2024-10-08 07:31

JOHANNESBURG, Oct 8 (Reuters) - The South African rand weakened on Tuesday, and is likely to take direction from U.S. inflation data and minutes from the Federal Reserve's September meeting due this week. At 1525 GMT, the rand traded at 17.58 against the dollar , 1.12% weaker than its previous close. Minutes from the Fed's September meeting due on Wednesday are expected to explain the central bank's big rate cut last month, possibly offering further clues to the bank's future path on interest rates. Focus will then turn to U.S. September inflation figures on Thursday, which could provide signs of disinflation, crucial for shaping Fed policy. "The USD/ZAR is influenced by U.S. CPI data, the Fed’s monetary policy direction, and the U.S. election," said Andre Cilliers, currency strategist at TreasuryONE. "The dollar remains strong, supported by solid U.S. jobs data, while the ZAR awaits further clarity on these factors." Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. monetary policy in addition to local economic indicators. On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) , opens new tab closed 0.95% lower. South Africa's benchmark 2030 government bond was weaker, with the yield up 2.5 basis points at 9.235%. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-weakens-focus-upcoming-us-data-2024-10-08/

2024-10-08 07:26

JAKARTA, Oct 8 (Reuters) - Indonesia will open thousands of kitchens across the country next year as the incoming government led by president-elect Prabowo Subianto kicks off his multi-billion dollar free meals programme, the head of the agency running the initiative said on Tuesday. Prabowo will be sworn in as Indonesia's next president on Oct. 20. In the first stage of his plan, meals will be given to around 20 million students from January at a cost of 71 trillion rupiah ($4.54 billion). When running at full scale, the free meals programme, which aims to end malnutrition in the country, will reach 83 million recipients, including pregnant mothers, and cost around $28 billion annually. Dadan Hindayana, the head of the national nutrition agency, told an investment forum that at least 5,000 kitchens, called 'service units', will be set up next year, before ramping up to 30,000 units in 2027. "The unit will not only operate as a kitchen but also have a role as a buyer for local agriculture products," Dadan said, adding the units will create over one million new jobs. The estimated demand for food under this programme next year is at 312,000 metric tonnes of rice, 546,000 metric tonnes of chicken meat or 4.68 billions eggs, 936 million litres of milk and 546,000 metric tonnes of vegetables, according to Reuters calculation based on the agency's data and accounting for six days a week. Dadan said one kitchen, which would serve 3,000 children, would have a daily consumption of 200 kg of rice, 350 kg of chicken meat or 3,000 eggs, 600 litres of milk and 350 kg vegetables. The nutrition agency will prioritise sourcing the food from local farmers and also will adjust the menus based on availability, Dadan said. ($1 = 15,650.0000 rupiah) Sign up here. https://www.reuters.com/world/asia-pacific/indonesia-run-thousands-kitchens-free-meals-initiative-starts-january-2024-10-08/

