Economy

PARIS (Reuters) -Renault on Monday ditched plans to list its electric vehicle business Ampere because of sluggish stock market conditions.In September, Luca de Meo, CEO of both the Renault (EPA:RENA) Group and Ampere, said the IPO could be worth up to 10 billion euros.EV demand in Europe has weakened and the region’s carmakers face stiff competition from Chinese rivals.The IPO sought to extract more value from the business by giving Ampere more visibility and separating it from the combustion engine business, called Horse.Renault emphasised it had enough cash to do without the IPO.”Today, we took a pragmatic decision. We are all focused on executing our strategy and building our track record to create value for all our stakeholders,” said de Meo.In a statement the Renault Group said it would continue to fund the development of Ampere until it reaches break-even in 2025.”Renault Group strategic plan, Renaulution, is self-funded and the results which will be released for 2023 confirm the group’s ability to generate sustainable cash flow to finance its future (including Ampere development),” the statement added.”Considering both current equity market conditions and stronger cash generation, Renault Group has decided to cancel the Ampere IPO process.”In 2022, the company announced its intention to proceed with an IPO for Ampere in the first half of 2024 but said in late 2023 that it would not go ahead if the valuation was too low.In December, Renault’s longstanding alliance partners Nissan (OTC:NSANY) and Mitsubishi confirmed plans to invest in Ampere.Renault reiterated on Monday that these companies were interested in investing in Ampere even if the company did not proceed with an IPO.Chip maker Qualcomm (NASDAQ:QCOM) was also expected to invest in Ampere but its investment hinged on the IPO taking place. “We’ll have to discuss with them if they want to participate in some other shape or form, or if we keep it the way it is,” Renault’s CFO Thierry Pieton told journalists on a conference call. Reuters reported in November that weaker EV demand, increased competition from China and market volatility were complicating Renault’s plans to list Ampere.The listing would have been a bright spot for the stock market after a poor 2023 due to rising interest rates. Last year’s IPO market had the lowest levels of activity since 2016, but bankers had hoped for a potential revival if borrowing rates started to fall. ($1 = 0.9249 euros) More

Farmers have staged massive protests in France over the past few weeks, angry about rising costs and cheap imports, following similar action in other European countries, including Germany and Poland. French farmers have in particular objected to ongoing talks on a trade deal between the EU and Mercosur nations, which they say would allow cheap food imports that do not meet strict EU standards. “(Macron) has very firmly reiterated to the Commission the fact it was impossible to conclude talks in these conditions,” a French presidential adviser told reporters ahead of Thursday’s EU summit.The adviser added that the EU understood it was impossible to reach a deal in this context and that EU talks with Mercosur countries had been stopped.”It is our understanding it has instructed its negotiators to put an end to the negotiation session underway in Brazil and in particular cancel the visit of the Commission’s vice-president that had been envisaged in view of a conclusion,” he added.The Commission said that EU and Mercosur technical experts remained in contact, including meetings on Jan. 25-26 in Brazil, but some important questions remained open.”The EU focus remains on ensuring that the agreement delivers on the EU’s sustainability goals, while respecting the EU’s sensitivities in the agricultural sector,” a spokesperson said.France has repeatedly expressed reservations about the EU-Mercosur deal, the text of which was agreed in 2019 after 20 years of on-off negotiations. Several other EU members back the deal. Talks resumed after the EU sought assurances on climate change and deforestation from Mercosur countries, a customs union formed by Brazil, Argentina, Uruguay and Paraguay.In Brasilia, diplomats said Macron was under pressure to defend French agricultural issues and his views did not represent those of the European Commission, with talks expected to continue in the coming months.Brazil’s foreign ministry declined to comment on Macron’s statements, but a ministry source said that the talks “are not carried out with individual countries or presidents, but between Mercosur and the European Commission.”EU and Mercosur trade negotiators met in Brasilia for two days last week but reported “limited progress,” according to one diplomat involved in the talks, who was sceptical that the deal could be concluded before the World Trade Organization (WTO) ministerial meetings at the end of next month as some had hoped.”Negotiations are proceeding slowly in the right direction. But it will take more time,” another diplomat told Reuters. More

The retailer has been raising wages for store workers. It’s now turning its attention to improving salaries and benefits for their bosses.Walmart, the nation’s largest private employer, is raising salaries and benefits for store managers as it looks for ways to retain them.Walmart said on Monday that managers of its U.S. stores would be eligible for grants of up to $20,000 in company stock every year. The stock will vest over a three-year period, with a percentage vested each quarter.Earlier this month, Walmart said it would increase the average salary for store managers to $128,000 from $117,000. The big-box retailer also said bonuses for store managers could reach up to 200 percent of base salary, with a store’s profitability becoming a bigger factor in the calculation.Store managers are crucial in driving sales and profitability within their stores and keeping morale high in a dynamic business. The managers are also seen as an important pipeline for leadership at the company.A store manager at a Walmart Supercenter oversees hundreds of employees who work across a variety of departments, including food, apparel, pharmacies and auto centers. These stores often attract scores of shoppers and bring in millions of dollars in sales each year. At the start of the Covid pandemic, store managers were given even more responsibilities as the company adapted to changing consumer behavior, including managing e-commerce abilities like in-store pickup for online orders and navigating goods that are out of stock as well as excess inventory.“It’s fair to say that we’re asking them to act like owners and to think like owners,” John Furner, the chief executive of Walmart U.S. and previously a manager at a company store, said in a briefing with reporters. We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

