2024-11-26 11:45

Adani Green at centre of U.S. indictment of billionaire founder Adani aims to develop world's biggest renewables park Partner TotalEnergies not to invest more in Adani for now Adani Green targets 50GW production by 2030 NEW DELHI, Nov 26 (Reuters) - Betting big on the clean energy goals of Indian Prime Minister Narendra Modi, billionaire Gautam Adani found backers in France's TotalEnergies and the Qatar Investment Authority as he set out to build the world's biggest renewable energy project. The crown jewel of his company, Adani Green (ADNA.NS) , opens new tab, is an energy park in western Gujarat state planned to be five times the size of Paris on completion, and producing 50 gigawatts by 2030, or roughly a tenth of India's clean energy goals. Now the plan faces a hurdle in the form of a U.S. indictment of Adani, his nephew and executive director Sagar Adani and managing director Vneet S. Jaain, accusing them of paying bribes of $265 million to secure Indian power supply contracts, and misleading U.S. investors during fund raises there. Since the news, stock of Adani Green has nosedived 36%, losing $9.6 billion in market value. Adani Group has denied the accusations in the U.S. indictment as baseless, and vowed to seek all legal recourse. But fund-raising could get complicated. "To the extent of raising additional capital for newer projects, any sort of regulatory issues become problematic," said Deepika Mundra, a senior analyst at M&G Investments based in Britain. "Particularly if you want to tap international markets." Adani Green is one of many public and private companies key to helping India achieve its goals, she added. "It is quite important that all these (Adani Green) projects go through." The Adani Green boom is reflected in a surge of 10,000% in its shares between 2018 and 2022 as power demand in India swells, spurring it to develop the energy park in Khavda in Gujarat. "For us, this renewable energy park is a symbol of our commitment to sustainability and a symbol of national pride," Adani wrote in his annual report in June. When complete, its output would be "enough to power nations like Belgium, Chile, and Switzerland", he added. Adani has committed investment of $100 billion in the renewables sector, seen as core to the ports-to-airports conglomerate that is worth more than $135 billion. Now the tide is turning for Adani Green, described by U.S. prosecutors as being at the heart of "The Corrupt Solar Project". After the U.S. indictment, TotalEnergies (TTEF.PA) , opens new tab, which holds a stake of nearly 19.8% in Adani Green, was among the first to react, saying it would not invest more in the group for now. It had not been made aware of the bribery case, even though Sagar Adani was served a grand jury subpeona last year by the U.S. Federal Bureau of Investigation, it added. The Qatar Investment Authority, with a stake of 2.7%, declined comment. But standing firm for now is GQG Investors, which holds a stake of 4.2%. In an internal client note seen by Reuters, it said, "We believe the fundamentals of the companies we are invested in remain sound." Adani Green added power capacity of 37% each year to reach 11.2 GW by September this year, from a mere 2 GW in the 2018-19 financial year. Its next big target is 50 GW goal by 2030, or a capacity addition of 31% each year, it told investors in a presentation in November. 'RENEWABLE ENERGY MARVEL' Adani Green's revenues of $574 million during the period from April to September this year were up 20% on the year, boosting its cash profit 27% to $313 million over that time. With large solar, wind and hybrid power developments in Gujarat and the desert state of Rajasthan, it is developing smaller pumped-storage hydro power projects in five Indian states. The facilities in Rajasthan and Gujarat were to have supplied the power contracted for in the Adani deals that U.S. prosecutors allege to have been granted after payment of bribes. One of them is the partly developed marquee project in Khavda, just 18 miles (30 km) from the international border with Pakistan. It is described by Adani as "a renewable energy marvel in the making". Adani is targeting a massive jump in operational capacity at the location to 30 GW by 2029, up from 2.25 GW now. Energy from the park can power 16.1 million homes each year, Adani says. Reuters was among media which toured the project site in April, when thousands of labourers worked on construction and scores of solar panels were being installed. Engineers that day talked up the potential of the project, which would sprawl across 540 sq km (210 sq miles) when complete, saying it would be visible from space. "The kind of support being provided by the central government, and I must say, the state governments also, is extraordinary," Managing Director Vneet S. Jaain said at the time. Jaain, one of three Adani executives, besides Gautam and Sagar Adani, indicted for offering bribes to Indian state officials to secure deals, has not responded to a request for comment from Reuters. Sign up here. https://www.reuters.com/business/energy/adanis-renewable-energy-marvel-trapped-us-bribery-indictment-2024-11-26/