2024-10-08 07:21

Shanghai Composite up 4.6%, CSI300 up 5.9% Hang Seng drops 9.4%; record fall in property stocks Aussie dollar, iron ore, miners and luxury shares sink SHANGHAI/SINGAPORE, Oct 8 (Reuters) - China's stock markets roared back from a week-long break to reach their highest levels in more than two years at the open, before paring gains after officials failed to inspire confidence in stimulus plans intended to revive the economy. Hong Kong's Hang Seng index (.HSI) , opens new tab is the best performing major market this year, having seen its steepest rally in a generation over recent weeks, and continuing to post gains during the onshore holiday. But on Tuesday, it closed 9.4% lower - its heaviest fall since 2008. Economic planner chairman Zheng Shanjie told reporters China was "fully confident" of achieving economic targets for 2024 and would pull forward 200 billion yuan ($28.36 billion) from next year's budget to spend on investment projects and support local governments. But his failure to detail sufficiently big or new measures rekindled market doubts about Beijing's commitment to ensuring the world's second largest economy can climb out of its most serious slump since the global pandemic and reach 5% growth. The Shanghai Composite (.SSEC) , opens new tab closed 4.6% higher while the blue-chip CSI300 (.CSI300) , opens new tab rose 5.9% - big moves but below gains of more than 10% seen early in a rollercoaster day with turnover of a record 3.45 trillion yuan. "Ultimately for the rally to be sustainable, we need to see more fiscal policy and more measures to support the economy and the property market," Vasu Menon, managing director of investment strategy at OCBC in Singapore, said. "A great deal of hope has been built into the strong rally in recent weeks and we now need to see additional government policy action to support the uptrend." China-exposed assets around the world were also caught up in the selling. The Australian dollar fell 0.5% and the yuan headed for its sharpest drop in 10 months. Iron ore and other industrial metal prices slid, with the steel ingredient at one point down 5% in Dalian and London copper hitting its lowest in two weeks. Global miners Rio Tinto (RIO.AX) , opens new tab and BHP (BHP.AX) , opens new tab fell in Australia, while, in Europe, miners (.SXPP) , opens new tab were down 4% on track for their biggest daily fall in 18 months and luxury stocks (.STXLUXP) , opens new tab tumbled. FRENZY AND INDEX FUNDS Before the Golden Week break, China announced the most aggressive stimulus measures since the pandemic and the CSI300 gained 25% over five sessions. Flows on Tuesday were directed at broad index funds and pockets of the market expected to benefit from government largesse. By midday, nearly 20 exchange-traded funds traded at a premium of more than 20% to the value of their assets, as funds rushed in faster than they could be rerouted to buy shares. The record turnover shows "massive profit taking as well as fresh money inflow," Wen Hao, a veteran investor in the eastern Hangzhou city, said. "It's still early stage of the bull market, and still a good time to buy stocks," he said, recommending small-caps that typically outperform blue-chips when the market is strong. On Tuesday small companies outshone larger ones and the biggest gainers were tech hardware makers, brokers, health care companies and builders. Some of the biggest winners from last week became the biggest losers in Hong Kong. The CSI semiconductor sub-index (.CSI931865) , opens new tab surged 17% and a sub-index of brokers (.CSI399975) , opens new tab was up 10.6%. Thematic indexes from biotechnology (.CSI399993) , opens new tab to defence (.CSI399813) , opens new tab and electric vehicles (.CSI930997) , opens new tab rose more than 11%. In Hong Kong, however, mainland property developers (.HSMPI) , opens new tab fell 15.5%, the biggest one-day percentage drop on record. Analysts said the selling reflected profit taking after a week of gains and balancing mainland moves, rather than a mood shift. "The returns between Hong Kong and Chinese stocks remain largely parallel," said Sean Teo, sales trader at Saxo in Singapore. "This underperformance may be due to some investors reallocating their funds from Hong Kong to Chinese markets, where government stimulus is more direct." ($1 = 7.0520 Chinese yuan renminbi) Sign up here. https://www.reuters.com/markets/asia/china-markets-reopen-with-roar-after-week-long-break-2024-10-08/

