US Business

The already-high US inflation rate likely climbed even further last month, the White House warned Monday, amid a spike in energy prices caused by Russia’s invasion of Ukraine.

“We expect March headline inflation to be extraordinarily elevated,” White House Press Secretary Jen Psaki told reporters ahead of the Tuesday release of the closely watched consumer price index (CPI) data.

The world’s largest economy has seen prices rise at record rates as it recovers from the Covid-19 pandemic, with CPI increasing 7.9 percent over the 12 months to February, its fastest rate in four decades.

A range of factors have propelled the price hikes, including component and labor shortages, shipping delays and strong consumer demand spurred by government stimulus policies.

The March report will be the first to fully encompass the fallout from Russia’s invasion of its neighbor and the sanctions imposed by the West in retaliation, which have combined to cause a spike in prices for energy, including gasoline.

Calling it the “Putin price hike,” Psaki said she expected to see “a large difference” between headline inflation and “core” CPI, which excludes volatile food and energy prices.

Economists say the annual inflation rate could be close to 8.5 percent, the highest seen since late 1981.

According to the median forecast of analysts, monthly CPI growth will accelerate to 1.2 percent compared to February when the gain was 0.8 percent rate, while core CPI will remain unchanged at 0.5 percent.

Japanese giant Sony and Lego’s Danish parent firm announced Monday a $2 billion investment in US gaming powerhouse Epic Games for its work toward joining the metaverse vision for the internet’s future.

Scores of tech firms have been rushing to invest in building the metaverse, a loose term covering the growing eco-system of interactive online worlds, games and 3D meeting places that are already attracting millions of users.

In the form of video games like Epic’s hit Fortnite, the precursors of the metaverse already exist in a minimalist way, with people coming together not only to play, but also to interact and participate in events. 

The $2 billion (1.84 billion euros) in funding is aimed at advancing Epic’s “vision to build the metaverse and support its continued growth,” the three firms said in a joint statement.

Sony, already a shareholder in Epic Games, and Kirkbi, Lego’s parent firm, are each investing $1 billion, the firms said. 

“All three companies highly value both creators and players, and aim to create new social entertainment exploring the connection between digital and physical worlds,” they added. 

The investment brings Epic Games’ valuation to $31.5 billion, the US game studio said. 

With 350 million users worldwide, its Fortnite game is free to download, but generates billions in revenue with the purchase by players of additional items for their characters, including clothing. 

The game has quickly become a global phenomenon, to the point that some games are now followed live by millions of viewers. 

French banking group Societe Generale said on Monday it was ceasing activities in Russia and selling its Rosbank unit to an investment firm founded by an oligarch close to the Kremlin.

The exit will cost the firm 3.1 billion euros ($3.4 billion).

Hundreds of foreign companies, from financial firms to fast-food restaurants, have pulled out of Russia since the February 24 invasion of Ukraine.

But French firms, which are the biggest foreign employers in Russia, have been among the slowest to withdraw, prompting Ukrainian President Volodymyr Zelensky to urge them to leave during an address to the French parliament on March 23.

Societe Generale is heavily involved in Russia, with exposure of 18.6 billion euros. Of that, 15.4 billion euros was linked to Rosbank, a heavyweight in the Russian banking sector, in which Societe General is the main shareholder.

Shares in Societe Generale ended the day 5.0 percent higher.

“Societe Generale ceases its banking and insurance activities in Russia,” the firm said in a statement.

It also announced “the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the Group’s Russian insurance subsidiaries” to Interros Capital, an investment firm founded by one of Russia’s richest oligarchs, Vladimir Potanin.

Potanin, who is close to President Vladimir Putin, is also the co-owner of Russian mining giant Norilsk Nickel.

“With this agreement, concluded after several weeks of intensive work, the group would exit in an effective and orderly manner from Russia, ensuring continuity for its employees and clients,” Societe Generale said.

The bank said it expected the deal to be completed in the coming weeks and that it was subject to approval from regulators.

The bank said it would write off some two billion euros of the net book value of the divested activities and take a further 1.1-billion-euro non-cash hit.

“One could criticise the decision to sell to this type of buyer but on the other hand there weren’t many people queuing up to buy,” an expert who declined to be identified told AFP.

