Investing.com — Shares of BASF (BU:BASF) traded lower on Monday as the company’s preliminary 2024 figures posted a sharp decline in earnings due to impairments and restructuring costs. 

According to the company’s statement, EBIT for 2024 is expected to reach €2 billion, a stark drop compared to the analyst consensus of €3.2 billion and the 2023 figure of €2.2 billion. 

The deviation from expectations is attributed mainly to non-cash impairments, particularly in the battery materials segment under Surface Technologies, and extensive restructuring measures across all segments.

The impairments, amounting to €1.9 billion in special items, reflect ongoing challenges in adapting to market conditions. 

Despite higher volumes in core businesses and some recovery in sales prices, these gains were insufficient to offset the costs and reduced earnings momentum, especially in the Chemicals segment during the fourth quarter of 2024. 

However, the Agricultural Solutions segment managed to achieve a notable increase in its contribution compared to the previous year.

Sales for the year are projected at €65.3 billion, down from €68.9 billion in 2023, driven by price declines and adverse currency effects, despite a slight increase in volumes. 

The German chemical company’s free cash flow is expected to be €0.7 billion, beating both analyst estimates and BASF’s forecasts. Still, this represents a drop from €2.7 billion in 2023.

Net income for 2024 remains uncertain due to pending contributions from an at-equity participation. 

“BASF expects that the analyst consensus of €2.2 billion will not be achieved. However, the net income of €225 million for 2023 will be significantly exceeded,” the company said in a statement late on Friday.

(Reuters) – Futures linked to the tech-heavy Nasdaq tumbled on Monday as the overwhelming popularity of an inexpensive Chinese artificial intelligence model sparked a selloff in AI-related shares, with megacap stocks including Nvidia (NASDAQ:NVDA) the worst hit.

Chinese startup DeepSeek has rolled out a free assistant it says uses lower-cost chips and less data, seemingly challenging a widespread bet in financial markets that AI will drive demand along a supply chain from chipmakers to data centers.

“It is far too early to describe DeepSeek as an existential threat to U.S.-based AI solutions,” Richard Hunter, head of markets at interactive investor, said.

“It will almost certainly put the cat among the pigeons as investors scramble to assess the potential damage it could have on a burgeoning industry which has powered much of the gain seen in the main indices over the past couple of years.”

DeepSeek’s AI Assistant on Monday overtook rival ChatGPT to become the top-rated free application available on Apple (NASDAQ:AAPL)’s App Store in the United States.

Nvidia, the poster child of AI, dropped 6.9% in premarket trading, while other chipmakers such as AMD (NASDAQ:AMD) and Micron Technology (NASDAQ:MU) fell 3.7% and 6.4%, respectively.

Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) were down 3.3% each. Both are set to report earnings later this week, along with Apple and Tesla (NASDAQ:TSLA).

Google-parent Alphabet (NASDAQ:GOOGL) fell 3.2%, and Apple lost 1.4%.

AI server makers Dell Technologies (NYSE:DELL) and Super Micro Computer (NASDAQ:SMCI) slid about 8% each.

At 4:06 a.m. ET, Dow E-minis were down 472 points, or 1.06%, S&P 500 E-minis were down 120.25 points, or 1.96%, and Nasdaq 100 E-minis were down 667 points, or 3.04%.

Also adding some caution to global markets, the U.S. and Colombia pulled back from the brink of a trade war on Sunday after the White House said the South American nation had agreed to accept military aircraft carrying deported migrants.

On Wednesday, the U.S. Federal Reserve’s first interest rate decision of the year is expected, with markets widely expecting the central bank to hold its lending rate steady.

The December reading of the personal consumption expenditures (PCE) is due on Friday, a crucial metric in assessing the inflation trajectory.

Markets have been on edge lately about Trump’s proposed tariffs, which could exacerbate inflationary pressures and slow Fed rate cuts, after he referred to trade policy multiple times last week without providing concrete details of his plans.