2024-10-08 06:51

China imposes security deposits on brandy imports from EU Move follows EU vote for tariffs on Chinese-made EVs Shares in French brandy makers fall after Chinese move Temporary security deposits effective from Oct. 11 BEIJING/PARIS, Oct 8 (Reuters) - China imposed temporary anti-dumping measures on imports of brandy from the EU on Tuesday, hitting French brands including Hennessy and Remy Martin, days after the 27-state bloc voted for tariffs on Chinese-made electric vehicles (EVs). China's commerce ministry said preliminary findings of an investigation had determined that dumping of brandy from the European Union threatens "substantial damage" to its own sector. France's trade ministry said the temporary Chinese measures were "incomprehensible" and violated free trade, and that it would work with the European Commission to challenge the move at the World Trade Organization. In a sign of the rising trade tensions, China's ministry added in another statement on Tuesday that an ongoing anti-dumping and anti-subsidy investigation into EU pork products would make "objective and fair" decisions when it concludes. It also said that it was considering a hike in tariffs on imports of large-engine vehicles, which would hit German producers hardest. German exports of vehicles with engines of 2.5 litres or larger to China reached $1.2 billion last year. France was seen as the target of Beijing's brandy probe due to its support of tariffs on China-made EVs. French brandy shipments to China reached $1.7 billion last year and accounted for 99% of the country's imports of the spirit. As of Oct. 11, importers of brandy originating in the EU will have to put down security deposits mostly ranging from 34.8% to 39.0% of the import value, the ministry said. "This announcement clearly shows that China is determined to tax us in response to European decisions on Chinese electric vehicles," French cognac producers group BNIC said in an email. French President Emmanuel Macron said last week that China's brandy probe was "pure retaliation", while EV tariffs were needed to preserve a level playing field. SHARES TUMBLE LVMH (LVMH.PA) , opens new tab owned Hennessy and Remy Martin were among the brands hardest hit by the measures, with importers having to pay security deposits of 39.0% and 38.1%, respectively. The deposits would make it more costly upfront to import brandy from the EU. However they could be returned if a deal is eventually reached before definitive tariffs are imposed. Both the investigation and negotiations remain ongoing, said an executive at a leading cognac company, who declined to be identified due to the sensitivity of the matter. Chinese investigators visited producers in France last month and were due to make further site visits, the executive said, while Chinese and EU officials held negotiations on Monday. The outcome was unclear, however, and doubts around the EU's willingness to make a deal were emerging, they added. Shares in Pernod Ricard (PERP.PA) , opens new tab were down 4.2% at 0839 GMT, while Remy Cointreau's (RCOP.PA) , opens new tab dropped 8.7% and shares in LVMH (LVMH.PA) , opens new tab, owner of Hennessy, fell 4.9%. Companies that cooperated with China's investigation were hit with security deposit rates of 34.8%, with that imposed on Martell the lowest at 30.6%. Pernod Ricard, Remy Cointreau and LVMH did not immediately respond to requests for comment. The measures could mean a 20% price rise for consumers in China, said Jefferies analysts, reducing sales volumes by 20%. Remy, with the greatest exposure to the Chinese market, could see its sales decline by 6%, with Pernod group sales seeing a 1.6% impact, they said. China is the second largest export market for cognac after the United States, but is the industry's most profitable territory. Difficult economic conditions in both markets have already prompted a sharp decline in cognac sales. James Sym, fund manager at Remy investor River Global, said despite this, there was no sign that demand for cognac had fundamentally changed, pointing to an uptick in cognac sales in Japan driven by Chinese tourists when the yen was weak. "That's obviously a sign that cognac is not out of fashion," he said, adding volumes – and the companies' share prices – should recover long-term, although the tariffs would likely hit volumes and margins while in place. TALKS CONTINUE Luxury goods shares fell by as much as 7% on Tuesday, with one trader attributing this to fears that the sector, which is heavily reliant on China, could be next to see trade measures. The brandy measures follow a vote by the EU to adopt tariffs on China-made EVs by the end of October. Before the vote in late August, China had suspended its planned anti-dumping measures on EU brandy, in an apparent goodwill gesture, despite determining it had been sold in China at below-market prices. At the time, the commerce ministry said its probe would end before Jan. 5, 2025, but that it could be extended. China's commerce ministry previously said it had found that European distillers had been selling brandy in its 1.4 billion-strong consumer market at a dumping margin in the range of 30.6% to 39% and that its domestic industry had been damaged. In the EU's decision to impose tariffs on China-made EVs, the bloc set tariff rates on top of the 10% car import duty ranging from 7.8% for Tesla to 35.3% for SAIC and other producers deemed not to have cooperated with its investigation. The European Commission has said it is willing to continue negotiating an alternative, even after tariffs are imposed. Sign up here. https://www.reuters.com/markets/commodities/china-puts-anti-dumping-measures-brandy-imports-eu-2024-10-08/