2024-11-26 11:32

DUBAI, Nov 26 (Reuters) - Iraq, Saudi Arabia and Russia agree on the importance of maintaining stable oil markets and fair prices, Iraq's Prime Minister Office said on Tuesday. The remarks followed a meeting in Baghdad between Iraqi Prime Minister Mohammed Shia al-Sudani, Saudi Arabian Energy Minister Prince Abulaziz bin Salman, and Russian Deputy Prime Minister Alexander Novak. They discussed "the conditions of global energy markets and matters related to the production of crude oil, its flow to markets, and meeting demand," the Prime Minister's office said. "The importance of maintaining stability, balance, and fair prices was emphasised, while stressing the vital role played by the OPEC+ group in this regard," the office added. OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia and allies led by Russia, is set to hold its next oil policy meeting online Dec. 1 where it will weigh a possible further delay to plans to raise output, two OPEC+ sources said on Monday. OPEC+ might again delay its planned output increases due to weak global demand, OPEC+ sources told Reuters last week. Sign up here. https://www.reuters.com/markets/commodities/iraq-saudi-arabia-russia-emphasise-importance-stable-oil-markets-2024-11-26/

2024-11-26 11:30

OSLO, Nov 26 (Reuters) - The supply of oil and gas will be plentiful, with oil markets being "comfortable" this year and next unless major geopolitical escalation happens, the head of the International Energy Agency (IEA) Fatih Birol told a conference in Norway on Tuesday. Global oil supply will exceed demand in 2025 even if OPEC+ cuts remain in place, the IEA said on Nov. 14 as rising production from the United States and other outside producers outpace sluggish demand. The prospect of excess supply is a headwind for OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, in its plan to start raising output. "This year and next year, we expect comfortable oil markets unless a major geopolitical escalation happens," Birol said on Tuesday. "There will be plenty of oil and gas." Sign up here. https://www.reuters.com/business/energy/iea-chief-birol-sees-comfortable-oil-markets-unless-geopolitical-shock-2024-11-26/

2024-11-26 11:27

LONDON, Nov 26 (Reuters) - The pound was little changed on Tuesday, relatively unscathed after a threat from U.S. President-elect Donald Trump to ramp up tariffs on Canada, Mexico and China sparked volatility in currency markets. Sterling initially lost ground after Trump's comments, reflecting its position as a "risk-sensitive" currency that tends to fall at moments of economic uncertainty. But it later perked up and was last 0.1% higher at $1.2587. The euro was roughly flat against the pound at 83.55 pence . Trump on Monday evening in the United States said he would impose a 25% tariff on imports from Canada and Mexico until they clamped down on drugs, particularly fentanyl, and migrants crossing the border. He separately outlined "an additional 10% tariff, above any additional tariffs" on imports from China. The dollar index climbed although later gave up its gains , while the Canadian dollar and Mexican peso slid around 1% and 2% respectively. Derek Halpenny, currency strategist at Japanese bank MUFG, said Britain's minor trade surplus with the United States meant it could escape Trump's ire. "The UK 12 month surplus - U.S. deficit - is very small at just 4.6 billion pounds ($5.79 billion) and hence Trump is unlikely to focus greatly on the UK-U.S. trade imbalance," he said, although he added tariff measures on the euro zone could also hurt Britain. "These factors could help contain GBP (pound) depreciation if the trade conflict escalates in the new year, although the risks remain skewed to the downside indirectly via weakening growth in the euro zone and globally that would see GBP suffer." The pound on Friday fell to a six-month low of $1.2475 in the wake of weak UK retail sales data, which raised the prospect of deeper Bank of England rate cuts. Sterling has also suffered as the dollar has climbed in the wake of Trump's victory, with his tariffs expected to support the U.S. currency next year. ($1 = 0.7944 pounds) Sign up here. https://www.reuters.com/markets/currencies/sterling-holds-steady-trump-triggers-currency-swings-2024-11-26/

