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India’s Future discloses new documents to bolster case against Amazon deal

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November 14, 2021

By Aditya Kalra and Abhirup Roy

NEW DELHI (Reuters) – Independent directors at India’s Future Retail have disclosed new documents in a letter to the country’s antitrust watchdog aiming to bolster their case against Amazon.com Inc as they seek to revoke a 2019 deal between the two companies.

A 160-page stock exchange filing on Sunday showed the directors reviewed records related to the 2019 deal between a group unit, Future Coupons, and Amazon, and argued that disclosures by the U.S. company before the Competition Commission of India (CCI) when it sought approval of the deal contradicted Amazon’s own internal communications at the time.

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Amazon and the CCI did not respond to a request for comment on the disclosure on Sunday.

The two companies’ legal dispute, centred around Amazon’s deal to invest $200 million in Future Coupons, has become a high-stakes battle which could determine the dominant player in India’s retail market in the years ahead.

Amazon has successfully used the tie-up to block Future’s attempted sale of retail assets to rival Reliance for $3.4 billion, which the Indian company is banking on to help keep its business afloat.

According to the Sunday filing, Future’s directors told the CCI in a Nov. 10 letter that Amazon’s intentions were not to invest in Future Coupons because of its “unique business model and strong growth potential”, as it stated while seeking approvals.

Rather, an internal email from an Amazon India executive to other senior Amazon executives, entitled “Future Retail Limited Investment”, said the U.S. firm was using a “‘twin-entity investment’ structure to invest in Future Retail” due to Indian law restrictions.

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“The CCI has to revoke the approval granted for Amazon’s investment,” the letter from Future’s independent directors stated.

Their filing is the latest salvo in an escalating legal battle.

In July, Reuters exclusively reported that the CCI had reviewed a complaint from Future and then accused Amazon of concealing facts while seeking the 2019 deal approval, after the watchdog compared legal disclosures made by Amazon at several forums.

The company told Reuters at the time that it was confident of addressing the watchdog’s concerns.

India’s financial crime-fighting agency has also ordered Future – the country’s second-largest retailer – to submit documents related to the 2019 Amazon deal as part of an investigation into possible breach of foreign investment laws, Reuters reported last week.

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(Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Editing by Edmund Klamann)

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

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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.

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“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.

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

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Chip shortage to cost Daimler Truck billions in revenues – Automobilwoche

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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.

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“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)

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(Reporting by Madeline Chambers, Editing by Louise Heavens)

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

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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.

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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).”

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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.

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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.

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“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)

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