He said the conditions under which the sale had taken place had been “very complicated” and “limited to candidates already in situ”.

Societe Generale had held talks with other prospective buyers, a source close to the bank told AFP.

– ‘Great resistance’ –

In a separate statement, Interros said that “the conditions for the deal have been approved by the government commission on control over foreign investment in the Russia Federation”.

“Interros intends to do the maximum efforts to develop Rosbank,” Potanin said in his company’s statement.

“The main objective is to maintain the stability of Rosbank, as well as create new opportunities for its clients and partners,” he said.

In a statement, Rosbank said it was “certain” that the firm would maintain its stability thanks to its “expertise” and reliance on “international expertise”.

The Russian bank said it built “great resistance” to economic turmoil due to its “well-thought-out risk policy” as well as its balanced loan portfolio and diversified liquidity base.

Meanwhile, Societe Generale’s auto leasing subsidiary, ALD, said it would not enter into new commercial transactions in Russia, Kazakhstan and Belarus.

Since Zelensky’s speech to the French parliament, auto giant Renault suspended operations at its Moscow factory and hinted that it might divest its majority stake in domestic car giant AvtoVAZ, while French sports retailer Decathlon halted sales at its stores in Russia.

Another major French company singled out by Zelensky, supermarket chain Auchan, has decided to stay, citing the “human” cost of leaving.

The Western exodus followed the invasion and a slew of Western sanctions on Russia, including the freezing of $300 billion of the country’s foreign currency reserves abroad.

Russia has since faced the risk of defaulting on its debt.

India’s largest software exporter Tata Consultancy Services reported strong quarterly earnings on Monday as demand for digital services brought in orders worth a record $11.3 billion.

Net profit at the IT giant rose to 99.26 billion rupees ($1.3 billion) in the three months ending March 31, which was 7.4 percent higher than in the same period last year.

Sustained demand across business segments pushed revenues 15.8 percent higher year-on-year to 505.91 billion rupees, crossing 500 billion for the first time.

“It’s been a very strong year and we are quite happy about the way we have executed this rebound post-pandemic,” chief executive and managing director Rajesh Gopinathan said in a media briefing.

“One of the biggest positives in this quarter has been the total volume of deals signed,” Gopinathan added.

The Mumbai-headquartered company said the value of its order book stood at $11.3 billion at the end of March, its highest ever.

This includes two large deals worth more than $1 billion each, Gopinathan told reporters.

The company — one of India’s largest private employers — hired more than 35,000 employees in the quarter to help meet demand and combat high attrition.

TCS was at the forefront of an IT boom that saw India become a back office to the world as firms in North America and Europe subcontracted work, taking advantage of a skilled English-speaking workforce.

The company earns more than 80 percent of its revenues from Western markets.

Its overseas growth in the quarter was led by North America, which contributed half of its business and saw revenue growth of 18.7 percent year-on-year.

“North America is the big story of the year,” Gopinathan said, adding that Britain, continental Europe and Latin America also clocked double-digit revenue growth.

TCS, India’s second-most valuable firm by market size, announced a final dividend of 22 rupees per share.

Shares in the firm closed 0.26 percent higher in Mumbai ahead of the release of the results.

French banking group Societe Generale said Monday it was ceasing activities in Russia and selling its Rosbank unit to an investment firm founded by an oligarch close to the Kremlin.

The exit will cost the firm 3.1 billion euros ($3.4 billion).

Hundreds of foreign companies, ranging from financial firms to retailers and fast-food restaurants, have pulled out of Russia since the February 24 invasion.

But French firms, which are the biggest foreign employers in Russia, have been among the slowest to withdraw, prompting Ukrainian President Volodymyr Zelensky to urge them to leave during an address to the French parliament on March 23.

“Societe Generale ceases its banking and insurance activities in Russia,” the firm said in a statement.

It also announced “the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the Group’s Russian insurance subsidiaries” to Interros Capital, an investment firm founded by one of Russia’s richest oligarchs, Vladimir Potanin.

Potanin, who is close to President Vladimir Putin, is also the co-owner of Russian mining giant Norilsk Nickel.

“With this agreement, concluded after several weeks of intensive work, the Group would exit in an effective and orderly manner from Russia, ensuring continuity for its employees and clients,” Societe Generale said.

