2024-11-20 22:03

Voluntary guidelines to help lift valuations may not be enough, governance experts say Democratic Party, with parliamentary majority, pushing for legislative changes Korea Zinc has withdrawn controversial share issue plan but still under investigation SEOUL, Nov 21 (Reuters) - A takeover battle over Korea Zinc (010130.KS) , opens new tab is adding pressure on Seoul to pass legislative reforms to ensure better protections for all investors in a country with a stock market dominated by family-run conglomerates. Korea Zinc Chairman Yun B. Choi, a grandson of a co-founder, last week agreed to scrap a controversial plan to issue new shares in the world's largest zinc refiner to help fend off a takeover attempt from the co-founding family's Youngpoong Corp (000670.KS) , opens new tab and its partner, private equity group MBK Partners. The share issue plan had infuriated many investors, as two days before it was announced, Korea Zinc finalised a buyback at a 25% higher price. Choi backed down after a regulatory probe and intense shareholder pressure that brought international attention to corporate governance shortcomings in Asia's fourth-largest economy. But Korea Zinc's actions under his leadership have fuelled scepticism over whether the government's call for voluntary efforts by companies to boost depressed stock valuations is sufficient, according to interviews with more than a dozen investors, governance experts, regulators and lawmakers. After Choi became chairman in 2022, Korea Zinc signed deals with LG Chem (051910.KS) , opens new tab and Hanwha Corp (000880.KS) , opens new tab to invest in each other, in an arrangement known as a cross-shareholding, though it sold shares in the latter this month to help repay debt. Under Choi, it also sold stock to strategic partners including Hyundai Motor Group and Trafigura. "Why do you use company funds, not your own money to increase your control?" asked Park Yoo-kyung, a managing director at Netherlands-based APG Asset Management, who noted Korea Zinc could have formed joint ventures or used other types of contracts. Many companies in Japan are unwinding cross-shareholding deals, which have been criticised as negative for corporate governance because they can insulate management from having to meet the interests of shareholders. Korea Zinc said the cross-shareholdings were needed to ensure stable partnerships as it expanded into battery materials, hydrogen and other businesses. Hahm Yong-il, senior deputy governor of the Financial Supervisory Service, said Korea Zinc's moves had fuelled investor doubts about board independence. The regulator's commitment to reforming and improving capital markets is being tested, said Hahm, whose agency is investigating allegedly unfair practices in Korea Zinc's proposed share issue plan even after it was cancelled. LEGISLATION PUSH Korea Zinc's actions show legislation is needed to protect the interests of minority shareholders and address the lack of board independence, particularly at family-run conglomerates known as chaebols, said the people interviewed by Reuters. In South Korea, board members have a fiduciary duty to perform their duties in the company's interests, but not to safeguard shareholders' interests. The Democratic Party, which has a majority in parliament, on Tuesday proposed a commercial law revision to extend the duty to shareholders, saying the Korea Zinc saga added urgency to long-delayed legislation. But President Yoon Suk Yeol's People Power Party and business groups have raised concerns that companies could be subject to attacks from overseas hedge funds if the law was amended. Yoon can veto bills, and his office this month took a step back from its earlier positive stance on the commercial law changes. In January, Yoon had pledged to address the so-called "Korea discount" to shore up support from the country's more than 10 million retail investors, taking a leaf from Japan's corporate governance reforms over the last few years that have drawn interest from global investors and sent Tokyo stocks to record highs this year. The Korea discount refers to a tendency for South Korean companies to have lower valuations compared to their overseas peers due to low dividend payouts and the dominance of chaebols that often have weak governance practices. Benchmark KOSPI index (.KS11) , opens new tab shares traded at a price-to-book multiple of 0.87 as of Wednesday, below an average of 1.2 for companies on Japanese exchanges and 4.8 for the S&P 500 (.SPX) , opens new tab in the U.S., according to data from the exchanges. FIRST HOSTILE TAKEOVER Korea Zinc's Choi pledged to give up his role as chairman and come up with measures to protect minority shareholders as he braces for a showdown with Youngpoong and MBK at a shareholder meeting early next year. Their bid for control, if successful, would be the first hostile takeover of a South Korean company by a private equity fund, and should serve as a wake-up call for chaebols, according to LSEG data. "What MBK is doing on Korea Zinc could potentially spur dozens of similar disputes at some 200 locally listed Korean companies," said Mike Cho, a business school professor at Seoul's Korea University. The country has traditionally been a tough ground for activist investors such as Elliott, which over the last decade made unsuccessful attempts to block deals at Samsung affiliates and Hyundai Motor Group companies. The number of activist campaigns annually in South Korea grew more than nine-fold between 2019 and 2023, according to Diligent Market Intelligence, though the outcomes have been mixed. "There is a buzz among local capital market players that MBK's deal with Korea Zinc could be a game changer," said Sanghyun Park, an analyst at Clepsydra Capital. "It's seen as a key step to tackle the Korea discount by shaking up ownership structures." Sign up here. https://www.reuters.com/markets/deals/korea-zinc-takeover-battle-tests-seouls-resolve-tackling-korea-discount-2024-11-20/