This article is an on-site version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesFor up-to-the-minute news updates, visit our live blogGood evening.News that a low-cost chipmaking machine from Canon could start shipping as early as this year cannot come too soon for a $600bn semiconductor industry that finds itself at the centre of geopolitical tensions between the US and China, which in turn is ramping up production capacity.Canon hopes the new machine — which stamps chip designs on to silicon wafers rather than etching them using light — can undercut longtime industry leader ASML in providing the tools to make leading-edge semiconductors. It will also be a shot in the arm for Japanese manufacturers, which have lost ground to rivals in South Korea, Taiwan and, increasingly, China over the past three decades.As Chris Miller, the academic and author of Chip War, argues in the FT today, the west needs a plan to cope with the forthcoming leap in chip production capacity from China — helped by generous subsidies — which is expected to double over the next five years. Since western restrictions on the exports of chipmaking equipment to China mean that it can’t make the most advanced processor chips, much of this production will be of the more basic type used in cars, household goods and consumer devices. The resulting supply glut, he argues, is likely to drive down prices — and western companies’ profits.Back in Canon’s home market, Japan is taking direct action through a $6.4bn investment in a semiconductor materials supplier via a government-backed fund. Tokyo says it will strengthen the country’s global competitiveness in the production and development of cutting-edge chips, but, as our Big Read details, for some it rekindles memories of heavy state intervention of the past.Japan’s move follows the introduction of subsidies for domestic manufacturers in the US through the Chips and Science Act, in the EU with its European Chips Act; and in the UK through its National Semiconductor Strategy. Supply chain foul-ups during the pandemic had exposed how Europe in particular had become over-reliant on chip imports from abroad.Analysts will also be closely monitoring earnings announcements this week from the likes of Qualcomm and AMD, which should give broad clues on the health of the industry. Some argue the rally in US chip stocks — Nvidia and AMD have doubled in value over the past year — masks a more muted outlook in other parts of the tech sector. Disappointing forecasts from industry bellwethers Intel and Texas Instruments last week have added to doubts about a broader recovery.Still, the Semiconductor Industry Association, which represents most global chipmakers, is confident that the market can bounce back from its 2023 downturn, driven by rising demand for high-priced processors designed for artificial intelligence. Taiwan Semiconductor Manufacturing Company, the world’s biggest contract chipmaker, is similarly bullish, forecasting a return to strong growth this year as the global market recovers. Need to know: UK and European economyThe food industry warned of higher prices and shortages when new post-Brexit border measures come into effect on Wednesday. Complex paperwork and a shortage of vets to sign export health certificates on the continent could hit supply chains for several products.The Bank of England makes its decision on interest rates on Thursday. Despite encouraging news on inflation, economists are expecting rates to stay on hold at 5.25 per cent.German rightwing populists suffered an unexpected defeat in a widely watched regional election after a fortnight of nationwide protests. The Alternative for Germany (AfD) party had looked likely to secure its second-ever local government mandate amid growing support for anti-immigration policies.  EU climate chief Wopke Hoekstra told the FT that climate action and business success were not incompatible as Brussels fends off a backlash against its ambitious environmental plans. Need to know: global economyThe US Federal Reserve makes its interest rate decision on Wednesday. Recent strong economic data have boosted convictions that it can take its time before making its first cut, with rates likely to stay unchanged at a 23-year high of 5.25 to 5.5 per cent.Burkina Faso, Mali and Niger, all ruled by military juntas, have quit the Economic Community of West African States, marking a significant deterioration of relations in the region. Ecowas had already suspended the three nations from the union, which promotes economic integration and freedom of movement.Sergio Moro, the former Brazilian judge and anti-corruption crusader who sent current president Luiz Inácio Lula da Silva to jail in 2017, faces the loss of his Senate seat and a Supreme Court investigation.Need to know: businessBP is under pressure from activist investors to ditch its clean energy plans, including the only hard target in the sector to cut oil and gas output. Bluebell, a London-based hedge fund that previously took on Danone and Glencore, said the “irrational strategy” was destroying shareholder value by moving away from hydrocarbons faster than society. Ryanair offered to take up Boeing’s surplus 737 Max planes if US airlines pulled their orders following the recent fuselage blowout. As our Big Read explains, the incident has the potential to reshape the world aviation market to the benefit of Boeing’s rival Airbus.Philips stopped sales of its sleep apnoea device in the US after reaching a deal with regulators to set aside €363mn to fix long-running problems with the breathing machines involving the disintegration of noise-dampening foam inside them.KaDeWe, Germany’s most famous department store, filed for insolvency. The 117-year-old institution said it could not afford to pay rent on its store in Berlin, one of Europe’s biggest luxury retail outlets.The creation of a new company to run England’s top women’s football leagues has sparked new hope that clubs can capitalise on the rising popularity of the game. Elon Musk’s X blocked searches for Taylor Swift after sexually explicit images of the pop star created using artificial intelligence spread across the platform. The incident is the latest example of how social media groups are scrambling to tackle “deepfakes”.The world of workConsultancy EY has started monitoring UK employees’ office attendance, with swipe card entry data being circulated at senior levels of the firm. At least 50 per cent of some teams are failing to meet its policy of being in the office at least two days a week.More than a quarter of UK employees are subject to non-compete clauses that make it harder to switch jobs, according to the competition regulator, strengthening the case for legislation restricting their use. Data matters to business but must be presented in a way that engages employees, writes Michael Skapinker. Managers need to learn how to present facts honestly while empathising with people’s difficulties, he says.What to do when staff are exasperated by red tape, worn down by petty rules and procedures, and held back by nitpicking managers and indecisive leaders? Stanford professors Huggy Rao and Bob Sutton share tips on removing bad “friction” in companies. Some good newsSome good news ahead of World Cancer Day next week. The introduction of a vaccine for young women against human papillomavirus in Scotland appears to have been successful in preventing cases of cervical cancer, with women from more deprived areas benefiting the most.Recommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from Work & Careers editor Isabel Berwick. Sign up hereThe Climate Graphic: Explained — Understanding the most important climate data of the week. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. And please share your feedback with us at [email protected]. Thank you More

