LONDON, Feb 9 (Reuters) – Britain’s housing market suffered the most widespread price falls since 2009 last month as the run of interest rate increases over the past year weighed on would-be buyers, according to a survey published on Thursday.
The Royal Institution of Chartered Surveyors (RICS) house price balance, which measures the gap between the percentage of surveyors seeing rises and falls in house prices, fell to -47, the lowest since April 2009, from -42 in December.
A measure of interest from buyers also fell to -47, its lowest since October last year.
Simon Rubinsohn, chief economist at RICS, said the overall mood of the market as measured by surveyors remained subdued.
“However, it is questionable how much downside to pricing there is likely to be given that recent macro forecasts from the Bank of England and others are now envisaging a less harsh economic environment this year,” Rubinsohn said.
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The BoE last week said Britain’s economy would probably fall into recession in early 2023 and would only come out of it in early 2024, a shorter period of contraction than in its previous set of forecasts.
The RICS report showed surveyors were less pessimistic about the outlook than in December with a measure of expected sales over the next 12 months improving to -20 from -42.
Other housing market measures have also recently shown a loss of momentum following the surge in demand seen during the coronavirus pandemic.
A Reuters poll of economists and analysts in November predicted house prices would fall around 5% this year having surged by 28% since the start of the pandemic in 2020.
RICS said the rental market continued to show strong interest from tenants with limited availability of stock.
Reporting by William Schomberg; editing by David Milliken
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Feb 1 (Reuters) – Humana Inc (HUM.N) on Wednesday beat Wall Street estimates for quarterly profit as the health insurer’s investment income jumped, even as the company reported higher-than-expected medical costs.
Humana’s fourth-quarter benefit expense ratio, or the percentage of payout on claims compared to its premiums, fell by 1 percentage point to 87.5%, but was higher than analysts’ estimate of 87.20%.
Health insurers’ costs were expected to decline on lower COVID-19-related hospitalizations, though there were concerns around a surge in flu and respiratory syncytial virus cases in the last quarter of 2022.
The respiratory season could be the primary reason behind high-than-expected benefit expense ratio, SVB Securities analyst Whit Mayo said.
Humana forecast adjusted earnings per share (EPS) of at least $28 for 2023, in line with analysts’ expectations, with Chief Executive Officer Bruce Broussard confident of achieving its 2025 adjusted EPS commitment of $37.
The health insurer said it expects to add at least 625,000 members to its Medicare Advantage plan this year.
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Medicare Advantage is the government-supported insurance by private companies for people over 65 years of age and has been growing at a rapid pace, outshining government-provided Medicare plans due to heavy competition among insurers for the same set of customers.
Excluding one-off items, the health insurer reported a profit of $1.62 per share, higher than analysts’ average estimate of $1.46 per share, according to Refinitiv data.
The company’s $160 million investment income was higher than Wall Street estimates of $136.7 million, Oppenheimer analyst Michael Wiederhorn said.
Humana recorded a loss of $71 million, or 12 cents per share, for the quarter due to a one-time charge of $188 million associated with its $1 billion investment plan for its Medicare business announced in February last year.
Reporting by Leroy Leo and Khushi Mandowara in Bengaluru
Editing by Vinay Dwivedi
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NEW YORK, Jan 31 (Reuters) – Memory chip maker Western Digital Corp (WDC.O) said on Tuesday it will receive $900 million through a convertible preferred stock deal from private equity firm Apollo Global Management Inc (APO.N) and hedge fund Elliott Management Corp.
Western Digital said the preferred stock it sold to Apollo and Elliot has a conversion price of $47.75 per share, which is approximately a 9% premium on its closing price of $43.95 on Tuesday. It will also pay a dividend starting at 6.25% per year.
Last year, Western Digital launched a review of strategic alternatives, including options for splitting off its flash-memory and hard-drive businesses, after activist Elliott disclosed a stake of nearly $1 billion in the company and pushed it to separate those businesses.
On Tuesday, Western Digital CEO David Goeckeler said the partnership with Apollo and Elliott would help “facilitate the next stages of Western Digital’s strategic review.”
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“We look forward to working together in advancing our goal of creating value and finalizing the best possible strategic outcome for our shareholders,” said Goeckeler.