2024-11-20 21:59

Nov 20 (Reuters) - Reddit (RDDT.N) , opens new tab said on Wednesday it has rolled out a fix for a software bug that prevented tens of thousands of people from accessing the social media platform in the U.S. The outage began around 3 pm ET, according to Downdetector, which tracks outages by collating status reports from several sources including users reports. At the peak, there were around 49,000 reports of problems with the platform. The figure had come down to around 14,575 reports as of 4.32 p.m. ET. "There was a bug in a recent update we made, but a fix is in place and we're ramping back up," Reddit said in a statement. Sign up here. https://www.reuters.com/technology/reddit-deploys-fix-outage-affecting-thousands-us-2024-11-20/

2024-11-20 21:47

Nov 21 (Reuters) - A look at the day ahead in Asian markets. Investors hoping that Nvidia's eagerly-awaited earnings after the U.S. close on Wednesday would inject renewed vigor into world markets will be disappointed, heralding the prospect of a lukewarm open in Asia on Thursday. Wall Street spent all day Wednesday firmly in the red before a late rally, bond yields and the dollar were higher, and a weak 20-year U.S. Treasury bond auction was a reminder of how deep Washington's fiscal deficit runs and the strain on investors to fund it. The global picture wasn't particularly reassuring either. European stocks fell for a fourth day - their worst run in over two months - China's yuan slipped to a three and a half month low on the spot market, and volatility ticked higher. Then came Nvidia. The world's most valuable company reported a beat on third-quarter earnings per share and forecast fourth-quarter revenue slightly above estimates. But shares immediately fell in after-hours trading by as much as 5% before recovering, and Nikkei and Wall Street futures are pointing to a lower open in Japan and the US on Thursday. Is the AI darling's shine beginning to fade? Thursday's economic calendar in Asia is relatively light, with South Korean export, Indonesian current account and Hong Kong inflation data the main releases. Annual inflation in Hong Kong is seen slowing to a 1.7% pace in October from 2.2% in September, which would mark the steepest decline since April and heighten concern that deflationary pressures on the Chinese mainland could be spreading. There may be more market fireworks from Bank of Japan governor Kazuo Ueda, who is scheduled to speak at a financial forum in Paris. Investors and traders will be trying to determine if his tone and signals differ from his fairly balanced remarks earlier this week that kept the door open to a December rate hike but also cautioned against moving too fast. Judging by the yen's behavior recently, whatever markets think the BOJ will do is being completely overwhelmed by renewed hawkishness surrounding the Fed outlook. The yen has only appreciated in one out of the last eight trading sessions, and finds itself back below 155.00 per dollar. It might need a notably hawkish signal from Ueda to engineer a sustainable recovery or get September's 140.00 per dollar back into view. But right now, the Japanese swaps market is pointing to less than 50 bps of BOJ tightening by the end of next year. Meanwhile, Bitcoin is moving closer to a historic break above $100,000, boosted by increasing confidence that President Donald Trump's administration will be a crypto-friendly regime. Here are key developments that could provide more direction to markets on Thursday: - Bank of Japan Governor Kazuo Ueda speaks in Paris - Hong Kong inflation (October) - South Korea exports (October) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2024-11-20/