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The insolvency manager, Christof Stapf, said that it had recognized only a fraction of the claims so far – just 80.3 million euros – and that many of the claims arrived without necessary supporting materials or late.Signa is the biggest casualty so far of Europe’s property crisis. It announced debts of around 5 billion euros when it announced its insolvency last year. Talks are still ongoing over the sale of Signa’s stakes in the Chrysler Building and its media holdings, Stapf said.($1 = 0.9248 euros)($1 = 0.9240 euros) More

ACCRA (Reuters) -Ghana’s central bank lowered its main interest rate by 100 basis points to 29% on Monday, its first rate cut since 2021, after inflation fell for the fifth consecutive month in December.The West African cocoa, gold and oil producer has been restructuring its debts as it tries to emerge from its worst economic crisis in a generation that saw inflation rocket beyond 50% in annual terms in late 2022.But price pressures eased considerably over the second half of 2023, falling to 23.2% year-on-year in December from 26.4% in November and 35.2% in October.Bank of Ghana Governor Ernest Addison told a news conference that bank officials now forecast inflation would drop to 13%-17% by the end of the year and to 6%-10% by 2025.The central bank targets inflation of 8% with a margin of error of 2 percentage points either side.”Several factors have supported the disinflation process, namely, the tightening monetary policy stance throughout 2023, favourable international crude oil prices which led to stable ex-pump prices and transportation costs, and relative stability in the exchange rate,” Addison said on Monday.He said there was still a need to maintain a strong policy stance.Ghana’s government earlier this month reached a milestone in its quest for debt relief when it agreed a deal to restructure $5.4 billion of loans with its official creditors.Following the agreement, the International Monetary Fund allowed an immediate disbursement of about $600 million under its $3 billion bailout programme and the World Bank approved $300 million in financing.Ghana, which defaulted on most external debt in December 2022 after servicing costs soared, also wants to reach a relief deal with holders of about $13 billion in international bonds. More

KARACHI (Reuters) -Pakistan’s central bank on Monday held its key rate at 22% for the fifth policy meeting in a row and increased its full-year inflation projections. The governor of the State Bank of Pakistan said the decision was warranted due to “elevated” inflation – which was 29.7% in December. He said a rise in the bank’s average inflation forecast for the fiscal year ending in June to 23-25%, from a previous projection of 20-22%, was due to rising gas and electricity prices.The decision is the last under a caretaker government before general elections due next week and comes as Pakistan undertakes reforms linked to a $3 billion Standby Arrangement with the International Monetary Fund (IMF). “SBP opted for a wait and see approach during this policy (meeting) and refrained from abruptly starting a monetary easing cycle,” said Tahir Abbas, head of research at Arif Habib Limited.”Economic indicators are gradually improving and inflation is expected to decline significantly from March 2024 onwards, where we believe that (the) SBP is expected to start a monetary easing cycle,” he said.The country’s external accounts and foreign exchange reserves have improved, the current account deficit is expected to shrink, the central bank’s governor Jameel Ahmad said.Pakistan’s key rate was raised to an all-time high of 22% in June to fight persistent inflationary pressures and to meet one of the conditions set by the IMF for securing the bailout.While the rescue programme has helped avert a sovereign debt default, some of the attached conditions, such as raising its benchmark interest rate, increasing government revenue, and increasing electricity and natural gas prices, have complicated efforts to curb inflation and have dampened business sentiment. But Ahmad said that Pakistan was in a “better position” since signing the IMF stand-by agreement. Despite negative real rates, the business community had been pushing for a rate cut for some respite amidst the economic challenges. More