2024-10-09 07:06

Frelimo candidate Daniel Chapo widely expected to win Observers have reported vote-rigging in past elections Winner must tackle Islamist insurgency, economic woes MAPUTO, Oct 9 (Reuters) - Voting was underway in Mozambique in a tense general election highly likely to deliver victory for the ruling party, Frelimo, which has governed the southern African nation since 1975. Poverty is the major concern for Mozambique's 35 million people, half of whom are registered to vote, along with an Islamist insurgency in the north that has forced thousands to flee their homes and halted multi-billion-dollar gas projects. The favourite among four candidates vying to replace President Filipe Nyusi, as he steps down after serving two terms, is Daniel Chapo, 47, a lawyer viewed as a safe choice for business and a fresh face for the long-ruling party. Accompanied by his wife, Chapo was among the first to cast his vote in a school in the coastal city of Inhambane. "I want to say thank you to the people of Mozambique for this opportunity we have today," he told reporters. Chapo faces off against Venancio Mondlane, a charismatic independent candidate who draws huge crowds, former rebel commander Ossufo Momade, and a small opposition party leader, Lutero Simango. Among those who braved early morning rain to queue to cast their votes in Maputo, the capital, was 22-year-old student Augusto Ndeve Pais. "I feel hopeful ... People my age are worried about the future of our country, so I think they will vote," Pais said, declining to say for whom he was voting. Counting will start after the polls close at 6 p.m. (1600 GMT), but official results can take up to two weeks. Frelimo first allowed elections in 1994 and has since been accused of rigging them, charges it denies. A rebel force turned opposition party, Renamo, usually comes a distant second place. "This election is different because we have new actors ... (but) Frelimo has a big probability to win," said analyst Dercio Alfazema. A disputed outcome would probably trigger protests similar to those which broke out after Frelimo swept last year's municipal elections and which were forcefully suppressed. But many also feel the elections will change little. Keila Sitoe, 28, voted with her 21-year-old sister in Maputo. Both, who said they hope for change but do not expect it, declined to reveal their picks. "We don’t feel the energy. We are young and things are difficult," said Sitoe, who is also a student. In the city's middle-class neighbourhood of Malhangalene, where Mondlane lives, voter Rosa Tembe, a 72-year-old widow, hoped for peace in the country's northern Cabo Delgado province. "We will ask the person who wins to end the conflict in Cabo Delgado because our grandsons are dying... and we don't want this to happen anymore," she said. Sign up here. https://www.reuters.com/world/africa/voting-begins-mozambique-election-likely-see-ruling-party-win-2024-10-09/

2024-10-09 07:01

Oct 9 (Reuters) - Geopolitical risk premium gauges in the oil market have decreased slightly this week, following sharp increases last week in both Brent implied volatility and call options implied volatility skew, Goldman Sachs said. Oil prices steadied in Asian trading as traders weighed developments in the Middle East conflict against continued bearish expectations for demand. Brent crude futures last traded at $77.72 a barrel, up 0.7%, as of 0612 GMT. Prices had plunged more than 4% in the previous session on a possible Hezbollah-Israel ceasefire. Goldman Sachs still expects a peak upside of $10-$20 per barrel for Brent in the case of disruptions in Iranian production as the development of the conflict remains uncertain. However, in the absence of major disruptions, prices could stabilize around current levels this quarter, the bank said in a note dated Tuesday. The call options implied volatility skew jumped to mid-April levels last week, while Brent implied volatility surged above its model-implied fair value for the first time this year, Goldman said. "Options markets are pricing in a roughly 5% probability of a $20/bbl price jump, which we estimate roughly corresponds to a 2 million barrels per day 6-month interruption without an OPEC offset, occurring within the next month," the bank said in a note last week. The market uses implied volatility to estimate the likelihood of a security's future price changes. (This story has been refiled to correct a typo in paragraph 1) Sign up here. https://www.reuters.com/business/energy/geopolitical-risk-premium-oil-market-slips-slightly-goldman-sachs-says-2024-10-09/

