By Supantha Mukherjee and Marie Mannes

STOCKHOLM -H&M, the world’s second-biggest fashion retailer, said on Monday it will wind down its business in Russia, a move that will cost almost $200 million and affect 6,000 staff as it joins a growing number of companies fully exiting the country.

The company suspended its business in Russia in early March in the wake of Western sanctions against Moscow following its invasion of Ukraine.

Russia was H&M’s sixth-biggest market and the company was increasing its store count there while reducing physical stores in many other markets.

“After careful consideration, we see it as impossible given the current situation to continue our business in Russia,” Chief Executive Helena Helmersson said in a statement.

“We are deeply saddened about the impact this will have on our colleagues,” Helmersson said but did not elaborate. A company spokesperson said about 6,000 employees in the country would be affected.

Shares in H&M were down 0.5% at 1250 GMT, lagging a 1.4% rise in the Stockholm bourse’s benchmark index.

The entire wind-down is expected to cost about 2 billion Swedish crowns ($191.3 million), of which about 1 billion crowns will have a cash flow impact, H&M said. The full amount will be included as one-time costs in the results for the third quarter.

Russia was one of H&M’s fastest-growing markets, and one of its most profitable, said RBC Capital Markets Richard Chamberlain, calling the decision to pull out “somewhat inevitable”.

H&M intends to temporarily reopen physical stores in August to sell the remaining inventory in Russia, a spokesperson said.

The shutdown will affect the company’s 170 physical stores in the country and its online sales channels, a spokesperson said. H&M rents the stores and operates them directly.

Several other retailers, including Inditex, Adidas have halted sales in the country, while U.S.-based fashion retailer TJX and Poland’s biggest fashion retailer LPP decided to sell their businesses in Russia.

H&M’s biggest rival, Zara-owner Inditex, told shareholders last week that it would keep operations suspended for the time being.

“We are in contact with all actors that have been affected by the suspended measure and we are exploring different alternatives… But at this moment there is no other decision than to continue to monitor the situation,” said Inditex CEO Oscar Garcia Maceiras.

Hit by sanctions and supply chain issues, Russia has legalised so-called parallel imports, which allow retailers to import products from abroad without the trademark owner’s permission.

($1 = 10.4543 Swedish crowns)

(Reporting by Anna Ringstrom and Supantha Mukherjee in Stockholm, Marie Mannes in Gdansk; Corina Pons in Madrid; writing by Supantha Mukherjee and Gwladys Fouche; editing by Niklas Pollard, Emelia Sithole-Matarise and Susan Fenton)

By Tim Hepher

FARNBOROUGH, England -The president of Dubai’s Emirates, which has clashed with London’s Heathrow over the introduction of a capacity cap, said on Monday a disrupted air travel industry would return to equilibrium in 2023 and must “tough it out” until then.

Tim Clark, speaking at an event at the Farnborough Airshow, criticised Heathrow managers for failing to anticipate the travel rebound until it was too late, sparking delays.

Air traffic problems had also played a role. “There are many, many late runners,” Clark told aerospace executives.

The comments came after Emirates on Thursday angrily rejected demands by Heathrow to cut capacity and pledged to keep its six daily A380 superjumbo flights running.

The airline and airport later announced a deal to cap sales on flights out of Heathrow through mid-August.

Clark said Emirates could eventually look at transferring one of its six daily Heathrow flights to London Gatwick as part of an agreement to relieve pressure.

“The way we left it with Heathrow (was that) today we still have our six flights operating. What I needed to do with them was to look at how we can possibly switch over one of the flights into Gatwick.”

Last-minute airport curbs are more complicated for Emirates than many European carriers because of the large variety of destinations served beyond its Dubai hub, meaning passengers coming from across the globe can be affected, Clark said.

“Anybody who does this to us obviously is going to incur our wrath … this is totally unacceptable,” he added.

“We still have to go into battle with regards to some of the draconian measures (that) they are insisting on taking and I don’t really want it to get any more ugly than it has been.”

Heathrow blames airlines for failing to secure enough ground handlers. Emirates says its own ground-handling unit is ready and blames the problems on central staff shortages at Heathrow.

“Heathrow is well-prepared for this summer. We started recruiting security officers in November last year and will soon have as many people in security as in summer 2019,” an airport spokesperson said.

“The fact that Heathrow’s cap is 50% higher than a similar cap at Amsterdam, our nearest rival, shows how much better we have planned than our competitors.”

(Reporting by Tim Hepher and Jamie FreedEditing by Mark Potter)

By David Shepardson

FARNBOROUGH, England -Delta Air Lines will buy 100 Boeing 737 MAX 10 jets worth about $13.5 billion at list prices and has options to buy another 30, the U.S. carrier said on Monday.

