Global Market Watch
From a change in policy by the Bank of Japan to downgrades in China’s real estate markets, here are some recent business events from around the world.
Apple is willing to pay $490 million to end a case against Tim Cook. On Tuesday, the Bank of Japan plans to end eight years of negative interest rates. Big companies in Japan are raising their bonus rates. This episode of World Street has all of this and more.
A big mouth
Apple Inc. will pay $490 million to settle a case that said CEO Tim Cook lied to owners by not telling them that iPhone sales were falling in China. Reuters reported that a preliminary deal was filed with the US District Court in Oakland, California, on Friday. It needs to be approved by US District Judge Yvonne Gonzalez Rogers. This comes after Apple shocked everyone by saying it would cut its quarterly revenue estimate by up to $9 billion, saying that trade issues between the US and China were to blame.
Lessen the cards
Credit rating company S&P Global warned China Vanke, a real estate firm, that its rating would be lowered. After being stable, S&P has changed China Vanke’s BBB+ score to a “credit watch negative.” By giving the company a “Ba1” corporate family rating (CFR), Moody’s also lowered its rating from “investment-grade” to “junk.” They also warned that all of Vanke’s ratings would be looked at for downgrades in the future.
Getting closer to the end
A newspaper called Nikkei said that the Bank of Japan is likely to end its negative interest rate policy on Tuesday because they think that big companies will agree to big wage increases this year. The markets were very excited about the possibility that negative interest rates would soon end, especially after the country’s October-December GDP numbers were updated to show better-than-expected growth.
Wars over prices
China’s Xpeng has announced plans to release a cheaper brand of electric vehicles (EVs). This is the company’s first move into the EV market, which is currently facing tough price competition. Xpeng Chairman and CEO He Xiaopeng told Reuters that new models will come out next month and cost between 100,000 and 150,000 yuan ($14,000 to $21,000).
Offer of a bounty
The biggest companies in Japan said they were going to raise wages by 5.28 percent in 2024. This is the biggest pay raise in 33 years and will help the Bank of Japan’s plans to end negative interest rates. BoJ plans to end eight years of negative interest rates in order to prepare for the huge pay raises.
Hard times
CATL, a Chinese company that makes batteries for electric vehicles, saw its net profit drop for the first time since the second quarter of 2022. This was because of more competition and price wars, along with slower demand in the world’s biggest car market. From October to December 2023, CATL made 12.98 billion yuan ($1.8 billion), which is 1.2 percent less than the same time last year. Growth of 10.7 percent in the third quarter and 43.6 percent for the whole year of 2017 is very different from this.
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Petrobras (NYSE:PBR) shares fell 13% after the firm reported a smaller-than-expected net profit and fewer shareholder distributions, suggesting its dividends may stop. The board authorized Q4 dividends of 1.10 reais per share, totaling 14.2B reais ($2.9B), with no special payments for the year. Analysts predicted $3.7B dividends and $3B special dividends. Petrobras CEO Jean Paul Prates said rising investment on wind, solar, and biofuel programs made him more cautious about payouts.
Petrobras (NYSE:PBR) shares fell 13% after the firm reported a smaller-than-expected net profit and fewer shareholder distributions, suggesting its dividends may stop. The board authorized Q4 dividends of 1.10 reais per share, totaling 14.2B reais ($2.9B), with no special payments for the year. Analysts predicted $3.7B dividends and $3B special dividends. Petrobras CEO Jean Paul Prates said rising investment on wind, solar, and biofuel programs made him more cautious about payouts.
WGovernment aid and bailouts for the struggling Chinese real estate market are unlikely. Chinese officials have said individuals who damage the public would be punished. “Real estate companies that are seriously insolvent and have lost the ability to operate should go bankrupt or be restructured, per the law and market principles,” stated the Chinese housing and urban-rural development minister.all Street Roundup Wall Street Roundup
Estancia Capital Partners LP is buying a minority stake in UK Savings Fintech Flagstone, a cash deposit platform, to boost its savings services. Flagstone said the private equity firm’s £108 million ($139 million) investment will help it consolidate and expand domestically and internationally.
This investment will also reward Flagstone’s investors. The sale did not reveal Estancia’s interest in the Arizona firm.
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