The bank said it expects the deal to be completed in the coming weeks and that it was subject to approval from regulators.

Societe Generale shares fell following the announcement but bounced back later in the day. 

The bank said it would write off some two billion euros of the net book value of the divested activities and take a further 1.1-billion-euro non-cash hit.

– ‘Great resistance’ –

In a separate statement, Interros said that “the conditions for the deal have been approved by the government commission on control over foreign investment in the Russia Federation”.

“Interros intends to do the maximum efforts to develop Rosbank,” Potanin said in his company’s statement.

“The main objective is to maintain the stability of Rosbank, as well as create new opportunities for its clients and partners,” he said.

In a statement, Rosbank said it was “certain” that the firm would maintain its stability thanks to its “expertise” and reliance on “international expertise”.

The Russian bank said it built “great resistance” to economic turmoil due to its “well-thought-out risk policy” as well as its balanced loan portfolio and diversified liquidity base.

Meanwhile, Societe Generale’s auto leasing subsidiary, ALD, said it would not enter into new commercial transactions in Russia, Kazakhstan and Belarus.

Since Zelensky’s speech to the French parliament, auto giant Renault suspended operations at its Moscow factory and hinted that it might divest its majority stake in domestic car giant AvtoVAZ, while French sports retailer Decathlon halted sales at its stores in Russia.

Another major French company singled out by Zelensky, supermarket chain Auchan, has decided to stay, citing the “human” cost of leaving.

The Western exodus followed the invasion and a slew of Western sanctions on Russia, including the freezing of $300 billion of the country’s foreign currency reserves abroad.

Russia has since faced the risk of defaulting on its debt.

The Paris stock market and the euro rose on Monday, with investors soothed by French President Emmanuel Macron’s election performance.

Frankfurt and London equities however followed Asian exchanges lower, with sentiment souring on flat UK economic growth.

Wall Street opened on the downside as traders looked ahead to inflation data due out on Tuesday, growth worries and the prospect of more aggressive US interest rate hikes.

Oil prices tumbled more than five percent at one point on Chinese demand fears arising from Covid lockdowns, and on dimming hope of a European embargo on Russian crude, dealers said.

“It is above all the bad news from China that is weighing on prices, as the number of Covid cases continues to surge,” said Commerzbank analyst Barbara Lambrecht.

Shanghai eased restrictions on some neighbourhoods on Monday after mounting outcry over China’s inflexible Covid-19 rules, which locked down 25 million people.

“The lockdowns that are slowing oil demand in the world’s second-largest consumer country threaten to persist for even longer,” added Lambrecht.

– ‘Solid result’ –

Macron topped France’s first-round presidential vote on Sunday, leading far-right rival Marine Le Pen by a larger-than-expected margin.

Emmanuel Macron won 27.85 percent of votes in the first round of France’s presidential election, while far-right leader Marine Le Pen scored 23.15 percent, according to final results.

“A solid result for incumbent Emmanuel Macron … has helped to allay fears of a Le Pen presidency,” said economist Jessica Hinds at research consultancy Capital Economics. 

“But the latest polls still point to a very tight race.”

Investors had fretted about the implications of a victory for Le Pen in the midst of the war in Ukraine, given her long-standing sympathies for Russia.

“All attention will now turn to the second round on April 24, and the big question for that will be where the supporters of the defeated first-round candidates go,” wrote Deutsche Bank analysts in a client note.

On the downside, London stocks slid on official data showing that the UK economy had ground to a near halt in February, growing by just 0.1 percent.

– Dollar eyes 2002 yen peak –

Elsewhere, the dollar hit a 2015 high at 125.77 yen on expectations of more US Federal Reserve interest rate hikes, in contrast with the Bank of Japan’s loose policy.

That was not far from the greenback’s two-decade peak of 125.86 yen.

The Fed has recently taken a hawkish tone as it embarks on an aggressive tightening path to counter runaway inflation.

In China, factory-gate inflation was higher than expected in March, official data showed, as Russia’s war on Ukraine pushes up oil prices while a domestic Covid-19 resurgence strains food supplies and consumer costs.

The producer price index — measuring the cost of goods at the factory gate — grew 8.3 percent on-year, National Bureau of Statistics (NBS) figures showed.

