2024-12-06 18:38
Egypt is one of the world's largest wheat buyers Traders trust decades-old GASC system of purchases Army-linked firms flourish under President Sisi CAIRO, Dec 6 (Reuters) - An Egyptian military agency has taken over the country's import of strategic commodities, a letter seen by Reuters showed, replacing a decades-old state institution to take over international buying tenders and also conduct direct purchases which have in recent weeks shaken the wheat market. As one of the world's largest wheat importers, Egypt had relied on the General Authority for Supply Commodities (GASC), part of the Ministry of Supply, to buy the grain for a country where subsidized bread is a staple for 70 million people. A letter from the ministry to Oksana Lut, Russia's Minister of Agriculture, said that the Mostakbal Misr Agency for Sustainable Development of the Egyptian Air Forces had become the exclusive body responsible for importing food commodities. The letter, which was seen by Reuters, said that the new agency had plans to employ direct purchase agreements alongside international tenders, a strategy aimed at streamlining processes but which has raised concerns among global traders. Firms owned by Egypt's military have flourished under President Abdel Fattah al-Sisi, unsettling some business leaders and foreign investors. The Egyptian government has said these companies were filling gaps in the market. "Mostakbal Misr Agency will assume all jurisdictions previously held by GASC," the letter said. "The Supply Ministry guarantees that the agency has the financial capacity to honour all commitments arising from tenders and direct purchases," it added. GASC told Reuters in a written response that the letter is intended to introduce the officials of the new agency. "This aims to ensure the import of wheat without any difficulties," it added, citing a cabinet decision to activate the role of Mostakbal Misr's Authority for Unified Procurement. The Russian Grain Exporters and Producers Union said it "cannot confirm or deny the existence of this letter". "We have not yet received any information through the official channels traditionally used for exchanging information of such importance," the Russian agency added in a statement. NEW AGENCY Founded in 2022 by presidential decree, Mostakbal Misr serves as the development arm of the Egyptian Armed Forces. While initially focused on land reclamation projects, its remit has since expanded to include major sectors of the economy. The new agency has been taking over some projects from other military organizations as well as civilian bodies. It made its first attempt to procure wheat and vegetable oil through direct purchase agreements in November. However, procedural ambiguities led to confusion among traders, prompting calls for greater clarity and forcing a postponement. Egypt has long relied on GASC as a trusted intermediary for international trade. Mostakbal Misr is little known in the global world of wheat trading. In May 2022, it said it intended to lower Egypt's wheat imports bill, by supplying about 1 million metric tons of local wheat to the government in 2024. But this year, the local harvest only reached 3.42 million tons by closure in August, marginally increasing from 3.41 million tons in 2023 and even less than the 3.7 million tons supplied to the government by farmers in 2022, data from Egypt's supply Ministry seen by Reuters show. Traders are sceptical about the new agency. "GASC terms for deals in international tenders have been built up over many years. They are trusted and only when there is trust can big purchases be made with many millions of dollars involved," one German trader said. "In the long run, the new organisation will no doubt be able to make purchases. In the short term it may face difficulties." Sign up here. https://www.reuters.com/world/africa/egypts-mostakbal-misr-takes-over-gascs-role-commodities-importer-2024-12-06/
2024-12-06 18:14
Dec 6 (Reuters) - U.S. energy firms this week added oil and natural gas rigs for the first time in eight weeks, energy services firm Baker Hughes (BKR.O) , opens new tab said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, rose by seven to 589 in the week to Dec. 6, its highest since mid-September. , , Despite this week's rig increase, Baker Hughes said the total count was still down 37, or 6% below this time last year. Baker Hughes said oil rigs rose five to 482 this week, their highest since mid-October, while gas rigs rose by two to 102, the highest since early November. The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output. U.S. oil futures were down 6% so far in 2024 after dropping by 11% in 2023. U.S. gas futures were up 23% so far in 2024 after plunging by 44% in 2023. The 25 independent exploration and production (E&P) companies tracked by U.S. financial services firm TD Cowen said that on average the E&Ps planned to leave spending in 2024 roughly