2024-11-20 21:00

Target plunges over 20% after muted holiday-quarter sales forecast Nvidia slips before results due after market close Indexes: Dow up 0.32%, S&P flat, Nasdaq down 0.11% Nov 20 (Reuters) - The tech-heavy Nasdaq closed lower on Wednesday, taking a break from the prior session's rally as investors worried about escalating Russia-Ukraine tensions and weak results from Target, while awaiting earnings from megacap Nvidia that landed after the bell. The Dow and S&P 500 ticked up late in the session, with the Dow closing higher and the S&P 500 ending flat. Stocks fell early in the session, after a report said Ukraine fired long-range British Storm Shadow missiles into Russian territory. On Tuesday, Ukraine launched U.S.-made ATACMS missiles into Russia, and Russia announced it had lowered the threshold for nuclear action. Wall Street's "fear gauge" (.VIX) , opens new tab jumped to 18.79 before easing to 17.24, still at its highest since the Nov. 5 U.S. presidential election. "It's gotten a little more defensive today after a strong rally yesterday from growth stocks and the tech sector," said James Regan, Director of Wealth Management Research at D.A. Davidson "Maybe there's a conservative view ahead of Nvidia earnings or a broader reaction from Target's earnings which is a consumer bellwether. There are also more geopolitical concerns with tensions in Ukraine and Russia and the U.S. evacuating embassies," Regan said. AI chipmaker Nvidia (NVDA.O) , opens new tab fell 0.76% during the trading session ahead of its results. The stock fell further after the bell when its fourth-quarter revenue forecast was slightly above estimates, but failed to meet lofty expectations of some investors. During regular trading, the index heavyweight dragged down the Information Technology sector (.SPLRCT) , opens new tab 0.23% and the tech-heavy Nasdaq 0.11%. Target (TGT.N) , opens new tab plunged 21.4% after the retailer forecast holiday-quarter comparable sales and profit below Wall Street expectations following a third-quarter estimate miss. The consumer discretionary (.SPLRCD) , opens new tab index was the biggest sectoral decliner, falling 0.57%. Growth stocks like Tesla (TSLA.O) , opens new tab and Amazon.com (AMZN.O) , opens new tab also fell 1.15% and 0.85% respectively. The Dow Jones Industrial Average (.DJI) , opens new tab rose 139.53 points, or 0.32%, to 43,408.47, the S&P 500 (.SPX) , opens new tab gained 0.13 points, or 0.00%, to 5,917.11 and the Nasdaq Composite (.IXIC) , opens new tab lost 21.32 points, or 0.11%, to 18,966.14. Nvidia shares have nearly tripled in value this year, accounting for about 20% of the S&P 500's (.SPX) , opens new tab returns over the last 12 months, according to BofA Global Research. "We're starting to see commentary from larger companies that have been deploying capital in the AI, tech spend space talking about examples of how that spend is converting to either higher revenue or cost savings. That bodes well for companies like Nvidia that are on the picks and shovels side of that tech, AI spend trade," said Bill Merz, head of Capital Markets Research for U.S. Bank's asset management group. Cryptocurrency stocks ticked higher as bitcoin jumped above $94,000, with MicroStrategy (MSTR.O) , opens new tab soaring 10% and MARA Holdings (MARA.O) , opens new tab up 13.9%. Traders have increased bets on the U.S. central bank leaving interest rates unchanged at its December meeting in the wake of strong economic data and signs of persistent inflation. Declining issues outnumbered advancers by a 1.24-to-1 ratio on the NYSE. There were 184 new highs and 94 new lows on the NYSE. On the Nasdaq, 2,007 stocks rose and 2,245 fell as declining issues outnumbered advancers by a 1.12-to-1 ratio. The S&P 500 posted 30 new 52-week highs and 13 new lows while the Nasdaq Composite recorded 92 new highs and 163 new lows. Volume on U.S. exchanges was 13.20 billion shares, compared with the 14.32 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-trade-cautiously-anticipation-nvidia-earnings-2024-11-20/

