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Business

Adani’s $2.5 bln share offer backed by investors, despite short-seller attack

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MUMBAI, Jan 31 (Reuters) – Indian billionaire Gautam Adani’s $2.5 billion share sale inched closer to full subscription on Tuesday as investors pumped in funds after a tumultuous week for his group in which its stocks were pummeled by a scathing short-seller report.

The secondary share sale of flagship Adani Enterprises (ADEL.NS) was subscribed 93% on Tuesday, including the anchor investor portion, Indian stock exchange data showed. The share sale needed at least 90% subscription to go through.

By Monday, the book building process of the country’s largest share sale had received only 3% in bids, amid swirling concerns that the share sale could struggle due to a market rout in Adani’s stocks in recent days.

The share sale is critical for Adani, not just because it is India’s largest follow-on offering and will help cut debt, but also because its success will be seen as a stamp of confidence by investors at a time the tycoon faces one of his biggest business and reputational challenges of recent times.

The offer closes days after Adani’s public faceoff with Hindenburg Research, which on Jan. 24 flagged concerns about the use of tax havens and “substantial debt” at the group. It added that shares in seven Adani listed companies have an 85% downside due to what it called “sky-high valuations”.

That has since sparked $65 billion in cumulative losses for stocks of the Adani group, which called the report baseless.

The support for Adani’s share sale came even as the flagship’s shares were trading at 2,967 rupees, up nearly 2.5% but below the lower end of the share sale price band of 3,112 rupees.

“It looks down to the wire with just a few hours remaining on the last day, but the offering should go through. Institutions seem to be subscribing to capitalise on opportunity to buy in bulk quantities outside the open market,” said Dipan Mehta, founder director of Elixir Equities.

Adani Group’s total gross debt in the financial year ended March 31, 2022, rose 40% to 2.2 trillion rupees ($26.83 billion). Adani said on Sunday – while responding to Hindenburg’s allegations – that over the past decade the group has “consistently de-levered”. Hindenburg later said Adani’s “response largely confirmed our findings and ignored our key questions.”

Reuters Graphics

The group had in recent days repeatedly said investors were standing by its side and the share offering would go through, amid rising concerns that may not happen. Bankers at one point had considered tweaking the pricing of the issue, or extending the sale, Reuters had reported.

Adani even said the Hindenburg report was a “calculated attack” on the country and its institutions while its CFO compared the market rout of its stocks to a colonial-era massacre.

Demand from retail investors remained muted, garnering bids only worth around 10% of the shares on offer for that segment. On Tuesday, demand mostly came from foreign institutional investors, as well as corporates who bid in excess of 1 million rupees each, data showed.

Over the weekend and through Monday, Adani’s firm held extensive discussions with investment bankers and institutional investors to attract subscriptions, according to two sources with direct knowledge of the talks.

Abu Dhabi conglomerate International Holding Company (IHC.AD) said it will invest $400 million in the issue.

“The follow-on public offering has to go through to restore investor confidence,” said V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The Hindenburg report and its fallout have drawn global attention. Adani is now the world’s eighth richest person, down from third ranking on Forbes’ rich list last week.

Adani Transmission (ADAI.NS) rose 1.6% on Tuesday, after losing 38% since the Hindenburg report, while Adani Ports and Special Economic Zone (APSE.NS) climbed 3.2%.

Adani Total Gas (ADAG.NS) languished at its 10% lower price limit, while Adani Power (ADAN.NS) and Adani Wilmar (ADAW.NS) were down 5% each.

Reuters Graphics

Global index publisher FTSE Russell said on Tuesday it continues to monitor publicly available information on the group, in particular from the Indian regulatory authorities.

Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group. On Tuesday, U.S. dollar-denominated bonds issued by Adani Ports and Special Economic Zone continued their fall into a second week.

($1 = 82.0025 Indian rupees)

Reporting by M. Sriram and Chris Thomas; Editing by Aditya Kalra and Muralikumar Anantharaman

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World

Australian nuclear body joins search for missing radioactive capsule

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MELBOURNE, Jan 31 (Reuters) – Australia’s nuclear safety agency said on Tuesday it had joined the hunt for a tiny radioactive capsule missing somewhere in the outback, sending a team with specialised car-mounted and portable detection equipment.

Authorities have now been on a week-long search for the capsule which is believed to have fallen from a truck that made a 1,400 km (870 mile) journey in Western Australia. The loss has triggered a radiation alert for large parts of the vast state.

The capsule, part of a gauge used to measure the density of iron ore feed, had been entrusted by Rio Tinto Ltd (RIO.AX) to a specialist contractor to transport. Rio apologised on Monday for the loss, which happened sometime in the past two weeks.

The Australian Radiation Protection and Nuclear Safety Agency said it was working with the Western Australian government to locate the capsule. It added that the Australian Nuclear Science and Technology Organisation has also sent radiation services specialists as well as detection and imaging equipment.