In Jakarta, Indonesia’s biggest tech firm GoTo soared on its debut after a billion-dollar IPO — the world’s fifth-biggest this year.

– Key figures at around 1330 GMT –

Paris – CAC 40: UP 0.3 percent at 6,568.02 points

London – FTSE 100: DOWN 0.5 percent at 7,630.80

Frankfurt – DAX: DOWN 0.8 percent at 14,173.79

EURO STOXX 50: UP 0.5 percent at 3,840.26

New York – Dow: DOWN 0.3 percent at 34,632.54

Tokyo – Nikkei 225: DOWN 0.61 percent at 26,821.52 (close)

Hong Kong – Hang Seng Index: DOWN 3.03 percent at 21,208.30 (close)

Shanghai – Composite: DOWN 2.61 percent at 3,167.13 (close)

Euro/dollar: UP at $1.0893 from $1.0877 late Friday

Pound/dollar: UP at $1.3032 from $1.3025

Euro/pound: UP at 83.59 pence from 83.51 pence

Dollar/yen: UP at 125.59 yen from 124.34 yen

Brent North Sea crude: DOWN 3.5 percent at $99.14 per barrel

West Texas Intermediate: DOWN 3.8 percent at $94.56 per barrel

burs-rl/gil

Tesla exported only 60 China-made cars in March, a trade body said Monday, with the domestic market absorbing most of its production while virus curbs in areas like Shanghai and Jilin hurt deliveries in the auto industry.

Shanghai is home to Tesla’s multibillion-dollar “giga-factory”, which the company calls its main export hub and has the capacity to produce hundreds of thousands of vehicles per year.

But the factory — like much of the country’s auto industry — has been hit by pandemic-related disruptions.

While Tesla China delivered 65,814 cars at its factory last month, only 60 were exported, the China Passenger Car Association (CPCA) said Monday, without giving further details.

In comparison, the company had exported 33,315 vehicles in February. 

Tesla’s slump is part of a wider trend across China, which saw car sales fall 10.5 percent from a year ago to 1.6 million vehicles on the back of strict measures to curb renewed virus flare-ups that have hit logistics and retail sales.

However, the new-energy sector appears to be the rare bright spot, with deliveries of the vehicles jumping 137.6 percent, compared to March 2021, and reaching 445,000 units, the CPCA said. 

Despite a chip shortage and high lithium prices, CPCA’s secretary-general Cui Dongshu said China’s share of the world’s auto market has “reached a new high of 36 percent” in the first two months of the year.

All eyes will be on Tesla’s numbers in April, given that its Shanghai factory has reportedly suspended production since March 28 amid the city’s virus lockdowns.

Beijing’s zero-Covid policy to stamp out clusters has been increasingly strained as the country battles its worst wave of infections since the start of the pandemic

Chinese electric vehicle maker Nio said Saturday it has suspended vehicle production due to hard lockdowns across the country, and warned of delays in making deliveries.

Indonesia’s biggest tech firm soared on its market debut Monday after a billion-dollar IPO that was the world’s fifth-biggest this year, defying recent heavy weather for Asian tech stocks.

GoTo, the largest digital ecosystem in the archipelago nation of 270 million people, was formed by the merger of ride-hailing company Gojek and e-commerce platform Tokopedia in May 2021.

Clad in the signature black-and-green jacket of a Gojek driver, GoTo CEO Andre Soelistyo pressed the 9:00 am opening bell at the Jakarta stock exchange.

“Despite global market volatility, investor interest has been strong, reflecting the rapidly growing demand in Southeast Asia for our on-demand, e-commerce and financial technology services, as well as confidence in GoTo’s position as the largest digital ecosystem in Indonesia,” he said in a press release.

GoTo shares jumped as much as 23 percent in early trade before closing 13.02 percent higher at 382 rupiah. Overall, Jakarta stocks ended down 0.10 percent.

The company raised about $1.1 billion in its IPO that concluded last week, priced at 338 rupiah a share, representing a market value of about $28 billion, it announced.

It has sold shares for $954.7 million (13.7 trillion rupiah) plus $146.3 million from treasury shares for the purpose of over-allotment.

Based on the total funds raised, GoTo’s IPO is the third-largest in Asia and fifth-largest in the world this year, it said.

