Bank of England looks to shine a light on private equity leverage 22 Apr 2024, 4:58 pm

Bank of England looks to shine a light on private equity leverage

By Huw Jones

LONDON (Reuters) – Regulators need to shine a light on the $8 trillion global private equity sector, as opaque leverage makes it hard to get a picture of the risks it poses to financial stability, jobs and growth, a Bank of England official said on Monday.

Private equity funds, part of wider market based finance, use pools of capital, largely from institutional investors, to invest in non-publicly traded companies.

“Shining a light on the current dynamics in the private equity market is crucial at this juncture, given the important role the sector plays for the real economy,” executive director Nathanael Benjamin told a Bloomberg event.

Globally, assets under management in the private equity sector have increased to around $8 trillion in 2023, from about $2 trillion in 2013, Benjamin said.

The sector provides about 250 billion pounds ($309 billion) in funding to British businesses, especially in software communications, IT, and media sectors.

“Recent developments in that market have the potential to disrupt the supply of funding to real economy companies in a stress. And to cause systemic institutions – such as banks – to experience significant and correlated losses on their exposures linked to private equity,” Benjamin added.

The BoE is looking at the sector now because interest rates have risen, hitting highly-leveraged companies backed by PE, along with the lack of exit for PE fund investments, putting pressure on valuations sold in secondary markets.

“Some people have been stuck. And this has catalysed the development of new types of leverage,” Benjamin said.

HOMEWORK

The British Private Equity and Venture Capital Association (BVCA) said the sector generated 137 billion pounds, equivalent to 6% of economic growth, in 2023 by private-capital backed businesses.

“The private capital industry stands ready to detail how it has played a vital role in the UK economy for over 40 years, showing its resilience through different economic cycles,” BVCA Chief Executive Michael Moore said in a statement.

The BoE said last month it was taking a deeper look at risks in the sector, and Benjamin said it was now focusing on “doing its homework” before considering rule changes.

However, as with other reforms in market based finance, any action would have to be taken internationally, rather than domestically, to be effective, meaning the case for change is needed first to forge a consensus among regulators.

“It’s important to evaluate the facts in a dispassionate way before jumping to conclusions,” he said.

Any rules that could restrict inward investment by private equity would be closely scrutinised by Britain’s cash-strapped government.

($1 = 0.8093 pounds)

 

(Reporting by Huw Jones; Editing by Toby Chopra, Emelia Sithole-Matarise and Alexander Smith)

Dollar firm as US rates and earnings take center stage 22 Apr 2024, 4:38 pm

Dollar firm as US rates and earnings take center stage

By Alden Bentley and Amanda Cooper

NEW YORK/LONDON (Reuters) -The dollar ticked higher against the euro and yen in subdued trade after last week’s volatility, with markets taking their lead from the Fed’s higher-for-longer messaging and a firmer Wall Street ahead of results from megacap growth companies.

Dollar/yen was steady on Monday, up 0.08% ahead of the Bank of Japan’s (BOJ) policy review on Friday, trading at 154.75, a whisker away from last week’s 34-year low of 154.79 and close enough to the 155-level that is next on traders’ radars for possible intervention.

“There will be a focus on the BOJ meeting, but it is too soon for them to alter policy, and the market gives a change in rates no chance at all,” said Chris Weston, head of research at Pepperstone.

The dollar’s trade-weighted index was up 0.22% at 106.33, but off the five-month highs hit last week after comments from Federal Reserve officials and a run of hotter-than-expected inflation data forced a paring back of U.S. rate cut expectations.

A cooling in Middle East tensions, which had driven the dollar, gold and oil sharply higher on Friday and battered stock markets, also helped temper volatility. Tehran downplayed Israel’s retaliatory drone strike, in what appeared to be a move aimed at averting regional escalation.

“The fact that the equities are up a little bit today as tensions ease a bit is what we’re focused on,” John Doyle, vice president of trading and dealing at Monex USA in Washington, said. “We’re expecting a fairly easy day as we kind of put that in the rear view mirror and look toward the earnings season.”

Last week, Deutsche Bank’s index of currency volatility rose 9.7% to its highest since February.

Besides the BOJ meeting and earnings due from megacaps like Tesla on Tuesday, Meta on Wednesday and Microsoft, and Alphabet on Thursday, investors will get U.S. first-quarter gross domestic product data on Thursday and the inflation metric the Fed targets, the personal consumption price expenditures (PCE) index.