The truck travelled from Rio’s Gudai-Darri mine, north of Newman, a small town in the remote Kimberley region, to a storage facility in the suburbs of Perth – a distance longer than the length of Great Britain.

State emergency officials on Tuesday issued a fresh alert to motorists along Australia’s longest highway to take care when approaching the search parties, as vehicles carrying the radiation detectors are travelling at slow speeds.

“It will take approximately five days to travel the original route, an estimated 1400kms, with crews travelling north and south along Great Northern Highway,” Department of Fire and Emergency Services Incident Controller Darryl Ray said in a statement late on Monday.

The gauge was picked up from the mine site on Jan. 12. When it was unpacked for inspection on Jan. 25, the gauge was found broken apart, with one of four mounting bolts missing and screws from the gauge also gone.

Authorities suspect vibrations from the truck caused the screws and the bolt to come loose, and the capsule fell out of the package and then out of a gap in the truck.

The silver capsule, 6 mm in diameter and 8 mm long, contains Caesium-137 which emits radiation equal to 10 X-rays per hour.

People have been told to stay at least five metres (16.5 feet) away as exposure could cause radiation burns or radiation sickness, though driving past the capsule is believed to be relatively low risk, akin to taking an X-ray.

Reporting by Melanie Burton in Melbourne; Editing by Muralikumar Anantharaman and Edwina Gibbs

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Business

Musk bullish on Tesla sales as price cuts boost demand

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Jan 25 (Reuters) – Tesla Inc’s (TSLA.O) aggressive price cuts have ignited demand for its electric vehicles, Chief Executive Elon Musk said on Wednesday, playing down concerns that a weak economy would throttle buyers’ interest.

The company slightly beat Wall Street targets for fourth-quarter revenue and profit earlier on Wednesday despite a sharp decline in vehicle profit margins, and it sought to reassure investors that it can cut costs to cope with recession and as competition intensifies in the year ahead.

Deep price cuts this month have positioned Tesla as the initiator of a price war, but its forecast of a 37% rise in car volume for the year, to 1.8 million vehicles, was down from 2022’s pace.

However, Musk, who has missed his own ambitious sales targets for Tesla in recent years, said 2023 deliveries could hit 2 million vehicles, absent external disruption.

Tesla’s sales prospects, as it confronts a weaker economy, are a key focus for investors. The company said it maintains a long-term target of a compounded 50% annual rise in sales.

Musk addressed the issue at the start of a call with investors and analysts.

“These price changes really make a difference for the average consumer,” he said, adding that vehicle orders were roughly double production in January, leading the automaker to make small price increases for the Model Y SUV.

He said he expected a “pretty difficult recession this year,” but demand for Tesla vehicles “will be good despite probably a contraction in the automotive market as a whole.”

Shares rose 5.3% in extended trading.

CYBERTRUCK

The company is relying on older products and Musk said its Cybertruck, its next new electric pickup truck, would not begin volume production until next year. Reuters in November reported that the highly anticipated model would not be produced in volume until late this year.

Tesla will detail plans for a “next-generation vehicle platform” at its investor day in March.

Tesla’s vehicles “are all in desperate need of updates beyond software,” said Jessica Caldwell, Edmunds’ executive director of insights. She said Tesla will largely depend on the cheaper unit as well as Model 3 and Model Y to bring EVs to the masses.

“It’s unlikely that the Cybertruck will attempt to achieve mass-market volumes like the Detroit competitors.”

Reuters Graphics

[1/5] A Tesla supercharging station is seen in the early morning sun, in Kettleman City, California, U.S., January 25, 2023. REUTERS/Mike Blake

Reuters Graphics

Analysts said Tesla’s goal is bullish given the macroeconomic uncertainties.

“I think that you’re going to see some severe demand destruction across consumer spending and I think cars are going to take a big hit,” Edward Moya, senior market analyst at OANDA, said.

Tesla said it does not expect meaningful near-term volume growth from China, since its Shanghai factory was running near full capacity, rebounding from production challenges last year.

“Even a small cooling of demand will have significant implications for the bottom line,” said Sophie Lund-Yates, an analyst at Hargreaves Lansdown.

Tesla said that its automotive gross margins, which dropped to a two-year low of 25.9% in the reported quarter, were pressured by the costs of ramping up battery production and new factories in Berlin and Texas, as well as higher raw material, commodity, logistics and warranty costs.

Tesla expected its automotive gross margin to remain above 20%.

Margins generally are expected to be under further pressure from its aggressive price cuts. Tesla, which had made a series of price increases since early 2021, reversed course and offered discounts in December in the United States, followed by price cuts of as much as 20% this month.