The company announced last week it would distribute shares worth about $21.6 million to hundreds of thousands of its drivers.

One of the lucky drivers was Ryan Supriandi, who has been a Gojek driver for nearly seven years. 

Supriandi was pleasantly surprised to receive a mobile notification saying the company had granted him 4,000 shares, worth about $90.

“I was happy and confused at the same time — what am I going to do with it? Many drivers don’t understand shares or markets,” the 34-year-old told AFP. 

– US listing planned –

President Joko Widodo congratulated GoTo on its debut.

“I hope GoTo IPO will motivate Indonesian youth to give new energy for the leap of our country’s economic development,” Widodo said.

But Reza Priyambada, a stock market analyst from CSA Research Institute, said that while it was still too early to judge how GoTo would perform, investors should proceed cautiously.

“While they do claim to be the biggest marketplace in Indonesia, they are still suffering losses at the moment,” Priyambada said.

“Right now investors are still under a euphoria, but we don’t know if they really understand how GoTo works, what are their prospects and how the management is run.”

GoTo has not published profits yet. The exchange reported that from January to July 2021 the company posted more than $556 million in net losses.

Last year, another Indonesian unicorn, Bukalapak, launched the biggest initial offering in the history of the country’s stock market, raising more than $1.5 billion.

However, shares in the online marketplace have since dropped by around 60 percent, instilling doubts in the Southeast Asian tech sector.

A successful IPO for GoTo could open the door to a string of listings in the country as several tech firms — including Traveloka, LinkAja, J&T Express, Tiket and Blibli — are also set to make their market debut, according to local media.

GoTo, whose main competitors in the region are SEA and Grab, has said previously that it was also planning a US listing.

In November it said it had raised $1.3 billion from various investors including Google, Singapore’s Temasek and China’s Tencent.

French banking group Societe Generale said Monday it was ceasing activities in Russia and selling its majority stake in Rosbank, weeks after Ukraine’s leader urged French firms to leave over Moscow’s invasion of the country.

Hundreds of foreign companies, ranging from financial firms to retailers and fast-food restaurants, have pulled out of Russia since the February 24 invasion.

But French firms, which are the biggest foreign employers in Russia, have been among the slowest to withdraw, prompting Ukrainian President Volodymyr Zelensky to urge them to leave during an address to the French parliament on March 23.

Societe Generale said in a statement that its withdrawal from Russia would cost it 3.1 billion euros ($3.4 billion).

“Societe Generale ceases its banking and insurance activities in Russia,” the firm said in a statement.

It also announced “the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the Group’s Russian insurance subsidiaries” to Interros Capital, an investment firm founded by one of Russia’s richest oligarchs, Kremlin confidant Vladimir Potanin.

“With this agreement, concluded after several weeks of intensive work, the Group would exit in an effective and orderly manner from Russia, ensuring continuity for its employees and clients,” Societe Generale said.

The bank said it expects the deal to be completed in the coming weeks and that it was subject to approval from regulators.

Societe Generale shares were down by almost six percent following the announcement.

– ‘Great resistance’ –

In a separate statement, Interros said that “the conditions for the deal have been approved by the government commission on control over foreign investment in the Russia Federation”.

“Interros intends to do the maximum efforts to develop Rosbank,” Potanin said in his company’s statement.

“The main objective is to maintain the stability of Rosbank, as well as create new opportunities for its clients and partners,” he said.

In a statement, Rosbank said it was “certain” that the firm would maintain its stability thanks to its “expertise” and reliance on “international expertise”.

The Russian bank said it built “great resistance” to economic turmoil due to its “well-thought-out risk policy” as well as its balanced loan portfolio and diversified liquidity base.

Meanwhile, Societe Generale’s auto leasing subsidiary, ALD, said it would not enter into new commercial transactions in Russia, Kazakhstan and Belarus.

Since Zelensky’s speech to the French parliament, auto giant Renault suspended operations at its Moscow factory and hinted that it might divest its majority stake in domestic car giant AvtoVAZ, while French sports retailer Decathlon halted sales at its stores in Russia.

Another major French company singled out by Zelensky, supermarket chain Auchan, has decided to stay, citing the “human” cost of leaving.