“FX has been center-stage for the last few weeks and might take a backseat this week as earnings take center-stage,” XTB research director Kathleen Brooks said.

The strong dollar prevailed at last week’s International Monetary Fund/World Bank spring meetings in Washington too, and the U.S., Japan and South Korea issued a rare joint statement on the issue.

Speaking after the Group of 20 (G20) finance leaders’ meeting in Washington, BOJ Governor Kazuo Ueda said the Japanese central bank may raise interest rates again if the yen’s declines significantly push up inflation, highlighting the dilemma the weak currency has become for policymakers.

A rethink on Fed easing has led to a general repricing of global rate cut timelines, but expectations for the European Central Bank (ECB) and the Bank of England (BoE) to start cutting by mid-year are still intact.

The euro, which is heading for its biggest monthly drop against the dollar since January, was down 0.27% at $1.0628, while sterling fell 0.54% to $1.2302.

Analysts do not see too much room for U.S. Treasury yields to rise further, given the light economic data calendar for the rest of the month and how far they have already risen as investors reprice Fed expectations.

Bitcoin was last up 2% at $65,947. The world’s largest cryptocurrency completed its “halving” at the weekend, a phenomenon that happens roughly every four years and aims to reduce the rate at which bitcoins are created.

(Additional reporting by Vidya Ranganathan in Singapore; Editing by Jamie Freed, Mark Potter and Alexander Smith)

US crude futures climb back into positive territory 22 Apr 2024, 1:53 pm

US crude futures climb back into positive territory

By Erwin Seba

HOUSTON (Reuters) -U.S. crude futures returned to positive territory on Monday after falling on easing fears of a wider Mideast conflict.

U.S. West Texas Intermediate crude was up 0.03 cents or 0.04% at $83.17 a barrel at 9:46 a.m. CDT (1446 GMT). The front-month WTI crude contract for May expires on Monday.

Brent crude futures were down 48 cents, or 0.55%, at $86.77 a barrel.

Both benchmarks had been down more than $1 a barrel. Early on Friday, prices for WTI and crude climbed than $3 a barrel, after explosions were heard in the Iranian city of Isfahan in what sources described as an Israeli attack.

Gains dissipated after Tehran played down the incident and said it did not plan to retaliate.

Geopolitical risk premiums tend not to last if supply is not actually disrupted, said UBS strategist Giovanni Staunovo, adding that the high spare capacity of a few oil-producing countries could compensate for any supply disruptions.

The market reaction to the rising geopolitical temperature was another example that it is only reasonable to expect a protracted oil rally if the Strait of Hormuz- the world’s most important oil artery – was disrupted or Saudi Arabia directly drawn into the conflict, noted Tamas Varga of oil broker PVM.

Meanwhile, plentiful supplies of some of the biggest crude grades are limiting the impact on oil futures of conflict in the Middle East, a Reuters analysis found.

On the economic front, inflation is back in focus, with comments from Federal Reserve officials and a run of hotter-than-expected inflation data forcing a paring back of rate cut expectations last week.

Economic concerns have again become a bearish factor of the crude market, with prices under pressure due to a large build in the U.S. stockpile and a hawkish Fed that has led to a strong dollar, said independent market analyst Tina Teng. [EIA/S]

A strong dollar makes oil more expensive for holders of other currencies. [USD/]

(Reporting by Erwin Seba; erwin.seba@thomsonreuters.com; Additional Reporeting Deep Vakil in Bengaluru, Natalie Grover in London, Colleen Howe in Beijing and Jeslyn Lerh in Singapore; Editing by Louise Heavens, Alex Lawler, Bernadette Baum and Alexander Smith)

Equities gain, gold drops as fears of wider Middle East conflict ease 22 Apr 2024, 12:51 pm

Equities gain, gold drops as fears of wider Middle East conflict ease

By Chris Prentice and Alun John

NEW YORK/LONDON (Reuters) -Investors scaled back safe-haven bets on Monday as worries over a wider Middle East conflict eased, boosting world equities and pressuring gold, oil and bond prices.

MSCI’s gauge of stocks across the globe rose 2.62 points, or 0.35%, to 745.90 by 11:04 a.m. EST (1504 GMT).

