2025-01-21 11:59

New measure could add $90 bln to FX reserves, ministry says Retained proceeds could be converted and used Rupiah hit 6-month low in January JAKARTA, Jan 21 (Reuters) - Indonesia will require natural resource exporters to hold all proceeds onshore for at least one year, its chief economic minister said on Tuesday, a move that could boost the country's foreign exchange reserves by $90 billion a year and support the local currency. The new requirement will apply to every export with a shipping document worth at least $250,000, starting from March 1, said Minister Airlangga Hartarto. Under current rules, exporters of natural resources such as coal, palm oil and nickel products are required to retain just 30% of such proceeds in the domestic financial system for three months. The office of the Coordinating Ministry for Economic Affairs said the new requirements could increase Indonesia's foreign exchange reserves by $90 billion per year. The country's reserves were $155.7 billion at end-December. "Conversion into rupiah can increase U.S. dollar supply. And without excessive intervention by the central bank through interest rates or dollar sales, this can reduce the rupiah's volatility," Airlangga said. The rupiah this month hit its weakest against the U.S. dollar since July. The proceeds could be used for business operations if converted into rupiah, Airlangga told reporters, while also encouraging exporters to swap their dollars for rupiah or borrow from banks if they are reluctant to convert. The export earnings retention rules have been controversial since they were first introduced in 2023, praised by some bankers and analysts for boosting dollar liquidity but criticised by some exporters who said they needed to pay their bills. To make it less painful for exporters, the central bank has been offering term deposit instruments with a competitive return. Airlangga said capital gains from such term deposits would not be taxed under the new measure. The executive director of the Indonesian Mining Association, Hendra Sinadia, said even the current retention level has disrupted cashflow. "I hope this news of 100% retention won't become a reality," he said. Palm oil companies could comply if their funds are accessible when converted into rupiah, Eddy Martono, the chairman of industry association GAPKI, said, although he warned of potential currency loss. Sign up here. https://www.reuters.com/markets/asia/indonesia-require-resource-exporters-retain-all-proceeds-onshore-year-2025-01-21/

2025-01-21 11:46

Smithfield, WH Group seek to raise as much as $940 million in US IPO Pork producer set for US stock market return after over a decade WH Group acquired Smithfield in 2013 for $4.7 billion Jan 21 (Reuters) - Smithfield Foods is targeting a valuation of up to $10.73 billion in its New York flotation, the biggest U.S. pork processor said on Tuesday, moving closer to its U.S. stock market return after more than a decade. Hong Kong-based WH Group (0288.HK) , opens new tab, the world's largest pork producer, is spinning off Smithfield into a listed company as it looks to create a separate fundraising platform for its U.S. and Mexico businesses. The IPO is set to be the largest U.S. listing by a food company since Swedish oat milk maker Oatly Group AB's (OTLY.O) , opens new tab $1.6 billion flotation in 2021, according to data compiled by LSEG. "As the first major consumer IPO this year, Smithfield will be closely watched," IPOX CEO Josef Schuster said. "Success of the deal could pave the way for other IPOs across industries, in particular if the deal performs well initially." The valuation target is roughly double Smithfield's $5.38 billion net asset value as of Sept. 30. Smithfield and WH Group are each offering 17.4 million shares, priced between $23 and $27 each, to raise up to $939.6 million. Smithfield, which competes with Tyson Foods (TSN.N) , opens new tab and Hormel Foods (HRL.N) , opens new tab, slaughters pigs and produces pork products under brands including Farmland and Eckrich. The company, which is known for producing about half of the pigs it processes, is now reducing its herd by selling animals to reduce its capital investment. It plans to produce 11.5 million pigs this year, down 21% from 2024, and buy more pigs from partners instead, according to a securities filing. The company, which carved out its European business last year, traded in New York from 1999 until 2013, when WH Group acquired it for $4.7 billion — then the biggest Chinese takeover of a U.S. firm. Its operations face potential hurdles from immigration and trade policies under President Donald Trump, who took office on Monday and suggested tariffs on Mexican and Canadian goods could take effect in February. Traders worry tariffs could spark trade retaliation that hurts U.S. agricultural exports. Last year, export business accounted for 13% of Smithfield's total sales through September, according to its filing. Increased U.S.-China trade tensions may hurt its stock price, the filing said. Smithfield, which has about 34,000 U.S. employees, could suffer worker shortages or higher employment costs if the federal government enacts new immigration laws, according to the filing. Sign up here. https://www.reuters.com/business/retail-consumer/smithfield-foods-targets-up-107-bln-valuation-us-ipo-2025-01-21/

