2023-11-20 19:13

BUENOS AIRES, Nov 20 (Reuters) - In downtown Buenos Aires a small group of black market money traders, known as "arbolitos" - or little trees - shouted for business on Monday, a day after a libertarian outsider pledging to dollarize the economy won the race to be president. The long-running but illegal trade in dollars is in the spotlight amid the rise of far-right Javier Milei, in a country where most people have little faith in the embattled local peso amid triple-digit inflation and rapid depreciation. Strict capital controls on official currency trading limits formal access to dollars and has spawned a wide array of parallel rates where dollars trade at a huge premium, over 900 pesos per greenback versus 350 at the official rate. On Monday, the streets were quieter than normal due to a local bank holiday and as people recovered from the election shock, but some "little trees" were selling dollars at between 920-950 pesos per dollar, similar to last Friday's level. Marcelo, a vendor who asked only to be identified by his first name, said his associates were selling dollars at 920, down from a price of 950 they charged on Friday, citing signs of the peso gaining value in crypto markets, the only ones trading. He expected more strengthening on Tuesday and thinks the peso will reach 870 or 860 per dollar, an optimistic call with most analysts expecting Milei's win to pressure the currency. Nicolas, a younger vendor a few blocks away, estimates the peso would remain steady until Milei takes power in December. Many though said they had no idea what tomorrow would bring as the markets reopened, with the peso having slid fast this year in all markets and a devaluation expected in the weeks ahead after a sharp readjustment already in August. For some, the uncertainty came hand-in-hand with hope that Milei's ambitions, including dollarizing Argentina's economy and closing the central bank, would bring more financial stability to a country that's seen poverty top 40% this year. "I want to have dollars," said 24-year-old Milka Car, a university student who also works as a money changer in Buenos Aires. "We depend on handouts from tourists, like if we were in a zoo. There are a lot of young people that don't have any opportunities." Even if dollarization would take away her money trading work, Car hopes it would bring better salaries and opportunities elsewhere. Aside from studying and selling dollars, she works in a jewelry story, teaches math, and does graphic and web design. She added that she had voted for Milei and celebrated his victory last night over hopes about the economy, even though she is worried about his plans to slash public education. "It's hard, almost impossible for an Argentine to build themselves up and get somewhere," she said. https://www.reuters.com/markets/currencies/argentinas-black-market-currency-traders-brace-uncertainty-2023-11-20/

2023-11-20 18:54

BERLIN, Nov 20 (Reuters) - German industrial projects in jeopardy after a court ruling wiped 60 billion euros from the federal budget include chip factories, decarbonised steel production, and expanding the battery supply chain, two government sources said on Monday. The ruling last week found the government's move to transfer unused pandemic funds toward climate initiatives and industry support in a so-called Climate and Transformation Fund (KTF) was illegal. That put numerous projects in key areas for Germany's industrial competitiveness at risk, the sources, who declined to be named, warned. Among them were the ramp-up of the hydrogen industry, with around 45 businesses from 35 regions involved in projects that had hoped for support from the fund. In the steel industry, businesses planned to invest 6 billion euros ($6.54 billion) in decarbonised steel production, directly and indirectly employing around 20,000 people. Investments in microelectronics were bundled into the KTF, totalling 31 projects relying on an estimated 4 billion euros in government funding. Fifteen of these had already received legally binding confirmations of the funds, the sources said. Other chip projects that had been expecting state support include the planned TSMC [RIC:RIC:TGLL.UL] chip plant, an expansion of the Infineon (IFXGn.DE) plant in Dresden, and the Intel (INTC.O) plant planned for Magdeburg. Numerous projects along the battery supply chain were submitted as outlines for funding applications, the sources said, with an investment volume of around 20 billion euros. The German economy ministry had also planned to offer so-called climate protection contracts worth in the mid double-digit billion euros, to protect against unexpected price fluctuations. Companies were to enter a bidding process for the contracts which, according to initial estimates, could secure around 500,000 jobs throughout Germany. Funding agreed earlier this month to raise and extend compensation for high electricity prices for 350 firms at risk of relocating out of Germany was also earmarked to come from the KTF fund, the sources said. ($1 = 0.9168 euros) https://www.reuters.com/markets/commodities/german-industrial-projects-steel-chips-batteries-risk-court-ruling-sources-2023-11-20/