In a reversal of Friday’s “risk off” mood, spot gold lost 2.1% to $2,340.25 an ounce, poised for its biggest one-day drop in over a year.

On Wall Street, the Dow Jones Industrial Average rose 0.13% to 38,037.07, the S&P 500 gained 0.19% to 4,976.62 and the Nasdaq Composite gained 0.09% to 15,296.43.

Investors have taken cautious positions on Fridays in recent weeks, fearing an escalation in the conflict in the Middle East over the weekend when markets are closed and they are unable to trade.

“It seems neither Israel nor Iran want an escalation in the crisis in the Middle East,” said Kazuo Kamitani, a strategist at Nomura Securities. “With a subsequent strike from either side not looking like it’s coming, investor concerns have eased somewhat.”

But expectations of Federal Reserve interest rate cuts and concerns about chip sector earnings will continue to keep investors on their toes, he said.

More than 150 companies in the S&P 500 and 173 companies in the STOXX 600 are slated to report first quarter results this week, according to data from LSEG Workspace.

These include several big European banks, as well as U.S. tech giants Microsoft and Alphabet, with the latter in particular focus after chip maker Nvidia’s 10% drop on Friday, its biggest percentage fall in four years.

The STOXX 600 index rose 0.68%. MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.95%.

Traders were expecting the first Fed rate cut as most likely coming in September following Consumer Price Index data earlier this month, though July was also seen as possible.

“The big picture in equities is that they have been able to digest this push back in rate expectations,” said Karim Chedid, Blackrock’s chief investment strategist for iShares EMEA.

“Now earnings have to deliver for them to continue to do well.”

London’s commodities-heavy FTSE-100 rose 1.72%, nearing an all-time high as tin and nickel rose to multi-month peaks. [.L][MET/L]

It was outpaced by a 3.11% gain for the Portuguese index as oil company Galp Energia rose nearly 20% after saying a field off Namibia could contain 10 bln barrels of oil. [.EU]

Iran said on Friday that it had no plan to retaliate following an apparent Israeli drone attack within its borders, which in turn followed an Iranian missile and drone attack on Israel days before.

HAVEN OUTFLOWS

Bond yields – which climb when prices fall – were generally heading back toward multi-month highs.

The yield on benchmark U.S. 10-year notes rose 1 basis points to 4.625%, from 4.615% late on Friday and the 30-year bond yield rose 1.9 basis points to 4.7303% from 4.711% previously.[US/]

In Europe, the benchmark Bund yield hit a new 5-month high. [GVD/EUR]

The dollar index, which measures the currency against six major peers, 0.1% at 106.21. The euro was down 0.1% at $1.0643.

“As long as there is this uncertainty about the cutting cycle particularly in the U.S, it’s interesting for investors to be in dollar longs because of its dual status as a high yielding currency and also a defensive currency,” said Yvan Berthoux, FX strategist at UBS.

Crude oil fell as traders put the focus back on fundamentals with a rise in U.S. stockpiles as the backdrop.

Brent futures 0.57% to $86.79 per barrel as U.S. crude lost 0.26% to $82.92.[O/R]

(Reporting by Kevin Buckland in Tokyo and Alun John in London; Editing by Angus MacSwan, Mark Potter and David Evans)

World’s workers increasingly at risk as climate changes, ILO says 22 Apr 2024, 11:49 am

World’s workers increasingly at risk as climate changes, ILO says

By Emma Farge

GENEVA (Reuters) -More than 70% of the global workforce is exposed to risks linked to climate change that cause hundreds of thousands of deaths each year, the International Labour Organization (ILO) said on Monday, adding governments would need to act as the numbers rise.

Workers, especially the world’s poorest, are more vulnerable than the general population to the dangers of climate extremes such as heatwaves, droughts, wildfires, and hurricanes because they are often the first exposed, or exposed for longer periods and at greater intensity.

As climate change accelerates, governments and employers are struggling to protect employees, the ILO said in a report.

“A staggering number of workers are already being exposed to climate change-related hazards in the workplace, and these figures are only likely to get worse,” the report entitled “Ensuring safety and health at work in a changing climate” said in its conclusions.

“As (the hazards) evolve and intensify, it will be necessary to re-evaluate existing legislation or create new regulations and guidance.”

Some countries have improved heat protections for workers, such as Qatar, whose policies came under scrutiny ahead of the 2022 soccer World Cup.