2025-01-21 11:32

Jan 21 (Reuters) - Italy's Prysmian (PRY.MI) , opens new tab will abandon a plan to build a plant in the United States to make cables for offshore wind parks, the group said in a statement seen by Reuters on Tuesday, even as it expands its overall business in the country. Prysmian, the world's biggest cable maker and a major player in offshore wind transmission, does not see a strong enough market in the U.S. for wind farms, a source close to the company told Reuters. "It is not a political decision," a spokesperson for the company said. "The market for offshore wind is in Europe". On Monday President Donald Trump suspended new federal offshore wind leasing pending an environmental and economic review, saying wind mills are ugly, expensive and harm wildlife. That sent shares in the world's top offshore wind firm Orsted (ORSTED.CO) , opens new tab plunging 17% on Tuesday after it warned of higher costs and delays to a crucial U.S. offshore project. Shares in Prysmian were down 1.4% by 1045 GMT. But the group, which is planning a potential dual listing in the U.S. after the recent acquisition of Encore Wire, added in the statement that opportunities in the country continued to show strong growth potential. "We have all the requirements for a listing in the United States if we decide to go ahead with it," the company spokesperson told Reuters. "The fundamentals are the same, nothing has changed." The cable maker's decision not to build the Brayton Point plant in Somerset, Massachusetts, was taken before Trump's inauguration, according to the group, which added that demand for its products will continue to grow under Trump. "There will be giant investments related to data centers, giant investments related to upgrades to have a modern and future energy system, and this is in line with what Trump said," the spokesperson said. Prysmian announced the plan to build the Brayton Point plant in 2021, saying it would invest around 200 million euros ($207 million) in the project as part of two contracts worth a total of almost $900 million in the U.S. The offshore wind sector took a hit earlier this month when Trump said he would try to ensure that no windmills are built on his watch, criticising the sector less than two weeks before he took office. ($1 = 0.9660 euros) Sign up here. https://www.reuters.com/business/energy/italys-prysmian-ditches-plan-build-us-plant-offshore-wind-parks-2025-01-21/

2025-01-21 11:31

YENAGOA, Jan 21 (Reuters) - Nigerian environmentalists on Tuesday condemned a government plan to resume oil production in the restive Ogoniland, demanding a halt until meaningful talks with local communities are completed. Ogoniland, in Nigeria's coastal Rivers state, is a flashpoint for pollution in the oil-rich Niger River delta region where a $1 billion cleanup was launched in 2018 following a comprehensive 2011 United Nations Environmental Programme study. More than 20 groups, including Environmental Rights Action/Friends of the Earth Nigeria, Health of Mother Earth Foundation, and the Ogoni Solidarity Forum have criticised the plan, saying it disregards the environmental and social damage caused by decades of oil extraction. In a 14-point demand issued on Tuesday, the groups slammed the government for initiating talks with a select group from the region, arguing it undermines efforts towards environmental justice and a cleanup of the heavily polluted environment. "This decision disregards the enduring environmental, social, and economic injustices faced by the Ogoni people and undermines efforts toward sustainable development, environmental justice, community empowerment, and cleanup of the devastated environment," the groups said in a statement. Ogoniland locals have a storied history of resistance to oil extraction on their land. Their struggle gained international attention in the 1990s with the execution of environmental activist Ken Saro-Wiwa and eight other Ogoni leaders by the then-Nigerian dictator Sani Abacha. They are also calling for a $1 trillion commitment for clean-up and compensation, the immediate release of a confiscated Saro-Wiwa memorial sculpture, and a full implementation of the U.N. report that recommended a comprehensive clean-up of Ogoniland. "We stand in solidarity with the Ogoni people in their fight for justice and sustainable development," the groups concluded. A government spokesperson did not immediately respond to a request from Reuters for comment. Sign up here. https://www.reuters.com/world/africa/nigerian-green-groups-protest-planned-return-oil-drilling-ogoniland-2025-01-21/

