2023-12-04 09:32

Riksbank held rates at 4.00% on Nov. 23 Said could hike again if needed Markets see no more hikes, next move a cut Next rate decision on Feb. 1 STOCKHOLM, Dec 4 (Reuters) - Swedish monetary policy needs to remain tight for some time and the policy rate may need to be raised further if the inflation outlook deteriorates, the minutes of the central bank's most recent meeting, published on Monday, showed. Late last month, the central bank kept its key policy rate unchanged at 4.00%, saying eight rate hikes in a row were now having an effect and that inflation was heading in the right direction. "It is now a question of ensuring that inflation will come all the way down to the target of two per cent and that it will stabilise there," Governor Erik Thedeen said in the minutes. "If new data is received that indicates inflation is not continuing its downward trend towards the target, we have plenty of opportunity to take action at coming meetings." The Swedish crown strengthened marginally after the minutes were published. Inflation, which peaked at over 10%, is still way above the 2% target and the Riksbank remains worried about the direction of prices for goods and services as well as the weak Swedish crown. Several policy makers said that policy needed to remain restrictive for some time in order to ensure that inflation comes back to the 2% target. Markets, however, believe the Riksbank is probably done with hiking and see the next rate move being a cut after the middle of next year. Inflation is falling fast and the effects of rate hikes to date have not been fully felt. The economy is in a technical recession and is expected to shrink on an annual basis both this year and next. Households and property firms are already struggling with debts. "We expect the Riksbank to stay on hold for now and start cutting by June," Swedbank said in a note. The Federal Reserve, the European Central Bank and the Bank of England are also expected to cut next year. The Riksbank will publish its next rate decision on Feb 1. https://www.reuters.com/markets/europe/swedens-riksbank-says-policy-must-remain-tight-cant-rule-out-hike-minutes-2023-12-04/

2023-12-04 09:13

HONG KONG, Dec 4 (Reuters) - China Evergrande Group (3333.HK) on Monday said it has been granted an adjournment of a court hearing into a liquidation petition to Jan. 29, giving the embattled property developer time to finalise a revamped offshore debt-restructuring plan. The decision came as the world's most indebted developer with more than $300 billion in liabilities sought adjournment unexpectedly unopposed by the petitioner's lawyer. On Oct. 29, at the previous adjournment, Hong Kong High Court Justice Linda Chan said Monday's hearing would be the last before a decision was made whether to liquidate Evergrande in the absence of a "concrete" restructuring plan. After Monday's adjournment, Evergrande stock reversed losses from earlier in the day to jump more than 13%. Evergrande defaulted on offshore debt in late 2021, becoming the poster child of a debt crisis that has engulfed China's property sector. Last week, it scrambled to revise its restructuring plan to avoid liquidation, Reuters has reported. Evergrande "somewhat surprisingly has obtained some further time to rethink its plans," said partner Neil McDonald of Kirkland & Ellis, a legal adviser to an ad hoc group of offshore creditors opposed to the revised terms. Still, Evergrande is likely to be wound up at the next hearing if it does not come up with a plan accepted by all classes of creditors, he said. SURPRISE Hong Kong-based investment firm Top Shine filed the petition in June 2022 saying Evergrande had not honoured an agreement to repurchase shares it bought in the developer's Fangchebao unit. The petitioner surprised the court on Monday when its lawyer started proceedings saying he was "instructed not to present any argument in opposition to" adjournment. Justice Chan ordered the petitioner inform other creditors a week ahead of the next hearing should it decide to withdraw the petition, so those creditors can continue action if they wish. "We'll see what happens with the company before the 29th but if nothing changes, then yes," said McDonald when asked by reporters whether the creditors Kirkland represents will file to liquidate Evergrande if the petitioner withdraws. "It (today's lack of opposition) is not an indication that we will not proceed with the liquidation petition," a representative of Top Shine told Reuters after the hearing. Evergrande's lawyer told the court the developer expects to "refine" its restructuring proposal in the next five weeks. Under revised terms, the lawyer said Evergrande is offering shares to creditors - 17.8% of China Evergrande Group, 21.6% of Evergrande Property Services Group (6666.HK) and 28.5% of Evergrande New Energy Vehicle Group (0708.HK). It will also offer certificates, or the right to proceeds from disposable assets. Those terms replace its proposal to issue equity-linked instruments backed by the three listed companies and new bonds in March. The ratio of shares is different for so-called Class A and Class C creditors, as is the list of assets that can raise funds, the lawyer said. Justice Chan said Evergrande must hold direct discussion with relevant Chinese authorities on the new restructuring terms, and that the plan needs support from all creditor classes by the next hearing. Evergrande failed to get the 75% approval required from Class C creditors for original terms proposed in March, Reuters has reported. Managing Director Bert Grisel of investment bank Moelis & Co - advising the same creditor group - said after the hearing the group "firmly" rejects the revised plan because creditors would be entitled to less than through liquidation. "Liquidation does little good to creditors, but it is extremely difficult to get a debt repayment plan that satisfies everyone - that is why we have a deadlock with Evergrande here," said ANZ Bank China credit analyst Ting Meng. UNFINISHED HOMES Liquidation of Evergrande, whose assets totalled $240 billion at June-end, would increase pressure on a reeling property sector, which accounts for a quarter of the world's second-largest economy. Its debt woes have been a major concern for global investors at a time when government stimulus has struggled to propel post-pandemic economic recovery, with property sales slowing and hundreds of thousands of homes left unfinished. Evergrande has been working on a debt revamp plan for almost two years. Its original plan was scuppered in late September when it said its billionaire founder Hui Ka Yan was under investigation for suspected crimes. At the time, the developer also said regulators denied approval to issue new U.S. dollar bonds - a crucial part of the restructuring plan - as its flagship onshore unit was also under investigation. https://www.reuters.com/world/china/china-evergrande-seeks-adjournment-hong-kong-liquidation-court-hearing-2023-12-04/