2024-10-08 06:51

Milton forecast to make landfall late Wednesday or early Thursday Evacuations ordered for over 1 million people in Florida's west-coast counties Evacuees create traffic jams; 17% of gas stations out of fuel Unusual path and rapid intensification raise concerns for storm-surge impact Huge storm comes less than two weeks after devastating Helene TAMPA, Florida, Oct 8 (Reuters) - Hurricane Milton barreled toward Florida's battered Gulf Coast as an enormous Category 5 storm on Tuesday, triggering massive traffic jams and fuel shortages as officials ordered more than 1 million people to flee before it slams into the Tampa Bay area. Milton, which exploded on Monday into one of the most intense Atlantic hurricanes on record, was forecast to make landfall late Wednesday or early Thursday, threatening a stretch of Florida's densely populated west coast that is still reeling from the devastating Hurricane Helene less than two weeks ago. A direct hit on the bay would be the first since 1921, when the now-sprawling Tampa-St. Petersburg-Clearwater area was a relative backwater. Today it is home to more than 3 million people. Tampa Mayor Jane Castor warned people against riding out the storm, calling Helene a mere wakeup call. "If you choose to stay in one of those evacuation areas, you're going to die," Castor said. In Tampa, Estephani Veliz Hernandez said she and her family were collecting their pets, important documents and their cash before heading to a relative's home further inland. "We're leaving everything behind. We're just trying to get to safety," she said. "If anything happens - if God says here you go - we're all together at least." Milton packed maximum sustained winds of 165 mph (270 kph), the U.S. National Hurricane Center said, putting it at the highest level on the five-step Saffir-Simpson scale. At 7 p.m. CDT (0000 GMT), the eye of the storm was 440 miles (710 km) southwest of Tampa, moving east-northeast at 10 mph (17 kph). "Milton's wind field is expected to expand as it approaches Florida. In fact, the official forecast shows the hurricane and tropical-storm-force winds roughly doubling in size by the time it makes landfall," the hurricane center said. The greater size also enlarges the scope of the risk of storm surge to hundreds of miles (kilometers) of coastline. The hurricane center sees surges of 10 to 15 feet (3 to 4.5 meters) north and south of Tampa Bay, in addition to the ferocious winds and risk of inland flash flooding from intense rainfall. About 2.8% of U.S. gross domestic product is in the direct path of Milton, Ryan Sweet, chief U.S. economist at Oxford Economics, wrote on Tuesday. Airlines, energy firms and a Universal Studios theme park were among the companies beginning to halt their Florida operations as they braced for disruptions. Hurricane Helene left the Tampa Bay area more vulnerable when it hit the Gulf Coast's barrier islands and beaches on Sept. 26, sweeping away tons of sand, knocking down dunes and blowing away dune grass, said Isaac Longley, a meteorologist with the commercial forecasting company AccuWeather. Five-thousand National Guard members have been deployed, with another 3,000 on hand for the storm's aftermath, Governor Ron DeSantis said. President Joe Biden, who postponed an overseas trip to supervise the storm response, urged those under evacuation orders to leave immediately, saying it was a matter of life and death. WON'T BE FOOLED AGAIN More than a dozen coastal counties issued mandatory evacuation orders, including Tampa's Hillsborough County. Pinellas County, which includes St. Petersburg, ordered the evacuation of more than 500,000 people. Lee County said 416,000 people lived in its mandatory evacuation zones. Mobile homes, nursing homes and assisted living facilities also faced mandatory evacuation. In Fort Myers, mobile home-dweller Jamie Watts and his wife took refuge in a hotel after losing their previous trailer to Hurricane Ian in 2022. "My wife's happy. We're not in that tin can," Watts said. "We stayed during Ian and literally watched my roof tear off my house and it put a turmoil in us. So this time I'm going to be a little safer," he said. Motorists waited to fill their tanks in lines snaking around gas stations, only to find that some were out of fuel. State police provided escorts to fuel trucks replenishing gas stations, DeSantis said. By early Tuesday, bumper-to-bumper traffic choked roads leading out of Tampa. Musician Mark Feinman, 38, said it took 13 hours to drive his family 500 miles (805 km) from St. Petersburg to Pensacola. Some drivers sped through breakdown lanes and across grass medians to cut ahead, causing accidents, he said. About 17% of Florida's nearly 8,000 gas stations had run out of fuel by late Tuesday, according to markets tracker GasBuddy. Fueled by warm waters in the Gulf of Mexico, Milton became the third-fastest intensifying storm on record in the Atlantic. It had weakened to a Category 4 hurricane on Tuesday but regained strength. Milton is forecast to remain an extremely dangerous hurricane after landfall in Florida, causing catastrophic damage and power outages expected to last days. The storm already caused some havoc in Mexico, but Governor Joaquin Diaz Mena of Yucatan state said much of the damage reported so far had been minor. Thousands of utility customers lost power. Relief efforts are still under way throughout much of the U.S. Southeast in the wake of Hurricane Helene, which killed more than 200 people across six states and caused billions of dollars in damage. Sign up here. https://www.reuters.com/business/environment/monster-hurricane-milton-threatens-an-already-battered-florida-2024-10-08/

