2024-08-12 11:06
Aug 12 (Reuters) - Canada's Barrick Gold (ABX.TO) , opens new tab edged past Wall Street estimates for second-quarter profit on Monday, as the company benefited from higher prices and robust production. Barrick's U.S.-listed shares were up 2.1% before the bell. Hopes of a U.S. interest rate cut this year and uncertainty around elections, along with global geopolitical risks have lifted the bullion's safe-haven appeal, pushing it to a record high level. The company's average realized gold prices jumped 19% to $2,344 per ounce and copper prices rose 22% to $4.53 per pound. The company also benefited from higher production at its mines in Nevada and Papua New Guinea, with gold output of 948,000 ounces in the quarter ended June 30, compared to estimates of 905,800 ounces, according to LSEG data. Last month, rival Newmont (NEM.N) , opens new tab also beat second-quarter profit estimates, benefiting from the rally in bullion prices and robust production at its mines. Barrick said its free cash flow surged more than 400% to $340 million from a year earlier, adding that the "strong cash flow from operations" sets it up to execute various mine expansion projects across the globe. The Toronto, Canada-based company reaffirmed its annual gold production outlook of 3.9 million ounces to 4.3 million ounces. This compares to analysts expectations of 4 million ounces of gold in 2024. Barrick added that it has not received any response from the United Nations Human Rights Council, after the company addressed allegations of human rights violations at its North Mara Gold Mine in June. On an adjusted basis, the world's second-largest gold miner posted a profit of 32 cents per share in the April-June quarter, compared with estimates of 28 cents per share. Sign up here. https://www.reuters.com/markets/commodities/canadas-barrick-gold-beats-second-quarter-profit-estimates-2024-08-12/
2024-08-12 11:00
LONDON, Aug 12 (Reuters) - OPEC on Monday cut its forecast for global oil demand growth in 2024, citing weaker than expected data for the first half of the year and softer expectations for China, and also trimmed its expectation for next year. The Organization of the Petroleum Exporting Countries in a monthly report said world oil demand will rise by 2.11 million barrels per day in 2024, down from growth of 2.25 million bpd expected last month. "This slight revision reflects actual data received for the first quarter of 2024 and in some cases for the second quarter, as well as softening expectations for China's oil demand growth in 2024," OPEC said in the report. "Despite the slow start to the summer driving season compared to the previous year, transport fuel demand is expected to remain solid due to healthy road and air mobility." This is the first reduction in OPEC's 2024 forecast since it was first made in July 2023. There is a wider than usual split between forecasters on the strength of oil demand growth in 2024 due to differences over China and more broadly over the pace of the world's transition to cleaner fuels. The reduction still leaves OPEC at the top end of industry estimates. Oil was steady after the report was released, trading above $80 a barrel. In the report, OPEC also cut next year's demand growth estimate to 1.78 million bpd from 1.85 million bpd previously expected. OPEC+, which groups OPEC and allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. The group agreed on June 2 to extend the latest cut of 2.2 million bpd until the end of September and gradually phase it out from October. The International Energy Agency, which represents industrialised countries, sees much lower demand growth than OPEC of 970,000 bpd in 2024. The IEA also updates its figures this week. Sign up here. https://www.reuters.com/business/energy/opec-cuts-2024-oil-demand-growth-forecast-citing-china-2024-08-12/
2024-08-12 10:51
KYIV, Aug 12 (Reuters) - Firefighters in Ukraine's southern region of Odesa have extinguished a sweeping blaze that had threatened a grain warehouse, the state emergency service said on Monday. No fatalities or injuries were reported as a result of the fire, which spanned around 2,000 meters and charred a portion of the facility in the village of Vizyrka. Authorities did not specify the cause. "Thanks to the prompt actions of the firefighters, it was possible to prevent the fire from spreading to nearby grain warehouses," the state emergency service said in a statement. It did not name the damaged facility near the Black Sea port of Pivdennyi, one of Ukraine's largest. The port is among three involved in a transport corridor through which Ukraine has shipped around 60 million tonnes of mostly agricultural cargoes. Sign up here. https://www.reuters.com/world/europe/ukraine-emergency-workers-extinguish-fire-grain-warehouse-odesa-region-2024-08-12/
2024-08-12 10:48
Aug 12 (Reuters) - Temasek-backed Sembcorp Industries (SCIL.SI) , opens new tab on Monday temporarily suspended operations at its Myingyan Independent Power Plant in Mandalay, Myanmar. The decision came in response to escalating civil unrest in the region, including in the Myingyan township, where its 225 megawatt (MW) gas-fired power plant Sembcorp Myingyan is located. In July, media reports said Myanmar's military government had extended the state of emergency by another six months. The government continues to grapple with armed rebellion and a turbulent economy, while facing increasing resistance on multiple fronts. "Sembcorp will look to resume operations at the Plant as soon as reasonably practicable once conditions are safe," the Singapore-based company said in a statement. The company is backed by investment firm Temasek, which is owned by the Government of Singapore. Separately, Japan's Unicharm Corp (8113.T) , opens new tab recently said it would discontinue the capital increase for its Myanmar unit, citing foreign currency remittance restrictions and other challenging business conditions in Myanmar. Sign up here. https://www.reuters.com/business/energy/sembcorp-temporarily-shuts-down-myanmar-power-plant-amid-escalating-unrest-2024-08-12/