unchanged from 2023. That compares with year-over-year spending increases of 27% in 2023, 40% in 2022 and 4% in 2021. U.S. crude output was on track to rise from a record 12.9 million barrels per day (bpd) in 2023 to 13.2 million bpd in 2024 and 13.5 million bpd in 2025, according to the latest U.S. Energy Information Administration (EIA) outlook. On the gas side, several producers reduced drilling activities this year after monthly average spot prices at the U.S. Henry Hub benchmark in Louisiana plunged to a 32-year low in March, and have remained relatively low since then. That reduction in drilling activity should cause U.S. gas output to decline for the first time since the COVID-19 pandemic cut demand for the fuel in 2020. EIA projected gas output would slide to 103.4 billion cubic feet per day (bcfd) in 2024, down from a record high of 103.8 bcfd in 2023. Sign up here. https://www.reuters.com/markets/commodities/us-drillers-add-oil-gas-rigs-first-time-8-weeks-baker-hughes-2024-12-06/
2024-12-06 18:09
WASHINGTON, Dec 6 (Reuters) - U.S. Treasury Secretary Janet Yellen on Friday warned it was "crucial" that a panel charged with monitoring financial risks be able to continue its work as worries grow President-elect Donald Trump's administration will again weaken the body. Speaking at Friday's Financial Stability Oversight Council (FSOC) meeting, the last of President Joe Biden's administration, Yellen said that under Trump's first term the panel's staff shrank to single digits and the infrastructure supporting interagency coordination was significantly scaled back. "This meant we were less equipped to identify and respond to risks to the financial system," she said, adding the Democratic Biden administration reinvested in the panel, which was created following the 2007-2009 crisis to monitor systemic risks. "This strengthened Council has delivered, helping make our financial system more resilient and our economy stronger. It is crucial that it continue to do so for the benefit of the American people," she said in prepared remarks. Trump has not laid out a vision for the financial regulators, but he has pledged to slash burdensome regulations. Yellen's remarks came as the FSOC warned again in its annual report about potential risks posed by commercial real estate, private credit, and cryptocurrencies, and called on regulators and companies to be vigilant in monitoring vulnerabilities. While the 2024 report echoes risks flagged in prior reports, it warns they have "evolved in consequential ways." The group said there are signs of increasing commercial real estate risk, particularly in the office sector in large urban areas. Rises in office vacancies, slow rent growth, and higher borrowing costs were pressuring borrowers, leading to higher delinquencies and more provision expenses by banks. On cryptocurrencies, the group warned that stablecoins could pose a risk to financial stability, and reiterated calls for legislation creating a comprehensive regulatory framework for the digital currency product. The group said that most other crypto firms and issuers either violate existing financial rules or operate outside their boundaries, creating heightened risks for "significant fraud and manipulation." The group called for legislation giving federal regulators explicit authority to police spot crypto markets, similar to its 2023 recommendation. The group also warned that while there has yet to be a major cybersecurity incident at a large financial institution, the issue is top of mind for regulators and industry with cyberattacks having nearly doubled since the COVID-19 pandemic. Sign up here. https://www.reuters.com/markets/us/yellen-warns-against-weakening-financial-risk-watchdog-2024-12-06/
2024-12-06 17:54
BP seeks to sell stake in network, sources say Sale could raise up to $3 billion, sources say LONDON/NEW YORK, Dec 6 (Reuters) - BP (BP.L) , opens new tab is seeking buyers for a stake in its U.S. natural gas pipeline network, four people with knowledge of the matter said. The British energy company could raise up to $3 billion from the sale, two of the people said, with one of them adding that BP may sell up to a 49% stake in the business. The sale process is part of BP CEO Murray Auchincloss's drive to reduce the company's debt levels, which have risen over the past year, another two people said. BP declined to comment. All four people were speaking on condition of anonymity as they were not authorised to speak publicly. With its share price languishing, BP is facing investor pressure to improve performance and profitability amid concerns over the company's energy transition strategy. It has plans to sell stakes in its Lightsource BP solar business as well as its U.S. onshore wind division , opens new tab and offshore wind operations. Auchincloss, who is seeking to increase cash flow and reduce debt, will update the company's strategy in February. Net debt rose to $24.3 