(Reuters) -Asia-focussed insurer AIA Group Ltd reported a 1% rise in quarterly new business value on Tuesday as sales recovered from pandemic lows in its main markets of China and Hong Kong.

AIA’s mainland China business posted a 6% rise in value of new business (VONB) during the quarter, on a constant exchange rates basis. Its Hong Kong business also saw VONB growth, AIA said.

The two markets together account for about half of AIA’s new business growth globally.

Prolonged border controls and social distancing measures imposed by mainland China and Hong Kong had hindered the mobility and activities of the agents who drive insurance sales in the region. In early September, however, some parts of China eased COVID lockdowns.

AIA saw “healthy” levels of agent recruitment and increased productivity from new and existing agents during the third quarter, Chief Executive Lee Yuan Siong said in an exchange filing on Tuesday.

In the quarter ended Sept. 30, AIA’s VONB rose to $741 million from $735 million a year earlier. VONB measures expected profits from new premiums and is a key gauge for future growth.

(Reporting by Harshita Swaminathan and Selena Li; Editing by Devika Syamnath)

BRASILIA (Reuters) -Brazil’s central bank said that its inflation calculations are still consistent with its policy strategy, though risks remain high and require continuous monitoring and serenity, according to minutes from its latest policy meeting released on Tuesday.

With the message, the central bank indicates that with interest rates unchanged at a cycle high, it continues to see no comfort in mentioning monetary easing.

In the minutes of the meeting held Oct 25-26, when the rate-setting committee known as Copom kept the benchmark rate at 13.75%, policymakers said that their slight upward revisions for inflation reflect higher inflation of market prices in the short term and a small increase for administered prices.

“The Committee assesses that the projections remain at values consistent with the strategy of reaching a level around the target over the relevant horizon,” which includes 2023 and 2024, said the central bank.

But after acknowledging that market projections for inflation remain worse for extended periods, policymakers stressed that “risks remain high, requiring continuous monitoring and serenity.”

Alberto Ramos, chief Latin America economist with Goldman Sachs, estimated rate cuts to begin only in the second quarter or possibly the third quarter of 2023.

“In the near-term (next 4-6 months) the risk that the Selic may have to be driven even higher is low, but a conservative stance is warranted,” he wrote in a note to clients, mentioning the robust labor market dynamics and lingering uncertainty around the fiscal stance in 2023.

The elected leftist president Luiz Inacio Lula da Silva, who takes office in January, has yet to detail his economic policy after vowing to abolish a constitutional spending cap.

In last week’s policy decision, the central bank had already held its inflation outlook for this year unchanged at 5.8%, raising its forecast for next year to 4.8% from 4.6% last month, compared to a 3.25% target.

For 2024, the inflation forecast increased to 2.9%, from 2.8% last month, compared to a 3% target.

According to the latest Focus weekly survey, private economists project inflation at 5.6% this year, 4.9% in 2023 and 3.5% in 2024.

(Reporting by Marcela Ayres; Editing by Steven Grattan and Chizu Nomiyama)

By Diane Bartz

WASHINGTON (Reuters) -A planned $2.2 billion merger of Penguin Random House, the world’s largest book publisher, and rival Simon & Schuster cannot go forward, a U.S. judge has ruled.

Judge Florence Pan of the U.S. District Court for the District of Columbia, said in a brief order on Monday that she found the Justice Department had shown the deal may substantially lessen competition “in the market for the U.S. publishing rights to anticipated top-selling books.”

Unlike most merger fights, which are focused on what consumers pay, this one focused on authors’ earnings. The government argued the deal should be stopped because it would lead to less competition for blockbuster books and lower advances for authors who earn $250,000 or more.

Penguin Random House said the decision was “unfortunate,” and said it would “immediately request an expedited appeal.”

“A merger would be good for competition,” said Thomas Rabe, chief executive of Penguin owner Bertelsmann, who said the court’s decision was based on incorrect basic assumptions.

Penguin writers include cookbook author Ina Garten and novelists Zadie Smith and Danielle Steele, while Simon & Schuster publishes Stephen King, Jennifer Weiner and Hillary Rodham Clinton, among others.

Penguin is owned by Bertelsmann, a German media group, while Paramount Global owns Simon & Schuster.

“The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy,” U.S. Assistant Attorney General Jonathan Kanter said in a statement.

The U.S. Justice Department had filed a lawsuit aimed at stopping the deal in November 2021.

In hearings held in August, the government argued that the largest five publishers control 90% of the market, and a combined Penguin and Simon & Schuster would control nearly half of the market for publishing rights to blockbuster books while its nearest competitors would be less than half its size.

