on rising interest rates but impairments and higher costs are likely to be a big drag on results.European banks are set to show their weak spots when they update investors on how their business has fared this year.Credit Suisse analysts said in a note that the strength in net interest income at HSBC would be offset by weaker wealth revenue and lower capital ratios in the quarter.HSBC is expected to post a 22% fall in pre-tax profit to $3.98 billion in the second quarter, based on consensus analyst estimates compiled by the bank. It reports results on Aug 1.StanChart, which unveils its numbers this Friday, is expected to report statutory pre-tax profit of $989 million, down 14% on the year, according to consensus analyst estimates compiled by the bank.Beyond the numbers, investor focus will be on HSBC’s response to a break-up proposal put forward by its biggest shareholder, Ping An Insurance Group Co of China.In India, HDFC Bank, the country’s largest private lender, kicked off banks’ results with a 19% rise in quarterly net profit as provisions for bad loans dropped and loan growth picked up. But the results came below market estimates. More

LONDON (Reuters) – The International Monetary Fund (IMF) said Sri Lanka should kick off debt restructuring talks with its bilateral lender China, while the island state’s government seeks a financing loan from the Washington-based fund. “China is a big creditor, and Sri Lanka has to engage proactively with it on a debt restructuring,” Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, told Reuters in an interview on Tuesday.The island of 22 million is currently engulfed by its most severe economic and political crisis in recent history. Six-time prime minister Ranil Wickremesinghe was recently appointed as president after a popular uprising ousted his predecessor following months of severe shortages of fuel, food and medicines.The government recently decided to restrict fuel imports for 12 months.The country owes Beijing some $6.5 billion in financing including development bank loans and a central bank swap, according to data from the Institute of International Finance (IFF). The world’s second-largest economy has invested in projects such as highways, a port, an airport and a coal power plant. Japan and India are also bilateral creditors to Sri Lanka. “Sri Lanka has to engage with its creditors, both private and official bilateral, on a debt workout to ensure debt sustainability is restored,” Srinivasan said, as he pointed out that technical talks on a new IMF program are ongoing with both officials from the finance ministry and the central bank.Sri Lanka’s foreign ministry and central bank did not immediately respond to a request for comment. China’s embassy in Sri Lanka did not immediately respond.The South Asian nation has requested an IMF rescue plan to overcome its worst economic crisis since independence in 1948. The country defaulted on a bond payment debt earlier this year on its $12 billion overseas debt with private creditors, as it struggles to pay for imports of basic goods. “There are some areas where we need to make further progress,” Srinivasan added, but declined to specify the top reforms Sri Lanka should address in other to reach an agreement.An Extended Fund Facility (EFF) programme from the IMF, which would be the fund’s 17th plan for the nation, requires countries to make structural economic reforms https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/20/56/Extended-Fund-Facility. Maldives and Laos are other examples of countries in the region that are facing onerous debt situations. Srinivasan said the fund is advising countries to “spend more in alleviating the impact on the poor and vulnerable but keeping budget neutral by reducing expenditures elsewhere or raising revenues where feasible.””It’s not just public debt, but also corporate debt and household debt – and that has implications for policymaking,” he said. “The debt issue is very significant.” More

DHAKA (Reuters) – Bangladesh has asked to start talks on a loan from the International Monetary Fund (IMF) but will take it only if conditions are favourable, the finance minister said on Wednesday, adding its macroeconomic conditions were fine.The country’s $416 billion economy has been one of the fastest-growing in the world for years, but rising energy and food prices because of the Russia-Ukraine war have inflated its import bill and the current account deficit.”A letter was sent to the IMF seeking assistance, but we have not mentioned how much we want,” Minister A.H.M. Mustafa Kamal told reporters.”We are waiting to see their conditions. If the IMF conditions are in favour of the country and compatible with our development policy, we’ll go for it, otherwise not. Seeking a loan from the IMF does not mean Bangladesh’s economy is in bad shape.”A senior IMF official had told Reuters on Tuesday that Bangladesh had asked it to start talks on a new loan under the global creditor’s Resilience and Sustainability Trust. Such funds are capped at 150% of a country’s quota or, in Bangladesh’s case, a maximum of $1 billion.Bangladesh’s Daily Star newspaper reported on Tuesday that the country wanted $4.5 billion from the IMF.Bangladesh’s economic mainstay is its export-oriented garments industry, which could suffer if sales fall in its main markets in Europe and the United States because of a slowdown in the global economy.After garments, remittances are the second highest source of foreign currency for Bangladesh.The South Asian country’s foreign exchange reserves fell to $39.67 billion as of July 20 – sufficient for just over five months worth of imports – from $45.5 billion a year earlier.Its July to May current account deficit was $17.2 billion, compared with a deficit of $2.78 billion in the year-earlier period, as its trade deficit widened and remittances fell.Sri Lanka and Pakistan are the other two South Asian countries to have sought IMF support this year. (Additional reporting and writing by Krishna N. Das; Editing by Kim Coghill and David Holmes) More