By Dagmarah Mackos

(Reuters) -French IT consulting group Capgemini sees demand slowing in 2023 but expects results at the top end of guidance this year driven by its cloud, data and artificial intelligence businesses.

“The group expects demand to decelerate a bit in the coming quarters, but it remains confident that 2023 will be a year of growth, even if probably not as strong as in 2022,” Chief Executive Aiman Ezzat said on a media call on Thursday.

His comments come amid growing fears that an economic slowdown could dent IT budgets after gloomy results from tech giants Alphabet Inc and Microsoft Corp.

The company has forecast revenue growth in 2022 of between 14% and 15% on a constant currency basis and an operating margin of 12.9% to 13.1%, which analysts said could be seen as conservative given healthy demand.

Capgemini shares were down more than 2% at 0727 GMT.

The company estimates growth in the fourth quarter at around 10%, chief financial officer Carole Ferrand said on the call.

The group reported third-quarter revenue of 5.55 billion euros ($15.8 billion), up 15.7% from the same period a year earlier at constant exchange rates. Bookings in the quarter rose 13% to 5.43 billion euros.

“Given this very good Q3 performance, we now feel comfortable with the top end of our growth outlook for

2022,” Ezzat said in the company’s statement.

It expanded its workforce 16% year on year, reaching headcount of 358,400 at the end of September.

The group also said it will hire less as growth slows and attrition rate moderates in a stabilising talent market.

The high demand for IT specialists due to a shortage of available workers has forced many companies to increase wages to attract new talent in a competitive market.

($1 = 0.9936 euros)

(Reporting by Dagmarah Mackos; Editing by Josephine Mason, Edwina Gibbs and Jane Merriman)

By Joyce Lee and Heekyong Yang

SEOUL (Reuters) – Samsung Electronics said on Thursday its supply of memory chips will grow faster than its peers and its investments will proceed as planned, bucking the broader industry move to scale back output and spending amid growing recession fears.

Samsung’s apparent confidence indicates it intends to use a sharp and sudden downturn in worldwide tech demand to consolidate its dominance in memory chips and catch up with bigger rival TSMC in contract chip manufacturing, analysts said.

The South Korean firm also said on Thursday its de facto leader Jay Y. Lee, who it says was behind its decision to make aggressive investments in contract chipmaking, was appointed as executive chairman.

“We are not considering an artificial production cut,” Han Jin-man, executive vice president of memory business at Samsung, told analysts after posting a 31% plunge in quarterly profit.

“Market demand has contracted right now, but … we need to prepare for mid- to long-term demand recovery.”

Samsung said it did not expect much change to its 2023 memory chip investment plans, in contrast to smaller rival SK Hynix, which on Wednesday warned of an “unprecedented deterioration” in memory chip demand and slashed 2023 investment by more than 50%.

Earlier this month TSMC also cut its annual investment budget by at least 10% for 2022 and struck a more cautious note than usual on upcoming demand. Samsung plans to invest 54 trillion won this year, of which 47.7 trillion won ($34 billion)is earmarked for its components business, mainly semiconductors.

Samsung said geopolitical uncertainties were likely to dampen demand for semiconductors until early 2023. For NAND flash chips, Samsung forecast the market may not recover in 2023.

Even so, it said it would boost shipments of memory chips at a faster rate than its peers across the industry. Samsung does not publish specific details of its supply plans.

In the contract chip business, where Samsung is a distant No.2 behind TSMC, it expected record sales and operating profit this year.

“Samsung seems to be saying it will use this downcycle to push out other NAND flash firms like SK Hynix and Kioxia,” said Park Sung-soon, analyst at Cape Investment & Securities.

Shares in Samsung closed up 0.2% in afternoon trade, but SK Hynix shares tumbled 4.2%. The wider market was up 1.7%.

ECONOMIES OF SCALE

Although Samsung’s fourth-quarter earnings are expected to dip further as memory chip prices continue to fall, Samsung will be better able to defend profits than peers due to economies of scale, analysts said.

Samsung is expected to keep capital expenditure cuts to a minimum in 2023 versus 2022 – at about 5% for memory chips – to continue its migration into more advanced manufacturing, which will initially curtail supplies of certain chips due to new production process, said Daishin Securities analyst Wi Min-bok.

This differs from rivals SK Hynix or Micron Technology’s plan to potentially cut investment by more than 30% next year.

Samsung’s operating profit fell to 10.85 trillion won ($7.7 billion) for the July-September quarter, from 15.8 trillion won a year earlier, the first year-on-year decline in nearly three years as its chip business profit fell to 5.12 trillion won from 10.07 trillion won a year earlier.