2024-11-26 11:25

Biden has opposed Nippon Steel's $15 billion U.S. Steel acquisition CFIUS deadline to review deal set before Trump takes office Ishiba emphasises Japan investment in U.S., strengthened Japan-U.S ties TOKYO, Nov 26 (Reuters) - Japanese Prime Minister Shigeru Ishiba has sent a letter to President Joe Biden asking him to approve Nippon Steel's acquisition of U.S. Steel, to avoid marring recent efforts to strengthen ties between the countries, according to two sources familiar with the matter. Biden joined a powerful U.S. labour union in opposing the $15 billion takeover of the storied American firm by Japan's top steelmaker and referred it to the Committee on Foreign Investment in the United States (CFIUS), a secretive government panel that reviews foreign investments for national security risks. The deadline for the CFIUS review is next month, before President-elect Donald Trump - who has vowed to block the deal - takes office on Jan. 20. CFIUS could approve the deal, possibly with measures to address national security concerns, or recommend that the president block it. It could also extend the review. "Japan stands as the largest investor in the U.S., with its investments showing a steady upward trend. Continuing this upward trend of Japanese investment in the U.S. benefits both of our countries, showcasing the robustness of the Japan-U.S. Alliance to the world," Ishiba said in the letter, according to a copy of the text seen by Reuters. The sources confirmed it was sent to Biden on Nov. 20. "Under your presidency, this Alliance has reached unprecedented strength. We respectfully ask for the U.S. government to approve the planned acquisition by Nippon Steel so as not to cast a shadow on the achievements you have accumulated over the past four years," the letter said. The U.S. embassy in Japan declined to comment. Ishiba's office deferred questions to the foreign ministry which did not immediately have comment. Nippon Steel declined to comment and U.S. Steel did not immediately reply to a request for comment outside of U.S. business hours. CHANGE IN APPROACH Ishiba's direct approach appears to mark a shift in the Japanese government's stance on the deal, which became a political hot potato in a key U.S. swing state in the lead-up to the Nov. 5 presidential election. Ishiba's predecessor, Fumio Kishida, had sought to distance his administration from the controversial takeover, casting it as a private business matter even as U.S. political opposition mounted. The tie-up appeared set to be blocked when CFIUS alleged in a letter sent to the companies on Aug. 31 that the transaction posed a risk to national security by threatening the steel supply chain for critical U.S. industries. But the review process was eventually extended until after the election to give the panel more time to understand the deal's impact on national security and to engage with the parties, a person familiar with the matter said. Before Ishiba took office on Oct. 1, he said any U.S. move to block the deal on national security grounds would be "very unsettling" given the close relations between the allies. Ishiba and Biden met for the first time as leaders on the sidelines of an international summit in Peru earlier this month. Ishiba's letter said the pair were not able to dive into discussions on the economic relationship at that meeting due to time constraints, and that he wanted to follow up to bring his attention to the deal at a "critical juncture". Nippon Steel has made various guarantees and investment pledges in order to win approval. Ishiba reiterated in his letter to Biden that the deal would benefit both countries. "Nippon Steel is deeply committed to protecting U.S. Steel workers and opening up a prosperous future together with U.S. Steel and its workers," Ishiba said. "The proposed acquisition will enable Japanese and U.S. steel companies to combine advanced technologies and increase competitiveness, and will contribute to enhancing steel production capacity and employment in the United States." It was not clear if Biden had replied to the letter. Sign up here. https://www.reuters.com/markets/deals/japan-pm-ishiba-urges-biden-approve-nippon-us-steel-deal-sources-say-2024-11-26/