However, rules to govern other dangers like growing pesticide use for agricultural workers are less common.

“We do have some (countries) that already limit exposure to high temperatures and also limit exposure to air pollution, but we rarely have occupational exposure limits set for the other hazards,” said Manal Azzi, ILO Senior Specialist on occupational safety and health.

The share of global workers exposed to the most widespread hazard, surging temperatures, has risen by around 5 percentage points over the last two decades to 70.9%, the report said,

Other climate dangers often co-exist, creating a “cocktail of hazards,” the report said, with UV radiation and air pollution each affecting 1.6 billion people.

Because a worker is likely to be exposed to multiple dangers at once, an ILO spokesperson said it was impossible to calculate exactly what portion of the 3.4 billion global workforce was at risk.

Climate-related hazards are being linked to a cancer, kidney dysfunction, and respiratory illnesses, leading to deaths or debilitating chronic conditions or disabilities.

Air pollution is the most deadly risk, causing some 860,000 work-related deaths among outdoor workers annually, the ILO report said. Excessive heat causes 18,970 occupational deaths each year and UV radiation kills 18,960 through non melanoma skin cancer, it said.

“The greatest impacts will be felt by the working poor, those working in the informal economy, seasonal workers and workers in micro and small enterprises,” the report said.

In some cases, the very technologies meant to slow climate change like solar panels and lithium-ion batteries for electric vehicles can end up producing new dangers since they contain toxic chemicals, it said.

The ILO plans a major meeting in 2025 of government, employer and worker representatives to provide policy guidance on climate hazards.

(Reporting by Emma Farge; Editing by Barbara Lewis and Mark Potter)

Building a Sustainable Brand in the Eco-Friendly Market 22 Apr 2024, 11:42 am

Building a Sustainable Brand in the Eco-Friendly Market

In today’s world, where sustainability is not just a buzzword but a necessary ethos, businesses are increasingly pivoting towards eco-friendly practices. Building a sustainable brand in the eco-friendly market is both a challenge and an opportunity to stand out. This article delves into the intricacies of crafting a brand that not only thrives but also contributes positively to the environment.

Understanding the Eco-Friendly Market Landscape

The eco-friendly market has witnessed exponential growth, driven by consumer awareness and a collective push towards sustainability. However, navigating this landscape requires a nuanced understanding of what it means to be truly eco-friendly.

The Pillars of a Sustainable Brand

Building a sustainable brand rests on several key pillars: environmental responsibility, ethical business practices, and social equity. Each pillar is crucial in establishing a brand that resonates with eco-conscious consumers.

Market Research: Identifying Your Eco-Conscious Audience

Before diving into the eco-friendly market, it’s essential to understand who your audience is. This segment delves into identifying and understanding the eco-conscious consumer.

Crafting Your Eco-Friendly Brand Message

Your brand message is crucial in communicating your commitment to sustainability. This section explores how to craft a message that is authentic and resonates with your target audience.

Sustainable Product Development: From Concept to Market

Developing eco-friendly products is at the heart of building a sustainable brand. This part discusses the considerations and challenges in sustainable product development.

Eco-Friendly Packaging Solutions

Packaging plays a significant role in sustainability. Explore eco-friendly packaging options that reduce environmental impact and appeal to eco-conscious consumers.

Building a Green Supply Chain

A sustainable brand is only as strong as its supply chain. This segment highlights the importance of building a green supply chain and how to achieve it.

Marketing Strategies for the Eco-Friendly Market

Effective marketing strategies are crucial for success in the eco-friendly market. Learn about marketing approaches that align with sustainability values.

The Role of Social Media in Promoting Sustainable Brands

Social media is a powerful tool for sustainable brands. Discover how to leverage social media to promote your eco-friendly brand and engage with your audience.

Engaging with the Community: Building Brand Advocates

Community engagement is key to building a sustainable brand. This section covers strategies for engaging with the community and fostering brand advocates.

Navigating Regulations and Certifications

Understanding and complying with environmental regulations and certifications can enhance your brand’s credibility. Learn about the key certifications and how to navigate them.

Challenges in Building a Sustainable Brand

While the benefits are numerous, there are challenges in building a sustainable brand. This part discusses common hurdles and how to overcome them.

Case Studies: Successful Sustainable Brands

Gain insights from successful sustainable brands. This section explores case studies of brands that have successfully navigated the eco-friendly market.