2024-08-12 10:13
MUMBAI, Aug 12 (Reuters) - The Indian rupee slipped to its weakest closing level on Monday, pressured by a decline in its Asian peers while likely intervention by the Reserve Bank of India ensured the currency did not weaken more. The rupee closed at 83.9725 against the U.S. dollar, after closing at 83.9550 in the previous session. The currency hovered in a narrow range between 83.95 and 83.97 during the session. The RBI likely sold dollars to limit further depreciation in the currency, traders said. Most Asian currencies fell 0.1% to 0.8% while the dollar index edged lower to 103.1. Traders expect the rupee to be rangebound ahead of the release of closely-watched U.S. consumer inflation data on Wednesday, which is expected to shape expectations of when the Federal Reserve may begin to ease policy rates. Interest rate futures are currently pricing in about 100 basis points (bps) worth of rate cuts over 2024, starting in September. "Given a still resilient U.S. economy... and ongoing uncertainty over the upcoming U.S. elections in November, there could still be further repricing of rate-cut expectations," MUFG Bank said in a note. Dollar-rupee forward premiums slipped, with the 1-year implied yield down 2 basis points at 2.02%. While far forward premiums should move higher over the medium term, it would be better to wait for a dip towards 1.95% to initiate a fresh paid position, a foreign exchange trader at a private bank said. India will report its consumer inflation data post market hours on Monday. The print is expected to have eased to 3.65% in July, according to economists polled by Reuters. Sign up here. https://www.reuters.com/markets/currencies/rupee-slips-record-closing-low-tracking-decline-asia-fx-2024-08-12/
2024-08-12 10:09
NEW YORK, Aug 12 (Reuters) - Portfolio managers at hedge funds have retrenched from some of their riskier positions after a volatile week for markets. A brutal selloff and recovery in global markets in the past week was triggered by the unwinding of billions of dollars worth of yen-funded trades and worries the U.S. economy was heading to a recession. The CBOE Volatility Index (.VIX) , opens new tab ended at its highest close in nearly four years on Aug. 5. The market rout has been painful for a number of hedge funds. Global macro quantitative funds posted losses between 1.5% and 2.5% between Aug. 1 and Aug. 5., while hedge funds focused on the technology sector were down between 2.5% and 3.5%, according to hedge fund research firm PivotalPath's exposure model. "We did see some degree of deleveraging," said Edoardo Rulli, chief investment officer at UBS Hedge Fund Solutions, which invests in hedge funds. "Not panicking, but portfolio managers reducing positions." An unexpected spike in volatility is likely to suppress risk appetite until investors are more comfortable about global growth prospects, according to Sophia Drossos, economist and strategist at Point72 Asset Management. "When you have a very long-term trade that starts to unwind very abruptly, it does hurt risk appetite. We'll probably see an environment where investors remain reticent or skittish about taking on too much risk again," she said. "It could be a headwind for the rest of the summer." Drossos' views do not necessarily reflect the hedge fund's positioning, the fund said. Leverage used by hedge funds to increase the size of trades is at a record high for the last decade, according to data provided by the Office of Financial Research's Hedge Fund Monitor. Hedge funds registered in the U.S. ended March with $2.3 trillion in borrowing from prime brokers, up roughly 63% from December 2019 and outpacing their assets' growth. There has been an unwinding of various positions in the last week. Commodity-trading advisors (CTAs), or money managers that follow market trends, registered a "sharp unwind" of long equity positions, short yen and short Japanese and 10-year German bonds starting after the weaker-than-anticipated U.S. job data on Aug. 2, JPMorgan said in a note last week. A Goldman Sachs' prime brokerage note to clients also showed on Friday that long/short equity hedge funds have reduced their overall exposure to Japan to 4.8% last week from 5.6% the week before, while cutting overall portfolios' leverage by almost a percentage point, to 188.2%. U.S. Commodity Futures Trading Commission and LSEG data released on Friday showed hedge funds' position on the Japanese yen shrank to the smallest net short stance since February 2023 in the latest week, indicating investors have also wound down the yen carry trade. MACRO CONCERNS Front of mind now for portfolio managers - and contributing to portfolios' de-risking - is the state of the U.S. economy, as fears of a recession in the world's largest economy mounted after the U.S. unemployment rate jumped in July. Rulli said macro hedge funds are also reconsidering some positions even though they made money during the market rout after being long U.S. rates. "Macro hedge funds still have conviction around the steepening of the yield curve, but they are taking some profits because obviously it's done very well over the past four weeks, Rulli said. Odds of the Federal Reserve cutting rates by 25 basis points or 50 basis points at its next meeting in September are close to the same, according to the CME FedWatch tool on Aug. 12. "If there is a 50/50 chance between the Fed cutting 25 basis points and cutting 50 basis points, that is maximum uncertainty," said Richard Lightburn, deputy chief investment officer at macro hedge fund MKP Capital Management. He has been considering potential adjustments in the portfolio to reflect the unknown environment. "That's telling you something – the market really doesn't know what’s going to happen, and that means there's going to be volatility," he said. Sign up here. https://www.reuters.com/markets/hedge-funds-retrench-risk-fearful-increased-volatility-2024-08-12/