Analysts had said Tesla’s profitability gave it room to cut prices and pressure rivals. The company’s $9,000 in net profit per vehicle in the past quarter was more than seven times the comparable figure for Toyota Motor Corp (7203.T) in the third quarter. But it was down from almost $9,700 in the third quarter.

“In severe recessions, cash is king, big time,” Musk said, adding that Tesla is well positioned to cope with an economic downturn because of its $20 billion of cash.

The company’s stock posted its worst drop last year, hit by demand worries and Musk’s acquisition of Twitter, which fueled investor concerns he would be distracted from running Tesla.

Musk dismissed surveys that suggest his political comments on Twitter are damaging the Tesla brand. “I might not be popular” with some, he said, “but for the vast majority of people, my follow count speaks for itself.” He has 127 million followers.

Revenue was $24.32 billion for the three months ended Dec. 31, compared with analysts’ average estimate of $24.16 billion, according to IBES data from Refinitiv.

Tesla’s full-year earnings were bolstered by $1.78 billion in regulatory credits, up 21% from a year earlier.

Adjusted earnings per share of $1.19 topped the Wall Street analyst average of $1.13.

It ended the fourth quarter with 13 days’ worth of vehicles in inventory, more than four times higher than the start of 2022, and a record $12.8 billion in value.

Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru, Additinoal reporting by Joe White and Ben Klayman in Detroit and Kevin Krolicki in Singapore
Writing by Peter Henderson
Editing by Sriraj Kalluvila, Matthew Lewis, Sam Holmes and David Goodman

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Business

U.S. home sales slump to 12-year low; glimmers of hope emerging

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  • Existing home sales drop 1.5% in December
  • Sales fall 17.8% in 2022, sharpest annual decline since 2008
  • Median house price rises 2.3% from year ago

WASHINGTON, Jan 20 (Reuters) – U.S. existing home sales plunged to a 12-year low in December, but declining mortgage rates raised cautious optimism that the embattled housing market could be close to finding a floor.

The report from the National Association of Realtors on Friday also showed the median house price increasing at the slowest pace since early in the COVID-19 pandemic as sellers in some parts of the country resorted to offering discounts.

The Federal Reserve’s fastest interest rate-hiking cycle since the 1980s has pushed housing into recession.

“Existing home sales are somewhat lagging,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. “The decline in mortgage rates could help undergird housing activity in the months ahead.”

Existing home sales, which are counted when a contract is closed, fell 1.5% to a seasonally adjusted annual rate of 4.02 million units last month, the lowest level since November 2010. That marked the 11th straight monthly decline in sales, the longest such stretch since 1999.

Reuters Graphics

Sales dropped in the Northeast, South and Midwest. They were unchanged in the West. Economists polled by Reuters had forecast home sales falling to a rate of 3.96 million units. December’s data likely reflected contracts signed some two months earlier.

Home resales, which account for a big chunk of U.S. housing sales, tumbled 34.0% on a year-on-year basis in December. They fell 17.8% to 5.03 million units in 2022, the lowest annual total since 2014 and the sharpest annual decline since 2008.

Reuters Graphics

The continued slump in sales, which meant less in broker commissions, was the latest indication that residential investment probably contracted in the fourth quarter, the seventh straight quarterly decline.

This would be the longest such streak since the collapse of the housing bubble triggered the Great Recession.

While a survey from the National Association of Home Builders this week showed confidence among single-family homebuilders improving in January, morale remained depressed.

Single-family homebuilding rebounded in December, but permits for future construction dropped to more than a 2-1/2- year low, and outside the pandemic plunge, they were the lowest since February 2016.

A “For Rent, For Sale” sign is seen outside of a home in Washington, U.S., July 7, 2022. REUTERS/Sarah Silbiger

Stocks on Wall Street were trading higher. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

MORTGAGE RATES RETREATING

The worst of the housing market rout is, however, probably behind. The 30-year fixed mortgage rate retreated to an average 6.15% this week, the lowest level since mid-September, according to data from mortgage finance agency Freddie Mac.

The rate was down from 6.33% in the prior week and has declined from an average of 7.08% early in the fourth quarter, which was the highest since 2002. It, however, remains well above the 3.56% average during the same period last year.

The median existing house price increased 2.3% from a year earlier to $366,900 in December, with NAR Chief Economist Lawrence Yun noting that “markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.”

The smallest price gain since May 2020, together with the pullback in mortgage rates, could help to improve affordability down the road, though much would depend on supply. Applications for loans to buy a home have increased so far this year, a sign that there are eager buyers waiting in the wings.

House prices increased 10.2% in 2022, boosted by an acute shortage of homes for sale. Housing inventory totaled 970,000 units last year. While that was an increase from the 880,000 units in 2021, supply was the second lowest on record.

“Home price growth is likely to continue to decelerate and we look for it to turn negative in 2023,” said Nancy Vanden Houten, a U.S. economist at Oxford Economics in New York. “The limited supply of homes for sale will prevent a steep decline.”