The latest investment is a precursor to a potential merger between Silicon Valley-based Western Digital and Japan’s Kioxia Holdings Corp, according to people familiar with the matter. The sources, who requested anonymity as these discussions are confidential, said the talks between Western Digital and Kioxia are still active.
The two companies were in merger talks in 2021 before the negotiations cooled off.
Bloomberg reported on the talks between Western Digital and Kioxia earlier.
Western Digital and Kioxia jointly produce NAND chips, which are widely used in smartphones, TVs, data center servers and public announcement display panels.
Western Digital’s shares fell nearly 7% in trading after market hours.
Qatalyst Partners, Lazard and J.P. Morgan are serving as Western Digital’s financial advisers and Skadden, Arps, Slate, Meagher & Flom LLP is serving as Western Digital’s legal adviser. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as the Apollo funds’ legal adviser, while Gibson, Dunn & Crutcher LLP is serving as Elliott’s legal adviser.
Reporting by Chibuike Oguh in New York; Editing by Anirban Sen and Lincoln Feast
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SYDNEY, Feb 1 (Reuters) – Australia’s house prices extended declines for the ninth straight month in January amid high mortgage rates, a drag on household wealth that will further erode consumer spending and add to economic stress.
Figures from property consultant CoreLogic on Wednesday showed prices nationally fell 1.0% in January from December, when values dropped 1.1%.
Prices were down 7.2% from a year earlier. They were also 8.9% lower from their April peak, making last month the largest and fastest decline in values since at least 1980 as the Reserve Bank of Australia embarked on the most aggressive tightening campaign in modern history.
The monthly fall was led by Sydney where prices slid 1.2% in the month to be down 13.8% on the year, while Melbourne dropped 1.1% on the month and 9.3% on a year earlier.
Prices across the combined capital cities fell 1.1% in the month, while outlying regions – which have performed better in this housing downturn – lost 0.8%.
Tim Lawless, research director at CoreLogic, does not expect listing and purchasing activity would return to average levels until consumer sentiment starts to improve, after prices suffered the biggest fall since 2008 last year.
New listings in capital cities in January were 22.2% lower than over the same period last year, implying that most home owners seem to be prepared to wait this downturn out.
“Until Australians have a higher level of confidence with regards to their household finances and the outlook for the economy, it’s likely they will continue to delay major financial decisions,” Lawless said.
The RBA has lifted rates by 300 basis points to a 10-year high of 3.1% to curb red-hot inflation. Investors are wagering rates would rise by another 25 basis points next week when the Board meets for the first time this year. ‘
Consumers are already feeling the pinch from rising borrowing costs and sky high inflation, with December retail sales tumbling the most in more than two years, in a warning for the economy.
Reporting by Stella Qiu; Editing by Jacqueline Wong
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Jan 31 (Reuters) – Japanese trading firm Marubeni Corp (8002.T) started commercial operation based on the feed-in tariff program for renewable energy at Akita Port offshore wind farm on Tuesday, it said in a statement.
Japan’s offshore wind power market, part of the country’s goal to be carbon neutral by 2050, is set to grow as the government eyes installing up to 10 gigawatts of offshore wind capacity by 2030, and up to 45 gigawatts by 2040.
Marubeni’s 100 billion yen ($768 million) project of two wind farms with 140 megawatt capacity at Akita Port and Noshiro Port in northern Akita prefecture is Japan’s first large-scale commercial offshore wind power project.
With its Noshiro Port offshore wind farm operating since late December last year, the launch of the Akita Port farm brings the project to the full-scale operation, Marubeni said.
Power from the two wind farms will be sold to Tohoku Electric Power for 20 years under a power purchase agreement based on the feed-in tariff program.
Marubeni’s 12 partners include Obayashi Corp, Tohoku Sustainable & Renewable Energy Co, Cosmo Eco Power Co, Kansai Electric Power Co and Chubu Electric Power Co.
($1 = 130.2900 yen)
Reporting by Katya Golubkova, Editing by Louise Heavens
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Jan 27 (Reuters) – UK landlord Land Securities (LAND.L) said on Friday it sold One New Street Square office property in London to Hong Kong-based Chinachem Group for 349.5 million pounds ($432.12 million), in tune with its strategy to offload mature office spaces in the capital.