That was in line with Samsung’s own estimate of 10.8 trillion won earlier this month. Revenue rose 4% to 76.8 trillion won.

Samsung said profit in its mobile business fell slightly to 3.24 trillion won from 3.36 trillion won a year earlier, as a market downturn was offset by firmer demand for high-end smartphones and newly launched wearables.

Samsung forecast 2023 mobile demand could recover slightly from 2022, and said it planned to focus on its flagship and foldable smartphones to harness comparatively robust appetite for premium products.

($1 = 1,416.8000 won)

(Reporting by Joyce Lee and Heekyong Yang; Editing by Miyoung Kim and Stephen Coates)

By Cynthia Kim

SEOUL (Reuters) – South Korea’s central bank announced more measures on Thursday to improve liquidity in the banking system and mitigate the fallout from a developer’s debt default which is sparking fears of a credit crunch in Asia’s fourth-largest economy.

Gangwon Jungdo Development Corp., the developer of the new Legoland Korea theme park two hours east of Seoul, missed bond payments worth 205 billion won ($144 million) due on Sept. 29.

The news shocked some investors given that the debts, asset-backed commercial paper guaranteed by the local government, were then rated A1. About 10 local brokerages are among the debt holders.

The default has led to a sudden freezing of short-term money markets in the country just as the Bank of Korea’s 250 basis points worth of rate hikes since mid-last year are battering the once-booming property market. Local brokerages are also heavily exposed to real estate project finances.

Growing signs that Korean companies are having trouble obtaining financing come against the backdrop of volatile global financial markets and China’s property market crisis, something the BOK will need to consider as analysts expect policy rates to rise further to 3.50% or 3.75% by next year.

Data earlier on Thursday showed South Korea’s economic growth fell to its slowest in a year in the third quarter.

Policymakers have announced a flurry of measures since Sunday to inject more money into the financial system, including the doubling of a corporate bond-buying facility to 16 trillion won.

That was part of a 50 trillion won package to prop up credit markets, which focused on buying commercial paper and other debt issued by financial institutions.

On Thursday, the BOK said it will loosen collateral policies for local financial institutions applying for loans from the bank.

The bank will also open a temporary repurchase agreement facility worth about 6 trillion won ($4.24 billion) for local financial institutions to support the smooth functioning of financial markets.

The measures come as the yield on 91-day commercial paper surged to 13-year high of 4.55% on Thursday from 1.55% at the start of the year. The country’s benchmark share index has been little fazed by the default news.

The theme park opened in May.

Caught off-guard by the default, even corporate bond sales by AAA rated state-run Korea Electric Power Corp. failed to get enough bidders on Tuesday.

“The Legoland issue has really triggered worries about a credit crunch and more are also worried about financial conditions at some brokerages and construction firms,” said Han Kwang-yeol, an analyst at NH Investment & Securities.

“The recovery of this credit market will be a slow one given that central banks all around the world are still hiking rates to curb inflation.”

To ease the market jitters, Gangwon Province, which is obligated to repay the loan as state guarantor of GJC’s debt, said on Thursday it will fully pay the entire 205 billion won by Dec. 15.

“The decision (to repay the debt) has been coordinated with the government including the Ministry of Economy and Finance,” said Jeong Kwang-yeol, deputy governor on economic affairs for Gangwon Province.

Lee Bok-hyun, the governor of the Financial Supervisory Service, separately said he expects market nerves to ease by next week.

“Today we saw Gangwon Provice’s detailed debt repayment plans regarding Legoland.. After the weekend, market sentiment will improve,” Lee told reporters in Incheon, Yonhap News reported.

($1 = 1,422.7300 won)

(Reporting by Cynthia Kim; Editing by Christian Schmollinger, Ana Nicolaci da Costa and Kim Coghill)

By Martin Petty

(Reuters) – Foreign ministers from member countries of the Association of Southeast Asian Nations (ASEAN) are meeting on Thursday to discuss an intensifying crisis in Myanmar, 18 months after agreeing a peace plan with its military rulers.

WHY IS THE MEETING HAPPENING?

ASEAN’s peace effort is the only official diplomatic process in play, but it has so far been a failure, with the junta unwilling to implement a so-called “five-point consensus” that it agreed to with ASEAN in April 2021.

ASEAN holds its annual summit next month and will be joined by numerous world leaders. The United Nations has backed the ASEAN plan, but international patience is wearing thin, with suspicion the generals are paying lip service and buying time to consolidate power and crush opponents before a 2023 election, knowing they could then control the outcome.

For ASEAN to remain credible as a mediator, it may need to present a new strategy before the summit.

WHAT IS THE CONSENSUS?