The Western exodus followed the invasion and a slew of Western sanctions on Russia, including the freezing of $300 billion of the country’s foreign currency reserves abroad.

Russia has since faced the risk of defaulting on its debt.

Asian stocks posted losses on Monday as unease lingered over tightening monetary policy by the Fed and rising prices in China.

The drop followed a negative lead from Wall Street. The S&P 500 and the Nasdaq retreated as the yield on the 10-year US Treasury note climbed above 2.7 percent — a signal markets are preparing for more tightening as the Federal Reserve battles inflation.

In Tokyo, the Nikkei closed 0.6 percent lower, while Hong Kong and Shanghai lost more than three percent and two percent respectively.

Taipei and Seoul were also down, while Sydney and Jakarta posted slight gains.

In early European trade, the Paris CAC 40 shed 0.6 percent and Frankfurt’s DAX slid 1.2 percent. London’s FTSE 100 index slid 0.6 percent on news that the UK economy had ground to a near halt.

“Stocks are soft at the Monday (Asian) open on increasing evidence the Federal Reserve will take a more committed approach to its monetary policy inflation-fighting stance,” said Stephen Innes at SPI Asset Management.

“However, markets have been surprisingly resilient as discussions under the surface debated whether this week’s US March CPI data will hint at the peak of the inflation cycle and help the Fed’s chance to better engineer a soft landing, however narrow that path may seem.”

The US central bank has recently taken a hawkish tone as it embarks on an aggressive tightening path, prompting traders to fret over the prospect of higher interest rates.

“Today, the mantra for many investors is ‘Don’t fight the Fed when it is fighting inflation’,” Ed Yardeni, president of Yardeni Research, wrote in a note.

In China, factory-gate inflation was higher than expected in March, official data showed, as Russia’s war on Ukraine pushes up oil prices while a domestic Covid-19 resurgence strains food supplies and consumer costs.

The producer price index — measuring the cost of goods at the factory gate — grew 8.3 percent on-year, National Bureau of Statistics (NBS) figures showed.

“It is China’s Covid situation that is making Asia nervous,” said Jeffrey Halley, senior market analyst with OANDA. “The weekend press was full of stories of locked down Shanghai residents unable to secure food supplies, with cases rising to 27,000 yesterday.”

“With China’s government doggedly sticking to its Covid-zero policy, fears are increasing that an extended lockdown in China, which may spread to other major industrial cities will darken an already cloudy outlook for China’s growth.”

– Indonesia’s GoTo soars on debut –

In Jakarta, Indonesia’s biggest tech firm soared on its debut after a billion-dollar IPO — the world’s fifth-biggest this year.

GoTo’s shares jumped by up to 23 percent in initial trading and hovered around 15 percent at 388 rupiah during the session.

“Despite global market volatility, investor interest has been strong, reflecting the rapidly growing demand in Southeast Asia for our on-demand, e-commerce and financial technology services, as well as confidence in GoTo’s position as the largest digital ecosystem in Indonesia,” CEO Andre Soelistyo said in a press release.

The euro climbed against the dollar over the course of the day, suggesting some relief over the French election.

Investors had fretted about the implications of a victory for President Emmanuel Macron’s nationalist rival Marine Le Pen in the midst of the war in Ukraine, given her long-standing sympathies for Russia.

Macron was set to beat Le Pen in the first round of elections Sunday by a larger-than-expected margin, the two candidates advancing to a run-off later this month.

“Make no mistake: nothing is decided,” Macron told supporters.

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: DOWN 0.61 percent at 26,821.52 (close)

Hong Kong – Hang Seng Index: DOWN 3.03 percent at 21,208.30 (close)

Shanghai – Composite: DOWN 2.61 percent at 3,167.13 (close)

Brent North Sea crude: DOWN 1.61 percent at $101.05 per barrel

West Texas Intermediate: DOWN 1.91 percent at $96.38 per barrel

Euro/dollar: UP at $1.0882 from $1.0877

Pound/dollar: DOWN at $1.3002 from $1.3025

Euro/pound: UP at 83.69 pence from 83.51 pence

Dollar/yen: UP at 125.35 yen from 124.34 yen

New York – Dow: UP 0.4 percent at 34,721.12 (close)

— Bloomberg News contributed to this report —