2023-11-20 18:52

HOUSTON, Nov 20 (Reuters) - Polish oil and gas firm Orlen (PKN.WA) has provisionally chartered a supertanker to load Venezuelan oil for China, according to a shipbroker and tracking data, following a temporary easing of U.S. sanctions on the South American country. The Very Large Crude Carrier (VLCC) Olympic Trophy, chartered for $13 million, is scheduled to load in early December, according to a source and ship tracking data on Kpler. Vitol (VITOLV.UL), the world's largest independent oil trader, chartered a supertanker earlier this month to load Venezuelan crude for China. Commodities trader Trafigura (TRAFGF.UL) also chartered a vessel to carry Venezuelan fuel oil for exports, which is currently loading. The U.S. Treasury Department last month issued a general license lifting, through April, sanctions on Venezuela's oil production and exports, which has prompted early deals by trading houses buying cargoes from little known intermediaries that have been registered as customers of state company PDVSA. Washington has said it wants to see progress towards a transparent presidential election in Venezuela, as well as a release of political prisoners, by Nov. 30 or it could reimpose the sanctions. PDVSA and Orlen did not immediately respond to requests for comments. https://www.reuters.com/business/energy/supertanker-chartered-by-polish-firm-load-venezuelan-oil-china-2023-11-20/