In December, there were 970,000 previously owned homes on the market, down 13.4% from November but up 10.2% from a year ago. At December’s sales pace, it would take 2.9 months to exhaust the current inventory of existing homes, up from 1.7 months a year ago. That is considerably lower than the 9.6 months of supply at the start of the 2007-2009 recession.

Though tight inventory remains an obstacle for buyers, the absence of excess supply means the housing market is unlikely to experience the dramatic collapse witnessed during the Great Recession.

A four-to-seven-month supply is viewed as a healthy balance between supply and demand. Properties typically remained on the market for 26 days last month, up from 24 days in November.

Fifty-seven percent of homes sold in December were on the market for less than a month. First-time buyers accounted for 31% of sales, up from 30% a year ago. All-cash sales made up 28% of transactions compared to 23% a year ago. Distressed sales, foreclosures and short sales were only 1% of sales in December.

“While the stabilization of affordability will be good news for potential home buyers, a lack of available inventory could remain a constraint for home buying activity,” said Orphe Divounguy, a senior economist at Zillow.

Reporting by Lucia Mutikani;
Editing by Dan Burns and Andrea Ricci

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Business

Fed to deliver two 25-basis-point hikes in Q1, followed by long pause

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BENGALURU, Jan 20 (Reuters) – The U.S. Federal Reserve will end its tightening cycle after a 25-basis-point hike at each of its next two policy meetings and then likely hold interest rates steady for at least the rest of the year, according to most economists in a Reuters poll.

Fed officials broadly agree the U.S. central bank should slow the pace of tightening to assess the impact of the rate hikes. The Fed raised its benchmark overnight interest rate by 425 basis points last year, with the bulk of the tightening coming in 75- and 50-basis-point moves.

As inflation continues to decline, more than 80% of forecasters in the latest Reuters poll, 68 of 83, predicted the Fed would downshift to a 25-basis-point hike at its Jan. 31-Feb 1 meeting. If realized, that would take the policy rate – the federal funds rate – to the 4.50%-4.75% range.

The remaining 15 see a 50-basis-point hike coming in two weeks, but only one of those was from a U.S. primary dealer bank that deals directly with the Fed.

The fed funds rate was expected to peak at 4.75%-5.00% in March, according to 61 of 90 economists. That matched interest rate futures pricing, but was 25 basis points lower than the median point for 2023 in the “dot plot” projections issued by Fed policymakers at the end of the Dec. 13-14 meeting.

“U.S. inflation shows price pressures are easing, yet in an environment of a strong jobs market, the Federal Reserve will be wary of calling the top in interest rates,” noted James Knightley, chief international economist at ING.

The expected terminal rate would be more than double the peak of the last tightening cycle and the highest since mid-2007, just before the global financial crisis. There was no clear consensus on where the Fed’s policy rate would be at the end of 2023, but around two-thirds of respondents had a forecast for 4.75%-5.00% or higher.

The interest rate view in the survey was slightly behind the Fed’s recent projections, but the poll medians for growth, inflation and unemployment were largely in line.

Inflation was predicted to drop further, but remain above the Fed’s 2% target for years to come, leaving a relatively slim chance of rate cuts anytime soon.

In response to an additional question, more than 60% of respondents, 55 of 89, said the Fed was more likely to hold rates steady for at least the rest of the year than cut. That view lined up with the survey’s median projection for the first cut to come in early 2024.

However, a significant minority, 34, said rate cuts this year were more likely than not, with 16 citing a plunge in inflation as the biggest reason. Twelve said a deeper economic downturn and four said a sharp rise in unemployment.

“The Fed has prioritized inflation over employment, therefore only a sharp decline in core inflation can convince the FOMC (Federal Open Market Committee) to cut rates this year,” said Philip Marey, senior U.S. strategist at Rabobank.

“While the peak in inflation is behind us, the underlying trend remains persistent … we do not think inflation will be close to 2% before the end of the year.”

Reuters Poll- U.S. Federal Reserve outlook

In the meantime, the Fed is more likely to help push the economy into a recession than not. The poll showed a nearly 60% probability of a U.S. recession within two years.

While that was down from the previous poll, several contributors had not assigned recession probabilities to their forecasts as a slump was now their base case, albeit a short and shallow one as predicted in several previous Reuters surveys.

The world’s biggest economy was expected to grow at a mere 0.5% this year before rebounding to 1.3% growth in 2024, still below its long-term average of around 2%.

With mass layoffs underway, especially in financial and technology companies, the unemployment rate was expected to rise to average 4.3% next year, from the current 3.5%, and then climb again to 4.8% next year.

While still historically low compared to previous recessions, the forecasts were about 1 percentage point higher than a year ago.

