Category: 3. Business

FRANKFURT, Germany — Europe’s economy grew by a modest 0.2% in the third quarter, official figures showed Thursday. Growth in the 20 countries that use the euro was held by back higher U.S. tariffs and anemic performances by Germany and Italy, both of which barely avoided a technical recession.

The weak growth outcome won’t be enough, however, to spur the European Central Bank to cut interest rates. The ECB’s stand-pat stance is a sharp contrast with that of the U.S. Federal Reserve, which cut its benchmark rate by a quarter percentage point Wednesday and is wrestling with whether to cut again before the end of the year.

Germany’s economy stagnated, with zero growth in the August-September third quarter, following a contraction of 0.2% in the second quarter, figures from EU statistics agency Eurostat showed. Two straight quarters of falling output is one frequently used definition of recession. Italy likewise turned in zero growth after contracting by 0.1% in the second quarter.

Germany’s manufacturing- and export-focused economy has been held back by multiple factors including higher energy prices, competition from Chinese producers of autos and industrial machinery, a lack of skilled workers and excessive bureaucracy.

Another headwind for Europe comes from President Donald Trump’s imposition of a 15% tariff, or import tax, on goods brought to the U.S. from Europe, as well as from the uncertainty spread by back-and-forth talks with the European Union’s executive Commission. over possible higher tariff rates.

The ECB left its key interest rates unchanged at its previous two meetings in July and September. The bank has cut its benchmark rate to 2% after raising it to 4% to snuff out a burst of double-digit inflation caused by the pandemic rebound and an energy crisis due to Russia’s invasion of Ukraine.

ECB head Christine Lagarde said both times that monetary policy was “in a good place.” Annual inflation of 2.2% in September is within range of the bank’s goal of 2%, and keeping inflation under control is the ECB’s chief job. Lower interest rates stimulate growth while higher ones combat inflation but can hold back business activity through higher borrowing costs.

The ECB meeting “will be as close to a non-event as one could possibly imagine,” said Matthew Ryan, head of market strategy at payments platform Ebury.

Purchasing managers surveys pointing to a modest improvement in economic activity at the start of the fourth quarter have strengthened the case for no further cuts, analysts say. Analysts at Deutsche Bank said 2% was likely the end of the ECB’s cuts and foresaw the next rate moves as moderate increases only late next year as German infrastructure and defense spending start to boost growth and inflation.

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You only get one shot at AI supremacy. Or that’s the thinking that seems to have taken hold among Big Tech executives. Their artificial intelligence strategy has a “you only live once” feel: shovel in as much money as possible, hope to come out on top, and if you fail, at least you tried.

Meta Platforms more so than most. Founder Mark Zuckerberg told analysts on Wednesday that he is spending to meet “the most optimistic cases”. That means the Facebook parent investing “notably” more than $100bn next year, twice what analysts were pencilling in for 2026 this time a year ago, according to LSEG.

The resulting $160bn drop in Meta’s market value reflects that, for investors, this logic is doubtful. There is no reason to think investing a lot ensures success — witness Zuckerberg’s languishing Metaverse project — so higher sums just up the chances of big writedowns. Google is spending even more than Meta on data centres but has a cloud computing business, so it can rent what it doesn’t use to third parties.

For one Meta shareholder at least, the risk-reward calculation works a bit differently: Zuckerberg himself. The prize — being the first to achieve so-called superintelligence — isn’t just a financial bet. It would propel him into the history books.

And the downside is limited. There is no chance of Meta going bust. Zuckerberg’s spree has so far been funded with operating cash flows, not debt. While Meta is juicing up its data centre investments with leverage, it is able to do so in joint ventures like the one it has set up with private credit operator Blue Owl that don’t sit on its balance sheet.

Meanwhile, the company makes so much cash that it can afford to risk some of its investments going nowhere. Even if Meta were to spend $500bn on superintelligence in the next five years, it would still have $400bn of cumulative free cash left over, according to Visible Alpha.

Even if Meta were not to cross the finish line first, the capex might not be entirely wasted. Spending on AI is increasingly driving more revenue in its “core” business of selling ads on platforms such as Facebook and Instagram. In the latest quarter, it showed users 14 per cent more ads than a year earlier, and charged 10 per cent more for each one.

