European stock indexes are down Thursday after the U.S. central bank’s decision to tighten monetary policy (monetary policy). Investors also expect interest rates to rise in the eurozone and are assessing issuers’ quarterly reports.
The Stoxx Europe 600 composite index of the region’s largest companies was down 0.52 percent at 460.1 points as of 11:55 a.m.
The British indicator FTSE 100 was losing 0.51% during the session, German DAX – 0.36%, French CAC 40 – 0.46%, Italian FTSE MIB – 0.71%, Spanish IBEX 35 – 0.58%.
The day before, the U.S. Federal Reserve (Fed) raised its interest rate on federal funds rate by 25 basis points, now its range is 5-5.25% per year. In addition, the words about the necessity of further tightening of MP, which were present in the document published at the end of the March meeting, disappeared from the press release on the results of the meeting.
The European Central Bank (ECB) is also likely to raise rates, Trading Economics said. The results of its May meeting will be published on Thursday at 15:15 Moscow time.
In addition, concerns about the banking sector are growing. PacWest Bancorp said it is in talks with partners and potential investors looking at different options for its business. Earlier, the media reported on the U.S. financier’s plans to sell the business, which triggered a more than 50% drop in its share price in Wednesday’s additional trading.
In France, shares of outsourcing Teleperformance (-4%), retailer Carrefour (-2.3%), cosmetics maker L’Oreal (-2.1%) and steelmaker ArcelorMittal (-1.7%) are among the leaders of the decline.
Papers of aerospace company Airbus SE fell in price by 1.1%. The European company in the first quarter recorded a 2% drop in revenue and net profit fell to 466 million euros from 1.22 billion euros a year earlier.
Shares of German Volkswagen AG fell 0.1%. The auto concern in the first quarter of 2023 significantly increased revenue, but reduced operating profit by 31%.
The capitalization of the Swedish Volvo Car falls by 3.8%. The company reported layoffs of 1,300 office workers in Sweden, or about 6% of its workforce in the country.
Another automaker, Bayerische Motoren Werke AG (SPB: BMW), is adding 2.2% in market value. The company approved a stock buyback of up to 2 billion euros, even though pre-tax earnings in the first quarter more than halved.
Mercedes-Benz Group AG common stock and Porsche Automobil Holding SE preferred stock added 2.4% and 1%, respectively.
Oil and gas company Shell (SPB: RDS.A) is up 2.3%. The British-Dutch company boosted its January-March net income by 22% year-over-year and plans to buy back its own shares for $4 billion before its second-quarter earnings release.
Shares of rival TotalEnergies (SPB: TOT) are up 1.3% and BP plc (SPB: BP) are down 0.4%.
Anheuser-Busch InBev (SPB: BUD) (AB InBev) brewery increased its net profit 17 times in the first quarter. Its market value is up 0.1%.
Ukraine’s international reserves as of May 1, 2023, according to preliminary data, amounted to $35 billion 943.2 million, reaching a record high level for the last 11 years (since August 2011), the National Bank of Ukraine said.
“In April, reserves increased by 13% (by $4.065 billion) due to receipts from international partners amid a further decline in the net sale of currency by the National Bank and moderate debt payments of the country in foreign currency,” the central bank pointed out.
He specified that $5.852 billion arrived at the foreign currency accounts of the government at the National Bank in April, including $2.707 billion – within the framework of a new program of expanded funding by the IMF, $1.653 billion – macrofinancial assistance from the EU, $1.25 billion – a grant from the U.S. (through a World Bank trust fund) and $0.243 billion – from placement of foreign currency bonds of internal government bonds (IOB).
According to Interfax-Ukraine, the influx of foreign aid in April was the largest since the start of the war.
Also, the Ukrainian government paid $446.0 million for servicing and repayment of public debt in foreign currency, of which $282.7 million was for servicing and repayment of foreign currency OVGZ, $113.1 million was debt to the World Bank, the rest was debt to other international creditors. In addition, Ukraine paid $107.4m to the International Monetary Fund.
The NBU added that its net sale of currency in April declined for the fourth month in a row, decreasing compared to March by $0.299 billion – to $1.370 billion.