The Future of Sustainability in Business

What does the future hold for sustainability in business? This segment looks at emerging trends and predictions for the eco-friendly market.

Leveraging Technology for Sustainability

Technology plays a crucial role in sustainability. Discover how innovative technologies can be leveraged to enhance sustainability efforts.

Sustainable Brand Building: A Step-by-Step Guide

A practical guide to building a sustainable brand from the ground up. This comprehensive step-by-step approach covers everything from idea to implementation.

Measuring Your Brand’s Environmental Impact

Understanding your brand’s environmental impact is crucial. Learn about tools and methods for measuring and reducing your footprint.

Fostering a Culture of Sustainability Within Your Brand

Creating a culture of sustainability within your organization is essential. This section discusses strategies for fostering this culture among your team.

Customer Retention Strategies for Sustainable Brands

Retaining customers is key to the long-term success of your sustainable brand. Explore strategies for keeping your customers engaged and loyal.

The Importance of Transparency in Sustainable Branding

Transparency is critical in the eco-friendly market. Learn why being transparent about your practices can build trust and loyalty among your consumers.

Financing Your Sustainable Brand

While this article steers clear of financial advice, it discusses general strategies for securing funding to grow your sustainable brand.

Evaluating the ROI of Sustainability Initiatives

Understanding the return on investment for sustainability initiatives can be challenging. This section provides insights into evaluating the effectiveness of your efforts.

Sustainable Branding FAQs

How do I ensure my brand is truly sustainable?

Ensuring your brand is truly sustainable involves a comprehensive approach that encompasses every aspect of your business, from sourcing materials to product design, packaging, and beyond. Start by setting clear, measurable sustainability goals based on recognized standards and frameworks such as the United Nations Sustainable Development Goals (SDGs). Conduct a thorough sustainability audit of your operations to identify areas for improvement and implement changes that minimize your environmental impact. Certifications from reputable organizations can also help validate your sustainability claims.

What are the best practices for eco-friendly packaging?

Eco-friendly packaging aims to reduce waste and utilize sustainable materials. Best practices include:

• Minimizing Packaging: Use the least amount of packaging necessary to safely transport your product.
• Choosing Sustainable Materials: Opt for materials that are recyclable, biodegradable, or made from renewable resources.
• Design for Reuse or Recycle: Design packaging that can easily be reused or recycled to extend its lifecycle and reduce waste.
• Educating Consumers: Clearly communicate how to properly dispose of or recycle the packaging to ensure its eco-friendly potential is realized.

How can I measure my brand’s environmental impact?

Measuring your brand’s environmental impact requires assessing the lifecycle of your products or services—from raw material extraction to production, distribution, use, and disposal. Tools like the Life Cycle Assessment (LCA) can provide a comprehensive overview of your environmental footprint. Additionally, carbon footprint calculators and water usage assessments can offer insights into specific areas of impact. Regularly measuring and reporting on these metrics can guide your sustainability efforts and demonstrate progress to stakeholders.

How do I market my sustainable brand without greenwashing?

To market your sustainable brand authentically and avoid greenwashing:

• Be Transparent: Share both your achievements and challenges in sustainability. Honesty builds trust with your audience.
• Provide Proof: Support your claims with certifications, third-party verifications, or detailed insights into your processes.
• Educate Your Audience: Use your marketing platforms to inform consumers about sustainability issues and how your brand addresses them.
• Focus on Authentic Stories: Share real stories about your sustainability journey, including the people and communities involved in your supply chain.

What certifications should I consider for my sustainable brand?

The certifications you should consider depend on your industry and sustainability goals. Some widely recognized certifications include:

• B Corp Certification: For overall social and environmental performance.
• Fair Trade Certified: For ethical treatment of workers and fair payment.
• USDA Organic: For organic farming practices.
• Energy Star: For energy-efficient products.
• Forest Stewardship Council (FSC): For responsibly sourced wood and paper products.

Each certification has its own set of criteria and benefits, so research which ones align best with your brand’s values and sustainability objectives.

How do I engage consumers in my brand’s sustainability efforts?