Penguin Random House lawyer Daniel Petrocelli, who defeated the government in a previous merger challenge, argued during the trial that the deal would have “enormous benefits” for readers and authors alike because the imprints, or brands, owned by the two giants would continue to compete against each other.

Best-selling author Stephen King, who testified during the three-week trial, took issue with this pledge. “You might as well say you’re going to have a husband and wife bidding against each other for the same house. It’s kind of ridiculous,” King told the court.

The top five publishers are Penguin Random House, HarperCollins, Macmillan, Simon & Schuster and Hachette, with Walt Disney Co and Amazon.com Inc also in the market. HarperCollins is owned by News Corp.

Pan was nominated to the U.S. District Court for the District of Columbia by President Joe Biden, who then nominated her to the appeals court in Washington. She was confirmed in September.

(Reporting by Diane Bartz; editing by Leslie Adler and Jason Neely)

By Satoshi Sugiyama

TOKYO (Reuters) – Toyota Motor Corp on Tuesday posted a worse-than-expected 25% drop in quarterly profit and cut its annual output target, as the Japanese firm battles surging material costs and a persistent semiconductor shortage.

The world’s biggest automaker by sales also warned that it remained difficult to predict the future after posting its fourth consecutive quarterly profit decline, underlining the strength of business headwinds it faces.

During the coronavirus pandemic, Toyota fared better than most car makers in managing supply chains, but it fell victim to the prolonged chip shortage this year, cutting monthly production targets repeatedly.

“We’re out of the worst phase, but … it’s not necessarily a situation where we’re fully supplied,” said Kazunari Kumakura, Toyota’s purchasing group chief. “I don’t know when the chip shortage will be resolved.”

Operating profit for the three months ended September fell to 562.7 billion yen ($3.79 billion), well short of an average estimate of 772.2 billion yen in a poll of 12 analysts by Refinitiv. Toyota sales reported a 749.9 billion yen profit a year earlier, and 578.6 billion yen in profit in the first quarter.

Kumakura said the global auto chip shortage continues, as chipmakers have prioritised supplies for electronics goods such as smartphones and computers, while natural disasters, COVID lockdowns and factory disruption have slowed a recovery in auto chip supplies.

He also said the supply of older-type semiconductors, that attract little capital investment currently, would remain tight.

Amid the gloom, shares in Toyota closed down 1.9%, versus a 0.3% rise in the Nikkei average.

‘VERY UNIMPRESSIVE’

Some analysts were underwhelmed by the performance, saying other positive factors beyond the chip shortage should have provided a boost.

“The yen is weaker in the second quarter, the volume in the second quarter is much higher than in the first quarter, and the (COVID) lockdown in China does not affect (the volume in the second quarter),” said Koji Endo, an analyst at SBI Securities.

“Considering these points … the absolute amount of profit in the second quarter has got to be higher than that of the first quarter. It is very unimpressive.”

Production rebounded by 30% in the quarter, but the company warned last week shortages of semiconductors and other components would continue to constrain output in coming months.

Toyota said it now expects to produce 9.2 million vehicles this fiscal year, down from the previously forecast 9.7 million but still ahead of last financial year’s production of about 8.6 million units.

Reuters reported last month Toyota had told several suppliers it was setting a global target for the current business year to 9.5 million vehicles and signalled that forecast could be lowered, depending on the supply of electromagnetic steel sheets.

MUTED YEN IMPACT

The yen has plunged around 30% this year against the U.S. dollar, but the benefit of the cheap yen – making sales overseas worth more – has been offset by soaring input costs.

The weak yen boosted profit by 565 billion yen in the first half of this financial year, but the gain was more than wiped out by 765 billion yen increase in material costs, with the cheap local currency further inflating import costs, Toyota said.

Toyota retained its conservative profit outlook, sticking to its full-year operating forecast of 2.4 trillion yen for the fiscal year through March 31 – well below analysts’ average forecast of 3.0 trillion yen.

By comparison, South Korea’s Hyundai Motor raised its revenue and profit margin guidance last month to reflect a foreign exchange lift.

Toyota, once a darling of environmentalists for its hybrid gasoline-electric models, is also under scrutiny from green investors and activists over its slow push into fully electric vehicles (EV).

Just a year into its $38 billion EV plan, Toyota is already considering rebooting it to better compete in a market growing beyond its projections, Reuters reported last month.

In a reputational hit, Toyota had to recall earlier this year its first mass-produced all-electric vehicle after just two months on the market due to safety concerns, and suspend production. It restarted taking leasing orders last month for domestic market.

Toyota reiterated on Tuesday that battery-powered EVs are a powerful weapon for decarbonisation, but that there are various other options to achieve the goal.

