2025-02-12 22:52
NEW YORK, Feb 12 (Reuters) - Privately owned U.S. oil and gas producer Validus Energy has struck a deal to buy rival 89 Energy III for about $850 million, including debt, sources familiar with the matter told Reuters. The deal adds more than 25,000 barrels of oil equivalent per day of production to Validus's growing footprint in the Anadarko shale basin in Oklahoma, making the company one of the largest private players in the U.S. Mid-Continent oil region, according to the sources. 89 Energy III's output is 70% gas, according to its website. The company was formed through a merger of three oil and gas producers in the Mid-Continent by private equity firm Kayne Anderson, announced in May 2021. Consolidating portfolio companies was a popular move among energy-focused buyout firms around that time, as a way to cut costs after a period of lower energy prices following the onset of the coronavirus pandemic. In the long run, it was also beneficial as it helped them gain scale and become more attractive acquisition targets as oil prices rebounded sharply in the following years. Validus and 89 Energy III did not respond to requests for comment. Kayne Anderson declined to comment. The Mid-Continent region has seen an uptick in deal activity in recent months, aided by a more cautious approach to drilling than during the late 2010s. The region's abundance of natural gas is also attracting renewed investor interest on expectations of a surge in demand from power generation to feed data centers. Validus, backed by institutional investors and its management team, has been among the most active buyers in that ongoing Mid-Continent dealmaking wave. Last year, the Denver-based company purchased rival Citizen Energy for over $2 billion from Warburg Pincus, Reuters reported in September. Validus had earlier bought some assets in the same oilfield from Continental Resources, Reuters reported. Sign up here. https://www.reuters.com/business/energy/validus-energy-buy-natural-gas-producer-89-energy-iii-850-million-sources-say-2025-02-12/
2025-02-12 22:12
Heating economy clouds Fed outlook Temporary factors may have pushed January inflation higher But some investors worry next Fed move may be a rate hike Trump's tariffs exacerbate inflation rebound fears NEW YORK, Feb 12 (Reuters) - Surprisingly strong U.S. inflation in January stoked investor fears that a heating economy and looming tariffs could corner the Federal Reserve, undercutting interest rate-cut hopes and even raising the threat of a hike. U.S. consumer prices increased more than expected in January, reinforcing expectations the central bank will be in no rush to resume cutting interest rates, particularly as economic uncertainty is exacerbated by the expected inflationary impact of U.S. President Donald Trump's tariffs on key U.S. trade partners. Fed Chair Jerome Powell said in congressional testimony this week that the Fed was prepared to keep rates unchanged until inflation resumes its decline. But the hot inflation reading will likely complicate investors' efforts to game out when it may cut rates again, with some even starting to voice concerns that its next move may be a hike to contain price pressures, a shift that would rattle markets. "We have to get comfortable with this idea that inflation is sticky at a higher level than what we were used to in the past," said Erik Aarts, senior fixed income strategist at Touchstone Investments. Aarts said he planned to maintain a slight "underweight" position on Treasuries, which rise in value when interest rates are set to decline. He remained bullish on corporate bonds, however, on expectations of continued economic strength. Interest rate future traders were betting on only one 25 basis point rate cut by the Fed later this year after the inflation data, down from about 36 basis points of expected easing in 2025 ahead of the release. Benchmark 10-year U.S. Treasury yields, which reflect economic growth and inflation expectations, surged over 10 basis points and were last at 4.65%, their highest in almost three weeks. The benchmark S&P 500 stock index (.SPX) , opens new tab fell on Wednesday, as the inflation data upended expectations of broad support for equities from less restrictive monetary policy. "Our base case was slowing growth, slowing inflation," said Jack Ablin, chief investment officer at Cresset Capital. The possibility of rates staying high longer than expected meant large companies with big cash flows could become more attractive, while it could stop an investor shift away from the so-called Magnificent Seven technology stocks into the broader market. "I'd love to see that broadening, but I think this is really a setback to that trend," Ablin said. TARIFFS BACKDROP Trump's protectionist policies exacerbated market fears of a sustained rebound in inflation, as he imposed a 10% additional tariff on Chinese goods while suspending 25% levies on goods from Canada and Mexico until March. "Inflation acceleration is more concerning than usual right now," Jason Pride, chief of investment strategy and research at Glenmede, said in a note. "The prospect of new trade barriers has the potential to further fuel inflationary pressures by increasing costs for businesses and consumers," he said. U.S. consumer sentiment dropped in February to a seven-month low and inflation expectations surged as households feared it may be too late to avoid the negative effects on their purchasing power from Trump's threatened tariffs, the University of Michigan Surveys of Consumers showed last week. "The rise in