Engaging consumers in your sustainability efforts involves:

• Interactive Education: Create content that educates your audience about environmental issues and how your brand is making a difference.
• Community Initiatives: Invite customers to participate in sustainability-focused events or initiatives, such as tree planting or clean-up drives.
• Feedback Loops: Encourage and act on customer feedback regarding your sustainability practices.
• Loyalty Programs: Offer incentives for customers who participate in your sustainability programs, such as recycling or returning packaging.

Conclusion: The Path Forward for Sustainable Brands

Concluding thoughts on building a sustainable brand in the eco-friendly market and the ongoing journey towards sustainability.

Hedge fund borrowing hits five-year peak, Goldman Sachs says 22 Apr 2024, 9:22 am

Hedge fund borrowing hits five-year peak, Goldman Sachs says

By Nell Mackenzie

LONDON (Reuters) – Global hedge fund borrowing rose to a five-year high in the week to April 19, a Goldman Sachs note showed, as hedge funds ramped up trading to take advantage of the first sharp dip in U.S. and European stocks this year.

Banks give hedge funds leverage, essentially a loan to fund investing, which amplifies hedge fund returns but can also increase losses.

Gross leverage, or total borrowing, reached 270% after rising 2.6 points from the prior week, Goldman said in a note released Friday and seen by Reuters on Monday.

Hedge funds’ overall net leverage, which measures a fund’s total assets including borrowing against what it actually owns, ticked up 0.5 points to 73% last week, said Goldman Sachs.

Stock picking hedge funds not using algorithms to trade were the type of hedge fund that ratcheted up leverage levels, the note added. It did not give a number for systematic hedge fund leverage.

Leverage can be used to take bets against stocks but also to fund the derivatives trades that bet their values will rise. A short trade bets that an asset will fall in value.

Hedge funds U-turned stock bets on Wednesday and Thursday last week after three straight weeks of selling and bought the dip in global equities particularly in the U.S. and Europe, said the bank.

The S&P 500 last week fell more than 5% from its March 28 closing high, its biggest retreat since October, while the broadest European index of stocks fell 1.2% in its biggest weekly decline since mid-January.

Though rare, sharp dips and recoveries are not uncommon: the S&P 500 has experienced an average of three pullbacks of 5% or more every year since 1929, a Bank of America analysis showed.

Hedge funds focused bullish trades on technology companies, which had the highest level of net buying in two months. But traders remained short consumer discretionary stocks, such as luxury and travel, the Goldman note said.

Hedge funds bought stocks in most sectors including healthcare, tech, real estate and industrials, it added.

Single stocks saw the largest notional long buying in over a year, while macro products were net sold for the third straight week led by short sales, Goldman said.

North America and Europe were net bought on the week, while Asia was net sold.

(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Mark Potter)

After VW plant victory, UAW sets its sights on Mercedes in Alabama 22 Apr 2024, 9:03 am

After VW plant victory, UAW sets its sights on Mercedes in Alabama

By Nora Eckert

CHATTANOOGA, Tennessee (Reuters) – The United Auto Workers has made history by winning its first unionization vote at an auto factory in the U.S. South. Now it needs to prove the success wasn’t a fluke by pulling off a second victory at a Mercedes plant in Alabama next month.

UAW representatives at the VW plant also will have to show their mettle by negotiating a contract that gives workers what they have fought for – better benefits, improved safety on the job and a greater work-life balance.

The Volkswagen landslide win in Tennessee is expected to provide crucial momentum to UAW President Shawn Fain’s $40 million campaign to expand the union outside Detroit to the U.S. South and West, focusing on 13 non-union auto companies, including Toyota and Tesla.

Fain, a scrappy leader who reveled in last year’s fight with Detroit companies that won double-digit raises and cost-of-living adjustments, told a party of VW workers that the union would carry the fight on to Mercedes. “Let’s win more for the working class all over this nation,” he said.

The Mercedes plant vote, scheduled for mid-May, is expected to be a tougher fight than at VW, which took a neutral position in the vote.

Mercedes has said it respects workers’ right to organize and wants them to make an informed decision. But in a letter to employees in January, it said that the union organizers “cannot guarantee you anything” and that some workers had said no to unionization because of Mercedes’ competitive pay and benefits.”Mercedes is running a much more aggressive anti-union campaign than Volkswagen within the plant,” said John Logan, labor professor at San Francisco State University.

But he added that the large VW victory that saw 73% of eligible workers vote in favor will provide significant momentum for organizing efforts at other plants in the South.