If the AI race really turns into a damp squib for Meta, the worst it faces is a badly bruised share price. And even that might sting less than one might expect. It is not clear investors were pricing in AI supremacy anyway. Meta shares trade at the same 25 times forward earnings that they have done on average for the past decade.

Failure would be unpleasant. But — for tech bosses who are wealthy, messianic and entrenched — the risk is far outweighed by the potential glory. It will take more than a mini market backlash to kill the AI YOLO trade.

john.foley@ft.com

The Indian rupee approached a record low, pressured by a stronger US dollar as traders pared bets on a December rate cut by the Federal Reserve, and as the local central bank was not seen stepping in to support the currency.

The rupee weakened as much as 0.6%, the most since Aug. 29, to 88.7437 per dollar on Thursday, closing in on its September record of 88.8050. Earlier this month, the Reserve Bank of India was alarmed to see the rupee nearing that level and sold dollars to stabilize it, said a person familiar with the matter.

Jobs at WPP could be at risk as its new chief executive launched a review designed to revive the advertising group’s fortunes after a fresh profit warning.

Cindy Rose announced the review on Thursday, saying she was taking action to address “unacceptable” performance at the company, which has struggled to stem a growing exodus of clients and compete with the AI and data capabilities of its rivals.

The former Microsoft executive said WPP – which lost its top spot as the world’s largest advertising agency by revenue to Publicis last year – would soon become a “much simpler” business that would be “pushing harder” into technology to get growth.

The comments raised the prospect of potential job losses across its 100,000-strong global workforce.

The company warned that its headline operating profit margin would now be lower than expected, sending shares down a further 11% on Thursday morning to 318p. Shares in WPP – which had already warned on annual profits in July – have already lost more than half their value since the start of 2025.

“I acknowledge that our recent performance is unacceptable and we are taking action to address this,” said Rose, who took over the top role in September after six years on WPP’s board.

“To deliver performance improvements, we will position our offering to be much simpler, more integrated, powered by data and AI, efficiently priced and designed to deliver growth and business outcomes for our clients,” Rose said, adding that she would be “dramatically simplifying how we organise ourselves internally, as well as building a high-performance team culture”.

Rose said the company would be “pushing harder” on using tech, and focus on “cost efficiency”. WPP will set out further details of the plans early next year.

WPP now expects “revenue less pass-through costs” – a figure that accounts for fees paid to external suppliers – to fall by between 5.5% and 6% in 2025, marking a downgrade on its previous forecasts for a drop of 3% to 5%. It also estimated that the headline operating profit margin would come in at about 13%, just below the bottom of its previous range.

Rose was appointed as the chief executive in September, in order to implement a sweeping restructure to turn around the ailing London-listed company. She replaced Mark Read, a WPP veteran who worked with the company for 30 years.

“There is a lot to do, and it will take time to see the impact, but in my first 60 days we are already moving at pace with some initiatives already announced and more to come,” Rose said.

“We know what it takes to win: we are optimistic, energised and confident that we’re building the right plan and the right culture to secure a bright future for WPP, our people, our clients, and our shareholders.”

Saritow Spinning Mills Limited (SSML) has announced plans to permanently shut down its spinning mill operations, which have been suspended since 2024 due to ongoing losses.

The company’s Board of Directors approved the closure and a plan to sell the entire plant and machinery, valued at approximately Rs. 411.93 million, according to an official notice sent to the Pakistan Stock Exchange (PSX).

In a strategic shift, SSML will convert its factory buildings into warehousing facilities to generate rental income. Proceeds from the asset sale will be used to partially refurbish the premises for warehousing, retire a portion of the company’s liabilities, and boost working capital for the new business line.

These decisions are subject to shareholder approval at an Extraordinary General Meeting (EOGM) scheduled for November 28, 2025. The company has begun preparations to notify shareholders and will submit further details, including the revised business plan, to the PSX for dissemination.

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The UK’s decision to open up cryptocurrency funds to retail investors has ignited a price war, with fees for bitcoin-linked products slashed to as low as 0.05 per cent.

The cut-throat battle for digital asset exchange traded notes (ETNs), which echoes a similarly aggressive fight for market share in the US when it opened up access in January 2024, means it can be cheaper to hold cryptocurrency in a regulated product than the vast majority of equity and bond funds.