2023-11-20 18:48

Nov 20 (Reuters) - Spanish Prime Minister Pedro Sanchez on Monday announced his new cabinet, keeping the same number of 22 ministers, 12 women and 10 men, despite reshuffling some of their portfolios. SOCIALIST MINISTERS: NADIA CALVINO - ECONOMY Calvino remains as Sanchez's first deputy prime minister and top economic expert. She is also one of the main contenders to head the European Investment Bank, a candidacy that EU countries will vote on in early December. TERESA RIBERA - ENERGY Ribera is Sanchez's third deputy. She built up her international profile by getting nearly all EU countries on board with the bloc's energy market reform and becoming a leading EU envoy for the Nov. 30-Dec. 12 COP28 climate change conference in Dubai. MARIA JESUS MONTERO - BUDGET Sanchez has promoted Montero to fourth deputy PM after she proved herself a skilled negotiator in pushing through three consecutive budgets with support from parties outside the coalition government. FELIX BOLANOS - JUSTICE Bolanos saw his profile boosted by heightened media exposure while acting as Sanchez's de facto cabinet chief. He has now been rewarded with the additional Justice portfolio. JOSE MANUEL ALBARES - FOREIGN AFFAIRS A career diplomat from a humble background, the former ambassador to France was brought on by Sanchez in 2021 during a cabinet reshuffle to replace Arancha Gonzalez Laya, who was forced out over a dispute with Morocco. MARGARITA ROBLES - DEFENCE Former judge Robles became the first female Supreme Court justice in 2004. She has been part of Sanchez's inner circle since he acceded to power in 2018. Her role became more visible after Russia's February 2022 invasion of Ukraine. FERNANDO GRANDE-MARLASKA - INTERIOR A former High Court magistrate, he has faced criticism from the left and human rights groups for his handling of a deadly mass crossing of migrants from Morocco into the enclave of Melilla. He was one of two openly gay ministers in the previous cabinet along with Culture Minister Miquel Iceta, who Sanchez has now replaced. PILAR ALEGRIA - EDUCATION AND SPORT The Socialist Party's main spokesperson for the past two years, Alegria, 46, will continue heading the education system and has gained the additional Sport portfolio, which was previously within Iceta's purview. She also replaces Isabel Rodriguez as government spokesperson. ISABEL RODRIGUEZ - HOUSING While Rodriguez has been demoted as spokesperson, her new ministry is also a sign of continued confidence in her by a government that has made increased access to affordable housing one of its main promises. JOSE LUIS ESCRIVA - DIGITAL TRANSFORMATION Hailed for his role in this year's reform of the pension system as Social Security and Migration minister, the econometrist is widely seen as a frontrunner in the race to succeed Calvino - who was until now in charge of digital transformation - if she secures the EIB post. DIANA MORANT - SCIENCE AND UNIVERSITIES Morant, a telecoms engineer, resigned as mayor of Gandia in 2021 to become minister. She has now gained the Universities portfolio, which was earlier an independent ministry. LUIS PLANAS - AGRICULTURE The former labour inspector and diplomat has faced discontent from the rural sector over extreme drought conditions and EU budget cuts. OSCAR PUENTE - TRANSPORT The mayor of Valladolid for eight years until losing the office in May, Puente rose to fame when Sanchez picked him to debate conservative opposition leader Alberto Nunez Feijoo when he tried to become prime minister. JORDI HEREU - INDUSTRY Mayor of Barcelona between 2006 and 2011, Hereu returned to the private sector after losing control of Spain's second-biggest city. He replaces Hector Gomez, who only served seven months in the post. ANGEL VICTOR TORRES - TERRITORIAL POLICY AND DEMOCRATIC MEMORY Regional leader of the Canary Islands from 2019 to 2023, Torres takes over Territorial Policy from Rodriguez and Democratic Memory from Bolanos. ELMA SAIZ - SOCIAL SECURITY AND MIGRATION Saiz, 47, was the Socialist leader in the city hall of Pamplona, the capital of Navarre. She previously ran the northern region's treasury and now takes over from Escriva. ANA REDONDO - EQUALITY Possibly the least known member in this cabinet, Redondo was a councillor in Valladolid and a professor of constitutional law at the city's university. She takes over one of the most contentious ministries, focused on gender equality and LGBTQ rights, from leftist Podemos party's Irene Montero, whose radical approach earned her enmity and respect alike. MINISTERS FROM COALITION PARTNER SUMAR: YOLANDA DIAZ - LABOUR Diaz is the second deputy PM and leader of Sumar, a coalition of 15 leftist parties, including Podemos. She has touted as her ministry's main accomplishments raising the minimum wage by 8%, the furlough scheme during the COVID-19 pandemic and a pro-union labour law reform. MONICA GARCIA - HEALTH Garcia, an anesthesiologist, leads Mas Madrid, a left-wing party that split from Podemos in 2019. She has spearheaded the opposition to Madrid's regional leader, conservative firebrand Isabel Diez Ayuso. ERNEST URTASUN - CULTURE Diaz's right-hand man is a career diplomat and an MEP with The Greens/European Free Alliance. He became Sumar's spokesperson in June and now replaces Iceta. PABLO BUSTINDUY - SOCIAL RIGHTS AND CONSUMER AFFAIRS Aged 40, Bustinduy is the cabinet's youngest minister. He takes on the Consumer Affairs portfolio from United Left leader Alberto Garzon and replaces Podemos leader Ione Belarra, a vocal critic of Israel's war in Gaza and constant thorn in Sumar's side. SIRA REGO - CHILDREN AND YOUTH The second-in-command and main spokesperson for the United Left, she became an MEP in 2019. Of Palestinian descent, she is also an outspoken Israel critic. Her ministry is new. https://www.reuters.com/world/europe/who-is-who-spains-new-cabinet-2023-11-20/

