Connect with us

Business

CME’s quarterly profit jumps, bitcoin futures surge

Published

on

October 27, 2021

By John McCrank and Niket Nishant

(Reuters) -CME Group Inc said on Wednesday its third-quarter profit more than doubled as trading in the futures exchange operators’ interest rate and energy products surged, while the approval of exchange-traded funds (ETF) tied to CME bitcoin futures also lifted volumes.

Average daily volume at CME rose 14% from a year earlier to 17.8 million contracts, mainly driven by double-digit growth in interest rate futures, up 53%, and energy futures, up 18%, as economies around the globe reopen from COVID-19 lockdowns.

Advertisement

CME’s bitcoin futures volumes rose 170% versus the third quarter of 2020, helped by the recent regulatory approval and launch of the first U.S. futures-linked bitcoin.

“The launch of ETFs based on CME’s bitcoin futures is validation from the industry of what we’ve known for some time, that CME bitcoin futures are the leading source of bitcoin price discovery in the industry,” Sean Tully, global head of financial and OTC products, said on a call with analysts.

So far in October, average daily volume for the company’s bitcoin contracts is up 57% versus September, to over 12,000 contracts or more than 60,000 equivalent bitcoin worth a record $3.5 billion per day, he said.

Net profit attributable to CME rose to $926.5 million, or $2.58 per share, in the quarter ended Sept. 30, from $411.7 million, or $1.15 per share, a year earlier.

Stripping out one-time costs, the company earned $1.60 per share, four cents below the consensus estimate of analysts, according to IBES data from Refinitiv.

Advertisement

Total quarterly revenue was up nearly 3% to $1.11 billion, just off the mean estimate of analysts of $1.15 billion.

The majority of the miss relates to a new post-trade services company CME jointly launched with IHS Markit, said Daniel Fannon, an analyst at Jefferies.

(Reporting by John McCrank in New York and Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri, Kirsten Donovan)

Advertisement
Continue Reading
Advertisement

Business

Delta flight from South Africa to Atlanta diverted to Boston for “technical specifications”

Published

on

November 28, 2021

(Reuters) -Delta Air Lines said a flight from South Africa to the United States was temporarily diverted from Atlanta to Boston on Sunday for technical reasons.

Flight 201, an Airbus A350, from Johannesburg was initially set to arrive at Hartsfield–Jackson Atlanta International Airport on Sunday but was instead routed to Boston’s Logan International Airport, Delta said.

The diversion “has to do with technical specifications of our A350 aircraft and the payload of this particular flight,” the company said in an email.

Advertisement

“This can happen on ultra-long-haul flights when optimal operating conditions can’t be met,” it said.

The Federal Aviation Administration told Reuters it would investigate the situation.

The flight, which was initially scheduled to land in Atlanta at 8:15 EST (1215 GMT), was rescheduled to land at in Boston at 9:27 a.m. before departing for Atlanta at 10:40 a.m., it said.

The company did not cite the newly discovered Omicron variant of the coronavirus, which has been detected in South Africa, as a reason for the temporary diversion.

More than a dozen passengers on a flight from Johannesburg to Schiphol that landed Friday tested positive https://www.reuters.com/world/europe/dutch-set-announce-findings-omicron-cases-among-safrica-travellers-2021-11-28 for the new variant, Dutch authorities said on Sunday.

Advertisement

(Reporting by Peter Szekely in New York and David Shepardson in Washington; Editing by Heather Timmons and Mark Porter)

Continue Reading

Business

Chip shortage to cost Daimler Truck billions in revenues – Automobilwoche

Published

on

November 28, 2021

BERLIN (Reuters) – Daimler Truck Chief Martin Daum expects the global chip shortage to hit revenues by several billion euros this year and sees the problem continuing into next year, Automobilwoche reported on Sunday.

The world’s largest commercial vehicle maker, to be spun off from Daimler on Dec. 10, has outlined cost-cutting measure aimed at boosting profit margins as it struggles with chip shortages hurting the entire sector.