2025-01-21 11:23

SINGAPORE, Jan 21 (Reuters) - The headline hit screens at the quietest time of day for trading Canadian dollars: U.S. President Donald Trump was thinking about imposing a 25% tariff on Canadian goods in just over a week's time. Within seconds the loonie - the foreign exchange market's nickname for the Canadian dollar after the loon bird depicted on one dollar coins - gave up 200 pips against its U.S. counterpart, sending a familiar adrenaline jolt across trading floors. The white-knuckle business of trading Trump had begun again. Brokers say it's an environment that rewards the nimble and encourages trading, although they expect markets to eventually shift focus to what Trump does and not move so wildly on what he says. "Smaller players will trade hard and fast and try to jump on the back of these moves very quickly," said Nick Twidale, chief market analyst at currency-focused broker ATFX Global in Sydney. Although Canada sends 75% of its goods and services exports to the United States, the move in the loonie was soon over with the currency pulling back from the five-year low hit in Asian trading moments after Trump's remarks. That meant only the fastest, or those positioned early, made money. "It's difficult to trade," said Twidale. "But there's opportunities out there. I think we'll see high levels of volatility...Trump 2.0 is trading very much like Trump 1.0." Trump, who told reporters he was thinking of imposing tariffs on Canada and Mexico from Feb. 1, tends to inject a unique volatility into financial markets with his stream-of-consciousness delivery keeping traders guessing. "You could look at this any which way, right? Is February 1 the open question, or is it the tariffs themselves," said Bart Wakabayashi, branch manager at State Street in Tokyo. "We're definitely headline chasing." Twidale and dealers at brokerage Saxo and online trading firm Moomoo reported strong volumes as clients logged on to trade through Trump's first afternoon in office. An even bigger surge is expected on Tuesday when U.S. equity markets re-open after the inauguration day holiday. "Traders love volatility," said Michael McCarthy, chief commercial officer at Moomoo Australia. "It comes at greater risk, but it means there's greater opportunity for them to make money out of the market." Big investors are also scrambling to chart a course. Speaking at Davos, JPMorgan's asset and wealth head Mary Erdoes said that the bank has a "war room" to address the slew of executive orders issued by Trump on Monday, while strategists look for long-term buys that can ride out the short-term rollercoaster. "If we take a step back and look at what's enveloping this whole discussion on tariffs, it's about global supply chains," said Tai Hui, JPMorgan Asset Management's chief strategist in Asia. "You can imagine demand for shipping and transportation will rise." Still, most traders have the Trump-owned Truth Social feeds close to hand, to catch his every word. Sign up here. https://www.reuters.com/markets/us/traders-saddle-up-trump-20-2025-01-21/

2025-01-21 11:22

LUSAKA, Jan 21 (Reuters) - Zambia is pinning its hopes on the mining sector for an economic revival after the worst drought in living memory caused a sharp slowdown in growth this year, its finance minister said on Tuesday. Situmbeko Musokotwane told an event on the economic outlook that new mines were opening imminently and old mines were re-investing to lift output. "If all goes according to plan, 2025 should be the start of this revival and it will be getting stronger and stronger each year going forward," he said. The government estimates last year's copper production was over 770,000 tons, an increase on the 698,000 tons produced in 2023. Zambia wants to raise copper output to about 1 million tons by 2026 and further out to 3 million tons. A finance ministry presentation to the same event showed officials were still optimistic that economic growth would reach 6.6% this year. The government has revised down its estimate for 2024 growth to 1.2% from the 2.3% forecast given in September due to the lingering effects of the drought, the presentation said. Zambia is still targeting a budget deficit of 3.1% of gross domestic product (GDP) this year, higher than the latest estimate of last year's deficit, which now stands at 2.7% of GDP. The southern African country, the first African nation to default on its sovereign debt during the COVID-19 pandemic, has agreed restructuring terms for 90% of the external debt that it had hoped to restructure, the presentation also showed. Zambian officials, including the secretary to the treasury and central bank governor, are in China to discuss some of the debt that still needs to be reworked, Musokotwane said. Sign up here. https://www.reuters.com/world/africa/zambias-government-says-it-still-hopes-66-growth-this-year-2025-01-21/