Reuters reported in March that Delta was edging towards an order for 100 MAX 10 planes and reported last week that Airbus was in talks for Delta to expand an existing order of A220 planes.

Boeing shares were up 4% in premarket trading in New York on the announcement, while Delta was up 2%.

Delta, which made the announcement at the Farnborough Airshow, said it would start taking MAX 10 deliveries in 2025. Delta previously was the only major U.S. airline without a MAX in its fleet or on order. The MAX was grounded for 20 months after two fatal crashes killed 346 people. The grounding was lifted in November 2020 after software and training updates.

“This is a huge testament to the value of the MAX,” said Boeing senior vice president of commercial sales and marketing Ihssane Mounir at a signing event. “What an endorsement from a world-class airline.”

Boeing has had “strong demand” for the MAX since the ungrounding, with over 1,000 gross orders and 1.7 million flight hours, Boeing’s Commercial Airplanes CEO Stan Deal said.

With the new order, Delta’s Boeing 737 fleet will expand to more than 300 total aircraft and will be its second-largest fleet family behind the Airbus A320.

Reuters separately reported a top-up order from Delta for around a dozen Airbus A220s is set to be signed as soon as Tuesday at the air show.

Boeing faces a December deadline to win approval for the 737 MAX 10 – the largest member of its best-selling single-aisle airplane family. Otherwise, it must meet new cockpit alerting requirements under a 2020 law, unless Congress waives it.

Boeing CEO Dave Calhoun told Aviation Week in an interview published this month that the planemaker could be forced to cancel the 737 MAX 10 over potential regulatory issues. On Sunday, Boeing Commercial Airplanes CEO Stan Deal said that canceling the MAX 10 was “not a high probability path.”

Delta said in the event of a delay in certification “the agreement has adequate protection in place, including allowing Delta to shift to another model of the MAX family if necessary.”

Delta had extensive discussions with Boeing before it agreed to the deal. “It took us a long time getting here,” Delta senior vice president Mahendra Nair said, saying it had options if the MAX 10 does not move forward. “This is really the airplane that we would want and we would hope that Boeing can get the extension that they need for the certification.”

The MAX 10 aircraft will be 20%-30% more fuel efficient than the retiring Delta planes it will replace.

(Reporting by David ShepardsonEditing by David Goodman and Mark Potter)

LONDON -British food delivery company Deliveroo on Monday slashed its full-year revenue guidance, as consumers trim their spending amid a worsening cost of living crisis.

Shares in Deliveroo, which have lost more than three quarters of their value since listing at 390 pence in March 2021, were down 3% at 82.4 pence at 0733 GMT.

The group, which competes with Just Eat Takeaway.com and Uber Eats, said its full-year 2022 gross transaction value (GTV) growth was now expected to be in the range of 4% to 12% in constant currency versus previous guidance of 15% to 25%.

Deliveroo said second quarter GTV growth slowed to 2% from 12% in the first quarter, missing analysts’ expectations.

It said this reflected “the impact of increased consumer headwinds” during the second quarter.

GTV growth was 70% in 2021 when COVID-19 lockdowns boosted demand.

Confidence levels among Britain’s consumers sank to a record low last month as they struggle with the accelerating cost of living. Wages are failing to keep pace with inflation that hit a more than 40-year high of 9.1% in May and is heading for double digits.

In response to the crisis, Britons are trading down in both stores and products, switching from mainstream supermarkets to discounters and from branded to lower priced private label products.

They are also cutting back on fuel purchases as they reduce the number of car journeys they make, cancelling streaming services and cancelling repair warranties on domestic appliances.

Deliveroo said second quarter growth in orders was 3% year on year, while GTV per order fell slightly year on year, as basket sizes were higher during lockdowns for part of the same quarter last year.

The group did, however, maintain its margin guidance for the year.

It continues to expect 2022 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin to fall by 1.5% to 1.8%, compared with a fall of 2.0% in 2021.

Analysts at Jefferies said the guidance implied a full year loss of 118 million pounds ($140 million).

“Management is confident in the company’s ability to adapt financially to a rapidly changing macroeconomic environment, through gross margin improvements, more efficient marketing expenditure and tight cost control,” Deliveroo said.

It had said in March it would break even in about two years as the proportion of revenue spent on marketing in the competitive food delivery sector falls.

($1 = 0.8402 pounds)

(Reporting by James Davey; editing by Edmund Blair and Jason Neely)

MOSCOW -Canada sent a turbine for the Nord Stream gas pipeline to Germany by plane on July 17 after repair work had been completed, Kommersant newspaper reported on Monday, citing people familiar with the situation.