Daum said there would be a significant financial hit.

Advertisement

“It is a huge sum,” Daum told Automobilwoche, saying the company would sell a “mid five-digit number” fewer vehicles than it could have.

With an average price of 100,000 euros ($113,170) per vehicle, this means several billion euros in lost revenues, reported Automobilwoche.

“We also have many vehicles sitting in the factory where just one part is missing. These deliveries are a priority because they are already sold,” said Daum.

He also told Automobilwoche that supply problems are likely to continue in 2022.

($1 = 0.8836 euros)

Advertisement

(Reporting by Madeline Chambers, Editing by Louise Heavens)

Continue Reading

Business

It’s raining dividends, hallelujah! Canadian banks set to post strong results

Published

on

November 28, 2021

By Nichola Saminather

TORONTO (Reuters) – Canada’s top six banks are expected to resume raising dividends and share buybacks after nearly a two-year hiatus and report strong quarterly earnings this week, which could boost the sector’s appeal to yield-hungry investors even as stocks trade close to all-time highs.

The market will also be looking for clues on the banks’ expected expense growth into next year as wage pressures intensify, and long-awaited improvements in net interest margins as interest rates rise.

Advertisement

The “big six” Canadian banks – Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia (Scotiabank), Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada – on average have a dividend yield of 3.3%, according to Reuters calculations.

That compares with the global sector median of 2.5%, according to Refinitiv data.

The dividend increases, which would be the first since the country’s financial regulator imposed a moratorium in March 2020 that was lifted earlier this month, could range from 10% for Scotiabank at the lower end to 34% at National Bank, Gabriel Dechaine, an analyst at National Bank Financial, wrote in a Nov. 22 note describing the coming hikes as a “dividend growth tsunami.”

The banks are also expected to announce repurchases of about 2% of their outstanding shares on average.

“It’s going to be a significant (dividend) increase, and will help them reduce excess capital on their balance sheets,” said Steve Belisle, portfolio manager at Manulife Investment Management. “That flows through to better ROE (return on equity).”

Advertisement

Even without the higher dividends or buybacks, Canadian bank shares have rallied to record highs, driven in part by better-than-expected earnings due to the release of reserves set aside to cover loan losses that haven’t materialized.

LOAN GROWTH ACCELERATION

The Canadian banks will be reporting their fourth-quarter earnings, with Scotiabank kicking off the results on Tuesday.

Analysts expect adjusted earnings for the top six lenders to jump about 37% from the year-earlier period, helped by a pick-up in business and credit card lending, strong mortgage growth and continued reserve releases.

An acceleration in loan growth is expected, as savings built up during the COVID-19 pandemic have lifted consumers’ and businesses’ purchasing power even at higher prices, with the broader economic recovery adding fuel to the fire, said Philip Petursson, chief investment strategist at IG Wealth Management.

Advertisement

The one blot on the horizon may come in the form of non-interest expenses. They could be 1% higher than in the third quarter, with much of the anticipated rise driven by variable compensation, and up 4% in fiscal 2022 on rising labor costs and continued investments in technology, CIBC Capital Markets analysts wrote in a note.

Earnings from capital markets earnings could also decline, although higher-than-expected trading revenues could help offset lower investment banking fees, some analysts said.

Profits are expected to be 6.6% lower than in the third quarter, largely due to releases of reserves, which are difficult to estimate and have driven better-than-expected results in past periods, and could again lead to positive surprises, analysts said.

The banks’ improving revenue growth, strong capital positions and expectations for returns on equity to remain in the mid-teens for longer than expected are positives, National Bank’s Dechaine said.

Wealth and asset management units are also likely to have seen further growth, as consumers continued to deploy cash piles they’ve amassed during the pandemic, Petursson said.

Advertisement

“It’s really hard to see where the warts would be on the banks’ earnings,” he added.

(Reporting by Nichola Saminather; Editing by Denny Thomas and Paul Simao)

Continue Reading
Advertisement

Trending