The agreement includes an immediate end of hostilities, all parties engaging in constructive dialogue, allowing an ASEAN envoy to mediate and meet all stakeholders, and for ASEAN to provide humanitarian assistance.

So far, the only success cited by ASEAN chair Cambodia has been allowing some humanitarian access, but that has been limited and conditional.

WHAT HAVE THE SPECIAL ENVOYS DONE?

ASEAN has had two Myanmar special envoys and both have expressed frustration with the junta for denying them access to other stakeholders, including deposed leader Aung San Suu Kyi, who is on trial, accused of multiple crimes.

The junta has refused to engage opponents or civil society groups and has outlawed a shadow National Unity Government (NUG) and an alliance of sidelined lawmakers, designating them “terrorists”. It has vowed to destroy resistance groups but its offensives have killed a large number of civilians and prompted frequent international condemnation.

Current ASEAN envoy Prak Sokhonn, Cambodia’s foreign minister, has complained of an absence of political will from all sides, with the lack of trust preventing anyone from coming to the negotiating table.

He said he understood criticism that his visits were one-sided and could legitimise the junta. His only notable meeting have been with the generals so far, with many cancelled. He has unsuccessfully sought the military’s blessing to engage the NUG in dialogue.

HOW HAS THE JUNTA RESPONDED?

The military government has accused critical ASEAN members of meddling and warned them not to engage with the NUG. In August it cited “notable progress” on the peace plan, without providing specifics, but said its commitment would be determined by developments on the ground.

It has accused its opponents of trying to sabotage the ASEAN plan and has justified military offensives as necessary to secure the country and enable political talks.

Instead of advocating for the five-point ASEAN plan, the generals have instead been pushing a five-step roadmap of their own towards a new election, with few similarities.

WHAT APPROACHES MIGHT ASEAN TAKE?

It is unclear what proposals the foreign ministers will bring to the meeting.

Suspending Myanmar as an ASEAN member would be extremely unlikely, as would any trade sanctions, and the junta has demonstrated it will not respond to threats. Modifying the plan could be interpreted as concessions to the military.

Malaysia’s foreign minister Saifuddin Abdullah has said the consensus must be seriously reviewed for its relevance “and if it should be replaced with something better”.

Singapore in August said the military had disrespected ASEAN’s peace effort and engaging with the junta had limited value without progress.

Philippine President Ferdinand Marcos Jr last month said he would be proposing a new approach on Myanmar that “at the very least” would bring the junta or its representatives to the table.

His strategy may meet resistance, however.

ASEAN has so far opted to bar the generals from key summits and invited non-political representatives instead, which the junta has declined.

(Editing by Simon Cameron-Moore)

ZURICH (Reuters) -Swiss agrichemicals and seeds group Syngenta on Thursday logged slightly slower – albeit still robust – growth in sales and core earnings for the third quarter.

The Chinese-owned company, which plans to list within the next few months, said sales jumped 20% to $7.9 billion in the three months to the end of September, compared to a 24% increase during the second quarter.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 24% to $1 billion. In the second quarter earnings had increased by 39%.

The Basel-based company said it was still seeing strong demand, as farmers – buoyed by high prices for commodities – invested in crop protection products and new seeds.

Some farmers were also stocking up on products, while Syngenta’s modern agricultural platform business in China – where it gives training and advice – had almost doubled in size.

Still, Syngenta noted it was seeing an “increasingly challenging macroeconomic environment” while the continued strengthening of the dollar also weighed.

“Sales growth was attributable to a significant increase in sales across all business units, driven by robust grain prices, attractive farm economics and inventory builds across the value chain.

“Necessary price increases were implemented to help mitigate higher costs,” it added.

Syngenta, which competes with U.S. company Corteva and Germany’s BASF and Bayer, was bought in 2017 for $43 billion by ChemChina, which was folded into Sinochem Holdings Corp last year.

The parent company plans to keep a majority stake after its $10 billion flotation, which is expected to value Syngenta at around $50 billion.

BASF on Wednesday said costs at its European sites must be cut to a “permanently” smaller size because of a triple burden of sluggish growth, high energy costs and over-regulation, with the German industrial giant’s boss throwing his weight behind a planned expansion in China.

(Reporting by John Revill; Editing by Michael Shields and Edwina Gibbs)

BEIJING (Reuters) – President Xi Jinping said China is willing to work with the United States to find ways to get along to the benefit of both, Chinese state television reported on Thursday, ahead of a possible meeting with U.S. President Joe Biden in Indonesia.

As major powers, China and the United States should strengthen communication and cooperation to help provide stability to the world, Xi said in a message to an event of the National Committee on U.S.-China Relations on Wednesday.