inflation expectations that we've seen with consumers recently, combined with this hotter-than-expected January CPI report, certainly shifts some of the risks over to the inflation outlook," said Sam Millette, director of fixed income at Commonwealth Financial Network. "Trying to forecast when the next rate change will be is extremely difficult, given some of the volatility that we have from Washington on the policy front." While he was not planning to tweak his portfolio based on the latest inflation reading, Millette said he had seen more interest from advisors in securities that would be expected to hold up well in a rising rate environment. Many in the market cautioned that seasonal effects could have worsened the January inflation reading, as companies typically raise prices at the start of the year. But even taking into account temporary factors, disinflation has largely stalled over the past few quarters, said Josh Jamner, investment strategy analyst at ClearBridge. "Should this month's hotter and broader reading portend a resurgence in inflation in the coming months, the Fed could end up needing to raise interest rates in the second half of 2025," he said. Sign up here. https://www.reuters.com/markets/us/hotter-january-inflation-jolts-markets-dimming-rate-cut-hopes-2025-02-12/
2025-02-12 22:08
Ganfeng Lithium starts production at Mariana project in Argentina $790 million investment for 20,000 metric tons of lithium chloride annually Argentina's incentives expected to attract further investment in lithium, copper BUENOS AIRES, Feb 12 (Reuters) - China's Ganfeng Lithium (002460.SZ) , opens new tab mining company has begun producing lithium at its Mariana project in northern Argentina, it said on Wednesday, kicking off one of several of its new lithium projects under way in the South American country. Ganfeng is one of the world's biggest producers of the white metal that is mainly used to make rechargeable batteries. The Mariana plant, in the province of Salta, represents a $790 million investment and has the capacity to produce 20,000 metric tons of lithium chloride per year from extraction at the Llullaillaco salt flat. Ganfeng also spent $190 million to build a solar park to support the plant's energy needs. Wang Xiaoshen, president of Ganfeng Lithium Group, said the company's other Argentina lithium projects are advancing. Pozuelos-Pastos Grandes is scheduled to start construction this year, while the Incahuasi–Arizaro project is in the advanced exploration phase, he said in a statement. Ganfeng is also a co-owner with Lithium Argentina of the Cauchari-Olaroz project, which is already in operation, and the Pastos Grandes project, in the feasibility stage. President Javier Milei's administration has welcomed mining projects as a way to pump foreign investment into the country, and has offered an incentives scheme praised by international copper and lithium miners. Argentina, along with Chile and Bolivia, comprise Latin America's so-called lithium triangle containing one of the world's biggest reserves of the ultra-light metal. A string of lithium projects is in development in Argentina by other companies as well, although some have been delayed due to low lithium prices caused by oversupply and a slowdown in sales of electric vehicles. Speaking at the project's inauguration, Mining Secretary Luis Lucero expressed hope that the Mariana plant can help strengthen local economies. "The Mariana project not only represents an important source of foreign currency earnings, but also the creation of genuine, quality employment for hundreds of families," he said. Sign up here. https://www.reuters.com/markets/commodities/chinas-ganfeng-starts-lithium-production-argentinas-mariana-project-2025-02-12/
2025-02-12 21:56
Feb 12 (Reuters) - Robinhood (HOOD.O) , opens new tab beat expectations for fourth-quarter profit on Wednesday, driven by a surge in equity, option and crypto trading on its platform following Donald Trump's return to the White House, sending its shares up more than 14% after the bell. Robinhood's transaction-based revenue, or income generated from fees for facilitating trading in options, cryptocurrency and equities, jumped 236% in the quarter to $672 million from a year earlier. Nearly half of those gains came from a 700% rise in revenue from crypto trading activity as bitcoin continued its rapid march towards the $100,000 mark in the quarter on hopes of favorable policies under the new Trump administration. "It was no secret that Robinhood's Q4 earnings were going to be great, driven primarily by a huge uptick in crypto-related revenues," Ava Labs President John Wu said. After Donald Trump's election victory, both equity and cryptocurrency markets surged as investors bet on deregulation and pro-business policies to benefit American corporates and the burgeoning digital asset industry. The company posted an adjusted profit of 1.01 per share, compared with analysts' expectations of 44 cents, according to data compiled by LSEG. Robinhood's assets under custody climbed 88% in the quarter to $193 billion, while quarterly net interest revenue, the bulk of which comes from margin investing, jumped 25% to $296 million. "This was a big quarter for us, so we did over $1 billion in revenue for the first time in the history of the company, and that capped off what was a record-breaking year with over $3 billion in revenue for the whole year," Robinhood co-founder and CEO Vlad Tenev said on a post-earnings call with analysts. Sign up here. https://www.reuters.com/business/finance/robinhoods-profit-surges-post-election-trading-frenzy-lifts-volumes-2025-02-12/