British landlords are grappling with a valuation slump of their properties, plagued by rising interest rates and broader economic uncertainty.
The 276,502 square-feet office space had a valuation of 362.8 million pounds in September 2022, Landsec said.
Landsec, after a strategic review undertaken in late 2020, had planned to sell about 2.5 billion pounds worth of mature London offices. With the latest sale, it is just 400 million pounds short of that target and will use the proceeds to repay debt.
London-headquartered Landsec, which has about 11 billion pounds worth of assets, with two-thirds of those properties in Central London, counts office spaces as its primary portfolio.
One New Street Square property, which Landsec bought in 2005 and, has 14 years of unexpired lease term remaining with Deloitte which has fully let the office space.
Landsec, one of the top UK landlords, had said in November the overall value of its properties dropped 2.9% as of Sept. 30 from the end of March, while the value of its key office portfolio dropped 4.4%.
($1 = 0.8088 pounds)
Reporting by Anchal Rana in Bengaluru; Editing by Arun Koyyur
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LONDON, Jan 26 (Reuters) – Britain’s commercial real estate sector is increasingly feeling the pinch of higher borrowing costs, as investor enquiries declined in the fourth quarter and the outlook for the year ahead worsened, an industry survey showed on Thursday.
The Royal Institution of Chartered Surveyors (RICS) said 83% of respondents to its quarterly commercial property survey thought the market was already in a downturn, up from 81% a quarter before. Almost half considered this downturn to be in its early stages.
RICS said investor enquiries fell across all sectors for the first time since the start of the pandemic, with a net balance of -30 of respondents citing lower investment demand.
Tarrant Parsons, senior economist at RICS, said the investment side of the commercial property market was “significantly affected” by the Bank of England’s (BoE) tighter monetary policy, and that higher borrowing costs were weighing on investor demand and hurting valuations.
The BoE’s Monetary Policy Committee raised its main rate at its last nine meetings and markets have priced in a half percentage point increase to 4% for Feb. 2.
British consumer price inflation was running at 10.5% in December, nearly five times the Bank’s 2% target.
Near-term capital value expectations dropped sharply across the board, and the industrial sector saw the weakest reading since 2011.
“Linked to the rise in government bond yields over the past six months, capital values have pulled back noticeably of late, while expectations point to this downward trend continuing over the near term,” Parsons said.
Looking at the year ahead, average capital values were forecast to fall further in all parts of Britain.
The survey of 940 companies was conducted between Dec. 7 and Jan. 13.
Reporting by Suban Abdulla; editing by David Milliken
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Jan 25 (Reuters) – Elevance Health Inc (ELV.N) said on Wednesday that the growth in the insurer’s commercial business is expected to keep concerns over attrition in Medicaid membership at bay, even as it forecast a weak 2023 adjusted profit.
Shares of the company rose nearly 5% as investors bet on improving margins and revenues at the commercial segment, through which it sells private insurance plans to employer groups and individuals.
The segment, which reported a profit of $260 million in the quarter, is expected to bounce back this year after its profit halved due to a hit from the pandemic.
Along with an “attractive” membership increase for its commercial plans, Stephens analyst Scott Fidel said margin improvement will also aid the insurer’s earnings in 2023.
This will likely help Elevance counter a hit to its Medicaid membership enrollments from the expected removal of pandemic-related relief measures later this year.
Several members who signed up under the COVID-19 relief measures to the government-aided insurance Medicaid plans will be deemed ineligible, beginning April 1, and will move to private or employer-backed plans.
Elevance, which was previously known as Anthem, expects total medical membership at 2023 end to range from 47.4 million to 48.5 million. Of these, total commercial memberships are expected to be between 32 million and 32.5 million.
“We anticipate growth in individual and group risk-based commercial membership… to be concentrated in the second half as consumers transition from Medicaid to commercial coverage,” Elevance’s finance chief John Gallina said on a conference call.
For the full year, Elevance expects to post more than $32.60 in adjusted profit per share, below estimates of $32.67 per share.
Elevance reported a higher-than-expected profit of $5.23 per share for the fourth quarter.
