Turkish lira hits record low as world inflation looms ISTANBUL: Turkey’s lira tumbled to a record low of 8.6 versus the dollar on Friday as it took a hit from global inflation concerns, expectations that the central bank will soon cut interest rates and worries over possible early elections. The lira — by far the weakest performer in emerging markets this year — slipped beyond its November intraday low of 8.58, marking the latest step in a years-long depreciation that has dogged the Middle East’s top economy. It recouped some losses and was at 8.575 against the US currency at 10:52 GMT, ahead of a review by S&P Global that could downgrade its Turkey credit rating. It also logged a new nadir of 10.4696 against the euro. Despite Turkish inflation having risen above 17 percent in April, the central bank says that should fall and it is expected to lower the policy interest rate from 19 percent in coming months. But as the world emerges from the pandemic, global inflation has risen and lifted US bond yields. That in turn pulls funds from emerging markets such as Turkey, hitting the lira and putting more upward pressure on domestic prices due to its heavy imports. “Earlier than expected (monetary) tightening in advanced economies is the most serious risk for Turkey because the inflationary pressures are mounting across the globe,” said Hakan Kara, former chief economist at the central bank who is now at Bilkent University. “If there was an early tapering (of US Federal Reserve asset purchases) that would not be good news for emerging economies, especially those facing external fragilities,” he said on a World Bank panel on Thursday. The lira has tumbled 16 percent since mid-March when President Tayyip Erdogan abruptly fired a hawkish and market-friendly central bank chief and replaced him with Sahap Kavcioglu, who had criticized recent rate hikes. Bankers say a four-day currency slide in part reflects calls for early elections from opposition parties in the face of uncorroborated allegations against government officials from a mafia boss. The series of accusations this month by Sedat Peker, whose YouTube videos have been watched by millions, have forced Erdogan to defend his interior minister and insist that elections will not happen until 2023 as scheduled. The lira has shed more than half its value in the last three years as Erdogan has ousted three central bank governors and his government has used unorthodox polices that analysts say have left the economy more vulnerable to crises. Foreign currency reserves plunged in the last two years as state banks sold about $128 billion in dollars to stabilize the lira, leaving Turkey potentially vulnerable if companies and banks have trouble meeting high foreign debt obligations. Even as the economy is expected to return to form with more than 5 percent growth this year, the tourism sector faces another lost season and paltry revenues, which inflates an already large current account deficit. In a statement on Friday, Kavcioglu said the current account should continue to improve and the central bank would act decisively to lower inflation. Later on Friday, S&P is set to review Turkey’s B+ rating. Credit debt swap markets, sometimes a leading indicator of moves, currently price Turkey two notches below S&P’s current rating in line with B- rated countries. Naci Agbal, who preceded Kavcioglu at the central bank, served less than five months as governor and was appointed a day after the lira logged its last record low in November. Agbal’s aggressive rate hikes temporarily attracted foreign investors and lifted the currency. But Tatha Ghose, analyst at Commerzbank, said Erdogan’s public opposition to high rates and his rapid leadership shuffles have hurt the central bank’s credibility and led to a “familiar lira spiral.” “Each burst of depreciation risks triggering a fresh lira crisis as it begins to feed back into higher inflation, which the central bank cannot fight off because it is unable to credibly hike rates,” he said in a client note.<doc-sep>Japanese conglomerate SoftBank Group Corp announced a stock split while keeping the per-share dividend unchanged for the year, effectively doubling its shareholder payout, as it also reported a better-than-expected annual profit. The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets like Uber Technologies heading to trading markets, in what investors and industry experts see as a test of SoftBank's strategy. The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms, a source told Reuters last week. A second Vision Fund will be announced soon, SoftBank Group founder and CEO Masayoshi Son said at a news conference on Thursday, adding it would be similar in size to the first fund with SoftBank likely to be the only investor initially. The value of Vision Fund's investments in 69 companies had risen to $72.3 billion by end-March, from their $60.1 billion acquisition cost, driven by gains at companies like Uber and Indian hotels startup OYO, SoftBank said on Thursday. The fund's stake in Uber, which debuts on Friday, grew 418 billion yen in value, while its share in OYO added 154 billion yen in value. Overall, the fair value rose for 29 firms and fell for 12 over the period, SoftBank said, with the rest unchanged. The value of its stake in Guardant Health, a Vision Fund portfolio company listed last year, grew 203 billion yen.