(For other stories from the Reuters global economic poll:)

Reporting by Prerana Bhat; Polling by Milounee Purohit; Editing by Ross Finley and Paul Simao

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Business

Wall St slips as labor market data fuels Fed worry

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  • Procter & Gamble falls after commodity cost pressure warning
  • Netflix down ahead of quarterly results
  • Dow down 0.76%, S&P 500 down 0.76%, Nasdaq down 0.96%

NEW YORK, Jan 19 (Reuters) – U.S. stock indexes closed lower on Thursday after data pointing to a tight labor market renewed concerns the Federal Reserve will continue its aggressive path of rate hikes that could lead the economy into a recession.

A report from the Labor Department showed weekly jobless claims were lower than expected, indicating the labor market remains solid despite the Fed’s efforts to stifle demand for workers.

Expectations the central bank would further dial down the size of its interest rate increases at its policy announcement next month were unchanged by the report.

Investors have been looking for signs of weakness in the labor market as a key ingredient needed for the Fed to begin to slow its policy tightening measures.

Jobless claims

Other data showed manufacturing activity in the mid-Atlantic region was subdued again in January, while data from the commerce department confirmed the recession in the housing market persisted.

“What we are seeing is the market carving out a bottom in the uncertainty so the news is having less of an effect and what we are seeing today is really just a continuation of that,” said Brad McMillan, chief investment officer for Commonwealth Financial Network, an independent broker-dealer in Waltham, Massachusetts.

“The fact we are not seeing more of a reaction says a lot of the bad news is out there.”

The Dow Jones Industrial Average (.DJI) fell 252.4 points, or 0.76%, to 33,044.56, the S&P 500 (.SPX) lost 30.01 points, or 0.76%, to 3,898.85 and the Nasdaq Composite (.IXIC) dropped 104.74 points, or 0.96%, to 10,852.27.

Traders work at the post where Carvana Co. is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

Recent comments from Fed officials continue to highlight the disconnect between the central bank’s view of its terminal rate and market expectations.

Boston Fed President Susan Collins echoed comments from other policymakers to support the case for interest rates to rise beyond 5%.

But stocks moved off their session lows after Fed vice chair Lael Brainard said the Fed is still “probing” for the level of interest rates that will be necessary to control inflation.

Markets, however, see the terminal rate at 4.89% by June and have largely priced in a 25-basis point rate hike from the U.S. central bank in February, with rate cuts in the back half of the year. .

Both the S&P 500 and the Dow fell for a third straight session, their longest streak of declines in a month.

On the earnings front, Procter & Gamble Co (PG.N) declined 2.11% after warning of commodity costs pressuring profits, despite raising its full-year sales forecast.

Analysts now expect year-over-year earnings from S&P 500 companies to decline 2.8% for the fourth quarter, according to Refinitiv data, compared with a 1.6% decline in the beginning of the year.

Netflix Inc (NFLX.O) closed 3.23% lower ahead of its results scheduled for release after the closing bell on Thursday. But the stock rebounded to gain 3.33% after posting subscriber gains for the quarter and the departure of co-founder Reed Hastings as chief executive to an executive chairman role.

Declining issues outnumbered advancing ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 1.70-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 46 new highs and 33 new lows.

Reporting by Chuck Mikolajczak, editing by Deepa Babington

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World

China’s population drops for first time since 1961, highlights demographic crisis

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BEIJING/HONG KONG, Jan 17 (Reuters) – China’s population fell last year for the first time in six decades, a historic turn that is expected to mark the start of a long period of decline in its citizen numbers with profound implications for its economy and the world.

The drop, the worst since 1961, the last year of China’s Great Famine, also lends weight to predictions that India will become the world’s most populous nation this year.

China’s population declined by roughly 850,000 to 1.41175 billion at the end of 2022, the country’s National Bureau of Statistics said.

Long-term, U.N. experts see China’s population shrinking by 109 million by 2050, more than triple the decline of their previous forecast in 2019.

That’s caused domestic demographers to lament that China will get old before it gets rich, slowing the economy as revenues drop and government debt increases due to soaring health and welfare costs.

“China’s demographic and economic outlook is much bleaker than expected. China will have to adjust its social, economic, defense and foreign policies,” said demographer Yi Fuxian.

He added that the country’s shrinking labour force and downturn in manufacturing heft would further exacerbate high prices and high inflation in the United States and Europe.

Kang Yi, head of the national statistics bureau, told reporters that people should not worry about the decline in population as “overall labour supply still exceeds demand”.

China’s birth rate last year was just 6.77 births per 1,000 people, down from a rate of 7.52 births in 2021 and marking the lowest birth rate on record.

The number of Chinese women of childbearing age, which the government defines as 25 to 35, fell by about 4 million, Kang said.

The death rate, the highest since 1974 during the Cultural Revolution, was 7.37 deaths per 1,000 people, which compares with rate of 7.18 deaths in 2021.