2025-02-12 21:53
1H25 underlying profit up 24%, beats consensus Declares interim dividend of 30 Australian cents per share Energy markets operating earnings down 30% SYDNEY, Feb 13 (Reuters) - Australia's Origin Energy (ORG.AX) , opens new tab exceeded half-year earnings forecasts on Thursday with a 24% jump in underlying profit on strong liquefied natural gas sales, allowing the company to commit A$1.7 billion ($1.07 billion) to major battery projects. CEO Frank Calabria said Origin's A$924 million underlying profit was a strong first-half result that would be reinvested to facilitate the clean energy transition, with the closure of the Eraring coal plant, the largest in Australia, due by 2027. "When we think about the Origin business and how we set ourselves up for today and in the future, it really is to lead the energy transition through differentiated assets and capabilities," he said in an earnings call. Shares of Origin were up 1.5% in early trading, against a flat overall market (.AXJO) , opens new tab. Origin’s underlying result, which beat the Visible Alpha consensus of A$888.3 million, led it to declare an interim dividend of 30 Australian cents, above the market's estimate of 27 cents. The Sydney-based company flagged A$1.7 billion of spending on large-scale storage batteries this financial year ending June 30 to meet its target of adding 4 to 5 gigawatts of renewables and storage to its portfolio by 2030. Origin is the latest of Australia’s top power companies defy a global pivot back to fossil fuels, with rival AGL Energy (AGL.AX) , opens new tab announcing on Wednesday it was scaling up grid-scale battery projects to firm renewable sources of electricity. Underlying earnings from Origin’s integrated gas business – the largest in the country – grew 25% to A$1.25 billion in the first half. That was driven by higher gains from trading LNG, as well as higher LNG volumes and commodity prices in the Australia Pacific LNG project where it has a 27.5% stake, it said. But Origin’s energy business performance was weaker than expected, with underlying earnings slumping 29% to A$738 million as lower wholesale prices fed into customer tariffs and coal costs increased. Consumer gas margins contracted 11% to A$138 million, it said, eroding growth in margins from supplying to large businesses. ($1 = 1.5929 Australian dollars) Sign up here. https://www.reuters.com/business/energy/australian-power-producer-origin-energys-first-half-profit-jumps-24-2025-02-12/
2025-02-12 21:39
Feb 13 (Reuters) - A look at the day ahead in Asian markets. Investors banking on the recent decline in U.S. bond yields and the dollar underpinning a rally across risk assets got a stark reminder in the shape of punchy U.S. inflation on Wednesday that interest rates won't be coming down any time soon. In fact, they got a few reminders - Fed Chair Jerome Powell repeated his view that monetary policy must remain restrictive for now, and House Republicans unveiled a fiscal plan that would cut taxes by about $4.5 trillion over a decade and raise the federal debt ceiling by $4 trillion. Faced with sticky inflation, fiscal largesse and Powell's confidence in the U.S. economy, rates markets are now only pricing in one Fed rate cut this year, which would leave the fed funds rate above 4.00%. The 10-year yield rose 10 basis points, the yield curve steepened, the dollar jumped, and stocks fell. But risk assets have been resilient this year, not only in the U.S. where Wall Street and corporate bonds are hugging record highs, but globally. Many emerging market stocks and currencies are up year-to-date, also quite impressive considering the dark cloud of U.S. tariffs hanging over them. This resilience got a boost on Wednesday after U.S. President Donald Trump spoke with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy about starting negotiations "immediately" to end the war in Ukraine. That was enough to take the wind out of the dollar's sails, slam oil down 2.5%, cut Wall Street's losses, and push Asian equity futures into the green. While many money managers will have factored a potential Russia-Ukraine ceasefire into their investment allocations this year, it's unlikely it has been fully priced across markets. All else equal, further progress towards peace should support risk appetite, and keep a lid on oil and the dollar. In Asia on Thursday, the main events will be an interest rate decision from the central bank of the Philippines and the latest wholesale inflation figures from Japan. The Bangko Sentral ng Pilipinas (BSP) is widely expected to cut its key policy rate by a quarter-point to 5.50%. Inflation appears to be under control, in the central bank's 2-4% target range since October, but growth is slowing. The Philippine peso has been among the weaker emerging market currencies, and is down slightly against the dollar year-to-date. The yen, meanwhile, had its worst day this year against the dollar on Wednesday but could rebound on Thursday if Japanese wholesale inflation figures come in on the strong side. Economists are expecting a rise in the annual rate to 4.0% in January. That would be the highest since June 2023 and strengthen the argument for further rate hikes. Here are key developments that could provide more direction to Asian markets on Thursday: - Philippines central bank policy decision - Japan wholesale inflation (January) - Thai finance minister Pichai Chunhavajira speaks Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphics-2025-02-12/