2023-12-04 08:58

NAPERVILLE, Illinois, Dec 3 (Reuters) - U.S. corn and wheat futures have recently hit contract lows and multi-year lows on a most-active basis, tumbling significantly from record or near-record highs set last year. But speculators’ enormous short positions imply the expectation of additional downside to prices. In the four-session week ended Nov. 28, money managers’ combined net short position in U.S. grain futures and options, including Chicago corn and wheat, Kansas City and Minneapolis wheat, topped 400,000 contracts for the seventh time since records began in 2006. That is safely the most bearish for the time of year and it ranks sixth all-time behind a five-week stretch from April to May 2019. Money managers’ net short in CBOT corn futures and options rose to 206,478 contracts through Nov. 28 from 185,502 a week earlier, driven by another large uptick in gross short positions. Funds’ new corn stance is their most bearish since June 2020 and most bearish ever for the time of year, surpassing the prior threshold set in 2017. In CBOT wheat, money managers’ net short of 119,986 futures and options contracts as of Nov. 28 is their most bearish since May, and it is roughly tied with 2016 and 2017 for the date’s most bearish. That compares with a net short of 108,176 contracts a week earlier. Both corn and wheat open interest plunged in the week ended Nov. 28 as is seasonal. Corn open interest is among the date’s lowest in the last decade, though it is a bit closer to average for wheat. Money managers through Nov. 28 extended their K.C. wheat net short to near 50,000 futures and options contracts, their largest since May 2019 and among their biggest-ever shorts. Funds’ Minneapolis net short grew slightly to near 29,000 contracts, close to the recent record. The U.S. government predicts record global corn production in the current marketing year and a multi-year high in stockpiles, led by a record U.S. crop. However, the wheat situation is forecast to tighten, especially among major exporters. Grain futures sank in the week ended Nov. 28, including a 3.2% decline in CBOT March corn and a 1.8% slide in March wheat . Corn hit contract lows on Nov. 29 but popped 2.4% over the last three sessions as U.S. export sales were larger than expected. CBOT March wheat found contract lows on Nov. 27 but touched three-week highs by Friday, presumably motivated by short covering. March wheat rallied 7.4% over the last four sessions, the largest four-session win for the most-active contract since late July. Money managers were also net sellers in the CBOT soy complex in the week ended Nov. 28 with January beans down 2.2%, January meal down 2.6% and January soyoil off nearly 1%. Funds in that week cut their net long in CBOT soybean futures and options to 67,562 contracts from 81,587 a week earlier. They also trimmed their sizable net long in CBOT soymeal futures and options by about 2,000 to 135,798 contracts, and meal open interest declined seasonally but remains strong. Money managers increased their modest net short in CBOT soybean oil through Nov. 28 to 4,720 futures and options contracts from 2,831 a week earlier. The soy complex weakened further late last week as rains were in the forecast for parched areas of Brazil. January beans dropped 1.6% in the last three sessions, meal lost 4.1% and oil slid 2.8%. January meal notched a one-month low on Friday and beans matched a one-month low. Karen Braun is a market analyst for Reuters. Views expressed above are her own. https://www.reuters.com/markets/us/fund-pessimism-cbot-grains-approaches-all-time-levels-2023-12-04/