2024-10-09 06:54

All cash deal represents 90% premium to Arcadium share price Deal will make Rio Tinto 3rd largest lithium producer Reuters exclusively reported talks on Oct. 4 Rio's London shares down 0.4% by 1054 GMT LONDON/MELBOURNE, Oct 9 (Reuters) - Rio Tinto (RIO.AX) , opens new tab, (RIO.L) , opens new tab has agreed to buy U.S. based Arcadium Lithium (ALTM.N) , opens new tab for $6.7 billion, it said on Wednesday, a deal that will catapult it to become the world's third largest miner of the metal used in electric vehicle batteries. Already the world's largest producer of iron ore, Rio is transforming itself into a processor of high end, low carbon raw materials essential for the energy transition. The market is currently oversupplied with lithium, but CEO Jakob Stausholm said Rio is confident that long-term demand will be strong. Rio said it would pay $5.85 per share in cash for Arcadium, an almost 90% premium to its closing price of $3.08 per share on Oct. 4, the day Reuters exclusively reported a potential deal. Rio's London-listed shares were down 0.4% by 1054 GMT. Shares in U.S.-listed Arcadium jumped around 40% on Monday, after the companies confirmed negotiations. Rio would gain access to lithium mines, processing facilities and deposits in Argentina, Australia, Canada and the United States to fuel decades of growth, as well as customers that include Tesla (TSLA.O) , opens new tab, BMW (BMWG.DE) , opens new tab and General Motors (GM.N) , opens new tab. Lithium prices have floundered due to Chinese oversupply and a slowdown in electric vehicle sales, resulting in miners of the metal emerging as attractive takeover targets. Rio's Stausholm told investors that by the end of the decade the company expects a shortfall in supply, with a more than 10% compound annual growth rate in demand through to 2040, boosted by electric vehicles and energy storage. The current weak market was an opportunity to pick up top quality assets at the right price, Stausholm told Reuters. "We really want battery-grade lithium, i.e. the processing as well. And then, of course, we like to be an operator, and if you take those criteria, you very quickly come to Arcadium," he said. "The way you should think about it is kind of a reverse takeover. This is not a case about cutting costs. This is a case about building faster and better," he added. The deal won't make a material difference to Rio's current capex plans of up to $10 billion in 2025 and 2026, Stausholm said. GOING FOR GROWTH The acquisition will make Rio the third largest producer of the battery-making metal after Albemarle (ALB.N) , opens new tab and SQM (SQMA.SN) , opens new tab. Arcadium Chairman Peter Coleman said Rio would be able to bring its expertise in execution and a strong balance sheet to help develop Arcadium's assets. "They are not capital constrained ... For us, we know that growth plans still relied on an improvement in price over the next two to three years, which is quite a significant improvement over where we are now," he told Reuters. The Anglo-Australian miner intends to fold its existing lithium assets into the new business to ensure growth and keep Arcadium's staff. "Rio has indicated they're very keen to keep their expertise," he added. Rio had been banking on its huge Jadar project in Serbia to supply much of Europe's lithium needs but that could take at least two years to secure permits and the miner is facing strong local opposition to its plans. Arcadium's mix of active mines, lithium deposits filled with decades of supply, and some of the industry's most advanced processing facilities would complement Rio's output of copper, iron ore and other critical minerals. Rio's balance sheet could easily fund growth without straining the miner's existing operations, investors and analysts said. Rio's market capitalisation is $112.4 billion. Arcadium shares have fallen more than 37% since the start of the year, giving it a market capitalisation of $4.56 billion. Jason Beddow, managing director at Australian fund manager Argo Investments, which owns shares in Rio, said the deal made a lot of sense. "Yes it's a big premium but stocks have been sold off a lot," he said. Beddow, who visited the companies' Canadian operations in recent weeks said: "They are both close together geographically, they both use Quebec hydropower. Rio has a strong chemicals business in Canada that this will slot into." The deal is expected to close in mid-2025. It has been a lot smoother than those of some of its rivals. Peer BHP Group (BHP.AX) , opens new tab walked away from its $49 billion plan to take over rival Anglo American (AAL.L) , opens new tab, earlier this year following three rejected proposals. BHP was barred from making another offer for Anglo by UK competition regulators, until late November. Sign up here. https://www.reuters.com/markets/deals/rio-tinto-buy-arcadium-lithium-67-bln-2024-10-09/