The two countries have been at odds over China’s policy towards Taiwan, China’s relationship with Russia and more recently, U.S. efforts to prevent its semiconductor companies selling technology to Chinese companies.

China was recently infuriated by a string of visits by U.S. lawmakers to Taiwan. China said the United States was sending “dangerous signals” on the democratically governed island, which China claims as its own..

Xi, who has just secured a ground-breaking third term as leader of the ruling Communist Party overseeing the world’s second-largest economy, has denounced foreign interference over Taiwan and recently said China would never renounce the right to use force over it.

Biden on Wednesday said “the United State does not seek conflict with China”.

The U.S. administration, following Xi’s securing of his third term over the weekend, has stressed the importance of keeping lines of communication open with China.

Xi and Biden are expected to attend a G20 summit in Bali, Indonesia, in November, but no information has been officially released on the possibility of a meeting between them.

(Reporting by Albee Zhang and Bernard Orr; Editing by Muralikumar Anantharaman, Robert Birsel)

WASHINGTON (Reuters) – U.S. President Joe Biden on Wednesday compared Republican plans on taxes and spending if they take control of Congress in November to the economic plan rolled out by Britain’s former Prime Minister Liz Truss, warning of similar results.

“You read about what happened in England recently, and the last Prime Minister, she wanted to cut taxes for the super wealthy,” Biden said during a fundraising call for Michigan lawmaker Cynthia Axne.

“It caused economic chaos in the country. Well, that’s what they did last time and they want to do it again. And they want to make that tax cut permanent — that $2 trillion,” Biden said.

Some Republicans on the U.S. House Ways and Means Committee, which oversees taxation and tariffs, have pledged to make permanent part of the tax cuts introduced in 2017 under President Donald Trump.

Truss introduced a tax cut on Britain’s richest that sparked turmoil in the financial markets and rebellion in her party, and was forced to resign after 44 days.

Biden has refocused on the U.S. economy in recent days, as support for Democrats wanes days ahead of the midterm elections that will shape the next two years of his presidency.

(Reporting by Eric Beech, Writing by Heather Timmons; Editing by Edwina Gibbs)

By Yoshifumi Takemoto and Takaya Yamaguchi

TOKYO (Reuters) -Japan will unveil on Friday a fresh spending package of more than $200 billion that includes steps to curb electricity bills, sources told Reuters, which could tame inflation next year and help the central bank justify keeping ultra-low interest rates.

Prime Minister Fumio Kishida’s administration has pledged to compile a spending package this month to cushion the economic blow from rising fuel and food prices, which would follow big measures deployed during the COVID-19 pandemic.

Facing calls for big spending from within his ruling party, Kishida is expected to announce a package that includes spending of more than 29 trillion yen ($200 billion), three ruling party and government officials told Reuters by Thursday.

The amount includes subsidies to cut household electricity bills by roughly 20% from January to September next year, according to a draft of the package obtained by Reuters.

“Spending will be between 26 trillion and 30 trillion yen, probably much closer to 30 trillion yen,” a ruling Liberal Democratic Party official told Reuters late on Wednesday.

Analysts expect the subsidies to push down core consumer inflation, which exceeded the central bank’s 2% target for six straight months in September, early next year.

“Of components that make up the consumer price index, the subsidies would affect electricity and gas bills. Technically, they will push down Japan’s inflation rate in January-March,” analysts at Daiwa Securities said in a research note.

After accelerating to around 3.2% toward December, Japan’s core consumer inflation will likely slow to about 1.7% by March due to the subsidies, the Daiwa analysts said.

SMBC Nikko Securities also expects the electricity and gas subsidies to push down year-on-year core consumer inflation by around 1.1% points in January.

The downward impact from the subsidies will moderate from April, when utilities revise charges taking into account the rise in import costs from the weak yen.

Details of the package won’t be announced in time for the Bank of Japan to incorporate in fresh growth and inflation forecasts, due out on Friday.

But it may affect how the BOJ sees the broader price trend, as the subsidies would offset some of the inflationary pressure from a tightening job market, analysts say.

The BOJ is set to keep ultra-low interest rates on Friday and its pledge to maintain massive stimulus on the view the recent cost-push inflation will prove temporary.

The huge spending could also force the government to issue additional bonds and strain Japan’s already worsening finances.

Several rounds of heavy spending to cope with COVID-19 pushed Japan’s outstanding balance of long-term debt to 1,212 trillion yen as of March, or 219% of the size of its economy.