2024-11-26 11:13

A look at the day ahead in U.S. and global markets from Mike Dolan Any speculation that U.S. President-elect Donald Trump would adopt a 'softly, softly' approach to his trade and economic policies was jolted overnight as he warned of immediate tariff hikes on Canada, Mexico and China - hitting the currencies of all three. Trump, who takes office on Jan. 20, said he would impose a 25% tariff on imports from Canada and Mexico on day one until these countries clamp down on drugs, particularly fentanyl, and undocumented migrants crossing the border. The move would appear to violate a free-trade deal with both countries that he negotiated during his first White House term. Trump also separately outlined "an additional 10% tariff, above any additional tariffs" on imports from China. It was not entirely clear what this would mean for China as he has previously pledged to end China's most-favoured-nation trading status and slap tariffs on Chinese imports in excess of 60% - much higher than those imposed during his first term. Currency markets quickly adjusted to try account for the risk of these moves in less than two months' time. The U.S. dollar surged more than 1% to a four-and-a-half-year high against its Canadian counterpart and more than 2% against the Mexican peso . And the greenback also rose to its highest since July 30 against China's yuan Together, the peso, Canadian dollar and yuan account for more than 40% of the Federal Reserve's 'broad' dollar trade-weighted basket of currencies. China's embassy in Washington responded to Trump's comments by saying on neither country would win a trade war. Other currencies also fell against the greenback but the moves had moderated by early trading in Europe. The fact that Trump didn't yet mention Europe or Japan as part of the 'day one' plan allowed the euro , which hit a two-year low on Friday, to hold on to Monday's bounce and the yen held up as well. European Central Bank policymaker Mario Centeno warned that the euro zone must be watchful to avoid inflation undershooting ECB's 2% target amid rising economic risks such as likely new U.S. trade tariffs - that are "not good news for Europe". TREASURY TRANSITION Trump's barrage of policy pledges on his social media account late on Monday came just as investors had warmed to the nomination of Wall Street money manager Scott Bessent as Treasury Secretary, hoping for a market-savvy influence on the administration and potentially a voice of restraint. News of Bessent's appointment came late on Friday and U.S. Treasury bonds rallied sharply in response, with 10-year and 30-year yields falling 10-20 basis points back to pre-election levels. The retreat in Treasury yields was aided by a fresh swoon in crude oil prices and inflation expectations on reports that Israel look set to approve a U.S. plan for a ceasefire with Lebanon's Hezbollah on Tuesday. The drop in U.S. crude prices back below $70 per barrel was also helped by news that Trump's transition team is planning an energy package that would approve export permits for new liquefied natural gas projects and increase oil drilling off the U.S. coast and on federal lands. And the drop in Treasury yields had pulled the dollar (.DXY) , opens new tab back off two-year highs on Monday, at least until the overnight tariff jolt upset the apple cart again today. Helped by the calm in Treasuries, Wall St stock indexes (.SPX) , opens new tab climbed again on Monday - with the Dow Jones Industrial Average (.DJI) , opens new tab hitting a new record and the small cap Russell 2000 (.RUT) , opens new tab outperforming to hit an all-time high, too. With another heavy diary of Treasury auctions underway in a holiday-shortened week state-side, the speculation around the new administration's direction is pushing more regular economic monitoring to one side for now. The Fed is due to release minutes of its most recent policy meeting - when it cut key interest rates again, just two days after the election. Before that, the Conference Board will also release its latest survey of consumer confidence, another key test of how households reacted to the election result. Key developments that should provide more direction to U.S. markets later on Tuesday: * US November consumer confidence, October new home sales, Richmond Federal Reserve November business survey, Dallas Fed November service sector survey, September house prices * Federal Open Market Committee issues minutes from its latest meeting * European Central Bank policymaker and Bank of Portugal Governor Mario Centeno and ECB policymaker and Bank of Finland chief Olli Rehn both speak * US corporate earnings: Dell, Analog Devices, CrowdStrike, HP, Autodesk, Workday, Best Buy, JM Smucker, Abercrombie & Fitch * US Treasury sells $70 billion of 5-year notes, $48 billion of 2-year floating rate notes Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-11-26/