2024-11-20 20:26

US Attorney says hackers conducted phishing attacks Authorities say at least 12 companies were targeted Hackers hit multinational companies, crypto investors Nov 20 (Reuters) - U.S. prosecutors unveiled criminal charges on Wednesday against five alleged members of Scattered Spider, a loose-knit community of hackers suspected of breaking into dozens of U.S. companies to steal confidential information and cryptocurrency. Martin Estrada, the U.S. Attorney in Los Angeles, said the defendants conducted phishing attacks by sending bogus but real-looking mass text messages to employees' mobile phones warning that their accounts would be deactivated. The hackers, in their teens or 20s at the time, allegedly directed employees to links for entering log-in information, enabling the hackers to steal from their employers and millions of dollars of cryptocurrency from individuals' accounts. Victims allegedly included at least 12 companies in the gaming, outsourcing, telecommunications and cryptocurrency fields, plus hundreds of thousands of individuals. Estrada's office confirmed that the case concerned Scattered Spider. No victims were identified by name. Security experts and officials have said Scattered Spider is composed of small clusters of people, including youngsters, who collaborate on-and-off on specific jobs. The group has been blamed for unusually aggressive cybercrime sprees, targeting major multinational companies as well as individual cryptocurrency investors. Some experts previously complained about law enforcement's apparent inability to crack down even though the identities of some suspects, including several living in Western countries, were known, industry insiders told Reuters last year. That may now be changing. "The days of easy money and no consequences are over," said Allison Nixon, chief research officer at cybersecurity company Unit 221B. "Defenders and law enforcement are meeting this wave of cybercrime aggressively now. Young people that have fallen into online crime culture need to exit before they become the next target." The defendants are Tyler Buchanan, 22, of Scotland; Ahmed Elbadawy, 23, of College Station, Texas; Joel Evans, 25, of Jacksonville, North Carolina; Evans Osiebo, 20, of Dallas; and Noah Urban, 20, of Palm Coast, Florida. Each was charged with two conspiracy counts and aggravated identity theft, and Buchanan was also charged with wire fraud. Investigators traced Buchanan through domain registration records for phishing websites, registered under an account whose user name included the name of late actor Bob Saget. Officials said the suspects' illegal activity spanned from September 2021 and April 2023. Scattered Spider drew particular notoriety in September 2023 when members of its community broke into and locked up the networks of casino operators Caesars Entertainment (CZR.O) , opens new tab and MGM Resorts International (MGM.N) , opens new tab, and demanded hefty ransom payments. Caesars paid about $15 million to restore its network. It was unclear whether these five defendants were connected with Scattered Spider's casino hackings. The U.S. Department of Justice declined to comment on specific victims. Caesars did not immediately return requests for comment. MGM said the defendants did not appear to be related to the cyber attack against its network. Evans was arrested on Tuesday in North Carolina. Urban has pleaded not guilty to 14 fraud and conspiracy charges in a separate case in Florida. Buchanan was arrested in June at an airport in Palma de Mallorca, Spain as he attempted to board a flight to Naples, Spanish authorities said at the time. He is awaiting extradition from Spain, a Justice Department spokesman said. A public defender representing Urban did not immediately respond to a request for comment. Lawyers for the other defendants could not immediately be identified. Sign up here. https://www.reuters.com/technology/cybersecurity/us-charges-five-scattered-spider-hacking-scheme-2024-11-20/

2024-11-20 20:23

BUENOS AIRES, Nov 20 (Reuters) - Argentina's state-run oil company YPF (YPFDm.BA) , opens new tab will seek $2 billion in financing in the second quarter of 2025 to complete its Vaca Muerta Sur project, a company source said on Wednesday. The project is being carried out by Vaca Muerta Oil Sur (VMOS), which is controlled by YPF, and aims to transport an additional 390,000 barrels per day from the Vaca Muerta formation to a coastal export terminal in Rio Negro province. The source said that the company is seeking $1.5 billion from foreign investors and $500 million locally and hoping to add Pampa Energy(PAMPm.BA) , opens new tab, Vista(VISTAA.MX) , opens new tab, Shell(SHEL.L) , opens new tab, Chevron (CVX.N) , opens new tab and Pan American Energy (PAMPm.BA) , opens new tab as partners. "This pipeline will allow more than double the oil evacuation capacity out of Vaca Muerta," YPF CEO Horacio Marin said at a press conference in Buenos Aires on Wednesday. "The VMOS project will make Argentina one of the main exporters in the region," he added. The company is seeking financing for 70% of the project, which will total around $3 billion, the source said. The remainder will be financed with equity from the companies that acquire capacity on the pipeline. Sign up here. https://www.reuters.com/business/energy/argentinas-ypf-seek-2-billion-financing-oil-pipeline-q2-2025-2024-11-20/