2024-10-08 06:35

Malaysia to help small farmers comply with EU rules Malaysia says no issues with India import tax on edible oil palm Palm oil production seen exceeding 19 mln tons in 2024 KUALA LUMPUR, Oct 8 (Reuters) - Malaysia said on Tuesday it hopes European lawmakers will be "more accommodative" on sustainable policies, following a proposal by the European Commission last week to delay the implementation of a law that would ban imports of products linked to deforestation. The proposed one-year delay would help give producing countries time to take the necessary steps to comply and rectify their policies, particularly for small farmers who may have trouble meeting the costs and standards of compliance, Malaysia Plantation and Commodities Minister Johari Abdul Ghani told a palm oil forum. Indonesia and Malaysia, the world's largest producers of palm oil, have strongly opposed the EU law, calling it discriminatory and aimed at protecting the bloc's oilseeds market. "In the engagements we have made with EU, we are ready to comply. We just need a little bit more time for our small holders... the government will assist them to comply," Johari told a news conference at the event. Malaysia has an estimated 450,000 small-scale producers, contributing to about 27% of the country's total palm oil cultivation. Johari said a transparent benchmarking criteria operated by EU regulators would also need to be closely looked over so as to not unfairly label producer countries as high-risk. "In the spirit of trade fairness, we hope that the EU parliament will play a more accommodative role to address this matter," Johari said. The EU policy, which requires companies selling soy, beef, coffee, palm oil and other products in the 27-nation bloc to prove their supply chains do not contribute to destruction of forests, was originally due to take effect on Dec. 30 this year. Separately, Johari said Malaysia did not expect to face any issues arising from India's decision to raise a basic import tax on edible oils by 20 percentage points last month, as demand for Malaysian palm oil remained strong. "We will continue to be a good partner to India... to supply sustainable palm oil," he said. Johari said Malaysia has managed to overcome several prolonged production challenges such as labour shortages, with output on track to exceed 19 million metric tons this year, the highest since 2020. The Malaysian Palm Oil Board previously forecast production at 18.75 million tons in 2024. (This story has been refiled to fix formatting of the bullet points) Sign up here. https://www.reuters.com/sustainability/malaysia-hopes-eu-legislators-will-be-more-accommodating-sustainable-policies-2024-10-08/