($1 = 148.3100 yen)

(Reporting by Satoshi Sugiyama; Writing by Miyoung Kim; Editing by Kenneth Maxwell)

By Hongji Kim and Ju-min Park

SEOUL (Reuters) – A temporary morgue for some of the people killed in South Korea’s Halloween party crush is now a huge lost-and-found, where hundreds of items such as a “Happy Halloween” backpack and a Minnie Mouse hairband await their owners.

The Wonhyoro sports centre was quiet on Tuesday, three days after the crush in the popular Itaewon district during Halloween festivities, as a few people sifted through more than 800 recovered lost items.

Five kilometres from the scene of the disaster, the modern sports facility was used in the initial hours to keep the bodies of some of the 156 people crushed to death when a chaotic surge of crowd poured into a narrow alley late on Saturday.

On Tuesday, its floor was laid with 256 pairs of shoes, 258 pieces of clothing, 124 bags and 156 electronic items, and other personal belongings, including stuffed animal key chains and festive Halloween masks.

Mobile phones and identification cards were kept separately at a police station.

One survivor of the crush walked through the items looking for her bag, her left leg in a cast from her injury that night. She couldn’t find what she was looking for.

The woman, who declined to give her name, said she and her friend were about to head home when the crowd swelled dangerously and ended up in a large crowd pushing forward into a narrow, sloped alleyway. She got jammed in place near the bottom of the hill.

“I was smothered at the far bottom (of the alley), but I survived because my upper torso wasn’t pressed under,” she said. She said her friend was also rescued.

South Korea is in a week-long period of national mourning and top officials pledged on Tuesday to answer questions about how the tragedy unfolded and how the government could prevent similar disasters. [L1N31X03Y]

The death toll is 156 with 151 injured, 29 of whom were in serious condition. At least 26 citizens from 14 countries were among the dead.

A police officer told Reuters the gym opened for owners and family members on Monday to claim their lost items, but few have come so far.

(Reporting by Ju-min Park; Editing by Jack Kim and Gerry Doyle)

BEIJING (Reuters) – China’s property market continued its slump in October, with private data showing home prices and sales falling, suggesting lacklustre sentiment and a bleak outlook amid strict COVID curbs, which hit consumer confidence.

China’s property sector, once a pillar of growth, has slowed sharply in the past year as a result of a government clampdown on excessive borrowing by developers, and a COVID-19-induced economic slump.

Prices in 100 cities dropped for the fourth straight month in October, falling 0.01% month-on-month after a decline of 0.02% in September, according to a survey on Tuesday by China Index Academy (CIA), one of the country’s largest independent real estate research firms.

Property sales by floor area in 100 cities fell about 20% year-on-year in October, according to a separate statement by the academy.

Analyst Chen Wenjing at the research firm said property recovery depends on COVID containment measures and the strength of policies.

Any rebound in the real estate market is expected to be delayed if the country sticks with strict COVID restrictions to quell the repeated coronavirus outbreaks, Chen said. Such curbs are expected to stay in place for some time after the Communist Party Congress in October.

Despite more than 230 stimulus policies introduced by 160 local governments in September and October, including subsidies, easing of purchase restrictions and decreasing down payment requirements, the property slump has widened from small cities with a net outflow of population to major cities.

Last month, new home prices in Shanghai and Shenzhen fell 0.05% and 0.32% in monthly terms, respectively.

Home sales by floor area in Shanghai and Guangzhou fell 35% and 26% in annual terms, respectively.

“Wait-and-see sentiment in homebuyers currently remains strong, with COVID flare-ups in many areas further dragging down the pace of market recovery and the previous policies have yet to take effect significantly,” Chen said.

(This story has been corrected to state that the Communist Party Congress was held in October, not this month)

(Reporting by Liangping Gao and Ryan Woo; Editing by Gerry Doyle)

By Donny Kwok and Twinnie Siu

HONG KONG (Reuters) – Hong Kong’s retail sales nudged up in September helped by improved tourism from eased pandemic restrictions, government data showed on Tuesday, but an official warned that tightened financial conditions will pose a challenge for the outlook.

Retail sales in September rose 0.2% from a year earlier in value terms to stand at HK$28.1 billion ($3.6 billion). That compared with HK$28.5 billion in August, when retail sales slid 0.2% from a year earlier.

Strict COVID-19 restrictions have weighed on Hong Kong’s economy since early 2020, grinding tourism to a halt and battering sales at bars, restaurants and shops.

The city scrapped a hotel quarantine requirement for all incoming visitors in September, after closely following China’s “zero-COVID” policy over the past two years.