ONE-CHILD POLICY IMPACT

Much of the demographic downturn is the result of China’s one-child policy imposed between 1980 and 2015 as well as sky-high education costs that have put many Chinese off having more than one child or even having any at all.

The data was the top trending topic on Chinese social media after the figures were released on Tuesday. One hashtag,”#Is it really important to have offspring?” had hundreds of millions of hits.

“The fundamental reason why women do not want to have children lies not in themselves, but in the failure of society and men to take up the responsibility of raising children. For women who give birth this leads to a serious decline in their quality of life and spiritual life,” posted one netizen with the username Joyful Ned.

China’s stringent zero-COVID policies that were in place for three years have caused further damage to the country’s demographic outlook, population experts have said.

Local governments have since 2021 rolled out measures to encourage people to have more babies, including tax deductions, longer maternity leave and housing subsidies. President Xi Jinping also said in October the government would enact further supportive policies.

The measures so far, however, have done little to arrest the long-term trend.

Online searches for baby strollers on China’s Baidu search engine dropped 17% in 2022 and are down 41% since 2018, while searches for baby bottles are down more than a third since 2018. In contrast, searches for elderly care homes surged eight-fold last year.

The reverse is playing out in India, where Google Trends shows a 15% year-on-year increase in searches for baby bottles in 2022, while searches for cribs rose almost five-fold.

Reuters Graphics

Reporting by Albee Zhang in Beijing and Farah Master in Hong Kong; Additional reporting by Kevin Yao and Ella Cao in Beijing; Editing by Edwina Gibbs

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World

Nepal finds black boxes of aircraft after deadliest crash in 30 years

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  • Searchers find bodies of two of four missing passengers
  • Rescue efforts paused after poor weather hampers operation
  • Cockpit voice, flight data recorders found in good shape
  • Nepal observes day of national mourning, launches probe

KATHMANDU, Jan 16 (Reuters) – Searchers found the cockpit voice recorder and flight data recorder on Monday from a passenger flight that crashed, killing at least 70 people in Nepal’s worst plane accident for 30 years, officials said.

The data on the recorders may help investigators determine what caused the Yeti Airlines ATR 72 aircraft, carrying 72 people, to go down in clear weather on Sunday just before landing in the tourist city of Pokhara.

Reuters Graphics

Both recorders were in good shape and will be sent for analysis based on the recommendation of the manufacturer, Teknath Sitaula, a Kathmandu airport official, told Reuters.

Under international aviation rules, the crash investigation agency of the country where the plane was designed and built is automatically part of the inquiry.

ATR is based in France and the plane’s engines were manufactured in Canada by Pratt & Whitney Canada (RTX.N).

Nepal’s Civil Aviation Authority has inspected all ATR 72 and ATR 42 aircraft operating in the country since the crash and found no technical faults in them, it said in a statement on Monday.

There are currently 16 ATR 72 aircraft and three ATR 42s with multiple airlines in the country, an aviation authority official said.

Rescuers battled cloudy weather and poor visibility on Monday as they scoured a river gorge for passengers who are unaccounted for, more than 24 hours after the crash.

Two more bodies were recovered on Monday, taking the death toll to 70, said Navin Acharya, an official at the rescue coordination centre at Kathmandu airport. The search was called off for the remaining two missing people as darkness descended and will resume on Tuesday, he said.

Pokhara police official Ajay K.C. said all bodies had been sent to a hospital.

In the capital Kathmandu around 100 people lit candles at a gathering in memory of the crash victims and called on the government to ensure proper safety standards, witnesses said.

Condolences poured in from around the world, including the Vatican.

“His Holiness Pope Francis sends his condolences to you and to all affected by this tragedy, together with his prayers for those involved in the recovery efforts,” Cardinal Secretary of State Pietro Parolin said in a message to Nepal’s president.

[1/7] A rescue team recovers the body of a victim from the site of the plane crash of a Yeti Airlines operated aircraft, in Pokhara, Nepal January 16, 2023. REUTERS/Rohit Giri

Reuters footage from the crash site showed rescuers looking at the charred remains of the plane near a mountain gorge.

The plane, on a scheduled flight from Kathmandu to Pokhara, gateway to the scenic Annapurna mountain range, was carrying 57 Nepalis, five Indians, four Russians, two South Koreans, and one person each from Argentina, Ireland, Australia and France.

The aircraft had flown more than 1,700 times in the past one year.

Minutes before the aircraft was to land on Sunday, the pilot asked for a change of runway, a spokesperson for Pokhara airport said on Monday. “The permission was granted. “We don’t ask (why), whenever a pilot asks we give permission to change approach,” spokesperson Anup Joshi said.

Sunday’s crash underlined the need for the government to break up the Civil Aviation Authority of Nepal (CAAN), which both regulates airlines and manages airports, experts said.