The return of the turbine from Canada to the Russian Portovaya compressor station, a crucial element of Nord Stream, has been in focus for the past month since Russian energy producer Gazprom reduced gas supplies to Germany.

Europe has experienced a reduction in Russian gas supplies amid already soaring energy costs and broader inflation after what Moscow calls a “special military operation” in Ukraine prompted sweeping Western sanctions against Russia.

Nord Stream 1 is currently undergoing planned annual maintenance, which is due to be completed on July 21 and has completely halted flows.

However, there are fears Russia could extend the work period, throwing plans to fill European gas storage for winter into disarray and heightening a crisis that has prompted emergency measures from governments and painfully high bills for consumers.

It will take another five to seven days for the turbine, serviced by Germany’s Siemens Energy to reach Russia if there are no problems with logistics and customs, Kommersant reported.

The daily said the turbine will be sent from Germany by ferry and then transported by land via Helsinki. The equipment is expected to arrive in Russia around July 24, with preparation work taking another three to four days, the paper reported.

Gazprom said on Saturday it expected Siemens to meet its obligations in full when servicing gas turbines needed for the reliable operation of Nord Stream and energy shipments to Europe.

Germany’s economy ministry said on Monday it could not provide details of the turbine’s whereabouts.

But a spokesperson for the ministry said that the turbine was a replacement part that was meant to be used only from September, meaning its absence could not be the real reason for the fall-off in gas flows prior to the maintenance.

Kremlin spokesperson Dmitry Peskov redirected questions to Gazprom. Gazprom and the Russian energy ministry did not respond to requests for comment.

Ukraine’s President Volodymyr Zelenskiy said he had told Canada’s Prime Minister Justin Trudeau on Sunday that Ukrainians would “never accept” Canada’s decision to return the turbine, saying the move violated sanctions.

(Reporting by ReutersEditing by Christopher Cushing, Kirsten Donovan)

HONG KONG – JPMorgan has hired Kelvin Goh from rival Citigroup to be its head of financial institutions group (FIG) for Asia Pacific, according to a memo seen by Reuters.

Goh held the same role at Citigroup and has been in the investment banking industry for 18 years, according to the memo, the contents of which was confirmed by a JPMorgan spokesperson.

He will be based in Singapore and report to JPMorgan’s head of investment banking for Asia Pacific Paul Uren.

In addition to the hiring, Michael Melly will become head of Southeast Asia FIG, in addition to his role as head of market infrastructure and asset management banking in Asia Pacific.  

Tony He has been appointed head of China FIG and has been with the bank since 2013, the memo said.

(Reporting by Scott Murdoch in Hong Kong; Editing by Edmund Blair)

PARIS -Stellantis and Guangzhou Automobile Group will end their loss-making joint venture producing Jeep vehicles in China, the carmakers said on Monday, only four months after the European carmaker said it would raise its stake in the business.

The U-turn comes after GAC reprimanded the world’s No.4 carmaker in January for announcing plans to raise its stake to 75% from 50%, stating the two parties had not yet signed a formal agreement.

“We came to the conclusion that it was better to close the joint venture,” said a Stellantis spokesperson, adding that the carmaker could still operate in China through its dealer network.

The Chinese automaker confirmed in a statement on its website that the two companies were negotiating how to terminate the joint venture after years of losses.

With less than 1% market share, Stellantis has been looking to revamp its strategy in the Chinese auto market as part of a broader simplification of its global structure under Chief Executive Carlos Tavares.

In its 2030 business plan released in March, Stellantis said it would adopt an “asset-light” business model in the country, still aiming to increase revenue but via imports rather than domestic production.

“The Jeep brand will continue to strengthen its product offering in China with an enhanced electrified line-up of imported vehicles,” Stellantis said.

Stellantis aims for revenue in China to reach 20 billion euros ($20.3 billion) by 2030, totalling 7% of total expected revenue – a steep jump from the 3.9 billion euros of turnover in China, India and Asia Pacific in 2021.

The GAC venture, which saw a 50% decline in sales last year, closed a plant in March, and a second joint venture with Dongfeng recently closed two due to excess capacity.

Stellantis and Dongfeng agreed last Friday on a share repurchase framework for the 3.16% of Stellantis’ share capital held by Dongfeng, enabling the China-based firm to sell some or all the shares back to Stellantis.

Stellantis’ shares in Milan and Paris were both up by just over 1% on Monday.