“This will give them a huge boost for the Mercedes vote, and if they win that one, too, I wouldn’t be surprised to see elections at Hyundai, Honda and Toyota over the next several months,” he said.

The UAW says a “supermajority” of the roughly 5,200 eligible workers at the Mercedes assembly plant in Vance, Alabama, and a nearby battery plant in Woodstock support it. UAW policy is to push for a vote once 70% of workers have signed union cards.

Much may depend on economics and perceptions about job security. In the traditionally anti-union South where the UAW has lost several fights in the past, six Republican governors have flatly opposed the union’s current campaign, describing it as risking job security since automakers face higher labor costs.

Prior to last autumn’s UAW labor talks with the Detroit Three automakers, Ford officials said their U.S. labor costs were $64 an hour, compared with an estimated $55 for foreign automakers and $45-$50 for electric vehicle leader Tesla.

Workers at two other plants in the U.S. South – a Hyundai plant in Alabama and a Toyota parts factory in Missouri – have also launched organizing campaigns, with 30% of employees signing cards saying they support the UAW.

Workers at the VW plant say they will kick off meetings on Sunday to strategize on contract negotiations.

“The real fight is getting your fair share,” Fain told VW workers Friday night.

VW worker Jeremy Bowman, who hopes to be on the plant’s organizing committee, agreed. “The fight is just starting,” he said.

(Reporting by Nora Eckert; Editing by Peter Henderson and Edwina Gibbs)

By Nora Eckert

CHATTANOOGA, Tennessee (Reuters) – The United Auto Workers has made history by winning its first unionization vote at an auto factory in the U.S. South. Now it needs to prove the success wasn’t a fluke by pulling off a second victory at a Mercedes plant in Alabama next month.

UAW representatives at the VW plant also will have to show their mettle by negotiating a contract that gives workers what they have fought for – better benefits, improved safety on the job and a greater work-life balance.

The Volkswagen landslide win in Tennessee is expected to provide crucial momentum to UAW President Shawn Fain’s $40 million campaign to expand the union outside Detroit to the U.S. South and West, focusing on 13 non-union auto companies, including Toyota and Tesla.

Fain, a scrappy leader who reveled in last year’s fight with Detroit companies that won double-digit raises and cost-of-living adjustments, told a party of VW workers that the union would carry the fight on to Mercedes. “Let’s win more for the working class all over this nation,” he said.

The Mercedes plant vote, scheduled for mid-May, is expected to be a tougher fight than at VW, which took a neutral position in the vote.

Mercedes has said it respects workers’ right to organize and wants them to make an informed decision. But in a letter to employees in January, it said that the union organizers “cannot guarantee you anything” and that some workers had said no to unionization because of Mercedes’ competitive pay and benefits.”Mercedes is running a much more aggressive anti-union campaign than Volkswagen within the plant,” said John Logan, labor professor at San Francisco State University.

But he added that the large VW victory that saw 73% of eligible workers vote in favor will provide significant momentum for organizing efforts at other plants in the South.

“This will give them a huge boost for the Mercedes vote, and if they win that one, too, I wouldn’t be surprised to see elections at Hyundai, Honda and Toyota over the next several months,” he said.

The UAW says a “supermajority” of the roughly 5,200 eligible workers at the Mercedes assembly plant in Vance, Alabama, and a nearby battery plant in Woodstock support it. UAW policy is to push for a vote once 70% of workers have signed union cards.

Much may depend on economics and perceptions about job security. In the traditionally anti-union South where the UAW has lost several fights in the past, six Republican governors have flatly opposed the union’s current campaign, describing it as risking job security since automakers face higher labor costs.

Prior to last autumn’s UAW labor talks with the Detroit Three automakers, Ford officials said their U.S. labor costs were $64 an hour, compared with an estimated $55 for foreign automakers and $45-$50 for electric vehicle leader Tesla.

Workers at two other plants in the U.S. South – a Hyundai plant in Alabama and a Toyota parts factory in Missouri – have also launched organizing campaigns, with 30% of employees signing cards saying they support the UAW.

Workers at the VW plant say they will kick off meetings on Sunday to strategize on contract negotiations.

“The real fight is getting your fair share,” Fain told VW workers Friday night.

VW worker Jeremy Bowman, who hopes to be on the plant’s organizing committee, agreed. “The fight is just starting,” he said.