“Such dynamics in April is due to both industry factors (reduction of energy imports, increased sales of currency for the sowing season, a certain activation of mining and metallurgical enterprises), and the subsequent restriction of unproductive capital outflows from Ukraine,” the regulator pointed out.
Besides, the NBU’s consistent monetary policy aimed at improving the attractiveness of hryvnia assets and the refusal to finance the budget deficit directly in 2023 contributed to the stabilization of exchange rate expectations, the central bank added.
In addition, as a result of changes in market values and exchange rates, the value of financial instruments in reserves increased by $128.7 million.
The current volume of international reserves provides funding for 4.7 months of future imports, said the National Bank.
As previously reported, in late April, the NBU raised its forecast of international reserves of the country by the end of 2023 to $34.5 billion from $27 billion in the January forecast.
Number of unemployed people registered in the public employment service as of 01.04.2023 (thush people)
Source: Open4Business.com.ua and experts.news
Canada has provided Ukraine with demining machines totaling 22.5 million Canadian dollars, the Canadian Embassy in Ukraine reported.
“Ukraine’s State Emergency Service received the first demining equipment from Canada as part of a $22.5 million Canadian aid,” a Facebook post said.
The equipment will be used to clear agricultural land to return it to productive use and help restore food security.
In January-March 2023, the Ukrainian industrial company Interpipe transferred almost UAH 623 million to the budgets of all levels and off-budget funds, which is 3% more than in the same period last year.
According to the company’s press release on Thursday, payments to the state budget in 1Q2023 amounted to about UAH 406 million (+24%), and to local budgets – UAH 107 million (-28%). Another UAH 110 million (-14%) was transferred as unified social tax.
Sergiy Kuzmenko, Interpipe’s Chief Financial Officer, noted that the company continues to hold Ukraine’s economic front during the war.
“The formula is quite simple: the higher the volume of production and export of finished goods, the higher the total amount of taxes paid. Stably operating Interpipe enterprises provide jobs for 10,000 people in the frontline region and fill the budgets of all levels,” Kuzmenko said, as quoted by the press service.
As reported, in 2022, Interpipe transferred UAH 2.816 billion to the budgets of all levels and off-budget funds. At the same time, payments to the state budget for the year amounted to about UAH 1.74 billion (-7% compared to 2021), and to local budgets – about UAH 623 million (+1%). Another UAH 454 million (-4%) was transferred as unified social tax.
At the same time, Interpipe’s Director of Economics and Finance noted that in 2022, each ton of pipe and railway products produced by the company brought more than UAH 5909 to the Ukrainian budget, which is more than half the previous year’s figure.
“Interpipe is a Ukrainian industrial company that manufactures seamless pipes and railway wheels. The company’s products are supplied to more than 80 countries through a network of sales offices located in key markets in the CIS, Middle East, North America and Europe. Railroad products are sold under the KLW brand.
Interpipe employs 10 thousand people.
The company has five industrial assets: “Interpipe Nizhnedniprovsky Pipe Rolling Plant (NTZ), Interpipe Novomoskovsk Pipe Rolling Plant (NMPP), Interpipe Niko Tube, Interpipe Vtormet and Dnipro Steel, an electric steelmaking complex under the Interpipe Steel brand.
The ultimate owner of Interpipe Limited is Ukrainian businessman Victor Pinchuk and his family members.
“DTEK Energy plans to launch three new longwalls in May in addition to the eight that have already been put into operation since the beginning of 2023, the energy holding said.
“DTEK Energy’s miners continue to work on supplying Ukrainian thermal power plants with coal. To this end, they have put eight new faces into operation since the beginning of the year. We plan to launch three more as early as May,” he pointed out in his Telegram channel on Wednesday.
According to the company, one of the faces has a stockpile of more than 1 million tons, which will come in handy in preparation for next winter.
“DTEK miners are making every effort to ensure that Ukraine’s generation is supplied with coal,” the energy holding said.
As reported, in 2022 coal miners of the company put into operation 28 new faces.
“In order to pass the heating season more reliably, DTEK Energy supported with fuel not only its own thermal power plants, but also found an opportunity to help state-owned ones. At the end of last year, more than 120 thousand tons of coal were shipped for their needs,” the energy holding said in March 2023.