Automakers including BMW and Volkswagen have raised their stakes in joint ventures with Chinese partners in recent years after the country loosened regulations which previously prevented foreign automakers from owning a majority.

Stellantis will recognise a non-cash impairment of around 297 million euros ($300 million) in its first half-year results, the company said.

($1 = 0.9861 euros)

(Reporting by Tassilo Hummel, Giulio Piovaccari, Victoria Waldersee, Zoey Zhang; editing by Edmund Blair and Jason Neely)

By Gaurav Dogra

(Reuters) – Overseas investors disposed of a combined net total of $5.08 billion in Indonesian, Thai, Malaysian, South Korean and Indian bonds last month, marking the biggest monthly outflow since March, regulatory data and bond market associations showed.

The emerging Asia bonds were hit by a surge in U.S. yields and a jump in the U.S. dollar, making the riskier assets less attractive.

As major central banks are looking to hike their interest rates in their efforts to combat soaring inflation levels, further outflows can be expected from the regional markets, analysts said.

Graphic: Monthly foreign investment flows: Asian bonds- https://fingfx.thomsonreuters.com/gfx/mkt/zgpomxarqpd/Monthly%20foreign%20investment%20flows%20Asian%20bonds.jpg

Fears over a global economic recession have accelerated in recent weeks, as economists expect the higher interest rates and inflation levels would lead to slower consumption and sluggish business activity around the world.

“From the perspective of Asia bonds, a U.S. recession would be a massive headwind,” said Duncan Tan, a strategist at DBS Bank in a research note last month.

The U.S. dollar index jumped 2.88% last month and hit over a 19-year high, boosted by the hawkish Federal Reserve and safe heaven demand amid economic concerns.

Graphic: Asian currencies’ performance in the first half of the year-https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkznwapx/Asian%20currencies%20performance%20in%20the%20first%20half%20of%20the%20year.jpg

Foreigners sold Indonesian bonds worth $2.13 billion, trimming down their cumulative holdings in local currency government bonds to 15.65% at end-June, the lowest since at least 2014.

Thai, Malaysian and South Korean debt witnessed outflows of $1.11 billion, $940 million, and $725 million respectively last month, after each attracting inflows a month ago.

Meanwhile, cross-border selling in Indian bonds eased to a five-month low of $181 billion as a slide in global oil prices calmed some concerns over its trade deficits, as the country is a major importer of crude oil.

The European Central Bank is set to deliver its first interest rate hike since 2011 this week, while the U.S. Federal Reserve is likely to raise its interest rates by 75 basis points at its July policy meeting.

Graphic: Foreign investors’ holdings in Asian bonds- https://fingfx.thomsonreuters.com/gfx/mkt/akvezwemgpr/Foreign%20investors%20holdings%20in%20Asian%20bonds.jpg

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Alison Williams)

SHANGHAI/BEIJING -Chinese regulators stepped up efforts to encourage lenders to extend loans to qualified real estate projects as the beleaguered property sector faced fresh risks from a widening mortgage-payment boycott on unfinished houses.

The China Banking and Insurance Regulatory Commission (CBIRC) told the official industry newspaper on Sunday that banks should meet developers’ financing needs where reasonable.

The CBIRC expressed confidence that with concerted efforts, “all the difficulties and problems will be properly solved,” the China Banking and Insurance News reported.

The remarks come as a growing number of homebuyers across China threatened to stop making their mortgage payments for stalled property projects, aggravating a real estate crisis that has already hit the economy.

The latest news helped banking and property stocks recover some of their recent losses. China’s banking index, which tumbled 7% to a more than two-year low last week, bounced 1.4% on Monday. Chinese real estate stocks gained 3.1% on the mainland, and jumped 3.7% in Hong Kong.

The rebound in Chinese banking stocks was also aided by news that China will accelerate the issuance of special local government bonds to help supplement the capital of small banks, part of efforts to reduce risks in the sector.

China may also allow homeowners to temporarily halt mortgage payments on stalled property projects without incurring penalties, Bloomberg reported after the market close on Monday, citing people familiar with the matter.

The report added that homeowner eligibility and the length of grace periods would be decided by local governments and banks, and the yet-to-be-finalised proposal from financial regulators would require approval from senior Chinese leaders.

HOPING FOR STABILITY

Official data on Friday showed output in the property sector shrank 7% in the second quarter from a year earlier, marking the fourth straight quarter of decline.

New real estate loans in June were expected at more than 150 billion yuan ($22.23 billion), compared with a contraction in May, state television CCTV reported on Monday.

“I think the Chinese government has the will and means to solve the problem, and will likely take swift actions,” said Mark Dong, Hong Kong-based co-founder and general manager of Minority Asset Management.