2023-11-20 18:37

BUENOS AIRES, Nov 20 (Reuters) - Argentina's libertarian President-elect Javier Milei has won a closely fought election. Now comes the hard part: dealing with economic crises. Inflation is at 143%, net reserves of foreign currency are deep in the red, savers are ditching the peso, and a recession is looming - if not already here. Four in 10 Argentines live in poverty and a sharp peso devaluation is likely. Milei, who is pledging economic shock therapy such as shutting the central bank and dollarization, won a second-round runoff vote on Sunday with some 56% to rival Sergio Massa's 44%. Milei now faces the huge challenge of turning around the economy once he takes office on Dec. 10. Failure could lead to the already embattled country suffering a tenth sovereign debt default, poverty climbing and possible social unrest. "It is an economy that is in intensive care," said Miguel Kiguel, a former undersecretary of finance at the Economy Ministry in the 1990s. INFLATION Argentina's high inflation rate creates huge distortions in markets and for consumers, with prices changing weekly. A central bank poll of analysts forecast 185% inflation by the end of the year. "One of the biggest challenges of the next administration will be to correct the distortion of relative prices that the economy has today," said Lucio Garay Mendez, economist at consulting firm EcoGo. "In a context of high inflation and a stabilization plan, a correction is inevitable." In a bid to tamp down inflation Argentina's central bank has hiked the benchmark interest rate to 133%, which encourages saving in pesos, but hurts access to credit and economic growth. PESO CONTROLS Argentina's peso currency has been shackled by capital controls since a market crash in 2019, which has led to an unwieldy array of exchange rates, where dollars trade for well over twice the price of the official level near 350 per dollar. Popular unofficial exchange rates include the "blue" dollar, the MEP, and blue-chip swap, though demand for dollars through parallel channels has over time spawned dozens of different rates including a "Coldplay dollar" and "Malbec dollar." Milei has pledged to quickly undo capital controls and eventually dollarize the economy, while a sharp devaluation is likely in the near future to bring the official and parallel rates closer together. CENTRAL BANK RESERVES Argentina's central bank reserves of foreign currency are near their lowest level since 2006, and in net terms are widely seen by analysts to be in negative territory after a major drought hit exports of key cash crops like soy, corn, and wheat. The low reserves threaten the country's ability to repay debts to major creditor the International Monetary Fund (IMF) and private bondholders, as well as cover key imports. Argentina will need to revamp its creaking $44 billion IMF program. The government has agreed on an extended currency swap with China to help cover some of its costs, and had to delay some payments to key trade partners such as Brazil. RECESSION Latin America's third-largest economy is on track to shrink 2% this year, according to the latest central bank analyst survey, partly due to the impact of the recent drought that cut corn and soy crops in half. Along with triple-digit inflation, that is likely to sharpen poverty levels, with two-fifths of people already living under the poverty line as salaries and savings are eroded. SILVER LININGS? Argentina, rich in grains, shale gas and lithium, could see a boost next year as better rains help the harvest, a new gas pipeline trims reliance on costly imports, and demand rises for the lithium needed for electric vehicle batteries. Soy and corn are expected to have far stronger harvests, which will bring in much-needed foreign currency. "The harvest will help bring a greater flow of income in the economy, as will the greater production of (shale oil formation) Vaca Muerta," said Eugenio Marí, chief economist at Libertad y Progreso Foundation. https://www.reuters.com/world/americas/argentinas-next-president-milei-must-tame-inflation-turn-around-economy-2023-11-20/

2023-11-20 18:09

BUENOS AIRES, Nov 20 (Reuters) - New York-traded shares in Argentine state-run oil company YPF soared more than 40% on Monday after President-elect Javier Milei said he would seek to privatize the firm. The libertarian economist, who defeated Economy Minister Sergio Massa to win the presidential election on Sunday, said YPF was one of several state-controlled companies he plans to sell in order to reduce the state's share in the market and improve public accounts. Milei, who will take office on Dec. 10, said in a radio interview he expects his government to "create value" for the companies "so they can be sold in a very beneficial way for Argentines". The South American country nationalized 51% of the oil company more than a decade ago from Spain's Repsol (REP.MC). YPF is Argentina's largest oil firm and oversees development of Vaca Muerta, the world's second-largest shale gas reserve and fourth-largest shale oil reserve. Shares of YPF jumped more than 40% early in the session, before paring some gains to trade up 35.2%. Argentina's markets were closed on Monday for a holiday but Argentina-related equities, as well as its dollar bonds, saw a major rally overseas after Milei's triumph. Global X analyst Trevor Yates said the YPF gains were related to the increasing likelihood of it being privatized and implementing an international price parity policy. A lower risk premium in the country, Yates added, should also reduce its cost of capital and favor output in the medium and long term. YPF reported $137 million in losses in the third quarter, swinging back from a $693 million profit a year earlier, hurt by lower local fuel prices and higher operating costs. A source within Milei's team, who asked not to be identified, said: "We are still trying to see all the businesses or activities where YPF participates and which ones it should be concentrated on. But we are still in a preliminary stage." https://www.reuters.com/business/energy/shares-argentinas-ypf-soar-milei-hints-privatization-2023-11-20/