“The government must immediately separate the regulatory body and service provider by splitting the Civil Aviation Authority of Nepal (CAAN) which is doing both works now,” K.B. Limbu, an aviation expert and a retired pilot, told Reuters.

“This leads to a conflict of interests.”

Asked for comment, Sitaula, the Kathmandu airport official, denied there was any such conflict in the functioning of CAAN.

“The regulatory and service provider (airport management) officials are separate and there is no cross-movement between the two bodies operating under the same organisation,” he said, referring to the CAAN.

There are nine domestic airlines in Nepal, including Yeti Airlines and its unit Tara Air. Yeti and Tara plane crashes have killed at least 165 people in Nepal since 2000 out of a total of 359 dead from aviation accidents, according to data from CAAN.

Reuters Graphics

An additional 75 people have died in helicopter crashes this century in Nepal, which is home to eight of the world’s 14 highest mountains, including Everest, and where sudden weather changes can make for hazardous conditions.

Experts say air accidents are usually caused by a combination of factors, and investigations can take months or longer.

Anju Khatiwada, the co-pilot of Sunday’s ill-fated aircraft, lost her husband Dipak Pokhrel in a similar crash in 2006. Khatiwada’s remains have not been identified but she is feared dead.

Nepal observed a day of national mourning on Monday and set up a panel to investigate the disaster and suggest measures to avoid such incidents in future.

Reporting by Gopal Sharma, writing by Shilpa Jamkhandikar and Shivam Patel; Editing by Gerry Doyle, Raju Gopalakrishnan and Mark Heinrich

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World

At least 64 killed in Nepal’s worst air crash in 30 years

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KATHMANDU, Jan 15 (Reuters) – At least 64 people were killed on Sunday when a domestic flight crashed in Pokhara in Nepal, the small Himalayan country’s worst air crash in three decades.

Hundreds of rescue workers were scouring the hillside where the Yeti Airlines flight, carrying 72 people from the capital Kathmandu, went down.

Local TV showed rescue workers scrambling around broken sections of the aircraft. Some of the ground near the crash site was scorched, with licks of flames visible.

“We have sent 31 bodies to the hospital and are still taking out 33 bodies from the gorge,” said police official Ajay K.C., adding that rescue workers were having difficulty reaching the site in a gorge between two hills near the tourist town’s airport.

Reuters Graphics

The crash is Nepal’s deadliest since 1992, the Aviation Safety Network database showed, when a Pakistan International Airlines Airbus A300 crashed into a hillside upon approach to Kathmandu, killing all 167 people on board.

The plane made contact with the airport from Seti Gorge at 10:50 a.m. (0505 GMT), the aviation authority said in a statement. “Then it crashed.”

“Half of the plane is on the hillside,” said Arun Tamu, a local resident, who told Reuters he reached the site minutes after the plane went down. “The other half has fallen into the gorge of the Seti river.”

Khum Bahadur Chhetri said he watched from the roof of his house as the flight approached.

“I saw the plane trembling, moving left and right, and then suddenly its nose dived and it went into the gorge,” Chhetri told Reuters, adding that local residents took two passengers to a hospital.

The government has set up a panel to investigate the cause of the crash and it is expected to report within 45 days, the finance minister, Bishnu Paudel, told reporters.

SERIES OF CRASHES

At least 309 people have died since 2000 in plane or helicopter crashes in Nepal – home to eight of the world’s 14 highest mountains, including Everest – where sudden weather changes can make for hazardous conditions.

The European Union has banned Nepali airlines from its airspace since 2013, citing safety concerns.

Those on the twin-engine ATR 72 aircraft included two infants and four crew members, said airline spokesman Sudarshan Bartaula.

The journey to Pokhara, Nepal’s second largest city tucked under the picturesque Annapurna mountain range, from the capital Kathmandu is one of the Himalayan country’s most popular tourist routes, with many preferring a short flight instead of a six-hour-long drive through hilly roads.

The weather on Sunday was clear, said Jagannath Niroula, spokesman for Nepal’s Civil Aviation Authority.

Passengers included five Indians, four Russians and one Irish, two South Korean, one Australian, one French and one Argentine national.

The ATR72 of European planemaker ATR is a widely used twin engine turboprop plane manufactured by a joint venture of Airbus (AIR.PA) and Italy’s Leonardo (LDOF.MI). Yeti Airlines has a fleet of six ATR72-500 planes, according to its website.

“ATR specialists are fully engaged to support both the investigation and the customer,” the company said on Twitter, adding that its first thoughts were for those affected, after having been informed of the accident.

Airbus and Leonardo did not immediately respond to requests for comment.

Flight tracking website FlightRadar24 said on Twitter the Yeti Airlines aircraft was 15 years old and equipped with an old transponder with unreliable data.

“We are downloading high-resolution data and verifying the data quality,” it said.