It comes at a time when some cryptocurrency ETNs, previously only available in the UK to professional investors, still charge up to 2.5 per cent a year in fees — 50 times more than the cheapest bitcoin vehicle. These notes track an underlying digital currency and are listed and traded on an exchange.

The Financial Conduct Authority, the UK regulator, lifted its ban on retail investors buying these exchange traded products this month, softening its stance against the investments after attempting to shield small investors from volatility and fraud.

The lifting of the ban means investors can hold any of the permitted London-listed crypto ETNs in a stocks-and-shares Isa if they buy in the current tax year. From April 6 next year, they will be reclassified as qualifying investments for the Innovative Finance Isa.

The cheapest bitcoin fund is managed by Bitwise, which has cut the annual fee for its Core Bitcoin ETP from 0.2 per cent to 0.05 per cent “effective for six months and then continuing until further notice”.

This undercuts 21Shares, which has slashed fees for its Core Bitcoin and Ethereum Core Staking ETPs to 0.1 per cent.

Both moves came after Fidelity reduced charges on its Physical Bitcoin ETP to 0.25 per cent and Invesco cut the levy for its equivalent vehicle to 0.1 per cent until the end of 2025.

BlackRock, which dominates the crypto exchange traded fund (ETF) market in the US with its $92bn iShares Bitcoin Trust, also waded into the UK market by listing its European iShares Bitcoin ETP in London with its usual 0.25 per cent fee discounted to 0.15 per cent until January.

The cheapest ether fund remains the CoinShares Physical Staked Ethereum ETP, which is the only exchange traded product in Europe to have no fee, according to data from ETFbook.

It is able to do this because CoinShares uses some of the income it earns from staking — the process of locking up ether to help run the blockchain and earn rewards — to offset the fund’s expenses. Staking is not possible for bitcoin.

Although many of the larger investment brokers such Hargreaves Lansdown and AJ Bell do not yet offer crypto ETNs, early trading data suggests some retail investors are gaining access via platforms such as Interactive Investor, Trading 212, Killik & Co and Interactive Brokers.

Trading volumes for bitcoin ETPs on the London stock exchange have averaged $7.2mn a day since retail access became available on October 17, up from $2.1mn earlier in October when they were only available to professional investors, according to analysis of data from Bitwise. Ether ETNs likewise saw a jump from $1.9mn a day to $4.4mn.

WisdomTree’s Physical Bitcoin and Physical Ethereum vehicles have seen the highest turnover since retail access was opened up, followed by iShares, according to data from Morningstar.

“We believe this reiterates the exceptional level of appetite for exposure to these assets,” said Russell Barlow, chief executive of 21Shares, commenting on the jump in trading volumes.

Despite finally permitting retail investors to buy crypto ETNs, the FCA this week issued a fresh statement ordering issuers not to offer customers any incentives to invest, to conduct “robust” appropriateness assessments, offer cooling-off periods and highlight relevant risk warnings.

KARACHI: TRG Pakistan Limited has announced an explosive start to its financial year 2026, reporting a profit after taxation of Rs. 6.87 billion for the quarter ended September 30, 2025. This represents a staggering 185% increase compared to the Rs. 2.41 billion profit recorded in the same quarter last year, underscoring the company’s heavy reliance on its strategic international investments.

The massive surge in profitability is directly attributable to the company’s share of profit from an equity-accounted investee, which skyrocketed to Rs. 8.30 billion for the quarter. This performance dramatically boosted earnings per share (EPS) to Rs. 12.59, up from Rs. 4.41 in the prior year period.

This windfall has significantly strengthened the company’s balance sheet. Total equity climbed to Rs. 44.45 billion as of September 30, 2025, a substantial increase from Rs. 37.93 billion just three months prior. The growth was primarily fueled by a rise in unappropriated profit. It is important to note that the company recorded an other comprehensive loss of Rs. 356 million due to the translation of its net investment in the foreign associate, a non-cash accounting adjustment reflecting currency movements.

Despite the blockbuster profitability, TRG Pakistan’s core operating activities remained minimal, reporting an operating loss of Rs 191 million, higher than last years’ Rs 132 million. For investors, the results cement TRG Pakistan’s identity as a holding company whose value is predominantly derived from its stake in a high-performing foreign entity, with quarterly results subject to the performance and currency translation of that investment.

Following the announcement, the TRG stock price dropped by almost 1% mimicking a larger market trend as the PSX also dropped 1.1% during the day’s trade.