All three major indexes clocked weekly gains last week despite a pullback on Friday, with the S&P 500 retreating from all-time highs.

Energy major Exxon Mobil (NYSE:XOM), United Parcel Service (NYSE:UPS) and planemaker Boeing (NYSE:BA) would be some of the other industry leaders reporting their quarterly results later this week.

By Rocky Swift

TOKYO (Reuters) -Japan’s Fuji Media said on Monday its chairman and the head of its TV unit would step down immediately amidst a probe into alleged sexual misconduct by a celebrity TV host.

The scandal, which has led to an exodus of advertisers and investor calls for a management shake-up, has also raised concerns about the exploitation of women in Japan’s entertainment industry.

In December, Japanese magazines accused Masahiro Nakai, a TV host and leader of the former boy band SMAP, of sexual misconduct. While Nakai has worked for many of Japan’s TV networks, the event at which the incident occurred was reportedly arranged by one of the broadcaster’s executives.

One of the magazines, Shukan Bunshun, has also reported the same executive had in a separate event gathered female TV personalities at a hotel to act as entertainment for Nakai and other celebrities.

Nakai, 52, has apologised for causing “trouble” and announced his retirement from show business. He acknowledged reaching a settlement with another party but has not addressed the allegations directly. Nakai did not respond to a Reuters request for comment.

Fuji Media said Chairman Shuji Kanoh and the head of its TV unit Koichi Minato would step down effective Monday. Another TV executive, Kenji Shimizu, will lead the TV unit.

According to tabloid magazines Josei Seven and Shukan Bunshun, a woman was invited to a dinner in June 2023 with a Fuji TV executive that Nakai also attended. But the executive backed out at the last minute leaving her alone with Nakai and there was a sexual act against her will, they reported.

“First of all, as a person, I would like to offer my sincere apologies to the woman involved to whom we were unable to show adequate care and awareness of human rights,” Kanoh told a press conference.

A Fuji Media spokesperson said the company became aware of the woman’s complaint that June but did not widely investigate it or report it due to privacy concerns and settlement talks between the parties.

Outrage over the scandal grew after a Jan. 17 news conference by Minato that was closed to most of the press with Minato answering few questions.

Dozens of big-name firms including Toyota (NYSE:TM) and cosmetics giant Kao have suspended advertising with Fuji and most of its ads are currently public service announcements.

Fuji Media has promised an independent investigation by a third-party committee. It will be made up of three lawyers and is scheduled to submit a report by the end of March.

Activist investors who have criticised Fuji Media’s handling of the crisis include U.S.-based Dalton Investments, its second-biggest stakeholder at 5.8% based on LSEG data, as well as Zennor Asset Management, a UK-based fund which holds just over 1%.

Zennor said in a statement that the actions of the board showed “the company is finally taking this matter as seriously as they should.”

It added, however, that it thought the broadcaster needed to embark on a thorough review of its governance and that there was a strong case for a new leadership team from outside the Fuji Media group.

After plunging in late December and early January, Fuji Media’s shares regained ground, bolstered in part by hopes for a major corporate shake-up and are now trading some 14% higher since news of the scandal first broke.

The proliferation of scandals involving sexual violence and coercion in Japan in recent years is reminiscent of the #MeToo movement that gained momentum in the United States in late 2017.

In 2023, Japan’s top talent agency, Johnny & Associates, announced it would dissolve after a BBC documentary exposed how its founder Johnny Kitagawa abused members of boy bands for decades.

Among Kitagawa’s biggest creations was SMAP, which launched Nakai and his bandmates into stardom in 1988.

Last week, the Japanese documentary “Black Box Diaries” was nominated for an Academy Award for its depiction of a woman’s search for justice after accusing a high-profile journalist of rape.