On its website, Yeti describes itself as a leading domestic carrier. Its fleet consists of six ATR 72-500s, including the one that crashed. It also owns Tara Air, and the two together offer the “widest network” in Nepal, the company says.

Reporting by Gopal Sharma; Additional reporting by Jamie Freed; Writing by Devjyot Ghoshal and Aditya Kalra; Editing by William Mallard and Susan Fenton

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Business

Tesla slashes prices in U.S., Europe to drive demand

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  • Tesla cuts prices in U.S., Europe by up to 20%
  • Move follows price cuts across Asia last week
  • Some models now qualify for U.S. tax credits
  • Model 3 price in Germany in line with Volkswagen’s ID.3

Jan 13 (Reuters) – Tesla (TSLA.O) has slashed prices on its electric vehicles in the United States and Europe by as much as 20%, extending a strategy of aggressive discounting after missing Wall Street estimates for 2022 deliveries.

The move, which prompted a 3.8% fall in Tesla’s shares in Frankfurt, came after CEO Elon Musk warned that the prospect of recession and higher interest rates meant it could lower vehicle pricing to sustain volume growth at the expense of profit.

The lower pricing across Tesla’s major markets marks a reversal from the strategy the automaker had pursued through much of 2021 and 2022 when orders for new vehicles exceeded supply. Musk acknowledged last year that prices had become “embarrassingly high” and could hurt demand.

The U.S. price cuts, announced late Thursday in U.S. time on the Model 3 sedan and Model Y crossover SUV, ranged between 6% and 20% compared with prices before the discount, according to Reuters calculations.

That is before an up to $7,500 federal tax credit that took effect for many electric vehicle models at the start of January.

Following is a table of the price cuts by model in Germany and the United States:

Reuters Graphics

Tesla also cut prices for its Model X luxury crossover SUV and Model S sedan in the United States.

In Germany, it cut prices on the Model 3 and the Model Y – its global top-sellers – by between about 1% and almost 17% depending on the configuration. It also cut prices in Austria, Switzerland and France.

For a U.S. buyer of the long-range Model Y, the new Tesla price combined with the U.S. subsidy that took effect this month amounts to a discount of 31%. In addition, the Tesla move broadened the vehicles in its line-up eligible for the Biden administration tax credit.

Before the price cut, the five-seat version of the Model Y had been ineligible for that credit, a designation Musk had called “messed up”. After the price cut, the long-range version of the Model Y will qualify for the $7,500 federal credit.

“This should really boost 2023 (Tesla) volumes,” Gary Black, a Tesla investor who has remained bullish on the company and its prospects through the recent, sharp share price decline, said in a tweet. “It’s the right move.”

Still, some users on Tesla fan forums online complained the price cuts disadvantaged customers who had recently bought their vehicle, leaving them with a lower-valued item on the second-hand car market.

“I’m not very pleased with these huge price sways. Just reducing 10,000 euros like that – definitely makes you feel that you just paid far too much,” one user wrote on a ‘Tesla Drivers and Friends’ forum on Friday.

In China, where Tesla cut prices last week by 6-13.5%, owners protested at delivery centres across the country, pressing Tesla for compensation.

Before the price cut, Tesla inventory in the United States, as tracked by the models its website shows as immediately available, had been trending higher. Prices on used Tesla models had also been declining, increasing the pressure on it to adjust new-car sticker prices.

For 2021, the United States and China combined had accounted for about 75% of Tesla sales, although the automaker has been growing sales in Europe, where its Berlin factory has been ramping up production.

Reuters Graphics

NEW SALES LEADERSHIP

The shift is the first major move by Tesla since appointing its lead executive for China and Asia, Tom Zhu, to oversee U.S. output and sales.

Tesla cut prices in China and other Asian markets last week. Along with previous price cuts announced in October and recent incentives, the Chinese price for a Model 3 or Model Y was down 13% to 24% from September after the recent move, Reuters calculations showed.

Tesla has also cut prices in South Korea, Japan, Australia and Singapore.

Analysts had said the Chinese price cuts would boost demand and increase pressure on its rivals there, including BYD (002594.SZ), to follow suit in what could become a price war in the largest single market for electric vehicles.

That pressure could be building in Europe as well.

Tesla’s Model 3 was the best-selling electric vehicle in Germany last month, followed by the Model Y, beating Volkswagen’s (VOWG_p.DE) all-electric ID.4. Volkswagen recently raised the price of its entry-level ID.3, putting it at parity with the now-discounted Model 3.

Tesla missed Wall Street estimates for fourth quarter deliveries. Full year growth in deliveries was 40% – also short of Musk’s own forecast of 50%.

Tesla shares under pressure

Reporting by Zhang Yan in Shanghai, Hyunjoo Jin in Seoul, Victoria Waldersee in Berlin; Writing by Kevin Krolicki in Singapore; Editing by Lincoln Feast, Kenneth Maxwell, Mark Potter and Alexander Smith

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