($1 = 145.2800 yen)

(Reporting by Yoshifumi Takemoto and Takaya Yamaguchi; Writing by Leika Kihara; Editing by Stephen Coates, Sam Holmes and Lincoln Feast)

By David Morgan

WASHINGTON (Reuters) -Republican U.S. Senate candidate Herschel Walker, who has said he opposes abortion with no exceptions, faced fresh allegations on Wednesday from a second woman who said he pressured her to have an abortion and paid for the procedure after a six-year relationship with him.

Walker, who hopes to unseat Democratic incumbent Senator Raphael Warnock of Georgia in a Nov. 8 election that could determine which party controls the Senate, has already denied allegations from another woman who claims he paid for her to have an abortion in 2009 and that she later gave birth to one of his children.

Neither woman has revealed her identity publicly. The first to come forward provided supporting documents to the Daily Beast, an online media outlet, including a check.

“I’m done with this foolishness. I’ve already told people this is a lie,” Walker said when asked about the claim, according to video posted by Atlanta media. He has called the first woman’s assertions a “flat-out lie.”

Reuters has not been able to independently confirm either woman’s claim.

The woman making the new claim, identified only as “Jane Doe,” spoke by phone to a news conference organized by attorney Gloria Allred in Los Angeles.

“Herschel Walker is a hypocrite, and he is not fit to be a U.S. senator,” the woman said. “We don’t need people in the Senate who profess one thing and do another. Herschel Walker says he is against women having abortions. But he pressured me to have one.”

Allred said the woman had years of documents, including receipts and greeting cards, documenting her romantic relationship with Walker from the late 1980s through the 1990s. She showed some of these at the news conference.

The woman told reporters she became pregnant in April 1993. The former NFL football star encouraged her to have an abortion and gave her the money to pay for one, she said.

She said she went to a Dallas clinic intending to have an abortion, but decided against it and left. She said that Walker talked her into going forward with the procedure and drove her to the clinic the next day, where she went ahead with the abortion.

“He pressured me to have an abortion and personally ensured it occurred by driving me to the clinic and paying for it,” the woman said in a voice heavy with emotion.

Republicans have sought to characterize the allegations against Walker as a “smear” campaign by Democrats and instead have emphasized the potential for the toss-up Georgia race to decide which party controls the Senate in the last two years of Democratic President Joe Biden’s term.

Walker, a political novice endorsed by former President Donald Trump, has said he opposes abortion, including for rape, incest or to protect the health or life of the mother.

Allegations about abortion represent the latest scandal for Walker, a first-time candidate for office who has also faced allegations of domestic violence.

Warnock, who serves as pastor at the Atlanta church once led by Martin Luther King Jr., backs access to abortion and other reproductive healthcare, saying on his campaign website that the U.S. Supreme Court’s June decision to overturn Roe v. Wade “cannot stand.”

Recent polls show the race to be close, with Warnock holding a lead of a few percentage points, though short of the 50% threshold needed to avoid a Dec. 6 runoff election.

(Reporting by David Morgan; Editing by Scott Malone, Cynthia Osterman and Jonathan Oatis)

By Johan Ahlander

STOCKHOLM (Reuters) -Swedbank on Thursday reported a better-than-expected operating profit for the third quarter, underpinned by strong income from mortgages.

The Swedish bank said in a statement its quarterly operating profit rose 24% to 8.70 billion crowns ($801 million) from 7.03 billion crowns posted last year, beating the 7.19 billion crowns seen by analysts in a Refinitiv poll.

“The quarter was marked by high and rising inflation and the response by central banks to tackle this,” Swedbank CEO Jens Henriksson said during a conference call. “Due to our position and business model, our net interest income benefits from this.”

Soaring inflation, fuelled in part by the Russia-Ukraine crisis, has seen central banks rapidly hiking rates, lifting interest income at Swedish banks but also squeezing households and businesses and depressing stock markets, potentially driving a rise in loan losses in the coming quarters.

“So far, we have not seen any material changes to the credit quality. The reservations we have made of 600 million crowns are macro and model-driven,” Henriksson said.

Swedbank, a rival of banks such as Handelsbanken, SEB and Nordea, said its interest income, which includes revenue from mortgages, rose to 8.36 billion crowns from 6.79 billion crowns a year ago and above the 7.56 billion analysts had forecast.

Commission income fell to 3.63 billion crowns from 3.80 billion crowns last year, beating the 3.53 billion seen by analysts.

Swedbank said high inflation, especially in the Baltic countries, meant that full-year expenses were likely to be around 1% higher than the cost cap of 20.5 billion crowns.

($1 = 10.8585 Swedish crowns)

(Reporting by Johan Ahlander, Editing by Terje Solsvik, Sherry Jacob-Phillips and Lincoln Feast.)