2024-10-09 06:47

Inclusion could draw up to $60 bln into South Korea's bond market Analysts expect boost for the won and stock market Reforms include omnibus account for bonds, extended trading hours SEOUL, Oct 9 (Reuters) - The surprise inclusion of South Korean sovereign bonds in the FTSE Russell's benchmark bond index is expected to give the won currency a boost on Thursday and attract billions of dollars of inflows over the next few years. South Korea's government has projected the inclusion to the World Government Bond Index could draw as much as 80 trillion won ($59.7 billion) into its $2.2 trillion bond market, a welcome source of funds for the world's fastest-aging country as welfare costs look set to surge. The inflows are also expected to provide a shot in the arm for the won, which is down 4% against the dollar so far this year and a slumping stock market, analysts say. Korea's financial markets are closed on Wednesday for a public holiday so are set to react on Thursday. "For Korea, the inclusion means steady and stable source of money inflows and signals that the 'Korea discount' could be eased," said Kim Han-soo, an analyst at the Korea Capital Market Institute. The Korea discount refers to a tendency for South Korean companies to have weaker valuations than global peers due to red tape, low dividend payouts and the dominance of opaque conglomerates known as chaebols. "Korea's unique, restricted FX market has always been a problem, but the accession means global investors now approve of the system," said Kim, referring to South Korea's efforts to increase participation by foreign banks in currency markets. The FTSE Russell decision follows President Yoon Suk Yeol's broader reforms to eliminate the Korea discount and boost inflows by getting the country into top-shelf indexes such as the WGBI and MSCI's developed market benchmarks. Among the reforms South Korea has adopted to boost foreign access to financial markets are the launch of an omnibus account for Korean treasury bonds with securities settlement house Euroclear, allowing of overdrafts in the won through the International Central Securities Depository, and extended onshore trading hours for the won. Despite these efforts, the won has lost ground this year and while the KOSPI (.KS11) , opens new tab has fallen 2.3%, underperforming the S&P 500's (.SPX) , opens new tab and Nikkei's (.N225) , opens new tab strong gains. Seoul's reform efforts were also clouded by the government's reimposition of a full ban on stock short-selling last year, which prompted index provider MSCI Inc. in June to retain South Korea's classification as an emerging market. Goldman Sachs and Morgan Stanley recently said Korea's addition to the FTSE Russell index may be delayed to next year due to a lack of meaningful global bond settlement volumes using Euroclear. "It's a surprise decision, and we are temporarily seeing some dollar selling in offshore USD/KRW. There is going to be some more demand for the won-based assets," an FX dealer said, asking not to be named due to internal policies. Asked to comment on the index provider's decision, director Kwak Sang-hyun at South Korea's finance ministry said Seoul's pitch to FTSE Russell was made on expectations Euroclear settlements would pick up once Korea was added to the index. "Inclusion will help new investors to settle bonds via Euroclear. The decision is a vote of confidence from global investors, and the inflows will allow Korea to have more fiscal policy room even if government debt increases," said Kwak. South Korean government bonds are projected to comprise 2.22% of the debt gauge and will be added to the index starting November 2025, which will be phased in over a one-year period on a quarterly basis. ($1 = 1,340.7000 won) Sign up here. https://www.reuters.com/markets/rates-bonds/korean-inclusion-ftse-russell-bond-index-seen-shoring-up-local-markets-2024-10-09/

