Aurelia Butler

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TOKYO (Reuters) -Japanese retail giant Seven & i Holdings has been classified as “core” to national security, according to an updated finance ministry list released on Friday.The classification has raised questions as to whether it is a defensive manoeuvre by the owner of 7-Eleven convenience stores which last week rejected a $38.5 billion buyout offer from Canada’s Alimentation Couche-Tard. Couche-Tard is discussing whether to raise its offer price, according to a Bloomberg report.However, Seven & i’s new status doesn’t necessarily raise any additional hurdles to a potential Couche-Tard takeover.When a company is categorised as core, foreign entities seeking to buy a stake of 1% or more in a Japanese firm must in principle file for a national security review with the Japanese government.But in cases where a full buyout is sought, a review is mandatory for companies like Seven & i which are considered significant to Japan’s economy or security regardless of whether they are categorised as core or non-core.The classification does not change the level of government scrutiny or the review process for any bid to acquire an entire company, a ministry official said.Seven & i said its classification was not related to Couche-Tard’s buyout proposal.The ministry’s classification list is based on responses from all listed companies to its surveys and is updated almost every year.Seven & i was among 88 companies newly added to the list, which generally spans sectors such as nuclear power, space and semiconductors.While convenience stores, Seven & i’s mainstay business, would not count as a sector that would require a national security review, the group has wide-ranging businesses including financial services as well as security services for commercial facilities.Seven & i said last week Couche-Tard’s offer was not in the best interests of its shareholders and could face antitrust challenges in the U.S., where the combined company would be the biggest convenience store operator by a considerable margin.U.S. antitrust regulators have told Seven & i that they may probe a potential deal with Couche-Tard, sources have said.Sources have also said the Japanese company has tapped Nomura to advise the company’s special committee about a potential takeover by Couche-Tard. Seven & i and Nomura declined to comment. More

BEIJING (Reuters) – New bank lending in China jumped less than expected in August after hitting a 15-year low in July, as the central bank keeps policy accommodative and pledges to roll out more supportive measures to bolster a fragile economic recovery.Chinese banks extended 900 billion yuan ($126.86 billion) in new yuan loans in August, up 246% from July but short of analyst expectations, data released by the People’s Bank of China showed on Friday.Analysts polled by Reuters had predicted new yuan loans would reach 1.02 trillion yuan last month, versus 260 billion yuan the previous month, but lower than the 1.36 trillion yuan a year earlier.”Both broad credit and bank loan growth slowed in August, coming in below expectations,” Leah Fahy at Capital Economics said in a note. “While stronger government spending should give the economy a boost over the coming months, that doesn’t seem likely to be helped by any pickup in private credit demand.”The People’s Bank of China (PBOC) does not provide monthly breakdowns, but Reuters calculated the August figures based on the bank’s Jan-August data and the Jan-July figure released earlier.The PBOC said new yuan loans totalled 14.43 trillion yuan for the first eight months of the year.Household loans, including mortgages, expanded 190 billion yuan in August after contracting 210 billion yuan in July, while corporate loans rose to 840 billion yuan from 130 billion yuan in July, according to Reuters calculations based on the PBOC data.A senior central bank official on Friday pledged to maintain a supportive policy and create a sound monetary environment for economic recovery.Analysts expect the PBOC, which has steadily lowered interest rates and increased liquidity throughout the year, to ease policy further to support growth.MORE POLICY EASING EXPECTEDThe central bank has room to lower its reserve requirement ratio (RRR) – the amount of cash banks must hold as reserve, a central bank official said last week.Analysts at UBS expect the PBOC to cut its main policy rate by 10 basis points and cut the RRR by 25 bps over the rest of 2024.President Xi Jinping on Thursday urged authorities to strive to achieve the country’s annual economic and social development goals, state media reported, amid expectations that more steps are needed to bolster a flagging economic recovery.Faltering Chinese economic activity has prompted global brokerages to scale back their 2024 China growth forecasts to below the government’s official target of about 5%.Broad M2 money supply grew 6.3% from a year earlier, central bank data showed, above estimates of 6.2% forecast in the Reuters poll. M2 grew by 6.3% year on year in July.Outstanding yuan loans were up 8.5% year on year in August, down from 8.7% in July. Analysts had expected 8.6% growth.     Annual growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 8.1% in August from 8.2% in July. TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.In August, TSF jumped to 3.03 trillion yuan from 770 billion yuan in July. Analysts polled by Reuters had expected August TSF of 2.95 trillion yuan.  ($1 = 7.0945 Chinese yuan renminbi) More

According to LSEG data, investors sold a net $7.82 billion worth of U.S. equity funds during the week, marking a fifth weekly outflow in six weeks.Last week’s U.S. payroll data revealed ongoing economic strains, sparking a stock sell-off, but Wall Street rebounded on expectations of a significant rate cut in the Federal Reserve meeting next week. Investors withdrew a substantial $6.91 billion from growth funds last week, the largest weekly outflow since December 2023, while redirecting $4.1 billion into value funds, marking the highest since at least December 2020. U.S. sectoral funds also saw significant withdrawals totalling $2.16 billion, the most in five weeks, with the financial, tech, and industrial sectors losing $1.75 billion, $1.17 billion, and $582 million, respectively.Conversely, safe-haven assets like government bond funds and money market funds attracted $3.51 billion and $18.17 billion, respectively.U.S. bond funds continued their positive trend with $4.94 billion in net inflows for the 15th consecutive week, and domestic taxable fixed income funds gained $1.75 billion following the previous week’s $2 billion in inflows. Short-to-intermediate government and municipal debt funds also saw significant inflows of $1.28 billion and $1.26 billion, respectively. More

Import prices fell 0.3% last month, the largest decline since December 2023, after an unrevised 0.1% gain in July, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had expected import prices, which exclude tariffs, would fall 0.2%.In the 12 months through August, import prices increased 0.8% after advancing 1.7% in July. Government data this week showed mild increases in producer and consumer prices in August, though some stickiness remained in underlying inflation. The Federal Reserve is expected to kick off its long-awaited easing cycle next Wednesday, with a 25-basis-point interest rate cut almost assured. Financial market expectations for a half-percentage-point reduction have been dashed by labor market stability and still-warm core inflation readings.The U.S. central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range for more than a year, having raised it by 525 basis points in 2022 and 2023. More