Reporting by Khushi Mandowara and Bhanvi Satija in Bengaluru; Editing by Shailesh Kuber
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LONDON, Jan 24 (Reuters) – Barclays (BARC.L) has appointed former Credit Suisse (CSGN.S) dealmaker Cathal Deasy as co-head of investment banking, the lender said on Tuesday, as Chief Executive C.S. Venkatakrishnan seeks to grow the business and plan for succession.
Deasy will work alongside Taylor Wright, the co-head of global capital markets, the British bank said.
The changes were part of the bank “fostering the next generation of leadership and thinking,” Venkatakrishnan, known internally as Venkat, said in a memo about the moves that was seen by Reuters.
Venkat is being treated for a form of cancer known as non-Hodgkin lymphoma, he said in November, adding that doctors are optimistic about his prognosis and that he would continue to be involved in the running of the bank.
Deasy left Credit Suisse a few weeks ago, just months after being promoted to regional co-head of its investment banking & capital markets (IBCM) unit.
At Credit Suisse, he managed some of the bank’s biggest client relationships in Europe, having spent nine years beforehand at Deutsche Bank (DBKGn.DE), according to the internal Barclays memo.
JF Astier and John Miller, who currently lead investment banking, are in “active dialogue” with Barclays about what roles they might now take, a Barclays spokesperson said.
Astier and Miller were promoted in 2021 to lead investment banking as part of a new management team.
Barclays’ investment bank has had a strong performance in recent quarters, thanks in part to a boom in fixed income trading, which has traditionally been one of its core strengths.
Recent results have been blighted however by a trading blunder last year that saw Barclays agree a penalty of $361 million with U.S. regulators for what they described as “staggering” failures that led the bank to oversell nearly $18 billion worth of investment products.
Reporting by Baranjot Kaur in Bengaluru and Lawrence White in London; Editing by Sriraj Kalluvila and Bill Berkrot
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LONDON, Jan 24 (Reuters) – Liberty Media-owned Formula One has accused FIA president Mohammed Ben Sulayem of interfering with its commercial rights by publicly questioning a reported $20 billion valuation of the sport.
Ben Sulayem, an Emirati elected in 2021 to the top job at Formula One’s governing body, took to Twitter on Monday after Bloomberg reported Saudi Arabia’s Public Investment Fund (PIF) explored a bid for more than that amount.
“As the custodians of motorsport, the FIA, as a non-profit organisation, is cautious about alleged inflated price tags of $20bn being put on F1,” Ben Sulayem said on his personal account.
“Any potential buyer is advised to apply common sense, consider the greater good of the sport and come with a clear, sustainable plan — not just a lot of money.”
He suggested the FIA had a duty to consider the possible negative impact on fans and promoters, who might have to pay more.
The comments followed his support this month for Michael Andretti’s bid to enter an 11th team on the grid — a move most existing teams are resistant to because of the dilution of revenues.
They also fuel the sense of an emerging turf war between the governing body and a commercial rights holder eager to grow an expanding and increasingly popular championship in new directions.
Sky Sports News reported that Formula One’s legal head Sacha Woodward Hill and Liberty Media counterpart Renee Wilm had sent a joint letter to the FIA accusing the governing body of exceeding its remit.
The FIA ultimately owns the rights to the championship but signed them over to former supremo Bernie Ecclestone’s Formula One Management in a 100-year deal in 2001 as part of a separation of commercial and regulatory activities.
“The FIA has given unequivocal undertakings that it will not do anything to prejudice the ownership, management and/or exploitation of those rights,” Sky quoted Formula One’s letter as saying.
“We consider that those comments, made from the FIA president’s official social media account, interfere with those rights in an unacceptable manner.”
The letter, sent to the FIA’s World Motor Sport Council, said the comments risked exposure to “serious regulatory consequences” and the FIA could also be liable.
“Any individual or organisation commenting on the value of a listed entity or its subsidiaries, especially claiming or implying possession of inside knowledge while doing so, risks causing substantial damage to the shareholders and investors of that entity,” they said.
Sources confirmed to Reuters that the details were correct and teams received copies of the letter on Tuesday from F1 chief executive Stefano Domenicali.
There was no comment from Formula One and no immediate response from the FIA.
Reporting by Alan Baldwin, editing by Christian Radnedge
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