The government said the stable domestic epidemic situation, improved labour market conditions and the government’s Consumption Voucher Scheme will continue to support demand.

“However, tightened financial conditions will increasingly offset the positive effects,” a government spokesman said.

Rising interest rates and a pessimistic economic outlook have put pressure on asset prices, dragging down private home prices in the city.

For the first nine months, the total retail sales value decreased 1.3% compared with the same period last year, the data showed.

In volume terms, retail sales in September fell 1.5% from a year earlier. That compared with a revised 3.0% drop in August. For the first nine months of the year, the volume decreased 4.2% from a year earlier.

The Chinese special administrative region has experienced a surged in travel after it ended mandatory hotel quarantine for international arrivals.

Tourist arrivals in September soared 568.5% from a year earlier to 66,037. That compared with a 451.4% jump in August.

Hong Kong’s economy contracted by 4.5% in the third quarter from a year earlier, shrinking for the third consecutive quarter as trade performance remained weak.

However, the city’s seasonally adjusted unemployment rate eased to 3.9% in the July-September quarter, improving for the fifth consecutive period.

In September, sales of jewellery, watches, clocks and valuable gifts, which before the pandemic relied heavily on tourists from the mainland, rose 8.4% from a year earlier, following a 3.9% expansion in August, the data showed.

Sales of clothing, footwear and accessories in September fell 7.2% on year after an 8.8% drop in August.

Online retail sales in September jumped 27.5% year-on-year in value terms, compared with a revised 21.6% growth in August. It was up 22.4% for the first nine months of 2022.

($1 = 7.8491 Hong Kong dollars)

(Editing by Jacqueline Wong)

LONDON (Reuters) – Central banks bought a record 399 tonnes of gold worth around $20 billion in the third quarter of 2022, helping to lift global demand for the metal, the World Gold Council (WGC) said on Tuesday.

Demand for gold was also strong from jewellers and buyers of gold bars and coins, the WGC said in its latest quarterly report, but exchange traded funds (ETFs) storing bullion for investors shrank.

Gold is typically seen as a safe asset for times of uncertainty or turmoil, but many financial investors sold shares in gold-backed ETFs as interest rates rose and pushed up returns on other assets.

Offloading of bullion by ETFs helped push gold prices down 8% in the third quarter, but this price fall helped stimulate demand for jewellery, the WGC said.

In total, the world’s gold demand amounted to 1,181 tonnes in July-September, up 28% from 922 in the same period in 2021, the WGC said.

Demand in the year to September had recovered to pre-pandemic levels, it said.

Buying by central banks in the third quarter far exceeded the previous quarterly record in data stretching back to 2000 and took their purchases for the year to September to 673 tonnes, more than the total purchases in any full year since 1967, according to the WGC.

Among large buyers were the central banks of Turkey, Uzbekistan, Qatar and India, but the WGC said a substantial amount of gold was also bought by central banks that did not publicly report their purchases.

It did not give any details on which countries these could be, but banks that do not regularly publish information about their gold stockpiles include those of China and Russia.

Purchases of gold bars and coins also surged in Turkey to 46.8 tonnes in the quarter, up more than 300% year-on-year, as people bought gold to shield themselves from rampant inflation.

“Looking ahead, we anticipate central bank buying and retail investment to remain strong,” said WGC analyst Louise Street.

“We also expect to see jewellery demand continue to perform strongly in some regions such as India and Southeast Asia,” she said.

Following are numbers and comparisons.

GOLD DEMAND (tonnes)*

Q3 2022 Q3 2021 % change

SUPPLY

Mine production 949.4 927.7 2%

Net producer hedging -10.0 -12.4 -19%

Recycled gold 275.8 292.8 -6%

Total supply 1,215.2 1,208.2 1%

DEMAND

Jewellery fabrication 581.7 515.1 13%

Technology 76.7 83.4 -8%

– of which electronics 62.8 69.0 -9%

– other Industrial 11.3 11.6 -2%

– dentistry 2.5 2.8 -11%

Investment 123.8 232.8 -47%

– Of which bar and coin 351.1 258.9 36%

– – Of which bars 220.4 177.5 24%

– – official Coins 100.2 57.5 74%

– – medals/imitation coins 30.6 23.9 28%

– ETFs & similar products -227.3 -26.0 773%

Central banks & other inst. 399.3 90.6 341%

GOLD DEMAND 1,181.5 921.9 28%

OTC and other 33.8 286.3 -88%

TOTAL DEMAND 1,215.2 1,208.2 1%

* Source: World Gold Council, Gold Demand Trends Q3 2022

(Reporting by Peter Hobson; Editing by Mark Potter)