billion at the end of September, from $22.3 billion a year earlier, due to lower than anticipated asset disposals, BP said in its third quarter results. The company's shares have lost more than 18% of their value so far this year, a worse performance than any of its rivals. Shell's shares are down 3% year-to-date while ExxonMobil is up 14% and Chevron is nearly 7% higher. The U.S. oil and gas pipeline sector has undergone increasing consolidation in recent years as production grows and problems with permitting for new pipelines make existing assets more valuable. BP owns around 1,500 miles (2414 km) of pipelines that transport 1.1 million barrels of crude, natural gas and fuels per day across the United States, according to its website. Sign up here. https://www.reuters.com/markets/deals/bp-seeks-buyers-us-natural-gas-pipeline-system-stake-sources-say-2024-12-06/
2024-12-06 17:52
Dec 6 (Reuters) - Apple (AAPL.O) , opens new tab is preparing to launch its long-awaited series of cellular modem chips next year, which will replace components from longtime partner Qualcomm (QCOM.O) , opens new tab, Bloomberg News reported on Friday. The iPhone maker is looking to ultimately overtake Qualcomm's technology by 2027, the report said, citing people familiar with the matter. Qualcomm, a leading designer of modem chips that connect phones to mobile data networks, has warned investors that Apple will eventually stop using its chips. The chip designer has a deal to keep selling chips to Apple until at least 2026 and investors are keen to see if Qualcomm's push into laptops and AI-powered data centers can accelerate quickly enough to compensate for potential drops in revenue from Apple. Apple's new component is set to feature in the iPhone SE, the company's entry-level smartphone, which is scheduled for its first update since 2022 next year, the Bloomberg News report said, adding that it will be followed by further generations of increasingly advanced chips. Qualcomm did not immediately respond to Reuters' request for comment, while Apple declined to comment. The iPhone maker has been working on its own modem technology and spent $1 billion to buy Intel's (INTC.O) , opens new tab modem unit in 2019. In early 2019, Reuters reported that Apple moved its modem engineering efforts into the same chip design unit that makes the custom processors for its devices, signaling a doubling down on the pursuit of self-designed modem chip. Last year, Apple signed a multi-billion-dollar deal with chipmaker Broadcom (AVGO.O) , opens new tab to develop 5G radio frequency components. Such a deal could hurt companies such as Skyworks Solutions (SWKS.O) , opens new tab and Qorvo (QRVO.O) , opens new tab, both of which are Apple suppliers. Sign up here. https://www.reuters.com/technology/apple-plans-three-year-modem-rollout-compete-with-qualcomm-bloomberg-news-2024-12-06/
2024-12-06 16:54
Canadian dollar falls 0.8% against the greenback Approaches recent 4-1/2-year low at 1.4177 Canada's unemployment rate rises to 6.8% 10-year yield hits a 2-month low at 2.978% TORONTO, Dec 6 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday, approaching a recent 4-1/2-year low, as a jump in Canada's unemployment rate bolstered expectations for another outsized interest rate cut next week from the Bank of Canada. The loonie was trading 0.8% lower at 1.4140 to the U.S. dollar, or 70.72 U.S. cents, stopping just short of the 1.4177 level it touched on Nov. 26, which was its weakest since April 2020. "A larger-than-forecast rise in the Canadian unemployment rate to 6.8% in November, leaves the CAD trading defensively into the end of the week," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. Canada had 1.5 million unemployed people in November, propelling its jobless rate to a near-eight-year high outside of the pandemic era of 6.8%. Investors see a roughly 80% chance of a half-percentage-point rate cut from the BoC on Dec. 11, up from 58% before the data. It follows a cut of that magnitude in October. "A weak exchange rate has helped loosen financial conditions significantly over the past year but policymakers have not stepped in the way of more aggressive easing expectations," Osborne said. The threat of U.S. tariffs on Canadian imports has added to downside risk for the loonie, analysts say in a Reuters poll. The U.S. dollar (.DXY) , opens new tab rose against a basket of major currencies as U.S. nonfarm payrolls increased by 227,000 last month, while the price of oil, one of Canada's major exports, was trading 1.4% lower at $67.33 a barrel. The Canadian 10-year yield was down 8.6 basis points at 2.993%, after earlier touching its weakest level since Oct. 2 at 2.978%. It fell 6.4 basis points further below its U.S. equivalent to a gap of 116.7 basis points, the widest gap in LSEG data going back to 1994. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-slides-jobs-data-boosts-jumbo-rate-cut-bets-2024-12-06/