(Reuters) – Property developer China Vanke said on Monday its chairman Yu Liang and CEO Zhu Jiusheng had resigned, amid growing concerns over the company’s liquidity as it faces several debt maturity deadlines this year.

Xin Jie, the chairman of its major state-owned shareholder Shenzhen Metro, will become Vanke’s new chairman, signalling increased state oversight amid expectations that the government will step in to contain non-repayment risks.

Yu will remain in the company as executive vice president, while three other people from Shenzhen state-owned firms will join with the same title.

A state media outlet reported earlier this month that Vanke’s CEO had been detained and that the firm could be subject to a takeover or reorganisation. The report was deleted within hours of its publication.

Investing.com – Shares in European chipmaking and data center-exposed stocks tumbled on Monday as investors fretted over the implications of the release of a new artificial intelligence model from Chinese firm DeepSeek.

The start-up has launched a free assistant to rival that of OpenAI’s ChatGPT, with the group saying that its technology offers similar performance despite using cheaper chips and less data. On Monday, DeepSeek’s large language model was the best-rated free application on Apple (NASDAQ:AAPL)’s App Store in the US.

Although some doubts have been cast over DeepSeek’s claims, the model has still sparked market worries over a long-standing wager that AI will fuel a chain of demand stretching from semiconductors to data centers.

The release and subsequent testing of DeepSeek’s flagship model also raised questions around a surge in recent massive capital spending by US tech giants on building out their AI infrastructure — and the potential returns investors want to see from such heavy investment.

“DeepSeek clearly doesn’t have access to as much compute as US hyperscalers and somehow managed to develop a model that appears highly competitive,” analysts at Raymond (NSE:RYMD) James said in a note to clients. “The natural question is, how would DeepSeek’s emergence impact compute intensity growth and the demand for hardware/semiconductors?”

However, they flagged that there remains “very limited information” around DeepSeek’s product.

In European trading, ASML (AS:ASML), the Dutch computer equipment maker whose clients include Intel (NASDAQ:INTC), Samsung (KS:005930), and Taiwan’s TSMC, was under particular pressure. Meanwhile, peers ASM International (AS:ASMI) and BE Semiconductor Industries (AS:BESI) slumped by more than 8%, and Schneider Electric (EPA:SCHN), Munters Group (ST:MTRS), and Siemens Energy (ETR:ENR1n) also declined sharply.

Frankfurt-listed shares in Nvidia (NASDAQ:NVDA), which has been propelled by enthusiasm around AI in recent years to become one of the world’s most valuable companies, retreated by over 8% as well. In premarket US trading, the stock decreased heavily.

Broader stock futures on Wall Street, including the tech-heavy Nasdaq contract, also pointed lower.

Investing.com — Universal Music Group (AS:UMG) and Spotify (NYSE:SPOT) have announced a new multi-year deal for recorded music and publishing, the companies announced in a Sunday statement.

The agreement includes a direct license between Spotify and UMG, spanning the US and several other countries, they said.

“Under the new agreements, UMG and Spotify will collaborate closely to advance the next era of streaming innovation,” the statement writes.

“Artists, songwriters and consumers will benefit from new and evolving offers, new paid subscription tiers, bundling of music and non-music content, and a richer audio and visual content catalog.”

UMG shares jumped 5% in European trading while Spotify’s US-listed shares fell 3% in premarket trading Monday.

Morgan Stanley (NYSE:MS) analysts said the early renewal of the UMG-Spotify partnership represents “a positive catalyst” for the world’s largest music label “and a broader affirmation of the music industry’s alignment to improve monetization throughout the value chain.”

“We see the early renewal of the deal, along with heavily-trailed prospects for super-premium tiers at digital streaming platforms (DSPs), as helping to underpin the average revenue per user (ARPU) element within UMG’s guidance for 8-10% subscription growth.”

Spotify’s CEO Daniel Ek said that the partnership would drive innovation, enhancing the appeal of music subscriptions to audiences worldwide.