2023-12-04 06:59

DUBAI, Dec 4 (Reuters) - Bill Gates' advanced nuclear reactor company TerraPower LLC and the United Arab Emirates’ state owned nuclear company ENEC said on Monday they have agreed to study the potential development of advanced reactors in the UAE and abroad. The memorandum of understanding comes amid a push by the UAE to expand its nuclear energy capacity, and a pledge by over 20 nations at the COP28 climate conference in Dubai to triple nuclear deployment this decade to fight climate change. “For the UAE, we're looking for a future for the clean electrons and molecules that will be brought to reality by advanced reactors,” said Mohamed Al Hammadi, CEO of ENEC, during the signing ceremony. "Bringing advanced nuclear technologies to market is critical to meeting global decarbonization targets," said TerraPower President and CEO Chris Levesque. The UAE currently has one traditional nuclear power plant, near Abu Dhabi, which began producing electricity in 2020. TerraPower, meanwhile, has a demonstration project underway for its advanced Natrium reactor in the U.S. state of Wyoming that hopes to come online in 2030. Advanced reactors are meant to be smaller, easier to build, and more dynamic than traditional plants, and are regarded by some as vital complement to intermittent power sources like wind and solar that are expanding rapidly. The MOU between TerraPower and the UAE said they would explore uses for advanced nuclear reactors such storing power on the grid and providing the energy needed to produce hydrogen, and decarbonize coal, steel and aluminum plants. One potential hitch, however, is that TerraPower's Natrium reactors require a fuel called high assay low enriched uranium or HALEU, the main producer of which currently is Russia. TerraPower's Wyoming project has experienced delays over concerns about HALEU supply since the Russian invasion of Ukraine, but the company told Reuters it expects the United States to be able to produce the fuel in the coming decade. The United States is seeking to start up HALEU production domestically and has contracted with a company called Centrus to develop a project to do so. https://www.reuters.com/business/environment/cop28-uae-signs-deal-with-bill-gates-nuclear-company-advanced-reactors-2023-12-04/

2023-12-04 06:56

Buyout offer fails to reach 75% threshold AustralianSuper says it welcomed vote SYDNEY, Dec 4 (Reuters) - Brookfield will walk away from Origin Energy (ORG.AX), a source familiar with the matter said, after shareholders in Australia's largest power retailer rejected a $10.6 billion takeover bid by a consortium led by the asset manager on Monday. Final votes were 31.08% against the bid with 68.92% in favour, according to Origin's regulatory filings, lower than the 75% threshold required for a takeover to proceed. The deal was expected to fail after Origin's largest shareholder, A$300 billion ($198 billion) pension fund AustralianSuper, said it would reject the A$9.39 per share offer. AustralianSuper owns about 17% of Origin, which was enough to block the bid. In a statement, Brookfield said it would take into account a new government plan to accelerate the rollout of green energy before it decides what to do next. A source familiar with the matter said the Canadian-based asset manager had no intention of returning with a renewed offer for Origin as it considered the government's green energy plans negative for Origin's future earnings. The source declined to be identified as the information remained confidential. Brookfield did not immediately respond to a request for comment. Brookfield's proposal, made with EIG Partners, promised to build 14 gigawatts of renewable energy as part of a ten-year, A$20 billion to A$30 billion investment plan. Origin already has plans to develop 4 gigawatts by 2030, and Chairman Scott Perkins reaffirmed that strategy, adding that the company was open to working with other investors. "The way we've seen the energy transition is there's been plenty of scope for third party capital to invest alongside Origin," Perkins told reporters after the vote. "So all those pools of low cost of capital are interesting to Origin, they always have been. AusSuper would be absolutely one of the obvious sources of that capital," he said, adding that Origin had not held any talks with AustralianSuper so far. In its statement, AustralianSuper said it would be a willing capital partner for Origin as it "prepares to transition over the coming decades". "We have never wavered in our belief that the value and future value of Origin is better in the hands of members and other shareholders rather than a private equity consortium seeking to make a quick return based on the proposed scheme terms," an AustralianSuper spokesperson said. Origin's board on Thursday rejected an alternative proposal lodged last week from the consortium to be considered if the current offer failed. The power retailer will continue as an independent listed company and the board, which recommended the bid, would remain in place, Perkins said. Origin shares were down 3.9% ahead the investor vote. The shares are on a trading halt. https://www.reuters.com/markets/deals/origin-investors-reject-brookfields-106-bln-bid-proxy-votes-2023-12-04/

2023-12-04 06:53

DAR ES SALAAM, Dec 4 (Reuters) - The number of people killed by floods and landslides in northern Tanzania has jumped to 47, with another 85 people injured, following torrential rain, a senior government official said. Severe flooding caused by a combination of the El Nino and Indian Ocean dipole weather phenomena has killed hundreds of people in Kenya and Somalia and forced hundreds of thousands from their homes since seasonal rains began in October. Search and rescue operations were underway in the Manyara region as authorities fear some bodies might be trapped in the mud, Manyara region commissioner Queen Sendiga told reporters late on Sunday. "As of the evening, we have rescued 85 injured persons who are continuing with the treatments and others have been discharged. The death toll has increased to 47 people," she said. Around 100 houses in the village of Katesh, Hanang district, were swallowed by a landslide, President Samia Suluhu Hassan said in a video message posted online by the ministry of health. "We are very shocked by this event," Suluhu said. Climate change is causing more intense and more frequent extreme weather events, according to climate scientists. https://www.reuters.com/world/africa/tanzania-flood-landslide-death-toll-jumps-47-2023-12-04/