<doc-sep>By Sam Nussey TOKYO (Reuters) – Japanese conglomerate SoftBank Group Corp announced a stock split while keeping the per-share dividend unchanged for the year, effectively doubling its shareholder payout, as it also reported a better-than-expected annual profit. SoftBank’s common stock will be split at a two-for-one ratio on June 27, while its dividend will stay at 44 yen per share. The tech and telecoms group’s operating profit for the year ended March rose 80.5 percent to 2.4 trillion yen (16.7 billion pounds), driven by higher valuations of its tech investments. That was above a 2.1 trillion yen SmartEstimate that gives a greater weighting to top-rated analysts, Refinitiv data shows. The results come at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point as some of its biggest tech bets like Uber Technologies head to the public markets, in what investors and industry experts see as a test of its strategy. SoftBank is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms, a source told Reuters last week. On Thursday, SoftBank said the value of Vision Fund’s investments in 69 companies had risen to $72.3 billion at end-March, from their $60.1 billion acquisition cost, driven by gains at companies like Uber and Indian hotels startup OYO. SoftBank’s transition away from telecoms towards tech investments accelerated with the 2.35 trillion yen listing of a third of its domestic telco SoftBank Corp in December in what is Japan’s largest-ever initial public offering. That provided the funds for a share buyback that has helped drive up SoftBank Group’s stock by nearly 60 percent this year. The shares closed up 0.7 percent ahead of the earnings. On Wednesday, the group said it would sell down its share in Yahoo Japan as SoftBank Corp hiked its stake in the internet firm to 45 percent in a deal that will function as a transfer of funds from the telco to its parent. The market welcomed the news, with SoftBank Corp’s shares up 7 percent on Thursday and Yahoo Japan’s shares up 9.4 percent. SoftBank Group did not provide a forecast for the current financial year, citing uncertain business factors. (Reporting by Sam Nussey; Editing by Himani Sarkar)<doc-sep>
TOKYO (Reuters) - Japan’s SoftBank Group Corp announced a stock split while keeping the per-share dividend unchanged for the year, effectively doubling its shareholder payout, as it also reported a $3.8 billion valuation gain on its stake in Uber. The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets like Uber Technologies headed toward public listings, in what investors and industry experts see as a test of SoftBank’s investment strategy. The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms, a source told Reuters last week. A second Vision Fund will be announced soon, SoftBank Group founder and CEO Masayoshi Son said at a news conference on Thursday, adding it would be similar in size to the first fund with SoftBank likely to be the only investor initially. The value of Vision Fund’s investments in 69 companies had risen to $72.3 billion by end-March, from their $60.1 billion acquisition cost, driven by gains at companies like Uber and Indian hotels startup OYO, SoftBank said on Thursday. The fund’s stake in Uber, which is set to make its market debut on Friday, grew 418 billion yen ($3.8 billion) in value, while its share in OYO added 154 billion yen in value. Overall, the fair value rose for 29 firms and fell for 12 over the period, SoftBank said, with the rest unchanged. The value of its stake in Guardant Health, a Vision Fund portfolio company listed last year, grew 203 billion yen. Aided by the soaring valuations of its tech investments, the Japanese conglomerate’s operating profit for the year ended March jumped 80.5 percent to 2.4 trillion yen ($22 billion). FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato/File Photo That was above a 2.1 trillion yen SmartEstimate that gives a greater weighting to top-rated analysts, Refinitiv data shows. SHAREHOLDER PAYOUT The tech and telecoms group said its common stock will be split at a two-for-one ratio on June 27, while its dividend will remain unchanged at 44 yen per share. “We are finally in a phase where we can meet shareholders’ expectations,” Son said. SoftBank’s transition away from telecoms towards tech investments accelerated with the 2.35 trillion yen listing of a third of its domestic telco SoftBank Corp in December in what is Japan’s largest-ever initial public offering. That provided the funds for a share buyback that has helped drive up SoftBank Group’s stock by nearly 60 percent this year. The shares closed up 0.7 percent ahead of the earnings. On Wednesday, the group said it would sell down its share in Yahoo Japan as SoftBank Corp hiked its stake in the internet firm to 45 percent. The deal will function as a transfer of funds from the telco to its parent. Part of the proceeds will be used to fund the second Vision Fund, Son said on Thursday. The market welcomed the news, with SoftBank Corp’s shares up 7 percent on Thursday and Yahoo Japan’s shares up 9.4 percent. SoftBank Group did not provide a forecast for the current financial year, citing uncertain business factors. ($1 = 109.9100 yen)