Over the past year, the Swedish streaming giant has reduced its workforce, scaled back its podcast offerings, and cut marketing expenses as part of efforts to improve profitability.

Moreover, it has increased the prices of its US subscription plans to leverage strong demand for its premium services.

Earlier this month, UMG announced that Pershing Square, led by billionaire Bill Ackman, has requested a US secondary listing for the record label. In November, Ackman expressed plans to relocate both his investment firm and UMG, but his earlier request to delist from Euronext (EPA:ENX) Amsterdam was denied.

Pershing Square, which reduced its UMG stake to 7.48%, can request a US listing if it sells at least $500 million worth of shares. However, UMG argued this does not require delisting from Amsterdam or a US relocation.

Investing.com — Shares of British Land (LSE:LON:BLND) fell 1.5% after the company announced the sale of a 50% stake in Broadgate REIT, which is developing the 2 Finsbury Avenue scheme in London.

The stake was sold to Modon, an Abu Dhabi-listed developer, leaving British Land and GIC each with a 25% interest.

The transaction involves the 2 Finsbury Avenue (2FA) office development, a significant project in the City of London, which is currently 33% pre-let to Citadel, with options to increase this to 50%. The completion of 2FA is projected for 2027, with British Land continuing as the developer and asset manager for the project.

Despite the stock’s decline, analysts see the disposal in a positive light. Bernstein analysts commented on the deal, stating,

“British Land’s (BL) announced disposal of 50% of Finsbury Avenue at a c.10% premium to book value is not only positive for the company but also a positive read-across for the wider London office market. The disposal should also help alleviate recent investor concerns of a potential double-dip in London office values in 2025.”

The sale appears to be a strategic move for British Land, allowing the company to realize a profit on the development while still maintaining a significant stake and management control. Additionally, the deal with Modon brings a new international partner into the Broadgate estate, potentially adding to the project’s prestige and financial stability.

The market’s reaction, as reflected in the decline of British Land’s stock, may encompass concerns over the company reducing its direct exposure to the London office market, which is currently showing signs of resilience. However, the analyst’s perspective suggests that the transaction could be beneficial in the long term by providing liquidity and reducing risk exposure for British Land.

Investors and market watchers will be keeping an eye on the development of 2FA and British Land’s future transactions to gauge the health of the London office market and the company’s strategic positioning within it.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

By Giulia Segreti and Valentina Za

ROME/MILAN (Reuters) – Shares in Monte dei Paschi (MPS) fell again on Monday, extending Friday’s losses, signalling lingering investor doubts over the bailed out Tuscan bank’s bid for bigger rival Mediobanca (OTC:MDIBY).

On Friday, the state-backed lender launched a surprise 13.3-billion-euro all-share ($13.9 billion) bid for Mediobanca, whose board meets on Tuesday to start reviewing the offer.

Based on Italian takeover rules, the board will be able to express a proper opinion and give advice to shareholders only once the bid’s prospectus is public, in a few months’ time.

In a letter to employees at the weekend, Mediobanca CEO Alberto Nagel said the offer had not been previously agreed and the bank would decide how to best protect the interests of its stakeholders.

Shares in MPS, which has returned to profits and dividends after a bailout in 2017, fell 1.5% by 0832 GMT, extending a 7% drop on Friday.

Mediobanca shares were little changed, after Friday’s 7.7% jump. Italy’s banking index fell 0.5%.

MPS’ proposed takeover, the latest move in wave of consolidation in the Italian banking sector, was welcomed by Italy’s conservative government but it has left analysts concerned about the limited scope for cost savings, and the ability to retain Mediobanca investment bankers.

GOVERNMENT ENDORSEMENT

MPS CEO Luigi Lovaglio, a veteran banker for decades at UniCredit, has said the idea was to combine MPS’ branch franchise with Mediobanca products, while preserving both brands and running Mediobanca’s investment banking business separately.