“The biggest risk is impairment to consumer confidence, which threatens the nascent recovery in property sales.”

Dong expects state-owned developers to step in and acquire troubled projects from heavily-indebted private peers, accelerating an industry consolidation.

The CBIRC vowed last Thursday to strengthen its coordination with other regulators to “guarantee the delivery of homes”.

Already more than 200 projects have been affected by the mortgage boycott by homebuyers across the country, and at least 80 property developers are affected so far, E-house China Research and Development Institution said in a report published on Monday.

E-house estimated stalled real estate projects across China involve 900 billion yuan worth of mortgages in the first half, or 1.7% of the total outstanding mortgage loans.

In the Sunday interview, CBIRC urged banks to “shoulder social responsibility” and actively participate in the study of plans to fill the funding gap and support acquisitions of real estate projects.

The regulator hoped these steps would help stabilise the property market by enabling the swift resumption of stalled real estate construction and delivery of homes to buyers early.

Mainland property shares rebounded sharply in Hong Kong.

Country Garden Holdings Co jumped 6%, Guangzhou R&F Properties leapt 9% and KWG Group Holdings was up nearly 11%.

($1 = 6.7475 Chinese yuan)

(Reporting by Beijing and Shanghai newsroom; Additional reporting by Clare Jim in Hong Kong; Editing by Hugh Lawson, Shri Navaratnam and Jacqueline Wong)

By Andrea Shalal

SEOUL – U.S. Treasury Secretary Janet Yellen described as “encouraging” talks with India about a proposed price cap on Russian oil that Washington is pushing to drive down oil prices and make it harder for Moscow to fund its war in Ukraine.

Yellen, who arrived in Seoul on Monday evening, told Reuters in an interview en route to the South Korean capital that she was feeling generally positive about the initiative.

“We’ll see where they come out. The conversations I’ve had have generally been encouraging,” Yellen said aboard a military aircraft on her way from Indonesia to South Korea.

A senior Treasury official said India had made no promises on the oil price cap, but was working with the United States and had not “expressed hostility to this idea”.

Yellen told reporters on Saturday that she had held productive bilateral meetings about the proposed price cap with more than six counterparts on the sidelines of a meeting of Group of 20 finance officials on the Indonesian island of Bali.

The Treasury said she met there with officials from Saudi Arabia, Australia, South Africa, Turkey and Singapore.

Yellen spoke with her Indian counterpart before leaving for Asia, but did not meet him in Bali, a senior Treasury official said. Other senior U.S. Treasury officials have been in touch with lower-level Indian officials as well, the official said.

(Reporting by Andrea Shalal; Editing by Mark Heinrich)

By Gayatri Suroyo

JAKARTA – Indonesia’s central bank has sold some of its holdings of government bonds in the secondary market, an official said on Monday, stepping up its normalisation of monetary policy after keeping liquidity very loose during the pandemic.

Bank Indonesia (BI) is among the world’s least hawkish central banks, having kept interest rates in Southeast Asia’s largest economy at record lows due to relatively low core inflation.

However, it has begun to tighten the financial system’s liquidity by making gradual increases in banks’ reserve requirement ratio from March to September.

“After raising the reserve requirement ratio … BI has also strengthened rupiah monetary operations via the sale of government bonds in the secondary market,” Edi Susianto, BI’s head of monetary management department, told Reuters in a text message.

The sale was also intended to improve the supply and demand conditions in the money market and the bond market, he said, adding this was part of BI’s efforts to maintain the stability of the rupiah currency.

BI sold 390 billion rupiah ($26.03 million) of bonds on Monday and would continue selling, Edi said.

BI’s liquidity normalisation efforts are underway while it continues to act as a standby buyer in government bond auctions, part of its agreement with fiscal policymakers to stabilise bond yields.

Last year it also agreed to purchase 224 trillion rupiah of bonds with low interest rates in 2022 to help the government control its interest payments.

As of July 14, BI held a total of 824.54 trillion rupiah ($55.04 billion) worth of government bonds, excluding those used in monetary operations with banks, compared with801.46 trillion rupiah at the end of 2021, according to finance ministry data.

Central bank governor Perry Warjiyo has assured markets the net impact of BI’s operations this year would be a reduction in banking liquidity to a level that would not disrupt lending.

BI is due to hold a two-day policy meeting later this week. Warjiyo told Reuters on July 8 that BI may raise interest rates in the current quarter to contain future pressure on core inflation.

($1 = 14,982.0000 rupiah)

(Reporting by Gayatri Suroyo; Editing by Ed Davies and Kanupriya Kapoor)