2024-10-09 06:39

Frelimo candidate Daniel Chapo widely expected to win Observers have reported vote-rigging in past elections Winner will have to deal with Islamist insurgency and economic challenges MAPUTO, Oct 9 (Reuters) - Mozambique votes on Wednesday in a tense general election highly likely to deliver victory to the ruling party, Frelimo, which has governed the Southern African nation since 1975. Four candidates are vying to replace President Filipe Nyusi, who is stepping down after serving two terms. The favourite is Daniel Chapo, 47, a lawyer viewed as a safe choice for business and a fresh face for the long-ruling party. He faces Venancio Mondlane, a charismatic independent candidate who draws huge crowds, former rebel commander Ossufo Momade, and a small opposition party leader, Lutero Simango. Dozens of posters of Chapo's face were pasted along Maputo's palm tree-lined seaside promenade, and red Frelimo flags flew over streets flanked by high rises dispersed with Portuguese colonial buildings. No opposition poster was in sight. Poverty is the major concern of Mozambique's 35 million people, about half of them registered to vote. An Islamist insurgency in the north that has forced thousands to flee their homes and halted multi-billion dollar gas projects also weighs. "The next president must create jobs. We are tired of hearing promises," said Amandio Sergio, 32, a small business owner in the seaside capital. Frelimo first allowed elections in 1994 and has since been accused of rigging them, which it denies. Rebel force turned-opposition party Renamo usually comes a distant second. Mondlane poses a challenge to both this year, but lacks the machinery of established parties and may struggle to win votes in rural areas, analyst Dercio Alfazema said. "This election is different because we have new actors ... (but) Frelimo has a big probability to win," Alfazema said. Chapo has experience in local government but has not been tainted by Frelimo's corruption scandals, he added. Counting will start after the polls close at 6 p.m. (1600 GMT), although it can take up to two weeks for official results. A disputed outcome would likely trigger protests, which broke out after Frelimo swept last year's municipal elections and were forcefully suppressed. Apathy may dampen them, however. "I feel it doesn't make any difference," 26-year-old fisherman Mussa Issufo said of the poll. "Nothing ever changes." Sign up here. https://www.reuters.com/world/africa/mozambique-votes-tense-election-likely-see-ruling-party-win-2024-10-09/

2024-10-09 06:37

FRANKFURT, Oct 9 (Reuters) - Germany's Fresenius (FREG.DE) , opens new tab said it was checking options to speed up the start of new production lines of medical equipment at a North Carolina facility to help mitigate potential shortages from hurricane damage to rival Baxter's (BAX.N) , opens new tab site in the same state. "We are working with the U.S. Food and Drug Administration’s Drug Shortage Staff, which is actively engaged with Baxter and other manufacturers" to assess whether and by how much capacity has to be increased, Fresenius said in a statement. The Germany-based healthcare group said its generic hospital drugs unit Fresenius Kabi had recently started manufacturing intravenous (IV) solutions at a new facility in Wilson, North Carolina, and that it was checking options to start up more production lines faster than planned in the unaffected location. "Such a ramp-up of U.S. production at our Wilson site would take several months and would not be sufficient to make up for a prolonged loss of production by Baxter," the German company added. U.S. Senator Amy Klobuchar on Tuesday urged the Department of Health and Human Services to address the shortage "as quickly and safely as possible" and coordinate with the Federal Trade Commission and Department of Justice to prevent the distribution of counterfeit IV solutions. Hurricane Helene slammed into the Florida Gulf coast in late September, ripping up roads, tossing homes about and severing lines of communication through southeastern U.S. states. In its wake, hundreds of people were unaccounted for and many confirmed dead. On Sept. 29, medical device maker Baxter said its North Cove site had been affected by hurricane-related flooding and was closed for production. It said it was working with the government to assess the damage and bring the plant back online as quickly as possible. Baxter said in a statement on Monday it was working with government agencies, including the U.S. Food and Drug Administration, on special importation requirements for certain sites and products located outside the United States. "We have moved finished goods from our North Cove site that were not impacted by the storm and are inspecting other finished goods onsite. This inventory will be used to support current allocations in the short term," Baxter said. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/fresenius-looking-boost-production-after-hurricane-damage-baxter-2024-10-08/