(Reporting by Nora Eckert; Editing by Peter Henderson and Edwina Gibbs)

London shares rebound as fears of wider Middle East conflict ebb 22 Apr 2024, 8:17 am

London shares rebound as fears of wider Middle East conflict ebb

By Pranav Kashyap and Shubham Batra

(Reuters) -London stocks gained 1% on Monday, following last week’s sharp selloff, as fears of the Middle East crisis escalating eased and investors looked ahead to domestic and U.S. economic data later in the week.

The benchmark FTSE 100 rose 1.1% as of 0826 GMT, while the mid-cap FTSE 250 gained 0.8%. Both indexes are set for the biggest percentage gain in a month.

Tyman led gains in the construction sector after it surged 29% on a $976 million buyout deal by Quanex Building Products. The index was also the top gainer with a nearly 3% jump.

The energy sector was up by 0.7% despite oil prices falling by more than 1%. Precious metal miners was the only sector in the red, slipping 1.2% as gold prices eased after Iran downplayed the risks of an escalation. [GOL/]

Markets will be focussed on comments from Bank of England’s Chief Economist Huw Pill on Tuesday for hints on future rate cuts and the manufacturing and services data for performance of the UK economy.

U.S. personal consumption expenditure price index data is due on Friday.

“All eyes this week are on the latest expectations for the United States and just how stubborn inflation is expected to stay,” Susannah Streeter, head of money and markets at Hargreaves Lansdown said.

Shares of Marks & Spencer Group jumped nearly 3% after Jefferies raised the stock to “Buy” from “Hold” earlier.

Hipgnosis Songs Fund boosted the midcap index with a 10.3% gain as Blackstone made a potential offer to buy the company that owns rights to music by artists including Shakira and Red Hot Chilli Peppers for about $1.5 billion.

Chill Brands fell nearly 24% after the vape-maker suspended CEO Callum Sommerton after allegations were raised around the company’s use of inside information.

Meanwhile, an industry survey showed that prices of homes being sold in Britain are close to their record highs after the biggest annual increase in a year.

(Reporting by Pranav Kashyap and Shubham Batra in Bengaluru; Editing by Mrigank Dhaniwala)

UK’s struggling Thames Water proposes spending more on environmental improvements 22 Apr 2024, 7:33 am

UK’s struggling Thames Water proposes spending more on environmental improvements

By Sarah Young

LONDON (Reuters) -Britain’s Thames Water has proposed spending an additional 1.1 billion pounds ($1.36 billion) on environmental projects over the next five years, in an updated business plan aimed at winning regulatory support.

The company is at risk of nationalisation as it struggles under the weight of its 16 billion pounds of debt, and needs to agree a plan that will help tackle constant sewage leaks and provide some kind of return to investors, without requiring an unacceptable hike in customer bills.

Thames Water, which supplies about a quarter of the British population, was thrown into crisis last month when an existing business plan was branded “uninvestible” by its owners.

Under the new proposal published on Monday, Thames Water said the rise in expenditure would go on clean-up projects and would come without hiking customer bills by any more than the 40% jump it had already proposed for the 2025-2030 period.

While that may help win over the regulator Ofwat, the company also needs the backing of its shareholders, who in March refused to invest a 500 million pound equity lifeline.

Britain’s privatised water industry has come under scrutiny after sewage spills jumped in recent years, after a period when some owners had taken out big dividends and loaded firms up with debt.

Public outrage over pollution and the prospect of higher bills to fix the problem has put the regulator under pressure to ensure consumers get value for money, but investors say they still need to make returns, resulting in a stand-off over Thames Water.

“We will continue to discuss this with our regulators and stakeholders,” Chief Executive Chris Weston said.

The company said it could also fund a further 1.9 billion of investment into the business, but that would require an extra 19 pounds on household bills.

Thames Water has until June 12 to win approval for its plan under the deadline set by Ofwat.

The 40% rise proposed by Thames Water compares to the 31% increase proposed on average by the other water companies in Britain for the five year period.

Thames Water’s nine shareholders include Ontario Municipal Employees Retirement System, the UK’s Universities Superannuation Scheme, a unit of the Abu Dhabi Investment Authority and the China Investment Corporation.

($1 = 0.8077 pounds)

(Reporting by Sarah Young; Editing by Kate Holton, Kirsten Donovan)