Mediobanca’s operations include wealth management and consumer finance. On the latter it already partners with MPS.

The government, which still owns 11.7% of MPS, has endorsed the offer and Prime Minister Giorgia Meloni on Sunday said everyone should be proud of MPS’ turnaround.

“If the deal is successful, we will have that third major banking group [after Intesa Sanpaolo (OTC:ISNPY) and UniCredit] which we always spoke about, a group that could help to protect Italians’ savings,” she said.

Meloni’s government had been working on returning MPS to the private sector, after a previous collapsed sale of MPS to UniCredit in 2021.

After spurning MPS then, late last year UniCredit CEO Andrea Orcel derailed government’s efforts to broker a tie-up of MPS and Banco BPM with support from billionaire Francesco Gaetano Caltagirone and the holding company of late fellow tycoon Leonardo Del Vecchio.

Caltagirone and the Del Vecchio family’s Delfin holding are also leading shareholders in Mediobanca.

Barclays (LON:BARC) on Monday predicted further volatility in the shares given the lack of clarity and added MPS had room to distribute more of its excess cash.

The bid enjoys unions’ favour given it does not require significant branch closures and job losses.

“MPS’ hostile bid for Mediobanca could reshape the Italian financial landscape, but is subject to high implementation risk due to different business models and difficulties in achieving sustainable synergies,” Scope Ratings wrote.

($1 = 0.9551 euros)

By Niket Nishant

(Reuters) – U.S. authorities must simplify the process to obtain bank charters, a group of lawyers wrote in a letter to the incoming leadership of banking agencies, emphasizing the industry’s need to adapt in an era dominated by fintech companies.

Current “bureaucratic inefficiencies” had led to a “nearly impenetrable barrier to entry” and regulators need to encourage the formation of new banks to enhance competition, the group said in the letter set to be released on Monday, a copy of which was seen by Reuters.

The letter comes at a time when corporate executives are hoping for a pro-business regulatory climate under U.S. President Donald Trump, who has pledged to cut excessive red tape.

It also highlights the complexity of securing a new bank charter in the U.S., where the process can drag on for more than a year and requires the involvement of multiple agencies.

Earlier this month, the Federal Deposit Insurance Corporation’s acting chair Travis Hill said encouraging more firms to pursue bank charters would be a focal point for the regulator in the coming months, to guarantee a healthy pipeline of new entrants in the sector.

The FDIC, the Federal Reserve and the Office of the Comptroller of the Currency are the three main agencies tasked with oversight of the banking system.

REALISTIC EXPECTATIONS

Between 2010 and 2023, an average of only five new bank charter applications were approved annually, compared with 144 per year between 2000 and 2007, the letter noted.

While the low-interest rate environment — which squeezed industry profits — was a key factor behind the drop, burdensome regulation and a heightened fear of bank failures post the 2008 financial crisis also played a part.

To promote innovation, regulators must set realistic benchmarks and recognize failure as an inherent risk for new banks, the lawyers said.

“The agencies currently expect an application to practically guarantee success, which is an unreasonably high standard,” they said.

Banking industry players have long criticized authorities for using failures, such as the collapse of three lenders in 2023, as a pretext to impose more stringent regulation.

The lawyers also called on the agencies to improve transparency in the application process and commit to a review period of 120 days.

(Reuters) – Shares in BASF fell 3% in early Frankfurt trading after the chemical company late on Friday reported write-downs and a drop in annual earnings below estimates.

According to preliminary figures, 2024 earnings before interest and taxes fell to 2 billion euros ($2.09 billion), missing Vara’s analyst consensus of 3.2 billion euros, also falling below the 2023 figure.

Full-year operating profit was dragged lower by impairments at its battery materials business and by restructuring costs across divisions, the company said.

BASF is scheduled to report its full-year results on February 28.

Shares are among worst performers of the German blue-cap index in early Frankfurt trade.

($1 = 0.9561 euros)