Pound firms awaiting Brexit extension date

A Brexit activist dressed as the late English comic actor Charlie Chaplin, holds a Union and an EU flag as he protests outside the Houses of Parliament in London. (AFP)
Updated 23 October 2019

Pound firms awaiting Brexit extension date

  • “Traders are terrified at the prospect of a no-deal Brexit”
  • European Council President Donald Tusk has recommended that the EU’s 27 other member states grant an extension, likely until the end of January

LONDON: The pound firmed against the dollar and euro on Wednesday as the European Union prepared to grant a further delay to Brexit, averting the prospect of Britain departing the bloc next week without a deal.
The prospect of another delay had initially hit sterling, which briefly dropped as low as $1.2841 on Wednesday in Asian trade before bouncing back to over $1.2890, up from late in New York on Tuesday.
The pound is experiencing volatility on every Brexit twist and turn. Earlier this week the unit reached five-month highs above $1.30 on increasing hopes that a painful ‘no-deal’ Brexit divorce would be averted.
“Like Brexit, the pound is bouncing around,” said CMC Markets UK analyst David Madden.
“Traders are terrified at the prospect of a no-deal Brexit, but that currently seems very unlikely, which is assisting the pound,” he added.
In stock market trading, London’s benchmark FTSE 100 index climbed 0.7 percent, while eurozone equities were mixed.
The EU is set to grant another Brexit extension after British MPs on Tuesday rejected Prime Minister Boris Johnson’s bid to force his divorce deal through parliament this week.
European Council President Donald Tusk has recommended that the EU’s 27 other member states grant an extension, likely until the end of January.
In the meantime, the UK could hold a general election aimed at ending the Brexit deadlock, according to analysts.
Elsewhere on Wednesday, Wall Street moved higher, with the Dow up 0.3 percent in midday trading.
Shanghai’s main stocks index closed down 0.4 percent and Hong Kong lost 0.8 percent, with traders keeping tabs on reactions to a Financial Times report saying China is drawing up a plan to remove Hong Kong’s beleaguered chief executive after nearly five months of pro-democracy unrest.
In commodities trading, oil prices bounced higher after data indicated US oil and gasoline stockpiles decreased, easing worries about weak crude demand growth as the world economy slows.
On the corporate front, shares in French carmaker PSA jumped 3.2 percent after the company said healthy demand for upmarket models helped it resist a slowdown in the global automotive market.
The maker of Peugeot, Citroen, DS, Opel and Vauxhall vehicles announced a one-percent gain in third-quarter sales to 15.6 billion euros ($17.4 billion).
Meanwhile shares in Boeing climbed 3.0 percent despite reporting that third-quarter profits fell by half to $1.2 billion as it said it expects to get regulatory approval this year to return the grounded 737 MAX to service.
“Dow component Boeing’s profit miss is being shrugged off as the company stuck to its plan to return the 737 MAX to service” by the end of the fourth quarter, said analysts at Charles Schwab brokerage.


Chile’s LATAM Airlines files for US Chapter 11 bankruptcy protection

Updated 26 May 2020

Chile’s LATAM Airlines files for US Chapter 11 bankruptcy protection

  • The company is the largest airline in Latin America
  • LATAM said they have about $1.3 billion in cash on hand

LATAM Airlines Group SA said on Tuesday the company and its affiliates in Chile, Peru, Colombia, Ecuador and US have filed for Chapter 11 bankruptcy protection in the United States, due to a slump in travel worldwide amid the coronavirus crisis.
Latin America’s largest airline said it secured funding from shareholders, including two of its largest the Cueto and Amaro families, and Qatar Airways, to provide up to $900 million in debtor-in-possession financing.
The company said it had about $1.3 billion in cash on hand.
“We have implemented a series of difficult measures to mitigate the impact of this unprecedented industry disruption, but ultimately this path represents the best option,” Chief Executive Officer Roberto Alvo said.
LATAM Airlines Group listed assets and liabilities in the range of $10 billion and $50 billion, according to a filing with the US Bankruptcy Court in Southern District of New York.
The airlines and its affiliates will continue to fly with no impact on passenger or cargo operations and reservations, the company said.
The company said its affiliates in Argentina, Brazil and Paraguay were not included in the Chapter 11 filing.
LATAM Airlines’ Brazilian affiliates are in discussions with the Brazilian government about the next steps and financial support for operations in the country.